A 12 months after private equity-backed Noble Health shuttered two rural Missouri hospitals, patients and former employees grapple with a broken local health system or missing out on hundreds of thousands in unpaid wages and advantages.

The hospitals in Audrain and Callaway counties remain closed as a slew of lawsuits and state and federal investigations grind forward.

In March, Missouri Attorney General Andrew Bailey confirmed a civil investigation. He had previously told local talk radio that there was an “ongoing” investigation into “the hospital issue.”

Bailey’s comment got here weeks after the U.S. Department of Labor’s Worker Advantages Security Administration notified executives tied to Noble Health, a startup, that they’d violated federal laws and asked them to pay $5.4 million to cover unpaid worker health insurance claims, in line with a 13-page letter detailing “interim findings” that was obtained by KHN.

The January letter confirms KHN’s previous reporting, which was informed by employees and patients who described missing paychecks; receiving unexpected, high-dollar medical bills; and going without care, including cancer treatment. In line with the letter from federal investigators, the Noble hospitals and their corporate owners collected worker contributions for medical, dental, and vision insurance in 2021 and 2022 but then didn’t fund the insurance coverage.

The owners and executives were “aware of the harm to participants and, in some cases, were attempting to resolve individual participant complaints,” the letter states, adding that “despite the amount and gravity of complaints and bills received,” they didn’t respond.

‘Tomfoolery’ and doing ‘everybody dirty’

Marissa Hagedorn, who worked as a hospital laboratory technician, has spent much of the past 12 months starting a recent job, caring for her 2-year-old son who was born with spina bifida, and haggling over unpaid medical bills. She told KHN the family owes a minimum of $8,000 for son Ryder’s specialty care in St. Louis, with $6,000 of that in collections. As a Noble worker, Hagedorn said, she was told repeatedly that her worker health insurance would cover Ryder’s care. It didn’t.

Noble has “done everybody dirty,” she said. “We just would really like for some responsibility to be taken by this company that did not feel the necessity to get their act together.” Hagedorn’s story of unpaid bills, which was first reported by the local newspaper, the Mexico Ledger, is common amongst former Noble employees a 12 months after the hospitals closed.

A former worker of the Fulton hospital has filed a class-action lawsuit intended to represent lots of of employees from each hospitals.

The Jan. 13 letter from federal officials called for responses by Jan. 27 from Noble corporate and hospital executives in addition to Platinum Neighbors, which last April bought the hospitals and assumed all liabilities. The letter instructs executives to contact the agency “to debate how you propose to correct these violations, fund participant claims, and achieve compliance.”

Former employees say their claims haven’t yet been paid. A Labor Department spokesperson, Grant Vaught, said the agency couldn’t comment on an ongoing investigation.

Individually, the Kansas Department of Labor is reviewing Noble and Platinum’s failure to pay wages and severance to corporate employees. Agency spokesperson Becky Shaffer confirmed that hearings took place in early February on a half-dozen cases totaling greater than $1 million in claims for unpaid wages and severance.

Dave Kitchens was amongst those that filed claims against Noble Health. Kitchens worked briefly as a contract worker after which was hired in October 2021 as a company controller, an accounting role through which he was chargeable for financial reporting and data analytics. Kitchens provided an audio recording of his hearing to KHN and hopes to eventually receives a commission greater than $90,000 in lost wages, advantages, and severance pay. In the course of the hearing, Kitchens told the executive judge: “I might identical to to be paid what I’m owed.”

Kitchens, who can also be named as a fiduciary on the federal investigation, said he was not on Noble’s executive team. When asked by Kansas Administrative Law Judge James Ward whether he expected Noble or the secondary buyer Platinum to pay his wages, Kitchens responded he had “no idea who was in charge.”

“I think there was some tomfoolery,” Kitchens said.

A ‘rabbit hole’ of responsibility

Noble launched in December 2019 with executives who had never run a hospital, including Donald R. Peterson, a co-founder who prior to joining Noble had been accused of Medicare fraud. Peterson settled that case without admitting wrongdoing and in August 2019 agreed to be excluded for five years from Medicare, Medicaid, and all other taxpayer-funded federal health programs, in line with the Health and Human Services Office of Inspector General.

By March 2022, the hospitals had closed and Noble offered explanations on social media, including “a technology issue” and a must “restructure their operations” to maintain the hospitals financially viable. In April, Texas-based Platinum Neighbors paid $2 for the properties and all liabilities, in line with the stock purchase agreement.

