For-profit entity resumes control of Ozarks Community Hospital

Effective July 1, the physician-owned, for-profit corporation previously doing business as Doctors Hospital of Springfield, resumed operational control of OCH.

The change in plans comes after multiple financial pressures, including the June 25 filing of a $1.2 million federal tax lien against OCH, according to Director of Communications Carrie Richardson.

It was announced Jan. 1 that DHS would transfer the health care system to Ozarks Community Hospital Inc., a not-for-profit corporation. The transfer of ownership was to take place when OCH became a qualified tax-exempt charitable organization. During the interim, OCH was managing the health care system on behalf of DHS under a management agreement.

According to Richardson, however, OCH hasn’t yet received 501(c)3 status from the Internal Revenue Service, and the nonprofit OCH Inc. couldn’t wait the additional several months the process was expected to take.

“We basically ran out of time and money to continue that process,” Richardson said. “As a 501(c)3, you can get all the benefits of being a nonprofit, which means a tax benefit, belonging to nonprofit buying groups, doing grant writing, fundraising. … We were operating as a nonprofit and not receiving any of those benefits.”

In addition to the tax lien, other economic challenges for OCH were an increase in the percentage of uninsured patients and unexpected delays in obtaining a Medicare provider number for the hospital reopened in April by OCH in Gravette, Ark.

A Medicare provider number is required in order to process claims for patient services with nearly all third-party payers, according to an OCH release, and the for-profit DHS corporation is better equipped to sustain operations as the health system waits for revenue from the Gravette hospital.

As a result of those financial pressures, Richardson said OCH has filed for Chapter 11 bankruptcy; according to a news release, this will allow OCH to wrap up its business affairs and provide a public forum for creditors and other interested parties.

DHS has agreed to take responsibility for any debts incurred in the interim, and OCH is transferring contract rights to DHS. All OCH employees became DHS employees July 1.

Doctors Hospital filed for Chapter 11 bankruptcy reorganization in 2002.

At this point, Richardson said there are no plans to restart the process of obtaining nonprofit status for the hospital.

“We intend to reinvent ourselves as a for-profit hospital,” she said. The for-profit group will, however, continue to operate as Ozarks Community Hospital, the name it began using Jan. 1.