Texas Tech claims El Paso Children’s payments ‘woefully insufficient’

New details are coming out of El Paso Children’s bankruptcy documents.

The ABC-7 I-Team combed through pages just released in the last week. ABC-7 spoke with Children’s CEO Mark Herbers on Friday about the current situation between Children’s and UMC. But we’re learning more about another entity Children’s owes money to: Texas Tech.

“The payables are growing, which means we’re recognizing the expense but we’re not paying the expense,” Herbers said. “The cash isn’t going out for it.”

Herbers recognizes the debt is building.

“We’re just building that liability,” he said.

But right now, the hospital isn’t focused on paying it down. In fact, according to the latest bankruptcy documents, Children’s is authorized by the court to use its cash collateral, or its cash on hand, to fund its interim budget — its day to day expenses.

“That’s how we’re managing,” Herbers said. “The money we’re receiving for providing services to our patients is sufficient to pay our suppliers for the drugs, for the medical supplies, for all the supplies incident to providing patient care, as well as make our payroll.”

Of course, Children’s creditors would probably appreciate some of that cash to come their way.University Medical Center claims Children’s owes it somewhere around $90 million, although Children’s would disagree. But according to new pages from bankruptcy court, Children’s said it owes Texas Tech little more than $1.5 million. The hospital says its willing to pay back that amount between May and August of this year.

“We negotiated with Texas Tech, they were billing us, according to our contractual rates,” Herbers said, “and they agreed to help us through this process by accepting less than full-payment, on a schedule, which we have been maintaining. But that payable has continued to grow.”

The growing payable may be the issue. A statement from the documents explains: “Texas Tech’s calculations of post-petition amounts owed on a going forward basis, however show that the amount proposed by the debtor…is woefully insufficient,”

The documents go on to say Texas Tech will “endeavor to calculate amounts owed…to reflect a further more director comparison and better demonstrate the insufficiency of the amounts the debtor is proposing to pay.”

A bankruptcy hearing has been postponed and now Children’s and UMC is preparing to mediate June 25.