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Arbitration likely over indigent care

STORY BY MEG LAUGHLIN (Week of July 3, 2014)

The seven elected Hospital District trustees unanimously agreed Monday to stick with their June 5 “last and final offer” made by treasurer Trevor Smith to Indian River Medical Center for indigent care reimbursement amounts over the next three years.

This decision will lead to arbitration between the District and the hospital, unless the hospital changes its position, which is that it will accept the amount the District offered only for fiscal year 2015, but wants to renegotiate after 2015.

District trustees oppose renegotiating for 2016 and 2017.

At a District meeting two weeks ago, hospital CEO Jeff Susi said the hospital would look at the District’s refusal to negotiate again in 2016 and 2017, but the hospital did not come back with a counter-offer.

“We’re at a stalemate,” said District chairman Tom Spackman.

The hospital has until the July 10 District meeting to accept the District’s offer. If the hospital refuses to budge, arbitration between the hospital and the District will begin 30 days later.

“Trevor Smith tried to be a nice guy but it didn’t work, and we need to stick with what we’ve said,” said District trustee Burton Lee. 

Hospital leaders hope that, if the hospital can buy time, it can get candidates elected as District trustees this fall who will be more in favor of increasing reimbursement amounts for 2016 and 2017.

Currently, the seven District trustees serve as a watchdog to the hospital, rather than a rubber stamp. But that could change if the hospital can get a slate elected to the District in November.

For fiscal 2015, the District offered the hospital $6,047,000 in indigent care reimbursement funds and $1 million for the Partners childbirth program. In a letter from hospital board treasurer Jack Weisbaum, the hospital said it would accept the total of $7,047,000 but wanted only $500,000 of it to go to Partners and the rest to the hospital.

While the 2015 deal appeared to be workable, District trustees and hospital leaders were not in agreement over reimbursement for the following two years.

For 2016, the District offered $6,169,000 to the hospital and $500,000 for Partners, and for 2017 the District offered $6,292,000 to the hospital for indigent care reimbursement and fee-for-service reimbursement for Partners qualified indigents.

Currently, the District pays for more than indigent care in the Partners program.

The hospital letter from Weisbaum said the 2015 deal would “strain the hospital’s budget” but the hospital would accept it because it did not want to go to arbitration. The cost of arbitration would hurt “IRMC’s ability to fulfill its mission,” he added.

After 2015, said the hospital, the impact would have to be evaluated before deciding on the reimbursement amounts for 2016 and 2017.

“The advantage of arbitration is there will be discovery and we will see what indigent care at the hospital actually costs,” said District chairman Spackman.