A local psychiatric hospital is in trouble, as its parent company heads toward bankruptcy.
Safe Haven Healthcare is continuing to operate its Boise hospital and three assisted-living and skilled-nursing facilities in Bellevue and Wendell. But some employees have quit, and those who remain are relying on a judge’s orders to get their paychecks.
The CEO and owner, Scott Burpee, and his attorney blame Safe Haven Healthcare’s financial crisis on a fire last fall that gutted its Pocatello hospital. Burpee also suggested in court that a failed buyout by an employee contributed to the bankruptcy. The company got buried under an avalanche of debt, they said.
The company filed for bankruptcy last month.
“I would say it stems from the fire in Pocatello,” said Safe Haven’s bankruptcy attorney, Matthew Christensen of Angstman Johnson in Boise. “The hospital in Pocatello was probably 50 or 60 percent of the total income to the companies at the time.”
That hospital faced other financial problems in the two years leading up to the fire. An inspection turned up severe problems that contributed to patient deaths, and after that, the Centers for Medicare and Medicaid Services fined the Pocatello hospital about $84,000 in April 2016.
The agency also withheld Medicare and Medicaid payments for 70 days that year, and again for 93 days in 2017.
A fire, patient deaths, cascading debts
Safe Haven told the court it owes more than $17 million and has just $10 million in assets to its name, mostly in the form of real estate. The debts listed on its bankruptcy filing include nearly $900,000 in overpayments to Medicaid that the state was recouping, and about $7 million in lease payments that are in dispute.
It also lists debts to some East Coast lending firms that specialize in giving credit to businesses on short notice. Some of those loans were made earlier this year. One of the firms’ websites touts its willingness to “fund when others won’t,” approving “more small businesses, regardless of collateral or credit.”
Burpee recently told a bankruptcy judge that his business has a hard time finding employees. He said his facilities can be understaffed due to long rural commutes, and that he pays nurses $35 an hour and nursing assistants $15 an hour.
One of the nurses he employs now lives in a car behind the hospital, he told the judge.
Understaffing contributed to the government sanctions the Pocatello facility faced.
An inspection in 2015 turned up numerous problems, including a lack of oversight by registered nurses that “resulted in the deaths of three patients who were hospitalized at the facility.” The hospital did not investigate what happened leading up to one patient’s death, inspectors said.
“We had to keep the hospital open with no revenue for 20 months” due to the licensing issues followed by the fire, Burpee told the court. “So we didn’t pay our payroll taxes for three quarters.”
Burpee thought Safe Haven would be able to rebuild the Pocatello hospital when insurance paid out, but that has taken “a long time,” Christensen said. “When it became clear the proceeds weren’t coming quick enough ... it was right before Thanksgiving,” he said. “They didn’t want to fire everybody.”
Fire investigators determined the fire began in the attic and ruled out any “malicious or intentional” cause.
Safe Haven owed the IRS more than $1 million in payroll taxes, Burpee said. But it managed to settle and/or pay that tax debt down to about $140,000 by August.
Will this make it even harder to get mental health care?
Safe Haven’s Boise hospital is at Northview and Milwaukee streets. It is one of only two Idaho psychiatric hospitals — the other is Intermountain Hospital in Boise — not owned and operated by the state or a larger, multipurpose hospital like St. Luke’s.
Safe Haven in Boise was first certified by Medicare to take patients in 1995. It can accommodate up to 16 patients at a time and logs hundreds of discharges per year, according to federal records. Its total patient revenue in 2016, the most recent year for which federal records are available, was $4.3 million.
The hospital remains open, and psychiatrists who care for patients there have agreed to keep working at Safe Haven, according to Christensen.
Christensen said he doesn’t believe Safe Haven in Boise will have to shut down.
“I think they’re going to either reorganize the debts to keep it open [or] they’re looking right now at a potential sale of the Treasure Valley facility — either one of which would keep the doors open,” he said. “I think within the next month, we’ll know if there will be a sale.”
Christensen said there are “two or three parties who have expressed interest, but none of them have made an offer.” He declined to give any details about who might buy the hospital.
If the troubles facing Safe Haven put a strain on resources for Idahoans with severe mental illness, a newcomer may soon help pick up the slack — and more. A company based in Tennessee plans to open a new 72-bed psychiatric hospital in Meridian early next year. It will serve adult patients in the former Vibra Hospital building at 2131 S. Bonito Way in Meridian.
Audrey Dutton is reporting on Idaho’s rural mental health care as part of a yearlong Reporting Fellowship on Health Care Performance, sponsored by the Association of Health Care Journalists and supported by the Commonwealth Fund. Contact her at 208-377-6448, adutton@idahostatesman.com or on Twitter at @audreydutton.
This story was originally published September 25, 2018 6:36 AM.