Ortego meets with USDA to talk about hospital loan

The new administrator of the Eureka Springs Hospital had a meeting with U.S. Department of Agriculture (USDA) officials in Little Rock Monday morning to determine the status of a loan application that is almost a year old to build a new hospital here.

Craig Ortego was named interim hospital administrator last Tuesday as members of the Hospital Commission ratified the signing of an agreement with Quality Health Network, Inc., (QNH) of Lafayette, La., to take over management of the facility.

"We had a two-hour meeting this morning that was very honest and open," he said Monday afternoon. "A lot of issues were presented that will be addressed. The USDA will work with me to handle things appropriately. They are interested in going forward."

He declined to be more specific until he has had time to make a report to the Hospital Commission. The next scheduled meeting is Sept. 14.

Ortego is president and CEO of QNH. He also serves as administrator for a hospital in Fordyce, Ark.

The company specializes in management of small, rural hospitals.

The commission gave him authority to pursue the USDA loan, to review the application and to make any changes necessary to go forward in obtaining the loan.

The initial $9.5 million loan application was denied in September of 2003 by Tom Tougaw, a rural development manager in the U.S. Department of Agriculture (USDA) office in Harrison.

He said he saw a "lack of repayment ability and lack of community support."

An appeal hearing was held in Maumelle, Ark., in October and the denial was eventually overturned.

Former Hospital Administrator David Cox had been telling the commission since May he was "just waiting on signatures in Washington, D.C."

The $9,625,000 loan is to build a 22 bed hospital on Passion Play Road, adjacent to the Eureka Family Medical Center.

Approximately $3 million will be for land and clinic acquisition, architectural plans and specifications, loan fees, etc. The remaining $6 million will be for actual construction.

Cox had set up a non-profit corporation, Community Health Resources, Inc., as the loan applicant.

Last week, the commission approved the creation of a board of directors for the new Eureka Springs Hospital Foundation, a 501 (c) 3 organization.

Serving on that board will be the seven members of the commission, Bill Fort, Betty Andrews, Dr. Pamela Crockett, Dr. Jim Fain, Flo Fitzsimmons and Dr. Jack Prichard, and six additional members, Drs. Dan Bell, Greg Kresse and Vianne France, former commission member Marlene Coiner, physical therapist Tom Wheatley and local businesswoman Gayla Wolfinbarger.

The commission also approved retaining the Health Law Firm of Little Rock as legal counsel.

Fort, acting chairman, called for motions to remove Cox's name from all bank accounts and to authorize Ortego, a business office manager and the chairman of the board to sign checks.

Ortego recognized Maryann Pownall from the hospital's bookkeeping department for her recent efforts in "bailing out the accounts receivable department. We appreciate you and your hard work.

"I wouldn't feel comfortable with this hospital if it had not been for the work this lady had done," he said. "This company may not have been salvageable without her."

Fort had announced during a special meeting Aug. 5 that the commission had to pledge investment CDs to cover approximately $366,000 in hospital debt.

He said payroll taxes for the last quarter of 2003 and the first half of 2004, amounting to approximately $116,000, had not been paid. Approximately $250,000 in accounts payable had not been made and several vendors were demanding payment of overdue accounts.

A large check to the hospital had been left lying in a drawer for several months.

Pownall has been instrumental in collecting approximately $400,000 in receivables in the past month and in getting the debts in line and paid.

The entire commission expressed its thanks to her for her efforts.

Ortego said Monday the business department is being entirely reorganized and moved to second floor offices in the hospital.

"Quality (QNH) has donated seven work stations and filing cabinets so we can organize the department," he said. "We are focused on the business of the hospital right now and trying to get that operating in an efficient manner. Our problems are fixable, but they are going to take a lot of energy and effort."

He expects to announce some promotions within the business department this week.

"We want to recognize the good efforts of our employees and the valuable contributions they make to the hospital," he said.