State lawmakers voted to approve $2 million for Hackley Community Care this week, which the health center’s CEO said provides crucial financial support for the facility as it treats thousands of new patients coming from Muskegon Family Care.
The $2 million for Hackley Community Care [HCC], which is located at 2700 Baker St. in Muskegon Heights, is part of a $371 million supplemental budget approved by the state Senate on Thursday and the House on Tuesday.
“Our team at Hackley Community Care has been rapidly ramping up capacity to accept as many MFC patients as possible who are looking for new medical homes—especially those who are uninsured, underinsured, or covered by Medicaid,” HCC CEO Linda Juarez said in a press statement.
Following MFC staff being let go with no prior warning on Feb. 14 and MFC’s announcement on Feb. 17 that the Muskegon Heights health facility would close at the end of March—a decision it has since reversed and it now plans to remain open—HCC has been working to support former MFC patients and staff who were scrambling to find healthcare and jobs. In a press release, state Rep. Terry Sabo (D-Muskegon) emphasized that the funding for HCC is needed due to MFC’s “unpredictable financial future going forward and because no financial plan [from MFC] has been released to the local community.”
Prior to MFC’s new CEO, Daniel Oglesby, stating on Feb. 28 that MFC would remain open, there was a period of close to two weeks that patients and staff believed MFC would close. During that time, MFC patients and staff began to search for care and jobs elsewhere, including at Hackley.
HCC has registered thousands of new patients from MFC, many of whom have come there in order to remain with the former MFC medical providers hired by Hackley, Juarez said. Hackley expects it will need to provide care to about 10,000 former MFC medical, dental and behavioral health patients. To treat the influx of new patients, HCC will hire up to eight new medical providers, three dentists, two hygienists, and three behavioral health counselors. In addition, nearly 40 clinical staff and up to 15 ancillary staff will be hired to help support the larger operation.
Treating thousands of new patients and hiring staff does not come cheap, HCC emphasized. The health center’s plan to accommodate the new patients and staff has a $6.8 million price tag and includes expanding service capacity, building IT infrastructure, and reconfiguring the center’s physical space. Hackley estimates it can generate about $4.8 million from patient services and related pharmacy revenue, which leaves a gap of about $2 million. That gap is now covered by the funds coming from the state.
“This supplemental funding is for the ongoing transition of patients from MFC,” Sabo said in a press release.
“Patients deserve to have their healthcare protected, and I trust my local health care leaders when they say this funding is needed to keep Hackley Community Care fully funded, while they care for the additional patients they have received,” Sabo continued.
State Rep. Greg VanWoerkom (R-Norton Shores) said the state legislature “recognized the dire nature of the situation and allocated this emergency funding so patients in Muskegon County can stay healthy and happy.”
“The allocation is essential to improving the lives and livelihoods of many Muskegon area families,” VanWoerkom said. “It’s great news for Hackley, and even better news for the local patients who will receive needed care.”
Juarez emphasized the funding bridges “a critical shortfall until we can apply for federal funding using the Health Resources and Services Administration grants process.”
“We’re grateful that our allies in the legislature understand that we’re trying to do what’s right: helping the families of Muskegon County get and stay healthy so that they can remain productive Michigan residents,” Juarez said.
Muskegon Family Care announced on Monday, Feb. 17 that it would permanently shutter at the end of March; the decision came days after the facility reportedly let about 70 percent–or about 150 people–of its employees go, according to Jen Anderson, the associate director of communications for the Michigan Primary Care Association. The primary care association is a group that had been working with MFC after the facility announced it would close. MFC’s new CEO has disputed the 70 percent figure, saying just 40 staff were let go. Oglesby could not be reached for comment on Friday.
“There’s no reason to close this facility; this facility has great potential,” Oglesby, whose first day at Muskegon Family Care was Friday, Feb. 28, said in a previous interview. “The people still need our services. Our challenge now is to fix what has been broken, move forward and continue to make this a great asset and medical home this community can be proud of.”
Muskegon Family Care’s previous announcement on Feb. 17 that it would close [MFC has since deleted the announcement, but you can see a saved version of that press release by clicking here] came as Michigan State Police have an “ongoing investigation into their financial situation,” said Anderson, of the Michigan Primary Care Association. Police said they are investigating “possible embezzlement involving staff members at the Muskegon Family Care facility in Muskegon Heights.”
“Those issues were compounded by the fact that the organization received significantly less revenue from Medicaid than anticipated,” rising organizational costs—such as for employee health insurance, and the “amount of debt owed by the organization,” Anderson said in an interview on Feb. 17.
“It was a perfect storm of financial complications,” Anderson said.
In an email to staff on Friday, Feb. 14, Mitze Alexander, the former interim CEO at MFC, said the U.S. Health Resources and Services Administration “denied our request to receive advanced funding” on Feb. 13, prompting the board to decide to let staff go.
“After this news, the board met yesterday evening to discuss how to proceed with ceasing operations as we are unable to meet the many financial obligations that we are and will be facing,” Alexander wrote in the email.
Muskegon Family Care has for years faced concerns and complaints regarding financial mismanagement. A 2014 evaluation by the U.S. Health Resources and Services Administration reported that top officials at Muskegon Family Care did not properly track how it used federal funds and violated its own bylaws and other policies during its 2010-2014 fiscal years.
In 2015, the Health Resources and Services Administration said the facility had turned itself around and had begun properly tracking its federal funds. However, another federal audit in 2017 found further “significant deficiencies.”
At the end of the 2019, former Muskegon Family Care CEO Sheila Bridges was fired, according to employees and Anderson. Alexander replaced her as the interim CEO before Oglesby came on at the end of February.
As Muskegon Family Care faced financial concerns and questions, top-level employees’ salaries continued to rise. According to tax filings with the federal government, Bridges’ salary rose from $120,132 for the fiscal year ending in June 2011 to $461,113 in the fiscal year ending in June 2018.
In 2017, Muskegon Family Care provided a $288,567 loan to Bridges for a “personal residence,” according to the health facility’s 990 tax form filed in 2018 [which you can see here]. By 2018, Bridges still owed the facility $280,544, according to the same tax statement.
Other administrators’ salaries rose as well. In the fiscal year ending in June 2015, for example, Marsha DeBoer, the chief financial officer for Muskegon Family Care, made $58,515; by 2018, she was earning $183,180, according to the organization’s tax filing.