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Mexico, Audrain County sign letter of intent with Boone Health to pursue local critical-access hospital
Summary
City and county leaders on Oct. 14 approved a resolution authorizing a letter of intent with CH Allied Services Inc. (Boone Health) to enter exclusive talks and due diligence toward establishing a Medicare-certified critical-access hospital at the former Audrain Medical Center site.
Mexico and Audrain County officials on Oct. 14 authorized a letter of intent (LOI) with CH Allied Services Inc., doing business as Boone Health, to begin exclusive negotiations and feasibility work toward reopening a Medicare-certified critical-access hospital at the former Audrain Medical Center site.
The city council and the Audrain County Commission held a joint special meeting in which city staff recapped a September 2023 needs analysis and financial-feasibility study that concluded a critical-access hospital is viable for the community. The city, the county and the Audrain Community Hospital Foundation purchased the shuttered hospital in a foreclosure sale on July 25, 2024, officials said.
"LOIs help define the framework for what we're going to work towards to get to a definitive agreement," said Brady DuBois, president and CEO of Boone Health. DuBois told elected officials the LOI would provide the exclusivity Boone Health needs to fund and conduct detailed due diligence, preliminary financial modeling and the certificate-of-need process.
The LOI, as described by city staff, would commit the parties to exclusive discussions and to conduct studies that estimate anticipated revenues and expenses, identify necessary services and size the hospital. The site of the former Audrain Medical Center was described as an acceptable location pending environmental and feasibility reviews.
Council members and county commissioners voiced support for pursuing a known operator. "The partnership between this facility and what they have in Boone County seems like a natural fit," said a county commissioner during remarks supporting the effort.
A council member raised community rumors about Boone Health's finances. DuBois responded that the health system had experienced "some bumps" during the COVID period but that he was confident Boone had the capacity and partnership needed to sustain operations for decades, not just years.
The council passed bill 2024-58, a resolution authorizing the city manager to sign the LOI with Audrain County, Audrain County Health Department and CH Allied Services Inc. Officials then signed four copies of the LOI and held a photo opportunity.
Next steps described by staff include Boone Health conducting preliminary financial modeling at its expense, environmental site surveys, further due diligence and, if the LOI leads to agreement, negotiation of a definitive written contract. Until parties agree to a definitive written agreement, staff said the LOI is not a binding purchase or construction contract.
Officials cautioned the public that the LOI is intended to enable private investment of time and money by a prospective operator and that some steps — such as the certificate-of-need review and bond/lease financing determinations — remain ahead. The parties also said they would avoid public commentary on negotiation details until agreements are finalized.
The council and commission did not set a construction timeline; staff said the LOI will enable the studies and planning necessary to estimate a timeline and financing structure.
