TV6 Investigates: Documents reveal Galesburg Cottage Hospital’s chaotic closure

GALESBURG, Illinois (KWQC) - Galesburg Cottage Hospital closed on January 8, 2021, following numerous health and safety violations. TV6 looked into what was happening behind hospital doors that led up to the closure.

Former employees said Cottage Hospital wasn’t always the chaotic and dangerous scene they witnessed before the latest owners took over.

“I loved working at Cottage, I loved it. Until the very end, then it was horrible,” said Lisa Axcell, a housekeeper who worked at Cottage for twelve years.

In May 2020, Cottage was bought by SBJ Group, an organization run by Sanjay and Priyma Sharma. SBJ Group’s website claims the group is “hospital turnaround specialists.”

A year and a half later, the Centers for Medicare and Medicaid Services conducted four surveys between November and December 2021, revealing the facility ‘failed to endure the health, safety, and well-being of patients.’ The termination notice states the hospital’s services posed “an immediate risk of serious injury, impairment, or death.”

“I was watching them [patients] go in the hospital and was thinking, oh my gosh. They have no idea what’s going on inside those doors. That’s not a way to run a medical facility. It’s just unsafe,” said a former nurse at Cottage, who agreed to speak with TV6 anonymously.

TV6 obtained 65 pages of survey results from the Centers for Medicare and Medicaid Services describing a lack of medical supplies, supervisors, and severe staffing shortages.

In one case, surveys reveal a patient died after there were not enough staff to perform CPR. In other incidents, staff was caring for ICU and blood transfusion patients without the necessary training or documentation. Dozens of other violations are listed in the survey results.

“It was major chaos. Dedicated doctors got slapped in the face. Ridiculous,” said Axcell.

CMS surveys show the owners did not take care of the building. Water was leaking from the ceiling and fire codes were not followed. Employees say the lack of upkeep caused them to be scared for the lives of their patients.

“Buckets after buckets catching water, and it was for a long time. They didn’t fix it,” said Axcell.

According to surveys, owners did not keep in compliance with numerous safety codes.

“I would answer the phone of a parent, and I would say I am so sorry. We are completely understaffed and we will do everything we can, but I don’t know if I can give you that best care,” said another former Cottage nurse of 30 years, who spoke with TV6 anonymously.

After failing to correct the violations, on December 20, 2021, CMS served Cottage Hospital a termination notice, cutting off payments for Medicare and Medicaid patients who were admitted to the hospital after January 14, 2022.

In the notice, the Centers for Medicare & Medicaid Services said the agreement has been terminated because of the hospital’s noncompliance with four different sections of the Medicare Conditions of Participation: governing body, patient rights, nursing services, and physical environment.

“It was devastating. For the employees, for the patients, for the doctors. These last owners came in and gradually everything started getting worse,” said a former nurse.

A report from the Illinois Health Facilities and Services review board found 59 percent of Cottage Hospital’s inpatient revenue for 2020 came from Medicare. Medicaid brought in another 14 percent, totaling more than 10.6 million dollars in 2020.

On January 5, the clinics connected to the hospital filed for Chapter 11 bankruptcy according to Courtney Bibo, Cottage Hospital director of community and staff relations.

“The clinic has filed Chapter 11 bankruptcy to reorganize to ensure its viability in the medium and long term,” Bibo said in an email to TV6. “The hospital is not included in this bankruptcy. The Clinic Corporation intends to continue to operate throughout the process and emerge with a more sustainable model.”

Cottage Hospital officially closed its doors on January 8, when dozens of employees were notified of their termination over email.

In the email to employees obtained by TV6, CEO Sanjay Sharma wrote, “While we disagree with the findings and decision, the recent notice from the Centers for Medicare and Medicaid Services has made it necessary to temporarily suspend all services at Galesburg Cottage Hospital - effective immediately.”

Employees who were laid off said they were shocked.

“It was like I can’t believe this. I have given my whole life to this, and boom,” said a former nurse.

“I just felt like my life was crashing down. No notice, no nothing,” said Axcell.

“I was in shock. But I remember when I left, I remember telling them that the community was not going to like this. That this was going to become a major issue,” said another ex-employee.

130 years after it was founded, Cottage was closed. According to Cottage Hospital’s website, the hospital was a 133-bed facility, the largest inpatient capacity hospital in the city.

“It was shocking, you know when you have invested so many years at a place, it was just shocking. Then you became angry - and then sadness. Gosh, I’ve invested all these years and now I get to start over,” said a former nurse.

“There was a lot of crying and hugging a lot. I mean these nurses have worked together for years and years and years, so it was a family for sure,” said Axcell.

The night the facility closed, the situation escalated.

A Galesburg Police report obtained by TV6, reveals officers were sent to Cottage Hospital for a suspected bomb threat. Nothing suspicious was found according to the report, but windows and the owner’s nameplate had been vandalized. According to the report, owner Priyma Sharma told police she received a death threat from a former employee should her family ever return to Galesburg. Sharma told police she wanted to press charges, however, police are still investigating the claim.

