Pratt (Kan.) Regional Medical Center has denied it is in default of its lease agreement with Pratt County, after the county’s attorney sent a letter claiming the hospital owes more than $1.58 million tied to unreplenished rent credits.
County attorney David Prelle Eron said in the letter, dated Jan. 23 and obtained by Becker’s, that PRMC has received $1.58 million in rent credits from a county sales tax reserve fund from Oct. 1, 2024, through Jan. 1, 2026. He alleged that the hospital failed to replenish the credits from its operating accounts “if possible,” under the lease requirement, and owes the $1.58 million by Feb. 23, plus an added $99,000 in rent that was due Feb. 1.
PRMC’s lease agreements will be terminated Feb. 24 if the hospital does not comply by a Feb. 23 deadline, the letter said.
However, two county resolutions from September 2024 and September 2025, also obtained by Becker’s, show the county authorized approximately $2.3 million in total rent credits over two fiscal years because PRMC failed to meet debt service coverage and cash-on-hand requirements under its lease agreement. The second rent credit period covers September 2026.
“This action was taken without warning, and PRMC is not in default under the lease,” PRMC board Chairman Bill Keller said in a Feb. 5 news release shared with Becker’s. “The notice introduces unnecessary disruption at a moment when collaboration, not escalation, is essential to securing the hospital’s future. PRMC is in direct communication with Pratt County and has been assured that all the County is seeking is the additional financial information requested.”
Pratt Regional has been working on a strategic short- and long-term plan with Stroudwater Associates, a rural healthcare consulting firm, after it received a USDA grant in 2025. In January, the hospital requested authorization from the county to dedicate specific unencumbered assets as collateral for a loan to fund added improvements detailed in the plan.
“PRMC believed that the strategic plan and the collateral request provided the County with the information needed to move forward,” Mr. Keller said. “The county later indicated it wanted additional data. PRMC takes responsibility for that misunderstanding and has been actively preparing the materials requested and remains fully committed to providing complete, accurate information to support an informed decision.”
PRMC must replenish the rent credits under its agreement with the county from its operating accounts once financially able. The hospital will hold a Feb. 18 public meeting to detail its status and plans.
