Report raises concerns over lay-offs, cash flow at Cottage clinic; records issues resolved

GALESBURG — A new report shows that Galesburg Cottage Clinic laid off five medical staff on April 29 without prior notice to patients, staff or the ombudsman assigned to the clinic’s bankruptcy proceedings.

The ombudsman Deborah L. Fish, a court-appointed official tasked with assisting the resolution of complaints against businesses or public entities, outlined her concerns in a report that examined the status of patient care at the clinic from March 24 to May 12.

Fish wrote that the clinic’s standard of communication, remaining cash flow and the clinic's plan for after its lease ends next month are all concerns that need to continue to be monitored.

On Dec. 27, 2021, Galesburg Cottage Hospital was informed it would lose its Medicare provider agreement, which accounted for 72% of its revenue, after the hospital was determined deficient of various codes from the U.S Department of Health and Human Service's Centers for Medicare and Medicaid Services.

The hospital closed on Jan. 8., 2021. CEO and owner of The Knox Clinic Corporation, Dr. Sanjay Sharma, has since filed for bankruptcy regarding the clinic in the eastern district of Michigan — the location of which was contested by an attorney representing various former providers at the clinic.

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Downsizing without notifying patients

Fish wrote that the five employees who were terminated included the remainder of the medical staff of the Women’s Health Clinic. Those terminated included a physician assistant, two nurses, a nurse practitioner and an assistant in the Family Practice portion of the clinic.

The Galesburg Cottage Clinic now employs 24 people.

Fish noted that the physician assistant and family medicine nurse practitioner had patients scheduled for the following week and coming months. The scheduled patients were notified late Friday and were left to reschedule with the Family Practice clinic or seek services elsewhere.

The ombudsman noted that in an earlier report she had requested communication improve from the Knox Clinic Corporation. But Fish wrote that communication from the clinic remains an area of concern, as it has been “reactive” to events instead of “proactive.”

“I have repeatedly advised the debtor that the staff and patients must be made aware of the changes otherwise the rumor mills start and staff will quit and patients will go elsewhere,” Fish wrote. “We are seeking a stable environment for patients and staff through the confirmation and plan process.”

Fish wrote she worked with the Knox Clinic Corporation to make certain it provides upcoming patients with as much notice and information as possible, including personal calls to all scheduled patients in the upcoming two weeks, automated calls to patients with scheduled appointments and letters to all patients of the practice advising them of the changes and how to reschedule their appointments or obtain their medical records.

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Ombudsman: Cash flow needs to be monitored

A March 2022 operating report shows that the Knox Clinic Corporation lost $104,284 that month and has over $3 million in unpaid bills. This is despite the corporation projecting to receive $1.8 million in income during the first 180 days of its bankruptcy case.

The ombudsman noted that the corporation’s cash flow needs to continue to be monitored because of the clinic’s continuous downsizing.

“It is especially important to examine the downsizing effect on cash-flow so as to not be caught off guard and not be able to make payroll or purchase necessary supplies,” Fish wrote. “Either of these scenarios would have an immediate adverse effect on the quality of patient care.”

Fish also noted that the Knox Clinic Corporation has yet to hire a third party collection agency to collect private pay and co-pay receivables, which would increase the corporation’s cash flow. The March 2022 operating report shows that the corporation is owed $436,877.

The ombudsman wrote that the corporation’s plan relies on these collections and “it is imperative that the hiring process is completed soon to stabilize and provide cash flow for play payments.”

Clinic exploring new location; lease expires June 30

Fish noted that The Knox Clinic Corporation’s lease on its only remaining medical practice property ends on June 30, 2022. OSF Healthcare System bought the property at 834 N. Seminary in April.

Fish wrote that the corporation is “exploring a new location for the clinic that is substantially smaller and more cost effective” but that she has also requested the corporation create a plan to notify patients of the new location or to assist patients obtain tele-health services in the event the corporation does not continue in a physical office.

Fish wrote “there are many concerns the debtor needs to address in the Transition Plan,” including pending lab work, how the debtor will notify patients, what the call center will say, what the messages on the phone lines will say, what the Debtor will do with paper medical records, how patients will be scheduled appropriately and who will report results.

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Medical records backlog resolved

Fish wrote she was pleased to report that as of May 12, the number of unfulfilled medical records requests was down to two. This number is down from over 1,500 unfulfilled requests

Fish wrote that the corporation “took this issue seriously” and assigned additional staff to complete the outstanding requests.

At the end of the report, the ombudsman affirmed that “while there are areas of concern, the debtor has taken action to address issues.”

Fish wrote that the corporation will continue to be closely monitored but that patient care and the medical records department is now operating at the same manner or better than it did before the beginning of the bankruptcy case.

This article originally appeared on Galesburg Register-Mail: Concerns raised over lay-offs, cash flow at Cottage clinic, Galesburg