Marshall County’s only ER to close this month after mix-up with federal government

As an internal medicine doctor, Dr. Kenneth Williams knows the importance of continuity of care. That’s one of several reasons why the impending closure of the Holly Springs hospital’s emergency room – and its precarious financial position as a whole – pains him so.

After receiving special designation from the Centers for Medicare and Medicaid Services to operate the hospital as an emergency room-only and close its inpatient services, the federal government pulled the status less than a year later. Now, the hospital must close its ER and face the expensive and daunting process of reopening and becoming relicensed as an acute care hospital. 

“At the end of the day, who suffers” from the emergency room’s closure and reduced services at the hospital? “My patients,” said Williams, who is co-owner and chief executive officer of Alliance Healthcare System in Holly Springs, a town of just under 7,000 residents about 50 miles from Memphis. 

The news of the ER’s closure comes less than three months after state lawmakers approved a $350 million deal to bring a battery plant to Marshall County that’s expected to create over 2,000 jobs over the next few years. But the county’s only hospital is struggling mightily to stay open, placing continuity of care out of reach for some people in the community. 

Spokespeople from PACCAR and Daimler Truck, two of the companies involved in the battery plant, declined to comment for the story. Representatives from Cummins did not respond to Mississippi Today’s request for comment. 

Recently, one of Williams’ patients he sees at the clinic had an emergency and was taken to an ER outside Marshall County. Williams knew the woman had a severe UTI and was allergic to an antibiotic called cephalosporin. 

But the other ER didn’t have her history, and she was given the drug, he said.

“She had a severe reaction and had to go to rehab. She almost died,” he said. “Something that simple means something. If she had come to our facility, it’s already in our records that she can’t take cephalosporin.”

Rural hospitals in Mississippi are struggling to stay afloat. One report puts 29% of the state’s rural hospitals at immediate risk of closure, and 62% are losing money on patient services. 

Research has found that Medicaid expansion has a positive impact on hospitals, including via a reduction in uncompensated care. And while expansion is not a silver bullet, median operating margins in rural hospitals were higher in expansion states than non-expansion states, according to KFF. 

Williams said Alliance incurs between $800,000 to $1 million a year in uncompensated care, or care the hospital provides for which no payment was received – often as a result of patients who are uninsured.

Williams said he’s “amazed” lawmakers are finally discussing the possibility, but damage has already been done to his hospital and the state as a whole.

“This state could be in so much better shape health care wise,” he said, noting the decision not to expand has been a “disservice” to communities like his.

Tim Moore, the former longtime head of the Mississippi Hospital Association, said expanding Medicaid would put significantly more money towards hospitals’ bottom line through a reduction in uncompensated care, and there’s “not a legitimate argument” against full expansion.

“Even if your concern is not for that individual that needs health care, you should have some concern for your local hospital that’s trying to take care of folks,” said Moore. 

READ MORE: Negotiations begin: Where do House, Senate, governor stand on Medicaid expansion? Is there room for compromise?

Without the boost from Medicaid expansion, the hospital applied for a new federal designation that aims to keep rural hospitals open – though it requires the discontinuation of inpatient services.

Last year, the financially struggling Alliance received rural emergency hospital status, which allowed it to operate as an emergency room-only facility and receive monthly payments and increased reimbursements from Medicare. But on April 1, after Alliance HealthCare System had already laid off staff and shut down its inpatient services to comply with the requirements of the new designation, the Centers for Medicare and Medicaid Services rescinded the designation.

Hospitals must either be a critical access hospital or a hospital with 50 or fewer beds in a rural county as of Dec. 27, 2020, to be considered for rural emergency status. The Centers for Medicare and Medicaid Services eventually determined Alliance is too close to Memphis, Williams and State Health Officer Dan Edney said.

The federal agency first inadvertently granted the designation, according to a letter it sent Williams, then claimed the hospital failed to reapply for rural status by the deadline given. 

But Williams and the hospital’s counsel Quentin Whitwell said there was no formal reapplication process that they could determine despite back-and-forth communications with agency officials over four months.

READ MORE: Under a new program, rural hospitals could get more money – but they have to end inpatient care

Williams said the federal government’s actions, in combination with the state’s refusal to expand Medicaid, has done “irreparable harm” to the hospital. 

Now, after closing two of its floors, the hospital has to start the long process of again becoming licensed as an acute care hospital, which includes major building repairs. 

“We’re spending a ton of money that we don’t have … just to get our old designation back,” Williams said.

And it notified the state Department of Health it will close its emergency department – which Williams says costs around $1 million a year just to staff with one around-the-clock physician – beginning April 15.

Mississippi Today’s Eric Shelton contributed to this story.