City Backs Hospital's Possible Need for Loan

Sallisaw City Commissioners voted to back Sequoyah Memorial Hospital's possible need for a not-to-exceed $1.3 million loan, if applied for, at a special city meeting Wednesday. Debbie Knoke, the hospital's chief executive officer, explained that, for some unknown reason, the Medicare program began decreasing payments to the hospital in late March. The delay in payments is causing cash flow and salary problems for the hospital, John Robert Montgomery, city attorney, explained to the commissioners. Montgomery explained that, because the hospital is backed by a city and county trust, both the city and the county must approve any loan applications the hospital submits. The county is expected to approve the request on Thursday (May 29). The hospital is also funded by a half-cent sales tax approved by voters in 1978. Knoke said the hospital administration and Medicare are working on identifying and correcting the problem. She said the hospital received $70,000 in Medicare payments Tuesday, and is expecting another large payment on Thursday. If the payments increase, the hospital may not need to seek a loan to cover bills and salaries. "We brought in a consultant today (May 28) to work on the problem," Knoke said after the meeting. The loan, if needed, will be applied for at the hospital's bank, Firstar in Sallisaw, and the hospital's inventory and/or accounts receivable will be used to secure the loan, if necessary. Knoke said Sequoyah Memorial Hospital is considered one of the top hospitals in the state, and both Sallisaw Mayor Julie Ferguson and Commissioner Ro Poindexter praised the hospital. "The hospital has a lot of good things going for it," Poindexter said. Knoke said she is sure the problems will be corrected, and Medicare patients "should not worry." Stay tuned to KXMX for the latest news, or visit www.kxmx.com. By Sally Maxwell, Senior News Director