At issue in the investigation is whether administrators defrauded employees of their benefits. Two ex-employees told the Chattanooga Times Free Press a DOL investigator asked them if the company failed to provide health insurance to them, as well as what kind of interactions they had with former Hutcheson CEO Farrell Hayes, according to the report.
A department spokesman did not confirm or deny such a DOL investigation to the publication.
Hutcheson Medical Center filed for chapter 11 bankruptcy protection in 2014. Without enough cash flow to support itself, the hospital closed Dec. 4. However, after securing a buyer, the hospital was able to reopen just three weeks later.
Before that sale to ValorBridge, which is affiliated with Atlanta-based ApolloMD, Hutcheson had a self-insured plan, according to the report. Employees paid the company biweekly, and their healthcare claims were submitted to a third party, which would then bill Hutcheson, the report states.
However, sometime before the hospital’s board filed for chapter 11 bankruptcy, Hutcheson administrators fell behind on health insurance claims, Trustee Ronald Glass wrote in a September court filing, according to the report. Claims ultimately continued to pile up, and Mr. Glass estimates total outstanding payments now stands at $2.8 million.
Subsequently, as administrators stopped paying healthcare claims, some companies gave the outstanding bills to debt collectors, according to the report. Employees were told they had to cover the bills, the report states.
Now, the DOL is investigating why employees weren’t covered for their claims despite consistently paying their bosses, ex-employees told the Chattanooga Times Free Press.
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