Trios Health has appointed two new leaders to key roles to oversee the beleaguered Kennewick hospital system.
Both are Quorum Health Resources employees.
The Tennessee-based consultants were hired by the Kennewick Public Hospital Board of Commissioners in 2016 to help analyze and manage the financial crisis that forced Trios into Chapter 9 bankruptcy last summer.
The public hospital board appointed Mark Armstrong as interim chief executive officer, effective Feb. 1.
He succeeds Craig Cudworth, also a Quorum employee, who served as the hospital’s CEO and chief restructuring officer for the last year.
Trios is mum on why it opted to swap Cudworth for Armstrong.
“Feb. 1 the contract (with Cudworth) was up and the board decided we’d feel better with a different CEO,” said board President Marvin Kinney. “He was our contracted consultant, and in our agreement with Quorum, we could say we want somebody else.”
Kinney said the contract didn’t require Trios to provide a reason.
The hospital board recently renewed its Quorum contract.
Trios officials have declined to release information about the contract, citing bankruptcy protection providing a “breathing spell” from “undue distractions.”
The initial $395,000 Quorum contract was for one year with an option to renew.
Kinney said permanent leaders wouldn’t be hired until after the hospital district is on better financial footing.
“I think we’re looking at an interim CEO until the hospital is out of bankruptcy or is sold. If it’s sold, the new people or whoever buys it will pick someone,” Kinney said, adding this would likely be the case with the CFO position as well.
Trios Health, which operates two hospitals and multiple outpatient care centers throughout Kennewick, filed for bankruptcy protection as it works to reorganize $221 million in debt.
Armstrong’s already familiar with Trios, because he’s worked with the hospital district since 2016 when the board hired Quorum.
He has more than 23 years of industry experience, having served in roles of CEO, chief operating officer, chief financial officer and chief restructuring officer for a variety of health care provider organizations.
Armstrong also has managed and led the day-to-day operational, financial and outcomes performance of acute and ambulatory hospital services, large provider organizations, skilled nursing facilities and long-term acute care programs.
“Mark brings a wealth of relevant experience that will help Trios hardwire the improvements already in progress and provide continuity as we continue working through the bankruptcy process,” Kinney said in a statement. “We appreciate his willingness to step in at this critical time and look forward to his leadership as we return the organization to financial health.”
Armstrong will serve in the role until a new interim CEO is identified.
Trios’ new chief financial officer is Michael Rolph.
He replaces Tony Sudduth, who had been with Trios since 2014. Sudduth took a job with a Florida startup corporation that buys and manages hospitals. His last day was Feb. 2.
The board agreed to bring on an interim CFO on Jan. 22, as part of the Quorum contract.
Rolph’s position oversees Trios’ financial, accounting and budgetary functions, information technology, facility maintenance, patient financial services, and health information management.
He has more than 30 years of experience in health care finance leadership positions, providing integration strategy and implementation, physician practice management, strategic financial planning and health care system financial oversight to a variety of organizations in the healthcare industry.
He has held leadership positions including as chief executive officer with Via Financial Insight Inc. in Sarasota, Florida, and as senior vice president and CFO with Sarasota Memorial Healthcare System, also in Sarasota, and FirstHealth of the Carolinas, headquartered in Pinehurst, North Carolina.
More program and staff cuts have come as Trios works to fix its financial crisis.
Trios will eliminate some outpatient therapy services later this month.
The department lost $450,000 annually, or “pennies on the dollar” from lower reimbursements from Medicare and Medicaid, Cudworth said in a January news release.
Trios faces a three-month gap between when patients receive service and when the hospital system gets paid.
The amount lost because of delayed reimbursement for services totaled $11 million over five years, with $4 million in losses predicted for this fiscal year.
“The challenge has been — and continues to be — that the (outpatient therapy service’s) revenues, which include reimbursements from insurances, do not cover the cost of delivering the services. And, they haven’t for years,” Cudworth said in a release. “Despite our best efforts to find ways to cover the losses and preserve these outpatient services, we have arrived at a point that we must make a difficult change or suffer further consequences to Trios Health at a time when we cannot afford to lose ground.”
Trios will discontinue physical, occupational and speech-language therapy services on Feb. 28.
Outpatient cardiac and pulmonary rehabilitation services will continue. All inpatient therapy services will not change.
Therapy services department staff were notified Jan. 25. The elimination of some of the department’s programs will affect eight employees.
“Four of them are eligible for other positions within Trios and we hope to retain them. The other four we are working with to find other opportunities with other local organizations,” said Lisa Teske, Trios Health’s director of marketing and development.
Trios mailed letters to patients about the change at the end of January.
In January, Trios laid off nine employees.
The layoffs were initially expected to total 20 people and save $4 million.
They came on the heels of 23 layoffs and reduced work schedules announced last spring that totaled about 95 full-time equivalent positions.
Quorum issued a 400-page report last year recommending the elimination of 115 full-time equivalent positions, among other measures.
Declining patient volume also has been affecting Trios, coming in the wake of last year’s announcements about Trios’ financial crisis and a massive medical records data breach by a former employee.
As the hospital district winds its way through bankruptcy court, the sale of the health district is on hold.
Trios is exploring a relationship with RCCH HealthCare Partners, a Tennessee-based health care system, and UW Medicine.
Despite all the challenges, Trios remains committed to serving the community, Kinney said.
“We’re still concentrating on quality. That’s our No. 1 goal,” he said.
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