Throughout the hospital’s chaotic closure, Galesburg city leaders said they were kept in the dark.

“It’s a private business and they function and unless there is some tragedy or some serious calamity we don’t know it’s happening. There are state agencies that regulate hospitals and we assume they are doing their job. They didn’t give us any indication that there were any problems,” Galesburg City Mayor Peter Schwartzmann said during a community meeting on January 27.

In an email to Todd Thompson, City Manager for the City of Galesburg on December 29, Cottage CEO Sanjay Sharma asked the city for financial help with convincing staff to work at Cottage in order to keep in compliance with the Illinois Department of Public Health.

The email obtained by TV6 through the Freedom of Information Act stated, “This has come as a shock to us. Thank you for reaching out to us. Galesburg Cottage is/was in a dire situation as it relates to ICU bed availability and bed availability generally. Despite all our efforts, we have been unable to find nurses (ICU and medical-surgical). Though we believe have enough to keep the doors open for our medical floor (not ICU), IDPH is not satisfied with our level of staffing and CMS is pulling our status. We continue to work on this and have reached out to multiple travel agencies, IDPH, recruitment firms, colleges, and local community members to fill our needs in the short term. They are still not satisfied, and we would like to have more to provide more care to our community. At the end of the day, in this climate/market, nurses are being pulled to the highest bidder. And those bids are going through the roof. Unfortunately, it is simply not feasible for a hospital of our size to pay $200+/hr + expenses for an ICU nurse (or two) 24 hours a day without any assistance. We would greatly appreciate any help with: 1. If City can convince IDPH to let us keep Mental Health Unit. Mental Health is not being provided anywhere within 30 miles radius. We are fully staffed. However, due to the acute care nurse shortage, we are on the verge of losing everything. 2. CMS termination letter from yesterday has created a climate of exodus. 3. It appears that we have not gained the confidence of the community or IDPH. CMS determination is based on the surveyor results. 4. Any financial assistance in attracting staff to keep in compliance. We would love to have a phone call to discuss this as time is of the essence and, frankly, this serves as an existential threat to the hospital and will inevitably have major consequences in an already underserved, rural community. At this point, if IDPH assists us in some way, there is no way for us to get past this hurdle. Long term it seems like we will lose everything. If we lose Medicare Contract, other payers will follow. Thank you again for your concern and I hope we can do something to help this community and save our hospital. We would like to Salvage our mental health unit as we have a license to build 15 more beds and we have 15 beds that we can continue to operate. However, once we lose the Medicare license. We will not be grandfathered in and would not be able to use those beds. - Sanjay Sharma, CEO Galesburg Cottage Hospital.”

Leaders at OSF St. Mary Medical Center, the only other hospital in Galesburg, say they were not surprised to learn of Cottage’s closure after watching departments like the ER and ICU slowly close at Cottage.

“We have been preparing for more than two years. A lot of strategic work has gone into monitoring the status of our community and cottage hospital and have really seen it through multiple ownership changes and bankruptcy and financial disturbances and really watching the service line reduction,” said Lisa DeKezel, President, at OSF St. Mary Medical Center. “Over the last few years, as we have managed the pandemic here at St. Mary Medical Center, we have also been hard at work to really build the infrastructure we need to solely support our community. It’s been a lot of work to make sure we have the right facilities, right people, services, and equipment. This has been a real key focus for us. So we are, we are poised and prepared to make sure we can meet the needs of our community.”

Now employees who lost their job are left wondering what to do next and how to move forward after some spent decades at Cottage.

“We think in the long term, we are going to be in good shape. In the short term, we are going to have to find solutions that are reasonable, and obviously, we are looking for ideas,” said Mayor Schwartzmann.

OSF HealthCare announced on February 28 that OSF and Cottage Hospital have signed an exclusive letter of intent for OSF to purchase real estate, medical equipment, and other assets owned by Cottage Hospital. According to OSF, real estate includes buildings and land.

In a media release, OSF Healthcare said they expect the transaction to close in the spring. OSF does not intend to offer inpatient services at the Cottage Hospital location, according to the release. OSF is now the only hospital in Galesburg. Meanwhile, OSF has established a hotline for receiving calls from former Cottage Hospital-Clinic patients who want to transfer their care. The hotline number is 309-344-9438.

The Workforce Office of Western Illinois has announced they will hold a series of virtual meetings to help former Cottage employees find a new job. The workforce office’s number is (309)-343-9832.

TV6 contacted Cottage Hospital CEO Sanjay Sharma multiple times who said he would speak with TV6 but never followed up. TV6 also contacted the Galesburg Chamber of Commerce who declined an interview.

You can find all 65 pages of survey results from the Centers for Medicare and Medicaid below.

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