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Going to the Auction Block: Bankrupt Natchez Hospital to be Sold Next Week

By John Mott Coffey, with News Mississippi affiliate WQNZ

NATCHEZ, Miss.–Adams County residents should finally know for certain next week that the hospital they’ve owned since 1960 will be sold to the largest hospital chain in the country.

Bidders interested in buying Natchez Regional Medical Center have a Monday deadline to try topping the $18 million offered by Community Health Systems for the county-owned hospital.

However, no other prospect is expected to come forward in the auction set for next Thursday.

“No one else has submitted a bid or inquired about submitting a bid,” said hospital attorney Walter Brown.

The Adams County Board of Supervisors in July approved a purchase agreement with CHS expecting no other offer would likely be made for Natchez Regional. CHS also owns Natchez Community Hospital.

State law requires an auction be held to sell a public hospital, but the county board and CHS were allowed to negotiate in advance on the deal they signed in July. It’s binding if not bested by another bidder. Other hospital operators wanting to place a bid must provide proof by Monday that they’re qualified.

“It is doubtful anyone is going to in that no one has asked to be considered, and there would be a great deal of diligence to be performed before anyone would invest in such a sale without thoroughly reviewing the hospital’s service area and finances,” Brown said.

CHS – after thoroughly vetting the hospital and its market – agreed to pay Adams County $10 million for Natchez Regional and another $8 million up front for local property taxes due to the county and city for the next 17 years. The revenues will help pay some of the bankrupt hospital’s debts, which totaled more than $20 million in March.

The county board is selling NRMC to CHS with the stated goal of  the company using its vast financial resources to upgrade the area’s health-care services, recruit more medical doctors and eventually build a new hospital on the NRMC site.

If all goes as planned, the sale will be completed Oct. 1 to make CHS the owner of both Natchez hospitals.

The Tennessee-based company bought the private Natchez Community Hospital in January as part of a megadeal with Health Management Associates to buy its 71 hospitals.

CHS executives have declined to publicly discuss their plans for the two Natchez hospitals in a community many people believe can only sustain one. The two facilities combined employ about 600 people and are licensed for 280 beds.

The 179-bed NRMC filed for bankruptcy in March as it drowns in debts it can’t fully pay. Its financial liabilities then totaled $20.8 million, according to court documents.

The hospital sale is contingent on being approved by U.S. Bankruptcy Judge Neil Olack as he oversees the complex process of settling NRMC’s debts.

“We don’t foresee any more problems,” said county board attorney Scott Slover.  “Of course, we’ve felt that way before and problems have arisen. But we’ve been able to answer them and get through them.”

The Adams County Board of Supervisors and NRMC Board of Trustees have been seeking a buyer for the financially ailing hospital since they agreed May 2013 to put it up for sale.

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