Allegations of fraud, stolen records swirl in legal fight over Hillsboro, Kansas, hospital

by Dan Margolies, Kansas News Service

Allegations of financial fraud and stolen hospital records have surfaced in an increasingly nasty legal battle over the fate of Hillsboro Community Hospital in Hillsboro, Kansas.

The critical access hospital, which is partly owned by a company controlled by Florida resident Jorge Perez, is resisting efforts by Perez to move its Chapter 11 bankruptcy case to North Carolina.

That’s where a bankruptcy judge recently consolidated the bankruptcy filings of seven other rural hospitals controlled by Perez and Perez-affiliated groups. The hospitals include the now-closed Oswego Community Hospital in Oswego, Kansas; Horton Community Hospital in Horton, Kansas; and I-70 Community Hospital in Sweet Springs, Missouri.

Four other hospitals in Oklahoma and Arkansas controlled by Perez-affiliated groups likewise have sought Chapter 11 protection in North Carolina.

It’s not clear why the cases were filed or consolidated in North Carolina, which has no obvious connection to any except one of the hospitals. But in a bankruptcy court filing, Hillsboro Community Hospital says the attempt to move its case there is an unlawful attempt to circumvent court orders in Kansas.

In January, Bank of Hays foreclosed on the hospital after it defaulted on a nearly $10 million loan. At the bank’s request, the court appointed Cohesive Healthcare Management + Consulting, LLC of Shawnee, Oklahoma, as a receiver to run the hospital. Cohesive, in turn, placed the hospital, which remains open, in voluntary bankruptcy on March 13.

In a typical Chapter 11 case, management would continue to run the business affairs of the hospital. But Bank of Hays moved for the appointment of a Chapter 11 trustee instead, stating it had learned that the owners of the hospital “are currently under criminal investigation by the United States Department of Justice.”

In a court filing, the bank said it believed the investigation related to the hospital’s owners and their “management of healthcare facilities nationwide.”

Brent King, a lawyer who was appointed as the Chapter 11 trustee, told KCUR two weeks ago that he was unable to provide more details about the federal investigation other than that it likely concerns billing irregularities. He said his law firm, which is conducting a forensic investigation of a hospital in Graceville, Florida, once controlled by Perez, had uncovered “massive” billing irregularities there.

“It went from $13 million a year in billings to $130 million a year in billings,” King said, referring to the now-closed Campbellton-Graceville Hospital. “There’s a lot of money passing through these hospitals and we believe there’s an attempt to defraud insurance companies.”

The Kansas attorney general’s office says it’s also investigating at least one of Perez’s Kansas hospitals, Horton Community Hospital, although it has declined to specify the nature of its probe.

Perez could not be reached for comment. Mike Murtha, president of the National Alliance of Rural Hospitals, a group once associated with Perez, said Perez’s hospitals had effectively ceased being members of the alliance.

“I don’t make decisions for him. I’m an advocate for the perpetuity of rural hospitals,” Murtha said.

In pushing back against Perez’s attempt to move Hillsboro’s bankruptcy case to North Carolina, King states in a recent court filing that Perez and his affiliated companies used Hillsboro and other hospitals they controlled to carry out an illegal billing scheme.

The filing cites allegations in a lawsuit filed by a Mission Hills, Kansas, couple who invested in the hospitals and claim Perez tried to cut them out of their rightful ownership share.

Perez and others, King says in the filing, “orchestrated and controlled the laboratory information system … of the Hillsboro Hospital to perpetrate a fraudulent scheme related to Medicare and Medicaid billing.” King also alleges that one or more members of the Perez Ownership group had stolen records from Hillsboro Hospital.

King could not immediately be reached for comment.

In the filing, King says he believes iHealthcare Inc., a Miami-based company associated with Perez, possesses “essential billing, patient and employee records which are property” of the hospital.

In January, iHealthcare entered into agreements with Perez to provide hospital management services to his hospitals. In exchange, Perez was eligible for about $2.5 million in “success fees” if certain conditions were met.

