The Richardton hospital must pay cash for food to feed patients while it struggles to stay open in a financial crisis.

It says the crisis was brought on by the financial bungling of the administrative company it fired in October.

Hospital employees were to get their normal two-week paycheck Thursday only because Medicare agreed to release $80,000 for past patient costs.

Hospital chief of staff Shelley Selph said the money won't cover all the hospital's bills, but it's enough to cover payroll and keep the doors open, for now. The hospital made its Thanksgiving week payroll when a board member anonymously chipped in a $20,000 donation.

Dickinson attorney Mike Maus said he's been hired by the board to recover financial losses.

Maus turned the hospital's financial records and other information over to Stark County State's Attorney Tom Henning.

Henning said he is conducting a criminal investigation into the matter, but said he doesn't yet know where it will lead and won't for at least another week.

The board says the losses started when former administrator Bruce Howe Jr. and his administration company, Dakota Medical Resources Group, knowingly spent a $222,000 overpayment from Medicare.

The board, in a statement, said Howe Jr. spent the money on questionable purchases. Maus said Howe Jr. used it to buy furniture for the hospital through Dakota Medical Resources Group and computers from his brother, Tim Howe. Howe Jr. and Dakota Medical Resources Group were fired in October after the hospital board got a registered letter from Medicare demanding its money back.

The overpayment occurred when Medicare issued money based on estimated, rather than actual, past costs.

Maus said Howe Jr. hid the Medicare debt from the board by covering the item with yellow sticky notes on original reports, so it didn't show up on board copies.

The hospital gets most of its income from Medicare because of its patient load. It has 16 elderly swing-bed patients now, and Selph said it won't take any more long-term care patients until it's sure it can remain open and the patients won't have to be transferred someplace else.

Besides the debt to Medicare, the hospital's cash flow problems were made worse because the agency has withheld subsequent reimbursements to try to get repayment.

Selph said the hospital is getting some relief from Medicare now. The agency agreed to release half of normal reimbursements, while it considers whether it will let the hospital pay back the original overpayment over the next 36 months. She said the hospital expects to get word on that "any day."

Howe Jr. and Dakota Medical Resources Group were hired for $5,000 a month to administer the hospital in September 2004.

Maus said Howe Jr. immediately hired his father, Bruce Howe, to represent the hospital board.

Maus said most board members didn't know that Howe the attorney is the registered agent and president of Dakota Medical Resources Group.

In January, hospital board president Phillip Messer signed an amended payment agreement with Dakota Medical Resources Group for $7,500 a month, with two targeted 10 percent increases, plus 10 percent of all revenue from every source, including Medicare, Maus said.

Maus said Messer was asked to stop in at the attorney's office. There, he signed the agreement to increase pay to Dakota Medical Resources Group, not knowing that the attorney Howe was also president of the Medical Group that the contract was with.

The Howes referred questions to their attorney, David Reich, of Bismarck.

Reich took a series of questions for the Howes from the Tribune, but their responses were not available by the deadline for this story.

Maus, the hospital board's attorney, said he represented the hospital until Howe Jr. and Dakota Medical Resources Group took over administration.

Maus and Howe the attorney had a long-standing law practice together in Dickinson until 1999.

In questions from the Tribune, Howe the attorney was asked about the matter of conflict with his relationship as officer of Dakota Medical Resources Group and the hospital's attorney. He also was asked about any conflict on the part of his former law partner, who has been hired to pursue possible legal action against Howe's son and Dakota Medical Resources Group. The father and son Howes are the only officers and directors of the Medical Group, according to the secretary of state's office.

(Reach Lauren Donovan at 888-303-5511 or lauren@;westriv.com.)