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Indigent care talks headed for arbitration

STORY BY MEG LAUGHLIN (Week of July 17, 2014)

The Hospital District has pulled the plug on negotiations with Indian River Medical Center over how much taxpayer money the District trustees will give to the hospital for indigent care bills.

Arbitration will begin Aug. 11 unless the hospital makes an offer the Hospital District accepts prior to that date, according to a unanimous vote by District trustees.

“The advantage of arbitration is that the books are basically open, and the public and trustees deserve real answers,” said District chairman Tom Spackman.

A letter from the District, hand-delivered to Indian River Medical Center CEO Jeff Susi on Friday morning, said that the hospital had not negotiated in good faith on the Indigent Care Agreement and that the hospital was in default. The hospital was given 30 days to cure the default and come to an agreement with the District.

The day before, at the District’s monthly meeting, hospital attorney Bill Stewart tried to convince District trustees not to proceed to arbitration but to have more detailed discussions with the hospital to better understand what each side “found deficient in the other party’s proposal.

“I do believe this current dispute can be resolved amicably and quickly,” said Stewart, who characterized himself as an observer, not an advocate for either side, despite being the lawyer for the hospital.

Stewart called for more discussion and negotiating because of the “significant risk” to  the hospital if the District only paid what it has offered – $7 million for indigent care reimbursement for fiscal year 2015, instead of the $9.5 million the hospital wants.

But the six Hospital District Trustees later said they were in no mood to consider going back to square one and having discussions, after the hospital had refused to talk for more than three months.

In early April at the start of negotiations, the Hospital District put an offer on the table to reimburse the hospital just below the average Medicaid rate. The hospital called the offer “simplistic and flawed” and refused to counter-offer.

In May, the Hospital District put a more generous three-year offer on the table. The hospital waited weeks before responding in writing that it would only take the District’s three-year offer for one year.

Then, the hospital proposed mediation to last until March 2015, while the District paid the hospital’s total requested amount in the interim. In reaction, District trustees said they were likely to go to arbitration if the hospital did not quickly negotiate, given that three months had already passed. 

“Let’s sit down and start having a conversation,” said Stewart at the conclusion of his talk to the District last week.

But having been met with mostly silence from the hospital since early April, District Trustees were prepared to finally act.

Furthermore, the hospital negotiating team had questioned the financial knowledge of the District’s lead negotiator, retired finance executive and accountant Trevor Smith, whose sudden death a week before the District meeting had devastated District trustees, and made them more determined than ever to support only what he had offered to the hospital – and no more.

After Stewart’s plea for a conversation, District trustee Burton Lee put a motion on the floor: “Because we are unable to come to an agreement, I move we send written notice to hospital leaders that they are in default for failure to reach a reasonable agreement, and they will have 30 days (before arbitration) if the default is not cured.” 

District trustee Alma Lee Loy was first among the six trustees to support Lee’s motion, saying that she believed it was in “the best interest of the taxpayers and the citizens of Indian River County.”

Loy said she was “an ardent supporter” of the hospital but wanted to “go forward.”

Trustee Harris Webber agreed, saying that to suggest talking – as Stewart had done – after the hospital had refused to talk was “going in circles.”

“It’s time we did something different,” said Webber.

One by one, all of the trustees expressed support for Lee’s motion, before voting unanimously for it.