FOSSTON, Minn. — Fosston City Administrator Cassie Heide claims a recent meeting of the town’s First Care Medical Services Board was not legitimate and that Essentia Health violated an agreement it has with the city by adding new members to the board before the meeting.
At the meeting, board members approved, in a 2-1 vote, a $12 million improvement to the local hospital’s emergency department. Heide, the dissenting vote as the third board member representing the city, said she doesn’t have an issue with the approved upgrades; rather, she believes Essentia Health violated an affiliation agreement by removing one member of the board and filling that seat and a third seat that was empty prior to the meeting. She said it was done without the city’s consent.
An Essentia spokesperson, meanwhile, said the agreement gives the health care provider the right to appoint members or remove board members without the city’s consent.
It’s the latest point of disagreement between the city of Fosston and Essentia Health. The 2009 affiliation agreement between the two and First Care Medical Services has been in contention since the beginning of 2024, when
Essentia announced
the cessation and redirection of the Fosston hospital’s labor and delivery services to Essentia Health St. Mary’s-Detroit Lakes. Fosston city leaders argued the services are core services within the agreement, while Essentia argued they aren’t. An
arbitration panel
ruled in favor of Essentia, which meant Essentia could maintain control of the hospital. The city has since decided to
seek termination
of the affiliation agreement.
Legal teams representing the city and Essentia have been in communication since, Heide said.
“We’re working through that,” she said. “We clearly don’t see eye to eye, and so the fact that we’re even terminating will likely be litigated. And we’re in that process right now. … I’m very hopeful to find a resolution very soon.”
According to Heide, Bob Overmoe, who has been a board member of the First Care Medical Services Board since before the affiliation agreement, was sent an email from Essentia notifying him of his removal from the board in December. Essentia then appointed two members unilaterally, filling Overmoe’s spot and an empty seat, Heide said. She claims this goes against the agreement, which says Essentia cannot change the board without the city’s consent. Essentia filled one of the spots with its finance director, she said.
“Between conflict of interest and failure to get consent from the city … the city’s position is that this board meeting is basically illegitimate due to the fact that the composition of the board was not approved by the city after termination,” she said. “I opposed that the meeting was even occurring.”
Essentia spokesperson Louie St. George told the Obituary the agreement gives “Essentia the right to appoint two of the three members on the First Care Medical Services Board. Nowhere does the agreement indicate that we need approval from the city to add or remove board members.”
He added the health system is excited to move forward with the emergency department project, with or without support from city leaders.
“It’s the right thing to do for our patients and colleagues,” St. George said.
In a press release sent to the media days after the meeting, Heide said she approves of the emergency department improvement, which has been in the 2009 affiliation agreement between Essentia, Fosston and First Care Medical Services for years. It was Overmoe’s removal and the subsequent implementation of the two new board members by Essentia that she took issue with.
“I voiced my support of those projects, as they’re necessary and needed,” she said. “The $12 million improvement that they’re celebrating is really something that should have been done 16 years ago because that was a part of the master campus development, which is called out in the affiliation agreement. And they have not done that improvement in the 16 years that they’ve had the agreement. We’re happy that they finally realized that it needs to be done, but the timing is not conducive to the situation that’s going on with the current dispute.”
Essentia earlier this week publicly announced the decision to move forward with finalizing the $12 million investment to expand and improve the Fosston hospital’s emergency department. The current 1,100-square-foot space will be stretched to 6,700 square feet, which Essentia said will “greatly improve patient flow and confidentiality; employee and patient safety; infection control; EMS access; and overall efficiency.” There are also plans for a new ambulance bay and rooms designed for behavioral health care. Essentia has previously allotted funding for the project.
“The project would mark another substantial commitment to our patients and the broader Fosston community,” Tanner Goodrich, Essentia’s senior vice president of operations, said in the media release. “Our team is dedicated to delivering exceptional care and serving the community. This investment will help us continue advancing those goals.”
Otto is the region reporter for the Obituary.