Noel Mijares, the president and CEO of iHealthcare, did not immediately return a call seeking comment.

Despite the alleged theft of the hospital’s records, King says that Cohesive, with the cooperation of the Bank of Hays and the city of Hillsboro, “has made great strides” in stabilizing the hospital’s operations.

Cohesive aims to take steps “to ensure quality patient care with the aim to sell Hillsboro Hospital as an operating critical access hospital in order to maximize its value both financially to its creditors and the needs of its patients and community it serves,” King states.

Although the hospital is licensed for 15 beds, the document filed by King says it has eight licensed hospital beds and generates estimated annual revenue of $8.8 million. The hospital has about 40 fulltime employees and about 30 part-time employees, including two doctors, two physician assistants and two nurse practitioners, according to King.

Hillsboro, with a population of about 3,000, is about 165 miles southwest of Kansas City. As a critical access hospital, Hillsboro Community Hospital is eligible for cost-based reimbursement from Medicare. Even so, the hospital lost $1.25 million in the fiscal year that ended in September 2017, according to American Hospital Directory records.

This story was updated to include comments from Mike Murtha, president of the National Alliance of rural hospitals.
Dan Margolies is a senior reporter and editor at KCUR. You can reach him on Twitter @DanMargolies. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to kcur.org.

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Wind advisory in effect today, with high of 82

A wind advisory is in effect Wednesday in Wyandotte County. (National Weather Service graphic)

A wind advisory has been issued for Wyandotte County from 10 a.m. to 7 p.m. Wednesday, according to the National Weather Service.

South winds of 25 to 35 mph are possible, with gusts to 50 mph, the weather service said. Today’s high will be about 82.

Travel along east to west highways such as I-70 will be very difficult, especially for high-profile vehicles and trailers, according to the weather service. The strong limbs also could cause tree limbs to break. Any unsecured lightweight items could become flying objects.

Residents are advised to use extra caution today when driving, according to the weather service.

Also in today’s forecast is a thunderstorm that is expected to miss Wyandotte County, but may affect areas to the north.

Because of the high winds, fire danger also will be high day, although with the relative humidity level a warning has not been issued. Burning should be completely avoided today, according to the weather service, as anything that does ignite will quickly burn out of control.

Flooding concerns will return to the Kansas City area by the end of next week, the weather service predicted. A flood warning has been issued for 9 a.m. April 17 for the Missouri River at Parkville, affecting Wyandotte, Leavenworth and Platte counties, according to the weather service.

The National Weather Service is forecasting significant snow and rain over the Missouri River basin area in South Dakota later this week, that may affect the river here next week.

A cold front will be forced through the area late tonight into early Thursday morning, according to the weather service. It appears this event now will remain dry, and it will usher in much cooler temperatures, with temperatures falling through the day.

Highs will occur in the 50s in the morning on Thursday to the west and in the 60s to the east.

Some areas may see a few snowflakes early Friday morning, however, it currently looks unlikely here with the storm system moving to the north. Highs on Friday will be in the upper 40s to mid-50s, while Saturday morning lows could be in the low to mid-30s. Sensitive vegetation may need to be protected, the weather service said.

Today, expect partly sunny skies, with a high near 82. A south wind of 13 to 22 mph will gust as high as 43 mph, the weather service said.

Tonight, the low will be around 52 with partly cloudy skies, according to the weather service. A south wind of 16 to 23 mph may gust as high as 33 mph.

Thursday, it will be partly sunny, with temperatures falling to around 50 by 5 p.m., the weather service said. A southwest wind of 17 to 23 mph will gust as high as 36 mph.

Friday, it will be mostly sunny with a high near 53, the weather service said. A west wind of 16 mph may gust as high as 26 mph.

Friday night, it will be partly cloudy with a low of 35, according to the weather service.

Saturday, it will be mostly sunny with a high near 54, the weather service said.

Saturday night, the low will be around 38 with a 60 percent chance of showers after 1 a.m., according to the weather service.

