NH AG clears way for Canaan health clinic’s partnership plan

By NORA DOYLE-BURR

Valley News Staff Writer

Published: 08-04-2023 4:03 PM

CANAAN — The New Hampshire Attorney General’s Charitable Trusts Unit issued a report last month that green lights a path forward for the Mascoma Community Health Center to stabilize the center’s finances.

Under the plan, the clinic on Roberts Road near Route 4 in Canaan would become the third clinic operated by HealthFirst Family Care Center, a federally qualified health center that has locations in Franklin and Laconia, N.H. Mascoma officials have said the plan is key to stabilizing the center’s finances for the long term.

The 11-page report, issued July 5, outlines the Charitable Trusts Unit’s “decision to take no action to oppose the proposed transaction,” as well as the conditions the health centers must meet for it to move forward. The plan still needs approval of the federal Health Resources and Services Administration, the state’s probate court and the U.S. Department of Agriculture, which provided Mascoma with a loan for the building.

Given those additional approvals are still pending, “...we have bumped our ‘hopeful’ opening date back to October 1st,” Audrey Goudie, director of marketing and communications for HealthFirst, said in an email last week.

Under the proposed transaction Mascoma health center would retain ownership of its 14,000-square-foot building on Roberts Road. HealthFirst would pay rent for the use of the space. Mascoma would use the rental income of about $26,000 a month to start to maintain the building and pay down a loan it received from the U.S. Department of Agriculture. HealthFirst would manage day-to-day operations, but Mascoma patients would have representation on HealthFirst’s board.

The Mascoma clinic, which opened in 2017, serves about 5,500 patients from the Mascoma Valley communities of Dorchester, Orange, Grafton, Canaan, Enfield, Lebanon, Rumney and Danbury. It provides general family medicine, pediatrics, gynecology, geriatric care, laboratory services, sports injury management and wellness programs. Until last summer the clinic also provided dental services, but stopped after the clinic’s dentist left. The clinic is currently aiming to reopen this fall.

The Charitable Trusts report notes that the Mascoma board “appears to have exercised due diligence in selecting the ‘acquirer’. HealthFirst is well-managed and financially stable and appears to be committed to expanding health care and dental services and programs in the Mascoma Valley.”

It also notes that public comments relating to the transaction were “uniformly positive.”

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But the report also points to concerns about the Mascoma center, including its failure to file a Form 990, a tax form required of nonprofits, for three consecutive years.

“These failures may well have jeopardized MCH’s eligibility for grants and donations,” the report said. “The board’s failure to ensure that MCH complied with the law constitutes a breach of its fiduciary duties.”

The report also is critical of the board’s decision to delay filing documents necessary to pursue the partnership with HealthFirst until “MCH’s financial situation was critical.”

But Mike Samson, the Mascoma health center’s interim executive director, said in a phone interview last week that the problem with the 990 forms came down to a change in 2019 that required that the forms be filed electronically, rather than in paper form. He also said the center didn’t receive notice that it had improperly filed the form until two years after the fact.

It was an “administrative issue,” he said. It “wasn’t that we didn’t prepare the report.”

He said that the problem with the 990 form did not affect fundraising because the center’s tax exempt status was reinstated retroactive to when it had initially been on hold.

He acknowledged that the center’s annual expenses of about $1.8 million exceed its revenue in fees for services of $1.2 million. That gap is made up for through donations and grants.

The shortfall between what fees for services cover and the cost for those services has been a problem since the clinic first opened in 2017, Samson said. Since 2018, the clinic’s leaders have been working to become a federally qualified health center, a designation that brings with it additional reimbursement from federal health insurers, a federal grant to support operating expenses and access to a lower-cost prescription drug program.

But the plan to merge with HealthFirst was shelved in 2020, amid the COVID-19 pandemic. Mascoma announced earlier this year it was returning to the HealthFirst plan and held a public listening session in April.

In addition to providing financial benefits, HealthFirst is planning to start offering behavioral health and substance use treatment in Canaan, services that Mascoma has been unable to offer on its own. HealthFirst also is expected to offer a sliding-fee discount program, which allows patients to obtain services based on their ability to pay.

The conditions imposed by the Charitable Trusts Unit include:

■A requirement that members of the Mascoma board participate in training regarding their fiduciary responsibilities within 90 days of the closing of the transaction;

■ Mascoma must obtain approval of the transaction from the New Hampshire Probate Court;

■ HealthFirst must amend its articles of agreement to reflect its expanded purpose and revise its bylaws to include a requirement that the board of directors include at least three representatives from Mascoma Valley communities;

■Members of both boards, HealthFirst and Mascoma, must complete a training that clarifies their roles within 60 days of the transaction closing;

■Should HealthFirst opt to buy the Mascoma health center building, the Mascoma board is required to alert the Charitable Trusts Unit and seek probate court approval.

“We’re in the last throes of the process,” Samson said. “...We’re still going forward.”

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.