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Although Calais Regional Hospital may have followed in the footsteps of Penobscot Valley Hospital by seeking Chapter 11 bankruptcy protection this week, its reported debts are greater than the Lincoln hospital’s.
Calais Regional Hospital now has about $25 million in debts, according to Vice President of Community Relations DeeDee Travis. In court filings this week, it has also listed 1,891 creditors, with the U.S. Department of Agriculture, financial institutions, and the Maine Department of Health and Human Services topping the list.
That’s more than twice as much debt as Penobscot Valley Hospital in Lincoln reported when it sought the same type of bankruptcy protection early in 2019 — up to $10 million in debts and as many as 1,032 creditors.
In its court filings this week, Calais Regional Hospital broke down the specific amounts that some of its largest creditors have claimed, as well as the amounts public health insurance programs have reportedly overpaid the hospital:
— U.S. Department of Agriculture: $10.68 million for unpaid loans.
— Katahdin Trust Company: $3.6 million for unpaid loans.
— First National Bank: $1.5 million for an unpaid line-of-credit and promissory note.
— The Maine Department of Health and Human Services: $1.1 million that it owes to the state’s Medicaid program for overpayments it apparently made to the hospital in 2018.
The filings also show that the hospital owed $3.2 million to many of its commercial vendors as of Aug. 29.
Vendors included a Texas-based medical staffing firm, CompHealth, that provides temporary workers to hospitals, and a Tennessee-based firm, Quorum Health Resources, that managed the hospital under contract until last year. Calais Regional Hospital owes about $170,000 to CompHealth and more than $440,000 to Quorum, according to the Chapter 11 court filings.
In those filings, Calais Regional Hospital CEO Rod Boula said that bankruptcy protection was necessary to help it stay open and overcome its cash shortfalls by restructuring its balance sheet and changing its operations. It also hopes that bankruptcy protection will make it easier it to negotiate with its large group of creditors.
“We expect a prompt and efficient reorganization, and to emerge from Chapter 11 restructuring a stronger hospital,” Boula said Tuesday.
The hospital has lost money every year since 2007, according to its annual tax filings, though officials said Tuesday the size of the hospital’s losses shrank to $574,600 last year from $2.64 million in 2014.
In 2017, the most recent year for which hospital tax data are available, Calais Regional Hospital took in $34.2 million in revenue and had $36.3 million in expenses, resulting in a $2.2 million loss. By comparison, Penobscot Valley Hospital took in $20.6 million that year and had $22.3 million in expenses, resulting in a $1.7 million loss.
Calais Regional is also in the midst of contract negotiations with its nurses that have continued for nearly a year. A representative for the nurses’ union on Tuesday said the bankruptcy filing’s timing was no coincidence, coming 11 days after nurses voted to put the option of a strike on the table.
The hospital’s board of directors approved the Chapter 11 filing at a July 30 meeting, according to the court filings.
The hospital is expected to appear in U.S. Bankruptcy Court in Bangor soon, but a specific court date was not set by Tuesday.