Heath Haussamen
Read the lawsuit brought by the City of Las Cruces and Doña Ana County by clicking here.
The local government agencies charged with ensuring that Memorial Medical Center serves our community sued the hospital’s operator on Monday, formally alleging a breach of contract.
The move follows 18 months of negotiations that officials say failed to assure them that LifePoint Health and its private-equity owner, Apollo Global Management, are honoring the public land lease and asset purchase agreement that give the government agencies oversight.
In the interest of continuity of care for residents, the City of Las Cruces and Doña Ana County hope to resolve the disagreement, officials said at a Monday news conference announcing the lawsuit.
“We remain hopeful that these matters can still be resolved,” Manuel Sanchez, who chairs the county commission, said at the news conference. “Our goal continues to be voluntary compliance.”
What happens if the lawsuit doesn’t force the resolution local government officials seek?
‘A hard pill to swallow’
Councilor Johana Bencomo said in an interview that her “ultimate goal would be for private equity to not have a strong ownership of our health-care system.”
But that’s an issue for state officials to tackle, she said. And, realistically, it’s a long fight. Bencomo and Councilor Cassie McClure pointed out that MMC is an active hospital, and a transition to a different operator would be a massive and difficult undertaking.
So fixing the problems with LifePoint is the best option, officials said.
“Honestly, yes, even though to me that’s a hard pill to swallow,” said Bencomo, whose day job is holding corporations accountable when they cut corners that put patients at risk.
McClure and Sanchez agreed. Of the agreement with LifePoint, Mcclure said, “No, I don’t want to toss it out and start over.”
Sanchez said terminating the agreement and finding a new operator to run MMC would be “very hard” on the community.
“We already know we’re an underserved community, and to have that loss would be a huge blow,” he said.
‘It can’t be fixed’
The city and county notified MMC of a potential breach of their lease in August 2024, weeks after NBC news reported that the hospital had turned away more than a dozen cancer patients, some of them due to an inability to pay.
Officials have been asking ever since for LifePoint and MMC to provide data that proves they’re complying with the agreement. Perhaps most concerning, according to the lawsuit, is information the government agencies have received that indicates the hospital is still turning away patients who can’t afford to pay.
For Yolanda “Yoli” R. Diaz, the patient advocate whose whistleblowing helped expose the issues at MMC, that’s reason to terminate the agreement and find a new operator. She suggested a nonprofit like the Albuquerque-based Presbyterian Health Services, which already operates nine hospitals in New Mexico.
“LifePoint’s actions didn’t just cut costs. They jeopardized the lives and safety of the very people they were entrusted to serve,” Diaz said. “That is not just negligent. It is unconscionable, and it raises serious concerns. …It can’t be fixed.”
MMC has failed to prove that it is providing care to indigent and low-income patients as required, the lawsuit alleges. The hospital is not proving that it is reinvesting as much revenue into capital improvements as the agreement requires, it claims.
The failure to provide such information violates the agreement, the lawsuit states.
The city and county are asking for a ruling that LifePoint and Apollo have violated the lease and asset purchase agreement, a court order that they come into compliance, and the awarding of damages and legal costs.
‘They can do it again’
Officials converted MMC from a public hospital to one run by a nonprofit in 1998. Then in 2004, Province Health Care entered into a 40-year land lease and an asset purchase agreement with the city and county to operate the hospital, ending the nonprofit arrangement and moving the facility to a profit-driven model. The city and county retained ownership of the land, which is part of the agreement that gives them oversight today.
LifePoint bought Province months later. Apollo bought LifePoint in 2018.
Diaz cited the 2004 transition in arguing that city and county officials shouldn’t fear ending the agreement with LifePoint.
“They’ve already done this before,” she said. “They can do it again for the betterment of the community.”
MMC says it’s ‘not in breach’
There’s no certainty LifePoint will agree to provide the information the government agencies seek. Some officials wonder if the company can’t demonstrate compliance because it isn’t complying.
LifePoint hasn’t responded to my request for comment, but MMC released a statement to the Albuquerque Journal asserting that the hospital “has been working in good faith to address the questions and concerns” and is “not in breach of our agreements.” The hospital said its efforts to discuss the requests for information “continue to be rebuffed.”
Dennis Knox, MMC’s CEO, emailed city councilors and county commissioners on March 13, according to documents Diaz received in response to a public records request, which she shared with me. In his email, Knox offered to share “certain operational and financial information” with city and county officials in a “secure data room.” He also offered a virtual meeting with LifePoint officials.
Bencomo wrote in response that private meetings “would be inappropriate” and asked Knox to instead provide such information during a public, joint work session of the city council and county commission to ensure compliance with the state’s Open Meetings Act. Sanchez responded to Bencomo’s email to express agreement.
Now, with the city and county escalating the conflict by suing, it’s possible LifePoint could walk away from the agreement, Sanchez acknowledged during our interview. Or the company could try to continue operating the hospital without resolving the concerns of government officials.
That might put the city and county in a tough spot.
‘Everything is on the table’
Sanchez said the county is willing to make difficult decisions. He cited the 2024 commission vote to terminate the county’s contract with the operator of the crisis triage center, RI International, and temporarily shutter that facility. The center re-opened in 2025 with a new operator, PEAK Behavioral Health, and today it is successful, Sanchez said.
But while it was closed, a man who Sanchez said had been a frequent user of the facility killed Las Cruces Police Officer Jonah Hernandez. Sanchez said he still wonders whether keeping the facility open might have saved Hernandez’s life.
“That hurts, though in the end I think we have a better outcome,” he said.
That experience informs Sanchez’s thinking about the the situation with MMC, he said.
“We prefer to have a solution to keep (MMC) open,” he said, “but sometimes as elected leaders we have to be willing to make hard decisions — and live with those hard decisions if we think it’s for the betterment of the community.”
City attorney Brad Douglas echoed that sentiment at the news conference. If the court finds LifePoint and Apollo in breach of the lease and asset purchase agreement, he said, “the city and county can take the facility back.”
“Yes, that is something that is on the table at this point,” he said. “Everything is on the table.”
Asking for a third-party audit
City and county officials have suggested a third-party forensic audit that would provide information to them and the public while protecting the hospital’s financial records from disclosure.
At the news conference, county attorney Cari Neill said the government agencies have offered to pay for such an audit. She said LifePoint would not agree to terms that would ensure “the audit is being done in a manner that is objective and is not skewed.”
Bencomo said LifePoint must provide indigent care, put the required revenue back into “the health of the actual, physical building,” adequately invest in its residency program to help address the shortage of doctors, and “commit to being transparent with all of these things in a public meeting.”
“To me, those things are non-negotiable,” she told me.
At the news conference, Las Cruces Mayor Eric Enriquez said the community “deserves quality care.”
“Our community deserves businesses and partners that meet their agreements and their obligations,” he said.
Dispute ‘could be over tomorrow’
Officials were quick to say they don’t take issue with the hospital’s 1,500 employees or doubt their hard work for the people of our community. “I have concerns that there are cost-cutting measures happening that will make patients and staff unsafe,” Bencomo said.
McClure said she gave birth to both her children at MMC. She doesn’t have concerns about the care the hospital provides for people who can afford to pay.
“But I wonder if everyone gets the same level of care in terms of their ability to pay,” she told me.
At the news conference, Douglas said the dispute “could be over tomorrow if LifePoint and MMC come to the table with a resolution that’s acceptable to the county and city, that satisfies our concerns, and ensures that our residents get the care that they deserve.”
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