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Indian River hospital seeks more tax dollars

STORY BY MEG LAUGHLIN (Week of May 15, 2014)

Despite coming in $218,000 under budget with its April bill to the Hospital District for indigent care, Indian River Medical Center says it will need an increase of between $900,000 and $1.7 million dollars from taxpayers for the coming fiscal year.

That amount, coupled with a $490,000 shortfall for fiscal 2014, means that what the Hospital District seeks from homeowners as its share of Indian River County property taxes is likely to go up between 15 and 20 percent.

“It’s one thing for those of us who live on the barrier island and can afford to come up with the extra property tax money, but it’s a different thing altogether for those families struggling to make ends meet to come up with the money, and it deeply concerns me,” said District Trustee Gene Feinour.

Last week at a Hospital District meeting, hospital CFO Greg Gardner told District trustees that the fiscal 2014 hospital bill to the District would be less than the $1 million extra anticipated a month ago, because the hospital had reversed 127 days of indigent hospital stays so that the taxpayers didn’t have to pay for them.

But, said Gardner, the District would need to come up with between $900,000 and $1.7 million extra for next year. 

District trustees expressed concern over both occurrences, saying that the unexpected savings for last month – while welcome – as well as the extra million to $2 million needed for next year, seemed an odd combination of facts.

“I’m perplexed and frightened that the numbers you give us can be so far off. They appear to be catawampus,” said District Chairman Tom Spackman. 

“Greg Gardner does not own and control the crystal ball,” responded Gardner.

“You’re suspected of creative financing,” Trustee Burton Lee told Gardner, referring to the rollercoaster of amounts presented to the District over the past eight months.

Ever since Gardner replaced former hospital CFO Dan Janicek last September, District trustees have voiced concern over the hospital’s financial fluctuations and the hospital leadership’s reluctance to fully explain them.

In an effort to get answers last November, District trustees called for and were promised an independent top-down review of hospital operations and finances to be presented to them. But that review, which has been described as “a cursory first pass not a top-down review,” was instead presented to hospital CEO Jeff Susi two months ago, not the Hospital District trustees.

Last week, it was again presented to the hospital’s strategic planning committee at a late afternoon meeting. But committee members were sworn to secrecy about its contents and the Hospital District is still in the dark.

On May 6 a few days before the secretive presentation, Susi sent out an email to donors, staff and hospital board members calling for an “open dialogue” and saying that the hospital was “happy to answer any questions about our finances or indeed any other matter.”

But District trustees do not feel that promise applies to them even though taxpayers help fund the hospital.

While the hospital is making its budget request to the District, it is also negotiating with the District over what the reimbursement rate from the District will be for 2015. 

Currently, the District reimburses at more than the Medicare rate, which means that for every night an indigent person spends in the hospital, the District pays the hospital about $1,900 and puts no limit on the number of nights.

But District trustees told hospital leadership two weeks ago that they want to reduce the reimbursement rate to 10 percent below the Medicaid rate.

That means instead of $1,900 a night for an indigent patient stay, the hospital will get about $1,500 a night from taxpayers. 

Hospital leadership told District trustees that they would respond to the reduced rate proposal in writing by May 5th. But the response from hospital board treasurer Jack Weisbaum came a week later on the afternoon of May 12th.

In a five-page memo, Weisbaum wrote that the hospital leadership believed the District’s “simplistic approach is flawed.”  If the hospital were to agree to the Medicaid minus 10 percent rate, he said, it “would result in a reduction in reimbursement for services rendered by almost $2 million.”

Weisbaum said the “loss” would not be “a fair and adequate reimbursement.” Instead, he said, the
District should keep reimbursing at the current Medicare-plus rate.