Published: June 26, 2009 11:01 am      

Pacer agrees to Knox Co. Hospital provisions

The company that operates the Knox County Hospital agreed in Knox Circuit Court Thursday to abide by the provisions of the contract into which it entered when it began running the facility on Jan. 1, 2007.

That company, Pacer Health Corporation of Florida, was sued by Knox County on June 4.

The suit claims the company has failed to live up to the contract it made with the county.

The agreement between the county and Pacer was reached as the administration of Judge-Executive Raymond Smith was ending.

In Thursday’s agreed court order between Knox County and Pacer, the company said it will “immediately commence providing ... all required monthly financial reports for the hospital” for the period of Jan. 1, 2007 to May 31, 2009.

And, the agreement states, until all those reports are provided, Pacer will “deposit all hospital revenues into the hospital’s operating accounts at Commercial Bank in Barbourville.”

Also, Pacer will not remove, transfer, withdraw or apply the revenues, except in the paying of operating costs.

Those include past rent, taxes, employee salaries, insurance, supplies and other hospital expenses.

Those expenses are to be paid only to vendors who are not affiliated with Pacer. Exempted from that agreement is Brick Mountain, which handles billing services for the hospital.

John Vincent, CEO of the hospital and COO of Pacer, is required in the agreement to be responsible for making sure payments are made in compliance with the agreement.

He is also required to furnish the county and the court with “timely bi-weekly financial reports of all hospital revenues and disbursements and bank account reconciliations.”

And, until Pacer provides the county and the court with all requested financial statements and reports through May 31, Pacer, its subsidiaries and/or officers may not, “transfer, assign or encumber any other hospital assets including its accounts receivable, unless approved by the court.”

The lawsuit as filed claimed that the company has failed to make payments to the county as agreed when the company took over the facility.

It also contended that the company was “sweeping” money deposited in a hospital account at Commercial Bank in Barbourville, to accounts out of state, often leaving the accounts at a zero balance or severely underfunded.

Often the accounts, the suit claims, were left with one day’s cash needs on hand.

The suit also claimed that Pacer had at the time of its filing not paid federal withholdng taxes since the hospital management contract began on Jan. 1, 2007.

It also accused Pacer of failing to pay local occupational taxes for the last quarter of 2008.

According to Consumer Services of Miami, Fla., Pacer Health Corporation is also behind in paying its local business taxes there.