Attorney General Ends Investigation Into Hospital Closure
NORTH ADAMS, Mass. — The state is closing its investigation into the demise of North Adams Regional Hospital, more than three years after its abrupt closure.
No actions will be taken against the health care system's board of directors or any of its officials.
In a letter dated Aug. 9, Assistant Attorney General Mary Beckman, head of the AG's Health Care and Fair Competition Bureau, wrote that "we are closing that investigation without further action."
"Although state law prohibits disclosing the details of our investigation, it is clear that NARH was under considerable financial pressure from declining patient volume and accumulated debt burden for more than a year before its closure."
Officials with AG's office said their investigation had not found any breach of fiduciary duties or willful negligence in the actions of the board. State law prevents any further disclosure, they said, adding it was unusual to provide even this much information but there had been numerous questions from the public.
The 125-year-old hospital and its parent, Northern Berkshire Healthcare, abruptly announced its closure on March 28, 2104, giving employees and patients just three days notice.
The health-care system had been burdened by some $50 million in debt incurred in part by poor investments in a local nursing home and retirement community. The changing landscape of health-care and the economic global collapse in 2007 further exacerbated the health-care system's financial woes.
Community activists had pressed for an investigation into the closure, which also appeared to violate state laws requiring sufficient notice. According to Department of Public Health regulations, a 90-day notice must be given in the case of cessation of "essential hospital services."
Then Attorney General Martha Coakley, a Drury High School graduate, had filed restraining orders in an attempt to prevent the hospital from closing but NBH promptly applied for Chapter 7 bankruptcy. Coakley has also directed her Non-Profit Organizations/Charities Division to conduct a full investigation into the actions of the board of trustees.
Coakley's replacement, Attorney General Maura Healey, vowed to continue the investigation later that year as she stumped for office.
"It bothers me deeply that people in this community would not have access to what I believe is a basic civil right," she said during a stop at the VFW in November 2014.
Healey had been consistently questioned on the progress of the investigation by both media and North County Cares Coalition members in the following years.
Officials said the division doesn't generally sue charities operating in good faith and that enforcing the 90-day notice violation would be problematic.
"While the closing of NARH was abrupt, deeply disruptive to the community, and did not comply with the notice requirements laid out in state law, the evidence reflects the board's sincere effort to keep the hospital open," Beckman writes. "The Office's decision to take no further action against the Northern Berkshire Healthcare Inc.'s board of trustees took all of these factors into consideration. Generally speaking, the law provides volunteer board members with protections, especially where they have acted in good faith."
The letter was addressed to Berkshire Health System's legal counsel, John F. Rogers, and was copied to local officials and the Northern Berkshire Cares Coalition, a community that has been advocating for the hospital's restoration. BHS, a Pittsfield-based health system, purchased the assets of NBH through bankruptcy proceedings months after its closure and has since restored many of its services except the one thing the coalition as called for — in-patient beds.
The letter's main topic was to notify Rogers that BHS was the "proper recipient of the restricted endowment funds" left by Northern Berkshire Healthcare. The attorney general's office, in its petition for dissolution of NBH and its physicians group and visiting nurse association, had filed that motion in April 2017 in agreement with BHS and the bankruptcy trustee.
Rachel Branch, a member of the steering committee of the coalition, had written on the group's behalf to request it has some say in the use of the estimated $1.1 million endowment. The coalition has been advocating to put those funds to use to develop in-patient services, substance abuse services or toward free care for North County residents.
"It is essential that any use of these Restricted Funds be transparent to the public; that no funds be expended until a public hearing is held for everyone to be able to have a thorough discussion about, and understanding of, the proposed use of Restricted Funds," she wrote. The letter was accompanied by 605 postcards from residents supporting the restoration of a full-service hospital.
The attorney general's response was that the restrictions placed on the fund by the donors must be maintained and that Berkshire Health Systems was best suited to ensure the $50,000 or so a year in interest generated by the fund was put to proper use. None of the endowment funds were restricted to in-patient services, wrote Beckman.
"We fully expect that BHS will take community input to inform its decisions on expenditure of the interest on the Endowment Funds," Beckman wrote in her letter to Rogers.
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