President's brother promoted the failed hospital chain that ran Pineville's community hospital into the ground, Politico reports

Pineville Community Health Center (Photo from Pineville Sun and Cumberland Courier)

Kentucky Health News

In May 2017, three men came to Pineville, Ky., the Bell County seat of 1,700 people, looking for business from Pineville Community Hospital, which had just been bought by a company that was buying financially distressed hospitals. One of them was James Biden, a brother of Joe Biden, who five months earlier was the vice president of the United States and is now president.

As the business relationship between then-hospital owner Americore and Biden's firm Fountain Health developed, Americore listed Jim Biden as a partner, identifying him as "Brother and campaign finance chair of former vice president Joe Biden," and Jim Biden began using his connections with current and former federal officials to help Americore, which was having trouble operating the facility that it had renamed Southeastern Kentucky Medical Center, reports Ben Schreckinger of Politico.

"Several former Americore executives said Joe Biden was central to Jim Biden’s ambitions for the company," Schreckinger writes. "One said that Jim Biden explained to him, 'His brother was very interested in rural health care and very interested in veterans’ health care and it was something he really wanted to get behind.' In fact, Jim Biden told the executive, if Americore successfully demonstrated a model for revitalizing rural health care, Joe Biden could run on it in 2020. 'This would help his brother get elected if it were to take off and go,' the former executive explained."

James Biden (Photo illustration by Politico)

There's no evidence that Joe Biden became involved in his brother's business, but his son Hunter Biden discussed with Jim Biden and Americore "the possibility that Americore could land an investment from associates of Jim and Hunter Biden affiliated with CEFC, a Chinese energy firm, according to a person familiar with the conversation," Schreckinger reports.

But no investments were made, and by January 2018, Americore was insolvent, according to a Securities and Exchange Commission complaint against hedge-fund manager Michael Lewitt, who was working with Jim Biden and Americore. Nevertheless, Politico reports, Jim Biden "waded deeper into the business," the financial model of which appeared to be based on taking advantage of federal rules that allow rural hospitals to charge more for laboratory work.

In Pineville, where Americore had renamed the hospital Southeastern Kentucky Medical Center, it was having trouble meeting payroll. Then it "stopped paying health-insurance premiums for its Pineville employees," Schreckinger reports. "Staffers, who continued to have the premiums deducted from their paychecks, only learned of the problem when their insurance claims met with surprise rejections. As a result, when the husband of one longtime employee, Betsy Marsee, died, her life insurance claim was denied, according to Pineville Mayor Scott Madon, a former executive at the hospital, and a report in the Middlesboro News."

In mid-2018, Jim Biden ended his relationship with Americore. In 2019, Medicare and Medicaid, which covered more than 90 percent of the Pineville hospital's patients, cut off payments to it. The hospital wenyt into bankruptcy, was sold in a bankruptcy auction to a local bank that essentially acted as an angel to save a hospital that had been a great source of pride for the town. 

A January 2019 report by the Centers for Medicare & Medicaid Services, part of the Department for Health and Human Services, says that "Over the course of 2018, doctors left, equipment went without maintenance and medical supplies became scarce," Schreckinger reports. "At times, staffers had to leave the operating room mid-surgery to track down missing gauze. . . In October, the report said, a surgeon quit after concluding that operating there was 'endangering the lives of my patients.'

"Then, just after 8 p.m. on the first Tuesday of December, a patient arrived in the throes of cardiac arrest. Twice, the patient needed epinephrine to stimulate their heart, but the hospital did not have enough of the drug on hand, and staff from the ambulance service had to provide it. A doctor ordered an X-ray of the patient’s chest, but it appears none was taken: A nurse later told an HHS investigator that there were no radiology staffers on hand that night. At 9:55, the patient, identified by HHS only as Patient #12, was pronounced dead."

The hospital is the only one so far to get financial aid from a new state fund to help rural hospitals. The $1 million loan at 1% interest over a five-year term was approved by the Kentucky Economic Development Finance Authority in December 2021.

Renamed Pineville Community Healthcare, it was sold in 2023 to Michael Fry of Nashville but offers only limited services, such as an emergency room and outpatient surgery. The first option in its telephone list is the laboratory.