Despite receiving approval for nearly $20 million in federal covid-19 relief money before it closed the hospitals — funds whose use continues to be not fully accounted for — Noble had stopped paying its bills, in line with court records. Contractors, including nursing agencies, a lab that ran covid tests and landscapers, have filed lawsuits in search of hundreds of thousands.

In Audrain County, where community members still hope to reopen the hospital or construct a recent one, county leaders filed suit for the repayment of a $1.8 million loan they made to Noble. Former Missouri state senator Jay Wasson also filed suit in September, asking for repayment of a $500,000 loan.

Two Noble Health real estate entities filed bankruptcy petitions this 12 months. One Chapter 11 bankruptcy filing names the Fulton hospital property in Callaway County as an asset and lists nearly $4.9 million in liabilities. A 3rd bankruptcy filing by FMC Clinic includes Noble Health as a codebtor.

Within the U.S. District Court of Kansas, Central Bank of the Midwest is suing Nueterra Capital over a $9.6 million loan Noble used to purchase the Audrain hospital. The bank alleges Nueterra, a non-public equity and enterprise capital firm that in 2022 included Noble as a part of its portfolio, signed off because the guarantor of the loan.

Federal investigators listed nearly a dozen people or entities connected to Noble Health as fiduciaries who they are saying are personally chargeable for paying back hundreds of thousands in unpaid medical claims. The letter also detailed Noble Health’s ownership for the primary time. The owners included William A. Solomon with a 16.82% share, Thomas W. Carter with a 16.82% share, The Peterson Trust with a 19.63%, and NC Holdings Inc. with 46.72%.

NC Holdings can also be listed on the stock sale agreement with Platinum together with several signatures including Jeremy Tasset, chief executive of Nueterra Capital.

Tasset didn’t reply to a request for comment for this text. In an email to KHN in March 2022, the Nueterra Capital CEO wrote, “We’re a minority investor in the true estate and don’t have anything to do with the operations of the hospitals.” In May 2022, Tasset wrote in an email to KHN that “the whole lot was sold (real estate included) to Platinum Neighbors, a subsidiary of Platinum Team Management.”

It’s unclear who owns and controls The Peterson Trust, which federal investigators identified. Peterson, who’s listed on Noble’s state registration papers as a director and in other roles, didn’t reply to requests for comment for this text. He previously told KHN that his involvement in Noble didn’t violate his exclusion, in his reading of the law.

He said he owned 3% of the corporate, citing guidance from the Office of Inspector General for the U.S. Department of Health and Human Services. Federal regulators may exclude firms if someone who’s banned has ownership of 5% or more.

In March 2022, Peterson created Noble Health Services, which federal investigators note of their letter was “established to restructure the ownership of multiple Noble entities.” Peterson dissolved that company in July 2022, in line with a Missouri business filing.

In September, Peterson posted on LinkedIn that he was “sitting within the Emirates Air lounge in Dubai” to finally end up due diligence on “launching a recent business.”

A 2013 OIG advisory states that “an excluded individual may not serve in an executive or leadership role” and “may not provide other kinds of administrative and management services … unless wholly unrelated to federal health care programs.”

KHN examined the federal system meant to stop health care business owners and executives from repeatedly bilking government health programs and located that it didn’t accomplish that.

The OIG keeps a public list of individuals and businesses it has banned from all federal health care programs, akin to Medicare and Medicaid. KHN’s review found a system devoid of oversight and rife with legal gray areas.

Within the wake of KHN’s reporting, Oregon Sen. Ron Wyden, a Democrat who’s the chair of the powerful Senate Finance Committee, said “it’s imperative that federal watchdogs can ensure bad actors are kept out of Medicare.” Sen. Chuck Grassley (R-Iowa) said the federal government must do more and “it is also as much as private-sector entities to do a greater job checking against the exclusions list.”

“We will not just depend upon one or the opposite to do the whole lot,” Grassley said.

In recent months, the Missouri hospitals appear to have been sold twice more, in line with public records. Oregon-based Saint Pio of Pietrelcina notified state officials of a change of ownership in December and requested an extension of the hospital licenses, which was denied. In January, Audrain County officials, in its lawsuit, revealed one other owner named Pasture Medical, which registered as a Wyoming company on Dec. 27, 2022.

“We’ve not come out of the rabbit hole on this one,” said Steve Bollin, director of the division of regulation and licensure for the Missouri Department of Health and Senior Services. Bollin’s agency, which conducts inspections and approves hospital changes in ownership, said he would support his agency doing financial reviews.

“It’s probably not a nasty idea that somebody takes slightly bit deeper dive. We do not have that many changes of ownership, but we would want appropriate staffing to do this, including some really good CPAs [certified public accountants].”