Sunday, there is a 30 percent chance of showers before 1 p.m., with a high near 55, the weather service said.

Sunday night, it will be partly cloudy, with a low of 41, according to the weather service.

Monday, it will be sunny with a high near 68, the weather service said.

Monday night, it will be partly cloudy with a low of 54, according to the weather service.

Tuesday, it will be partly sunny, with a high near 71, the weather service said.

A storm system on Wednesday night could miss Wyandotte County. (National Weather Service graphic)
The National Weather Service has issued a flood warning for April 17, a week from now, for the Missouri River at Parkville, which applies to Wyandotte and Platte counties. (National Weather Service – USGS graphic)

KCKCC’s Collier, Young named to NJCAA DII All-America teams

Nija Collier (KCKCC photo)
Kisi Young (KCKCC photo)

by Alan Hoskins, KCKCC

Add two All-Americans to those two NJCAA DII championships at Kansas City Kansas Community College.

Nija Collier was named today to the first All-America team; Kisi Young to the second team announced by the NJCAA. It is the first time KCKCC has had two All-Americans the same season.

Both Collier and Young were also members of the all-tournament team at the national tourney and were both first team All-Jayhawk and All-Region selections.

“Obviously this is good for our program and recruiting but first and foremost, I am so proud of these two girls,” KCKCC coach Joe McKinstry said. “They gave me maximum effort at all times with how hard they played and competed. It’s why they received the recognition they have and so deserved.”

A 6-foot sophomore from the Detroit suburb of Roseville, Michigan, Collier is the sixth Lady Blue Devil to be named a first team All-American. She joins Aneta Kausaite, Jurgita Kausaite, Stephanie Brown, Cierra Gaines and Cheyenne North on KCKCC’s list of first-team selections.

Being named to the All-America first team caps one of the best seasons in NJCAA DII history for Collier. The MVP of the NJCAA national tournament, Collier was also the KJCCC Player of the Year, a two-time NJCAA National Player of the Week and an unparalled six-time KJCCC Player of the Week.

The Blue Devil leader in scoring (17.3), rebounding (9.7) and blocked shots (1.5), Collier was the only player to finish in the Top Five in all major statistical categories in the Jayhawk Conference, finishing second in scoring, rebounding and field goal percentage (.585) and third in 3-point field goal percentage (.400). Although a starter in only five games, Collier finished seventh nationally in offensive rebounds (165), 16th in total rebounds (349) and 13th in shooting percentage. Her 349 rebounds are fourth most in KCKCC history as are her 20 double-doubles.

“Very talented with a big motor that sets her apart from other players,” McKinstry says of Collier. “At 6-foot, she has long arms, fantastic athleticism and great jumping ability. Her second and third jumps going after a rebound are as good as her first. She’s like a pogo stick. Very skilled, she can shoot with both her right and left hand and is phenomenal from the perimeter and free-throw line.”

Young, a 5-9 sophomore from Magnolia, Arkansas, re-wrote the KCKCC record book for field goal percentage. Second on the all-time list when she shot 60.7 percent as a freshman, Young’s .639 shooting percentage this year is the best ever.

While undersized at 5-9, Young was third in rebounding in the Jayhawk at 8.7 per game and her 571 career rebounds are fifth on the all-time list. KCKCC’s leader in both scoring (14.4) and rebounding (8.1) as a freshman, Young averaged 10.6 points and 2.1 assists this season.

“Kisi is someone I would describe as position-less,” McKinstry said. “She’s just a basketball player who does a lot of things well and is very unselfish. Undersized at about 5-9, she plays like she’s 6-foot. She’s able to play around the basket against bigger players than she is but on the flip side, she can go out and guard smaller players on the perimeter because of her quickness, length and athleticism. Offensively, she can go from one end of the floor to the other quicker than just about anyone she faces and her shooting percentage speaks for itself.”

Two other Jayhawk Conference players were named to All-America teams. Highland’s Stefania Chiziane, the conference’s leading scorer at 18.1, was named to the first team and teammate Janiya Davis to the third team.