The new owner of Fulton Medical Center is also part owner of another hospital management company recently investigated by a state official.
"I will tell you Jorge Perez is a minority owner of Hospital Partners Inc.," said J.T. Lander, vice president of EmpowerHMS, a company owned by Perez.
Lander said Perez was not involved in the investigation.
"He only visited the hospital (maybe) two times," Lander said. "We're not aware of any investigation. There was an audit done and the audit is concluded."
Perez, also a CEO of EmpowerHMS, purchased Fulton Medical Center last week. Purchase details for this private sale are not available.
Perez is listed as a vice president, treasurer and director of Hospital Partners Inc., according to the company's 2017 annual report filed Jan. 10 with the Florida Secretary of State. The president/secretary/director of that company is David L. Byrns, who was recently investigated by State Auditor Nicole Galloway.
On Aug. 9, Galloway released an audit of Putnam County Memorial Hospital - a 14-bed facility in Unionville. She said her office uncovered $90 million in inappropriate lab billings by hospital leadership and associates.
In September 2016, the Putnam County Hospital Board hired Byrns and Hospital Partners Inc., to take over management of the hospital. Lander said Byrns owns the hospital, but there is no mention of any involvement on Putnam County Memorial Hospital's website.
Galloway's news release stated a billing scheme was uncovered in which the lab services company, also owned by Byrns and Hospital Lab Partners LLC, conducted lab work across the country. Hospital Lab Partners would bill lab work through Putnam County Memorial Hospital to insurance companies using the hospital's account. In exchange, Galloway said, the hospital would receive a cut of the insurance payouts.
The hospital received more than $90 million since November 2016, passing most of the money along to Byrns' lab company and its affiliates, according to Galloway.
The release also stated: "However, during this time, the vast majority of billings were for patients who had never been to or received services from Putnam County Memorial Hospital. Instead, the hospital submits the bills for their services to the insurance companies, funneling millions of dollars through the hospital and reducing it to what is essentially a shell organization for labs across the country." Galloway also said the hospital paid out more than $10 million in lab management fees.
On Hospital Partners Inc.'s annual report, Byrns and Perez list the same address in Lighthouse Point, Florida. On Tuesday, Perez answered a question about his association with David Byrns.
"I was an investor in a company that he had," Perez said. "I lent him money for a hospital that he was managing."
Lander said the association with Putnam County hospital was the men's only connection.
"David Byrns doesn't have any involvement with any other hospital Jorge (is involved with)," Lander said.
EmpowerHMS
On Tuesday, officials from EmpowerHMS held a town hall-style meeting at Fulton City Hall. Perez said EmpowerHMS, a for-profit company, is located in Kansas City. Perez also is chair of the National Alliance of Rural Hospitals, whose president Michael P. Murtha also attended Tuesday's gathering. Other EmpowerHMS representatives in attendance included Lander and President Mike Alexander.
Lander said several times during Tuesday's meeting EmpowerHMS has never closed a hospital.
"We've never closed a hospital," he said. "We don't know how to do that."
Lander added neither Perez nor any of his companies had any association with the company HMC/CAH Consolidated Inc. when it operated and eventually closed Yadkin Valley Community Hospital in North Carolina. That hospital closed May 22, 2015, while under the management of HMC/CAH.
"Yadkinville happened before Jorge Perez had ownership in that group of companies, completely," Lander said.
Another hospital associated with Jorge Perez closed in August: Campbellton-Graceville Hospital, a 25-bed facility in Jackson County, Florida.
"Jorge did the billing for that hospital," Murtha said, adding Perez also was CEO for a short time.
On May 5, Campbellton-Graceville hospital officials advised staff they would be filing Chapter 11 bankruptcy. The hospital closed June 30.
"It's defunct now," Sheila Mader, managing editor of the Jackson County Times, said Wednesday afternoon. "It's out of business."
Murtha said there was a hearing this week determining the hospital's fate.
Rural Community Hospitals of America formerly managed I-70 Community Hospital and Clinics in Sweet Springs, according to that hospital's website. Now, EmpowerHMS runs the facility, according to Lander.
"RCHA was the management company for 10 hospitals owned at that time by a company called HMC," he said, adding he didn't know what "HMC" stands for. "Earlier this year, a company called Hospital Acquisition Corporation did a conversion on a promissory note that gave them an 80-percent ownership in the group of 10 hospitals. They called in a loan giving them the right to (convert from equity to ownership) those 10 hospitals. Jorge Perez' company EmpowerHMS purchased an interest in HAC in spring of 2017."
Hospitals managed by Rural Community Hospitals of America
Oklahoma:
Drumright Regional Hospital
Fairfax Community Hospital
Haskell County Community Hospital
Prague Community Hospital
Kansas:
Hillsboro Community Hospital
Horton Community Hospital
Oswego Community Hospital
Missouri:
I-70 Community Hospital (Sweet Springs)
Tennessee:
Lauderdale Community Hospital
North Carolina:
Washington County Hospital
Hospitals owned by HMC/CAH:
Oklahoma:
Drumright Regional Hospital
Fairfax Community Hospital
Haskell County Community Hospital
Prague Community Hospital
Selling Community Hospital
Kansas:
Hillsboro Community Hospital
Horton Community Hospital
Oswego Community Hospital
Missouri:
I-70 Community Hospital (Sweet Springs)
North Carolina:
Washington County Hospital
Yadkin Valley Community Hospital (since closed)
Tennessee:
Lauderdale Community Hospital