RITZVILLE, Wash. — After months of financial struggles, East Adams Rural Healthcare (EARH) CEO Todd Nida announced plans to avoid bankruptcy and avoid closure.
“We now know that individuals in the prior administration misrepresented the financial performance of the hospital to the Hospital’s Board and the Ritzville community starting in July of 2023 and continuing through June of 2025, apparently concealing $10.5 million in losses,” Nida said.
With the publication of the most recent audit, Nida confirmed that the system has lost $10,512,533 between 2022 and 2024.
“In addition, it appears that the hospital’s prior administration falsified documents on a federal grant for $342,000, falsely billed Medicare for $512,000, falsely billed Medicaid for $249,000 and failed to disclose $930,000 of accounts payable in financials,” Nida said. “Individuals in the former administration also approved $1.9 million in contracts without seeking board approval.”
Nida says as a result of these audit discoveries “New management self-reports the internal findings of fraud and cooperates with 14 ongoing state, federal and local government entities and their investigations.”
When NonStop Local asked if those investigations were civil or criminal, Nida said they were “both.”
NonStop Local also asked if the investigations could result in money being recovered for EARH.
“We don’t know that as of yet,” Nida said. “That would depend on where those end up.”
Nida also confirmed that no arrests or charges have been made in those investigations.
“Cooperation with (the agencies) is providing them any information that they ask for,” Nida explained of their cooperation process.
To avoid closing the only emergency room hospital within 45 miles, EARH has applied to transition to a Rural Emergency Hospital (REH).
Additionally, they have sought cash transfusions to keep the doors open, Nida explained.
Over the last 6 weeks, Nida says EARH has been putting final touches on their transition REH plan.
“EARH currently employs 69 staff,” Nida said. “Under the latest model, EARH will employ between 55 and 60 people.”
That means layoffs.
“Our new model continues with a reduction in staff,” Nida said.
But even with that transition, EARH still has to deal with approximately $5.3M in unsecured debt.
Attorney Shaun Cross explained that their trust structure is projected to result in long term revenue for EARH.
“(REH) will generate a net increase in profit for the next five years, including next year,” Cross explained.
Cross explained that right now, EARH has approximately 175 creditors with claims totaling $5.3 million.
“There’s just no way that the organization can pay those debts today,” Cross said.
Instead, EARH will have a trust that would pay creditors over time.
While two of the largest creditors have already agreed, several of the smaller creditors have not.
Together, they are owed approximately $1.4 million.
Cross said that if those creditors did not chose to participate in the trust, EARH could have to declare chapter nine bankruptcy.
“It is possible that if the remaining creditors don’t work with the hospital, it would have to file a chapter nine bankruptcy,” Cross said. “The hospital’s not out of the woods yet.”
Nida explained that EARH is waiting for the federal government to approve their REH designation, at which point the plans would move forward.
Under that model, ambulances would still run, but for many residents, like Cathlene Wright, eliminating non-emergency services at the hospital means they have to go as many as 45 miles to receive other care.
“I just, I no longer have that convenience,” Wright said.
But still, the prospect of having the emergency department available, Wright says is encouraging.
“I’m ecstatic,” Wright said.
Watch the full press conference:
