Sharkey Issaquena Community Hospital may begin negotiations with the University of Mississippi Medical Center over a potential lease of the rural, 29-bed hospital and all of its operations, including its nursing home, clinics, emergency department and ambulance services for the two counties.

After seeking out potential buyers earlier this year, the community hospital received lease proposals from UMMC and Delta Health System. The committee that evaluated the proposals, which included representatives from both counties and the community hospital, chose the Medical Center over Delta Health System, which has its own financial problems and recently closed the only neonatal intensive care unit in the Mississippi Delta.

“Due to the economics of the hospital, particularly during COVID, they sought a partner that would strengthen their ability to serve the community,” said Charles Weissinger, attorney for the Issaquena County Board of Supervisors and one of the Issaquena County representatives on the committee that evaluated the lease proposals. “They went through a request for proposal process and the University of Mississippi Medical Center provided the best hope for results going forward.”

UMMC declined to comment for the story.

Details of the proposal submitted by the Medical Center are not publicly available due a provision in state law that exempts “records directly relating to prospective strategic business decisions of a public hospital.”

UMMC is also working to finalize a lease of Greenwood Leflore Hospital. 

Sharkey Issaquena Community Hospital, like many rural hospitals across the country, has struggled to stay afloat for years due to low patient volumes. The two counties have a collective population of fewer than 6,000 people.

To cut costs, the community hospital, which has 125 full-time employees, has been pooling its resources with small hospitals across the state over the last few months to buy supplies at a discounted wholesale rate. Though the arrangement is beneficial for all the involved hospitals, it’s not enough for Sharkey Issaquena Community Hospital to remain viable in its current state, Weissinger said.

The community hospital is jointly owned by Sharkey County, which owns two-thirds of the hospital, and Issaquena County, which owns the remaining one-third. The board of supervisors of both counties have greenlit entering into negotiations with the Medical Center to finalize a deal, but the hospital’s board of trustees must also sign off on the plan for negotiations to begin. Their next meeting will be Sept. 29. 

UMMC’s efforts to expand have played out amidst its public and contentious fallout with Blue Cross & Blue Shield of Mississippi, the state’s largest private insurer. 

Sharkey Issaquena Community Hospital, like UMMC, has its own history of legal battles with Blue Cross. In 2017, the insurer sued the community hospital over an alleged lab testing scheme that cost the insurer nearly $10 million.

Under the alleged scheme, two Texas-based lab testing companies ordered lab tests for Blue Cross customers in other states and were allowed to submit reimbursement claims to the insurer for the tests by using the hospital’s name and billing information, though the tests were not performed by the hospital’s own laboratory.

The community hospital allegedly received kickbacks from the two Texas companies as part of the deal, which Blue Cross claimed was used to take advantage of the favorable reimbursement rate the hospital received from the insurer for lab tests due to it being small and rural..

Ultimately, nearly $34 million in misrepresented claims were submitted to Blue Cross, according to court filings, though the insurer only paid for $9.8 million of them before discovering the arrangement.

The two parties reached a settlement in 2018.

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