Receivership looms after North Star CEO resigns, but state silent on path forward

BY JIMMY LAWTONNorth Country This Week

OGDENSBURG —  With North Star Health Alliance CEO Richard Duvall out, the future of healthcare in Ogdensburg and Carthage is uncertain.

News of Duvall’s departure follows months of turmoil that have left 120 people jobless at Claxton-Hepburn Medical Campus and Carthage Area Hospital, putting significant strain on employees, patients, and communities. 

Looking forward

At this time, the future is uncertain, as the Department of Health continues to ignore questions from the press.

“The Department is working with the North Star Health Alliance Board and is committed to ensuring continued care for the community. Our focus remains on patient access and safety and additional information will be provided at the appropriate time,”  was the response received to a series of questions regarding the hospital’s fate.

 Despite the silence from the state, signs point toward receivership, likely voluntary, given the CEO’s decision to step down, but no official statements have been provided by the hospital or the Department of Health.

Receivership could come in various forms, but essentially it entails another organization or group coming in to help “right the ship.”

The hospital could be taken over by another organization or “right-sized” by a temporary team, as has happened at local healthcare facilities in the past. It is also possible that receivership could involve a permanent takeover by another organization and complete rebranding.

Attempts to obtain a timeline for when or if receivership would occur, or whether it would be temporary or permanent, voluntary or involuntary, went unanswered by the Department of Health. Requests for information regarding when an update might be expected also went unanswered.

Assemblyman Scott Gray, R-Watertown, and the Ogdensburg City Council have requested that, if receivership occurs, a St. Lawrence County provider be given preference.

In St. Lawrence County, Rochester Regional Health is the largest healthcare provider. Other providers include Citizen Advocates and Community Health Center of the North Country.

In Jefferson County, River Hospital and Samaritan Medical Center both provide healthcare.

With no communication from the state, however, it is possible officials could look to providers in Onondaga County as well. At this time, all options amount to speculation.

Meanwhile, developments are already taking place locally. North Country This Week has received word that some local clinics operated under North Star have closed, though official confirmation has not been received.

What’s happening now

Duvall’s  resignation was accepted at a Jan. 22 board meeting, according to a press release issued by the hospital board of trustees. The release states the board has taken steps to ensure continuity of operations through interim administrative positions, pending further discussions with the New York State Department of Health and the NSHA Board of Directors.

“On behalf of the board, I want to thank Mr. Duvall for his years of dedicated service to our communities,” said Chet Truskowski, chairperson of the North Star Health Alliance Board of Directors.

Truskowski said the Bonadio Group will continue to oversee communications and financial reporting. “Our commitment to accountability remains steadfast,” he said.

“The independent review is ongoing and, to date, has provided additional assurance and reinforced NSHA’s commitment to responsible stewardship,” he added.

In an internal email sent to employees, Duvall said financial and operating officers would continue to oversee operations until an official plan is laid out by North Star officials and the Department of Health.

He said Rob Bloom, Jerian O’Dell, and Brandon Bowline will assume interim responsibilities for North Star, Carthage Area Hospital, Meadowbrook Terrace, North Country Orthopedic Group, and Claxton-Hepburn medical facilities.

Duvall said the decision to step down came with a “full heart and deep gratitude for the privilege of serving alongside an extraordinary group of people.”

How it got here

The recent layoffs and the CEO’s departure follow a months-long dispute between North Star Health Alliance and the Department of Health after millions of dollars in payments from the state’s Vital Access Provider Assurance Program were halted in July.

The payments were intended to support the hospital system’s restructuring into a critical access hospital and safety-net model.

The Department of Health had been aware that the transition could temporarily disrupt billing and require close coordination and timely financial support. That support did not materialize, leaving the system with more than $120 million in unpaid charges and nearly $90 million in accounts payable, with no clear path to resolving the backlog.

State officials have attributed the delay to spending disclosure concerns, saying the department has requested more detailed tracking of funds already issued.