SUBLETTE COUNTY – On the heels of its April 19 vote to construct a standalone critical access hospital (CAH), the Sublette County Rural Health Care District (RHCD) board voted, 3-2, to “expand their current affiliation agreement” with St. John’s Medical Center (SJMC) at a special meeting on May 3.

After initially rebuffing the Roundup’s requests for further information related to that May 3 vote, the RHCD board held a special meeting Tuesday evening to discuss in executive session whether to release further information amid a push for improved transparency by some on the board. After about an hour of sometimes-heated discussion, the board ultimately decided that the additional documentation on the agreement expansion could be “read but not given” to those requesting it. The hair-splitting decision was based on a promise made to SJMC not to release the document to the public, according to reports.

On Wednesday, board members Kathy Anderson and Wendy Boman visited the Roundup office and read the six-page document, which was dated May 3 and entitled “Affiliation Agreement.”

“This document constitutes a letter of intent to negotiate a management-agreement relationship,” it states in its opening line.

The agreement is a working draft of the final, future version and details four “key features” in which SJMC and the RHCD will collaborate on health care in Sublette County: a practice manager, administrative services, performance improvement, and health-care services offered.  

Practice manager

According to the document, SJMC will provide “administrative guidance” for a newly created position of practice manager, who will “live and work on site in Sublette County.”

The district and SJMC will “jointly” develop a job description and salary range for the position, in addition to jointly interviewing and selecting the hire. RHCD will be the official employer and pay the associated salary and benefits of the position.

The practice manager will “report administratively to St. John’s but will take direction from” the RHCD board. And in the event that “either party” has cause to fire and replace the existing person, the two entities will “collaborate on how to proceed.”

Administrative duties

This area of collaboration is the lengthiest of the four and details the many services SJMC is willing to provide the district “to the degree agreed upon.”

“The services may include some or all of the following and others not listed,” the document states, listing a wide range of services that include medical records, marketing, nursing, information technology (IT), maintenance, purchasing, medical staff services, medico-legal services, education, emergency department physician supervision of district mid-levels, infection control, risk management, administration consultation, human resources, and coding, billing and patient account collections.

“The method of providing the services will be flexible to meet the (RHCD’s) desires,” the document states, offering a range of examples from simple consultation on improving efficiencies to supervision of personnel to direct services from SJMC to the district, or vice versa.

According to the working draft, the two entities will “discuss and agree on what services are to be provided,” as well as how those services will be delivered and at what level.

“St. John’s will be compensated for these administrative services on the basis of a mutually agreeable, fair-market-value percentage of the district’s collections,” the document says.

And if the RHCD opts to outsource any of those administrative duties – resulting in incurred costs to St. John’s for set-up – then the district would compensate SJMC “a one-time payment of some or all of those set-up costs.”

Performance improvement

This area of collaboration involves the two entities establishing “annual targets for improving the district’s quality of care and financial performance,” according to the document.

RHCD and SJMC will work together to establish “quality of care and financial metrics” and “mutually agree” on setting targets of improvement within the district. At the end of each fiscal year (FY), those improvement targets will be reviewed in relation to the district’s “break even” point for that year, if and when operating income exceeds operating expenses.

If the targets are met, SJMC will be “paid an incentive payment of 50 percent of any excess ‘net operating income,’” defined as any revenue that exceeds the district’s “break-even” point.

“St. John’s will only receive the incentive payment in any FY if the district has met the mutually agreed upon … targets for that FY,” the document states.

Health care services

The fourth “key feature” of the working draft agreement is that the RHCD will have “sole authority” to determine which services are provided and which facilities are operated within the county.

“It will, however, consult in good faith with St. John’s as to the practicality, need, financial benefit, etc., in making its decisions to retain, expand or discontinue any of its operations or services,” it says.

Miscellaneous items

The document briefly addresses four additional topics near the end of the primary agreement.

For starters, it says the two entities will work on “integrating their current (2015) affiliation agreement … for clinical services into this agreement.”

And in the event that the district constructs a CAH, “St. John’s will have a right of first refusal to expand this Affiliation Agreement to provide services for the CAH.”

It also says that either side may terminate the agreement at any time, “upon 180 days’ written notice” to the other entity. And if the agreement is terminated, the two sides will collaborate on a transition plan; they will agree not to hire each other’s employees for six months without consent; they will not use each other’s confidential information against each other; and they will indemnify each other for “any third-party claims made as a result of services provided under the agreement.”

The final feature is that “any further agreement is subject to approval by each party’s governing body” before it takes effect.

What now?

According to RHCD’s legal counsel Doug Mason, lawyers for both entities are now in the process of using the current “letter of intent” to hammer out a draft legal agreement, which will be presented to both boards.

“Then I expect both board to consider the working draft and to refine it until a final draft can be completed and can then be approved and executed by both boards,” Mason wrote in a May 18 email.