Toole County Commissioners to discuss RFPs from Benefis and Kalispell Regional on June 11

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The proposals from Kalispell Regional Healthcare and Benefis Health System are available to the public and are located at the Toole County Commissioners’ office at the Courthouse. The Toole County Commissioners will meet on Thursday, June 11, at 10 a.m., to discuss each proposal more at length and make a decision. The public is invited to attend.

 “One company offered more money but only wanted the hospital, the other company wants all of Marias Medical Center, Marias Care Center, the Brittain House and the Heritage Center as a package deal with less money,” said Toole County Commissioner Joe Pehan. “So it comes down to who will be the best healthcare package for the community.”

The proposals submitted by each are very detailed and are available to the public to review during regular business hours.

“Our idea is what is best for the community,” said Commissioner Mary Ann Harwood. “Not necessarily the highest bid. This is not the ‘normal’ bid process where you are looking for the most money, but at what each is offering and what would be best for the community.”

Here is a general rundown of what each proposal offers.

Benefis Health System

Benefis is offering a $3.7 million acquisition bid and is prepared to invest $4.0 million in upgrades to the facilities over the next four years.

Benefis critical access hospital subsidiary would create “Newco,” a new Montana non-profit corporation, which would purchase from Toole County, free and clear of any debt, liens, mortgages, or other encumbrances, except for those that are typically permitted (e.g., easements for utilities), Marias Medical Center (MMC) and Marias Care Center.

With respect to Marias Care Center, the County will terminate the lease agreement with EmPres on or before the closing and Newco will not assume the County’s interest in the lease agreement or any liability regarding the lease agreement.

Benefis would not purchase the Heritage Center or Brittan House or the cash and cash equivalents and accounts receivable of MMC or the Care Center.

Newco will not assume or agree to pay, perform or discharge any liabilities of the County related to the purchased assets, including without limitation the defined benefit retirement plan, the County will retain all such liabilities.

Newco would have a board of directors comprised of seven voting members, one commissioner selected by the Toole County Commission, three residents of Toole County selected by Benefis, the Chief Executive Officer of Benefis (or his/her designee), one senior executive of Benefis selected by the Benefis CEO and the president of Newco. Resident directors would serve staggered, three-year terms.

Benefis will continue to provide educational programs for all employees of the facility and participate in activities designed and carried on to promote general health and welfare of the community. The Toole County Health Foundation will continue to support MMC after the closing of the transaction.

Newco will continue the use of the name “Marias Medical Center” but will reserve the right to use “Benefis” or “Benefis Health System” in the name. At any time after closing Newco will have the right to consolidate MMC and Marias Care Center into a single, 25-bed critical access hospital within the existing MMC and Care Center facility. Benefis will cause Newco to maintain the 25-bed facility for a period of not less than seven years after closing.

Benefis/Newco would continue to offer the same services currently provided, the commitment to maintaining essential services would be subject to satisfaction of all of the hospital conditions during the seven-year period, no significant decrease in patient volumes and no failure of any essential services to generate sufficient net revenue to cover its direct costs for a period of 24 consecutive months.

Newco would also offer employment at salaries equal to the salaries at the closing date to all employees of MMC and Marias Care Center who are actively employed and in good standing on the date of closing, so long as such employees pass Benefis’ current employment eligibility screenings, including, without limitations, tests for illegal substances and background checks. As a controlled subsidiary of Benefis, Newco will provide its employees with Benefis’ health, welfare and retirement benefits and plans.

Kalispell Regional Health

Kalispell Regional Health’s bid involves purchasing all the facilities- MMC, Marias Care Center, the Brittan House and the Heritage Center.

Kalispell Regional would establish a new 501(c) (3) Critical Access Hospital  New Corporation (CAH Newco) to acquire the assets of Marias Medical Center with Newco assuming any debt associated with the Series 2016 Revenue Bonds and defease bonds, which are anticipated to have a principal balance of $1.515 million as of June 30, 2020.

Newco will assume notes payable and capital leases for $1.05 million, transfer MRI to the Newco balance sheet for $1.2 million, upgrade CAH to Kalispell Regional Health’s Meditch Instance for $1.012 million and are committed to an additional capital of $1.5 million over five years related to infrastructure improvements and an estimated $1.4 million to provide sufficient working capital to operate the facilities.

All staff will be retained, except for those not meeting the standard hiring protocol, moving them to Kalispell Regional Health pay scale and benefits. Kalispell Regional will recognize previous tenure for service associated with benefits available in the Kalispell Regional Health system. Employees accrued paid-time off balances will be transferred and honored during the lease.

Kalispell will not assume defined benefit pension plan assets or liabilities from the balance sheet and the County will indemnify Kalispell Regional for any future obligations to PERS and OPEB. Toole County would be liable for all payroll obligations prior to the close date.

Kalispell Regional would provide leadership oversight through a regional management structure with a regional operations leader, who will use content expert support from the Kalispell Regional Health enterprise team for all operations and strategy.

 The Marias Medical Center Board would have delegated authority and will continue to function as the local community advisory board. A representative of Kalispell Regional would attend all local board meetings.

The Marias Medical Center Advisory Board of Directors will retain specific authority for annual operating and capital budgets, new clinical or business services, nominating individuals to serve on the Marias Medical Center Advisory Board, changes to the scope of clinical services and candidates for the MMC CEO.

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