Hospital set to change hands

Last modified: Monday, May 05, 2014
SPRINGFIELD — Berkshire Medical Center has reached an agreement to purchase the former North Adams Regional Hospital, and it could have the emergency room open by mid-May.

Berkshire Health Systems, the parent company of Berkshire Medical Center, said Thursday it would need to spend up to $10 million on repairs and improvements to the former hospital if the deal is finalized.

North Adams Regional Hospital closed abruptly on March 28, giving three days notice and discharging its more than 500 employees. In the weeks since, northern Berkshire County has been without emergency services, while ambulance services have been strained by longer travel times to Berkshire Medical Center in Pittsfield.

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“I couldn’t be happier,” said North Adams Mayor Richard Alcombright. “It’s been four weeks, and all of us thought something could happen a little more quickly. So we’re looking forward to getting the (emergency center) reopened, and then go from there.”

He applauded officials at Berkshire Health Systems for their efforts and commitment.

“It’s a big step and a big investment,” he said. “I’ve really been impressed by (CEO) David Phelps and BHS for their efforts.”

Berkshire Health Systems did not elaborate Thursday about the potential scope of the North Adams facility or how many former hospital employees it might hire. Nearly 150 former employees already have been hired by Berkshire Medical Center (BMC) on either a short-term or long-term basis.

During a conference in U.S. Bankruptcy Court in Springfield on Thursday, attorneys representing BMC and creditors of Northern Berkshire Healthcare, parent company of North Adams Regional, announced a two-pronged agreement guiding the future of the hospital.

The first step will be a 90-day occupancy and use agreement that would allow BMC to open a satellite emergency center in the hospital until a purchase agreement can be finalized. Financial terms of the agreement were not disclosed.

During the 90-day lease, BMC will not pay rent, according to attorney J. Mark Fisher, who represents Wells Fargo, the hospital’s largest creditor. It will only be responsible for operational costs and utilities.

“That’s OK for a 90-day period,” Fisher said.

U.S. Bankruptcy Court Judge Henry Boroff is expected to rule on the occupancy agreement during a conference scheduled for Wednesday. It will be several weeks before the purchase agreement can be finalized.

Harry Murphy, the bankruptcy trustee appointed to oversee the proceedings, is expected to officially file the terms of both the official occupancy agreement and purchase agreement either Friday or Monday, he told the judge.

“All of us have been working very hard,” Murphy said.

The temporary occupancy agreement also allows services to be maintained at other former North Adams Regional Hospital buildings, such as the Northern Berkshire Family Medicine building on State Road.

The purchase agreement would include all the hospital’s real and personal assets, according to Murphy. Per bankruptcy law, once a final sale is approved by the court, there will be a 45-day window during which any interested party could outbid BMC. The judge will have to sign off on the bidding process for BMC’s purchase to be finalized.

When asked by Boroff if any other health care providers had expressed interest in the facilities, Murphy said there was a solicitation of potential bidders after the hospital’s 2011 Chapter 11 bankruptcy, and that “we would try to engage these parties.”

“If there are other bidders, a bankruptcy auction will be held shortly thereafter,” Berkshire Health Systems said in a statement on Thursday. “In the event that Berkshire Medical Center is the successful bidder, it will be necessary for the hospital to invest another $10 million or more in required repairs and improvements to the former North Adams Regional Hospital building.”

An attorney for Berkshire Medical Center estimated that the ER could be open during the week of May 19. Joseph Baldiga told Boroff that BMC would need to “clean up the area and get it ready for inspection” before an emergency department is opened.

If all goes according to plan, Murphy said, the hospital should belong to BMC sometime in July.

BMC has obtained approval from the state for a satellite emergency department license, but it has only received preliminary federal approval from the Center for Medicare and Medicaid Services.

Under its requirements, the Center for Medicare and Medicaid Services will inspect the emergency department shortly before it is set to reopen. Murphy told Boroff he does not expect any “bureaucratic” obstacles to an emergency department opening.

In response to a motion filed by Murphy earlier this week, Boroff ordered that utility companies maintain services to the hospital until BMC can move in.

The agreement calls for BMC to pay a retroactive sum of $400,000 to the hospital’s creditors, which had provided cash collateral to maintain the hospital buildings while they were closed.