Gainesville Hospital District board members recently voted to sell North Texas Medical Center’s home health operations to a firm that has taken over management of the operations within the last few weeks.
By a unanimous 8-0-1 vote, the board approved a resolution authorizing the home health agency’s sale for $500,000 after a period of 20 months of management in lieu of payment. Board member Derrell Comer was absent for the vote at the board’s Nov. 25 regular meeting.
A summary of the sale terms provided to board members shows the management company will manage the agency for 20 months “for a fee of $25,000 per month.”
“The management company will not be paid the fee but will receive a credit in such amount which will be applied to the purchase price,” the summary of terms states. “The purchase price shall be $500,000.”
If the management company decides not to purchase NTMC’s home health agency after all, it won’t be paid for its management services during the 20-month period, according to the summary of terms.
NTMC is leased to and operated by Gainesville Community Hospital through an agreement between Plano-based Community Hospital Corp. and the Gainesville Hospital District. Jim Kendrick, president and CEO of CHC, said in response to a board member question that Tyler-based Choice Rehab was the company agreeing to buy the hospital’s home health agency.
The website for Choice Rehab’s home health brand, Choice Homecare, shows the firm services 100 Texas counties including Cooke County.
Selling NTMC’s home health agency removes risk to the hospital’s bottom line, Kendrick explained.
“The home health space is highly regulated and it’s highly complex,” he said. “Reimbursement for it is more and more challenging, with significant changes in this year’s laws as well. So what we did was we looked at what we could do to preserve that for the community, but also not have it be there as a risk for us as an operating entity.”
CHC never intended to operate the hospital’s home health agency long term, Kendrick said, but couldn’t spin it off when taking on NTMC’s operations because the home health agency was in the middle of an audit at the time. Since its ownership changed along with the hospital to the joint venture between the district and CHC about a year ago, federal regulations prevent the hospital from transferring its ownership to someone else for at least a couple more years, Kendrick said.
“But we don’t want the risk, the obligation, the components associated with running a home health to impact our books or impact our risk on our books,” Kendrick said. “That agency has agreed to take on all of the risk from the time the transaction closes, and has also agreed to guarantee to continue to operate the home health [agency] for at least five years” after the sale is completed.
“We’re getting out of the home health business. We’re putting it into the hands of someone who does this well, and has helped us in this market doing well, and has committed to continue to operate for at least five years, and is taking away any potential future risk from the time that we move forward,” Kendrick added. “So if you approve this tonight, from this point forward there won’t be any risk associated with home health regulations that would impact the hospital.”
NTMC’s home health services represent an “alternative to hospitalization or a skilled nursing facility for those who require continuing medical assistance following a hospital stay or surgery, or professional management of a newly diagnosed or chronic condition,” according to the hospital’s website.