JAMESTOWN, Tenn. — Rennova announced layoffs at Jamestown Regional Medical Center Monday. 

According to a statement from the hospital, 20 people have been laid off and approximately 120 people from the local area are still employed.

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The hospital has had a "significant decline in receipt of payments over recent months, caused in part by mistakes made at the facility during a transition to a new billing company in December 2018."

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The past few months have seen an "unexpected cash flow deficit", according to the statement, and "every effort" will be made to "correct this matter in the immediate future." The Centers for Medicare and Medicaid Services has decided to terminate the hospital from Medicare participation effective June 12, the statement said.

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Rennova also appointed a new Jamestown hospital CEO Monday. Michael Alexander, who specialized in hospital administration and healthcare operations, was named as CEO. According to a release, Alexander spent 10 years as Hospital Administrator with Tanner Health Systems in Georgia, where he managed overall operations of a 25-bed joint commission-accredited Critical Access Hospital with over $98 million in revenue and over 22,000 ED visits per year.

“We are delighted to welcome Michael to the Rennova team,” said Seamus Lagan, CEO of Rennova Health, Inc. “His knowledge and experience in the rural hospital sector will ensure excellent leadership for our Jamestown hospital. Michael is originally from Dothan, AL and has spent a large portion of his career in Georgia. He now lives in East Tennessee and fully understands the needs and workings of a rural community.”

Rennova Health CEO Michael Alexander
Rennova Health CEO Michael Alexander
Rennova Health, Inc.

“I believe that Jamestown Medical Center can effectively serve the medical needs of our area in a manner that is professional and efficient” said Michael Alexander “and I look forward to applying my knowledge and experience to oversee the hospital through its current challenges and to provide the very best medical care possible to this community.”

The statement reads as follows: 

"Jamestown Regional Medical Center (JRMC), A Rennova Health Company, strives to be a responsible partner in the local community and to those we serve for their health care needs.

Unfortunately, it has become necessary for the hospital to readjust its staffing levels in accordance with our current census. We recognize that any reduction in staff causes concern and raises questions and with so much information, including some that are totally inaccurate circulating in the public domain we wanted to ensure that you have information at hand from the company.

We have always taken a cautious approach to staffing levels and ensured that we had more staff on hand that was perhaps necessary to facilitate the necessary levels of care we have been providing. It is also true that the hospital has sustained a significant decline in receipt of payments over recent months, caused in part by mistakes made at the facility during a transition to a new billing company in December 2018. While these mistakes have now been corrected and we expect to receive what we are owed from payers, the past few months of an unexpected cash flow deficit have caused other problems that now require correction as well. As has been well publicized CMS has decided to terminate the hospital from participation in the Medicare program effective June 12th. Every effort will be made to correct this matter in the immediate future but in the meantime, we have evaluated our cost structure in keeping with the current level of business. Unfortunately, our evaluation has determined that we need to make an adjustment in staffing levels at this time to protect the long-term sustainability of the hospital. This decision has not been without the utmost consideration for all parties involved, not the least of which is our staff and their families.

For information, we have to date directly employed approximately 140 people in JRMC and have a number of other contracted employees and professionals on site. Our current plans will affect approximately 20 people which while not insignificant means we will continue to directly employ approximately 120 people from the local area. We hope that corrective action on the abovementioned matters will avoid any further loss of employment and will instead see employment levels increase to and surpass previous levels in the not too distant future.

We recognize that JRMC is an integral part of the community; we look forward to filling the health care needs of our customer’s and the long-term success of the hospital to serve the needs of the community. Our recent acquisition of an additional hospital in Jellico along with Big South Fork Medical Center, offers an exciting opportunity for JRMC and these hospitals to work together to offer additional services to the community and with BSFMC is testament to the investment we have made and will continue to make in this geographic location.

We are happy to repeat that Rennova Health and Jamestown Regional Medical Center are committed to the citizens of the communities we serve for the long term and we look forward to sharing more positive actions with you in the future as we correct the current situation with CMS , invest in and provide additional services from the hospital. This starts with the appointment of a new, experienced CEO starting at the facility on Monday June 10th. We expect to provide a press release with more details on this appointment on Monday and will provide continued updates where relevant on the CMS matter as we make progress there."

Rennova did not answer 10News' questions about care at the Jamestown facility after CMS found it was lacking basic medical supplies. Rennova also did not answer our question about payroll issues at Big South Fork Medical Center in Oneida and did not answer our question about a CMS report that the company had been withholding income and social security taxes from paychecks but not sending the money to the government.

The announcement comes amid days of delays in paying employees at Scott County's only hospital, Big South Fork Regional Medical Center.

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