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Hospital District will cover indigent care bills

STORY BY MEG LAUGHLIN (Week of February 27, 2014)

The Hospital District says it will meet its obligations to the Indian River Medical Center for indigent care during the current fiscal year – even if it has to raise taxes to cover expenses that seem likely to exceed what had been budgeted by as much as $1 million.

But the seven Hospital District trustees, who direct county property tax dollars for indigent care, unanimously voted last week to review the District’s financial responsibility to Indian River Medical Center after the current year.

District trustees agreed to honor a financial obligation to the hospital for fiscal 2014 for the $8 million budgeted plus any overrun.

Several weeks ago, hospital CFO Greg Gardner said the overrun could be as high as $535,000, but Hospital District treasurer Trevor Smith estimated the amount could go as high as $1 million because the hospital already needed $386,000 more than what was in the budget for the first four months of fiscal 2014.

The extra money will either come from digging deeply into Hospital District reserves – a move that could leave funds “precariously low,” according to Smith – or from raising property taxes, most of which come from the island. Currently the millage rate is $.97 per $1000 of the appraised value of a home, but Smith estimated that it will probably have to increase by 12 to 13 percent.

But once the Hospital District’s 2014 financial responsibility to the hospital is met, it could negotiate to change the present “Indigent Care Agreement” and reimburse the hospital at a lower percentage. The unanimous vote last Thursday to review that agreement opened the door to eliminate what some said amounts to a blank check.

“We are paying at a rate higher than Medicaid. We shouldn’t be paying at a rate higher than the government,” said District trustee Mike Weiss.

District trustee Burton Lee pointed out that the District pays even more than Medicare because the District pays the full bill for indigent patients regardless of the number of days a patient stays.

The Hospital District pays the hospital $1,997 for every day an indigent patient stays in the hospital. Medicare ties the hospital stay to the diagnosis and limits what it will pay.  Medicaid limits the number of days a patient can be hospitalized in a year.

Furthermore, January hospital numbers show that the bulk of the hospital’s unexpectedly large bill to the Hospital District, which was $93,000 over budget for the month, comes from indigent people going through the hospital’s Emergency Department.

The District’s attempt to divert patients to other healthcare facilities to lower its ER bills is being undermined because the hospital’s unanticipated huge bills leave the District less able to fund organizations like the Health Department and We Care, which keep people out of the Emergency Department.

Recently, the administrator of the Health Department had to lay off half of its staff and consolidate clinics, and the Hospital District put a request for funding for We Care primary care on hold because of a lack of funds.

“It’s very punishing for the community,” said District chairman Tom Spackman at last week’s meeting.

“The taxpayers are on the line unless we can come up with a fairy story or a miracle,” said District trustee Lee. “We’re at odds over whether to cut expenses or raise taxes.”

During the public comment segment of the Thursday meeting, county residents spoke about which side they fell on – cutting expenses or raising taxes.  

First up was island resident Sharon Kolor, who supported a tax increase: “If we want a good hospital, it’s our community’s responsibility,” she said.

Jim Seaton, a retired Polk County hospital administrator who now lives in Vero, said that he was “shocked” to learn that even with $8 million from the Hospital District, the hospital was not making money.

“With good management this hospital could be very profitable,” said Seaton. “The patients, medical staff, volunteers and taxpayers deserve better.”

Prior to last Thursday’s lively debate, District chairman Spackman wrote hospital board chairman Tom Segura, asking for “more detailed financial reporting, similar to what previous CFOs have presented.”

Spackman ended the letter: “The view that District questions and comments have caused the hospital to see its reputation suffer is misguided. Deficiencies need to be discovered, discussed and dealt with.”