ONEIDA | After several years of apparent financial stability, unpaid wages are once again in the spotlight at Big South Fork Medical Center.
Rennova Health-owned Oneida Hospital has reportedly failed to pay wages twice in recent weeks. Independent Herald received an internal email on Friday from Rennova’s vice president of human resources, who works at the company’s headquarters in West Palm Beach, Florida, informing employees at Oneida Hospital that they would not receive their paychecks on time.
According to the email, hospital employees did not learn that they would not be paid until 4:35 p.m. on Friday, payday.
“Unfortunately, Big South Fork’s payroll funding is not fully secured,” the email said. “…Without 100 percent funding, the company is unable to pay today’s payroll.”
The email stated that payroll funding is expected to be received on or before Tuesday, August 20.
“We apologize for the delay in payroll processing and the disruption this may cause to our employees and their families,” the CEO said.
The employee who spoke to IH said this was the second time in the last three pay periods that the hospital had failed to process payroll on time.
A few years ago, late payroll payments were a major problem at the hospital. In 2019 and again in the spring of 2021, late payroll payments were a problem. However, after the closure of Rennova-owned hospitals in Jamestown and Jellico and a federal cash injection during the Covid-19 pandemic, the situation seemed to stabilize.
A year ago, Rennova opened a new business in Oneida, Myrtle Recovery Centers. And in January, Rennova CEO Seamus Lagan told shareholders that the company had seen significant net revenue growth and debt reduction in 2023. Inpatient admissions at Big South Fork Medical Center increased 75% in 2023 compared to 2022, while emergency department and outpatient services saw year-over-year increases of 4% and 8%, respectively.
In June, Rennova announced an IPO in which FOXO Technologies would acquire Big South Fork Medical Center and Myrtle Recovery Centers.
FOXO’s acquisition of Myrtle for $500,000 in common stock was completed on June 14, and on August 1, FOXO announced that it had acquired the necessary licenses to operate the facility in Oneida from the Tennessee Dept. of Mental Health & Substance Abuse Services.
FOXO’s acquisition of BSFMC, meanwhile, was valued at $20 million in convertible preferred stock. At the time of the announcement in June, Rennova reported earnings of $5.2 million for the 2023 calendar year, and Lagan said the deal will allow the company to “quickly grow our core business.”
Recently, however, BSFMC employees have been forced to miss salary payments. The internal communication from the company’s headquarters on Friday quickly reignited tensions that had already been building in the hospital. Within minutes of the email being sent, a hospital official posted a screenshot of it online, which has since been shared more than 150 times and has been commented on by several employees at the local hospital.
One employee who spoke to IH said she would likely be fired if she spoke out, but added that the possibility no longer deterred her.
According to this employee, BSFMC employees learned several months ago that the company’s insurance policies – Rennova offers dental, vision and life insurance through MetLife – had been canceled. She said that even though the insurance policies were no longer valid, premiums continued to be deducted from employees’ salaries.
A hospital employee claimed he spoke with a MetLife representative and learned that the insurance policies were canceled on April 30 for nonpayment and that Rennova executives allegedly instructed MetLife in late July not to reinstate the policies.
The employee said Rennova’s corporate office has since addressed the situation internally and said it is trying to correct a “billing error” at MetLife and restore insurance plans.
An internal Rennova memo dated Friday, a copy of which was obtained by IH, said that “a billing discrepancy between MetLife and the company has resulted in a disruption in benefits for dental, vision and life insurance products.” The memo added that health and disability insurance were not affected.
“We are working with MetLife to resolve this matter in a timely manner,” the memo said. “In the meantime, please retain receipts for all expenses in order to issue reimbursements if necessary.”
The memo went on to say that payroll deductions for the MetLife plans would cease on August 19. However, it also said that if Rennova and MetLife could not reach an agreement by August 31, the insurance plans would not be offered for the rest of the year.
If the allegations of insurance deductions despite canceled policies prove true, this would not be the first time Rennova’s business practices have come under scrutiny. After Rennova’s Jamestown hospital closed, it was revealed that workers there had taxes withheld from their salaries that were never paid to the IRS. That matter was eventually resolved, as was another matter in which Rennova was accused of improperly remitting unemployment insurance contributions to the state for the Jamestown hospital.
U.S. Senator Marsha Blackburn’s office also alleged in 2020 that Rennova owed millions in unpaid payroll taxes related to Oneida Hospital, which led to a seizure of BSFMC’s property.
BSFMC celebrated its seventh anniversary last week since Rennova acquired Oneida Hospital and opened as Big South Fork Medical Center.
