BC Commissioners trying to dissolve Hospital Authority Board. | Eastern North Carolina Now

Subject Background:

    When Vidant agreed to lease BC Hospital, they refused to assume the liabilities that were lurking from past mismanagement, an amount estimated to be around $22 million. Hundreds of documents were filed with the federal Center for Medicare and Medicaid (CMS) in 2011 taking advantage of a new regulation that encouraged self disclosure of potential misdeeds falling under the SHARK legislation. So far, the Hospital Authority Board has saved the County millions in fines. Although the $6.5 Million Escrow Fund is scheduled to expire in 2016, the BC Commissioners have the authority to discontinue the Hospital Board at their will.

    There are real concerns that Vidant has been increasing the number of patients transferred to Vidant Medical Center from Beaufort Hospital. Vidant Medical Center can charge at a higher rate to make up for the fact that they are overbuilding and overspending. Vidant recently applied for a Certificate of Need (CON) for 85 additional new beds for the 5th & 6th floors of the New Cancer Center that is still under construction. The Cancer Center project is scheduled to have 65 beds on the lower floors.

    The majority(6) of the Commissioners have long desired to build a new jail, even though the taxpayers have objected. But we taxpayers keep getting in their way. During the recent budget discussions the 6 Commissioners turned down an opportunity to provide some tax relief. The citizens of Beaufort County have been overtaxed and a tidy (slush) fund has accumulated to almost $16 million. If the Commissioners can get a hold of this Escrow Fund ($6.5) and add it to the $16 million, they will be able to fund a new jail without the taxpayer's approval. Here below is the Press Release: communication a group of these facts:

News Release:

    A resolution is on the Tuesday, July 7th, 2015, Beaufort County Board of Commissioners meeting agenda to dissolve the above described 9 member board, also known as the "Hospital Board". Upon being dissolved the Beaufort County Board of Commissioners will increase the County general fund assets by approximately 6.4 million dollars. Neither the county manager nor any county board member has consulted the Hospital Board. There has been no vote by the Beaufort County Board of Commissioners to hire attorneys to dissolve the Hospital Board.

    The purpose of the trust fund, set up in 2011 when University Health Systems acquired the lease to the Beaufort County Hospital, was to insulate Beaufort County from liabilities generated during the time the County operated the hospital. University Health Systems, now Vidant, cut off all of their liability by obtaining new licenses and provider numbers. Vidant is a partner in administering these funds. The Hospital Board has managed to preserve almost all of the money during the past four years. The Trust began with 6.8 million dollars. The Hospital Board had one liability estimated at 22.5 million dollars. The Hospital board managed to settle that liability for about 4 hundred thousand dollars.

    At present identified known liabilities consist of at least one malpractice suit and unsettled MEDICAID/MECICARE audit settlements. Actual amounts are unknown. They could be significant. Beaufort County, upon dissolving the Board would assume all known and unknown liabilities without limit. The present board structure protects Beaufort County and the taxpayers from unlimited liability.

    The present Hospital Board has members who are competent in finance, health care law, health care operations, MEDICARE/MEDICAID, and government operations. The Board of County Commissioners does not have members who are familiar or to say nothing of competent in these areas.

    Vidant would have to agree to dissolve the Trust Fund. At this point it seems no liability could fall on Vidant should they agree to dissolve the trust. There would be benefits to Vidant in dissolving the trust and the Hospital Board. Presently the Hospital Board has called Vidant's attention to certain failures to comply with the terms of the lease agreement and has requested our attorney to pursue compliance. Vidant has failed to follow some important terms of the lease during the past four years. Dissolving he Board would mean Vidant could essentially do as they please.

    With the County Commissioners handling of the closure of the hospital in Belhaven, the Hospital Board has become concerned about the future of the Beaufort Hospital. It is located only 20 miles from the Vidant complex in Greenville. Recent articles in the Daily Reflector suggest Vidant's mission may be in jeopardy. The Board has discussed how we would keep the Beaufort Hospital open should Vidant give up their lease. Board members are concerned that Vidant may treat Washington the same way they did Belhaven.

    Beaufort Hospital Board members unanimously agree the 6.5 million dollars on hand should be placed in a trust to cover startup expenses should Vidant abandon their lease.

    Beaufort County is estimated to have 21 million dollars in cash at the end of this year. There will be a minimum of 11 million dollars of true unencumbered surplus. With another 6.5 million dollars there will be 17.5 million dollars of unused surplus

    Seventeen and one half million dollars will easily build a 96 bed jail behind the court house or a larger jail at Chocowinity. Once Beaufort County has the cash on hand, by a simple vote of only four, the commissioners could build the jail without borrowing money. This would be an egregious misuse of funds placed in trust to be used for health care needs.

    Contact: Hood Richardson