RITZVILLE — Investigations are ongoing into allegations that mismanagement and possible fraud left East Adams Rural Healthcare with what its current administrators say was a $10.5 million loss between 2022 and 2025. Hospital officials announced Thursday at a press conference in Spokane that they have filed a request with state and federal authorities to convert to a rural emergency hospital.

“With our latest model, EARH will employ between 55 and 60 people,” said Chief Executive Officer Todd Nida in a statement.

The current staff is 69 people, he said.

The hospital will continue operating its emergency room and a walk-in clinic, Nida said, along with its laboratory and radiology department. It will work with other facilities to transfer patients, he said.

According to the Center for Medicaid and Medicare Services, a rural emergency hospital cannot provide inpatient services, although it can keep patients temporarily for observation. The hospital will be limited in how long a patient can stay.

Hospital district voters are approving a “levy lid lift” proposal for emergency medical services in unofficial election results released Wednesday. The levy lid lift will allow the district to raise its levy assessment to 50 cents per $1,000 of assessed property value. The district had been collecting about 32 cents.

Hospital officials also had asked for a levy lid lift for hospital operations, but voters were rejecting that proposal by one vote, 534 to 542, in Wednesday’s unofficial results.

Ritville Police Chief Mike Suniga said the investigation into the allegations is going to involve a lot of state and federal agencies.

“It’s a very intense and complex investigation that we can’t comment on, because it’s still ongoing,” Suniga said.

The hospital is required to submit a yearly audit to the Washington Auditor’s Office, but the audits weren’t completed between 2022 and 2024, said Viola Babcock, EARH chief financial officer, in an earlier interview. The hospital hired DZA, a Spokane accounting firm, which conducted audits for the three missing years and determined the hospital lost about $10.5 million over that period, Nida said.

Hospital officials also may have improperly billed Medicare and Medicaid, and allegedly failed to inform hospital commissioners about contracts that were approved and bills that were not paid.

The money loss left the EARH in a precarious financial position, Nida said. The hospital received $2 million in distressed hospital funding from the Washington Health Care Authority in 2025 in addition to Medicare payments that had been deferred due to the uncompleted audits.

The hospital has already cut staff and canceled contracts, Nida said, and administrators are working with its creditors.

Results of the police investigation will be forwarded to the Adams County Prosecutor’s Office.