From the Weatherford Democrat, by Christin Coyne CNHI, August 20, 2012: WEATHERFORD — Last month, the Parker County Hospital District Board of Directors voted to make a voluntary payment of up to $9 million in tax revenue to the company that leases and operates Weatherford Regional Medical Center for yet-to-be-decided improvements to the facility as well as other plans.
“That money is coming back into Parker County for the health care of Parker County people and to make improvements to the hospital,” board president Melvin Woody said.
Five of the seven elected directors voted for the payment to Community Health System, Inc., with the exception of David Barbrick, a CHS employee who abstained, and Dr. Eric Floyd, who voted against and said he believes the payment is a waste of taxpayer money.
Floyd said he has issues with the fact that such a large payment was voluntarily made to the for-profit company, as well as the lack of a contract.
Though they have not nailed down everything on paper, it will not be a “no strings attached” gift, proponents said.
Floyd, however, questions how much input the district will have regarding where the money is spent now that they’ve agreed to make the payment.
Urgency in payment
The payment, which will be matched with Medicaid funds through the Upper Payment Limit program, is expected to be between $8 million and $8.75 million and will be made in the next 30 days, about the same time the hospital district expects to have some sort of agreement in writing, according to district CEO Randall Young.
The UPL program is a state and federal program that matches tax payments based on the number of Medicaid patients seen at the hospital and is used by hospitals across the state.
“We successfully used it for the last five years to get the hospital where it is,” Young said.
The UPL program, which has multiplied district funds by about 2 1/2 times since they began giving money to CHS through the program, is scheduled to go away at the end of the fiscal year next month, Young said.
“CHS wanted to take advantage of the last opportunity to run money through UPL,” Young said.
Earlier this summer, the district made the last hospital indigent care payment to Community Health Systems, Inc., which began leasing the property from the district and operating the hospital in 2007.
The hospital district was required to pay roughly $40 million to cover the cost of indigent care over the 30-year lease, according to Young, who said the district has saved about $2 million paying off the 10-year obligation in five years.
Since the lease program began, Parker County taxpayers have received roughly $70 million in improvements to hospital facilities with no bonded indebtedness, while the tax rate has decreased from 17.5 cents per hundred dollar valuation to 11.3 cents, according Young.
The district wanted to take advantage of the government matching program so that more physical improvements may be made to the facility — the details of which will be forthcoming, Young said.
Several months ago, CHS told the board that the company had some projects they’d like to do but their costs for Medicaid, indigent, no pay and similar types of patients had gone up about four times, Young said. The company asked whether the board would be willing to make another UPL-matching payment to them so they could make considerable improvements in the facility.
Because of the tight deadline for the UPL program, which goes away Oct. 1, they have not worked out and put on paper the details of what that money will pay for, according to Young.
They’ve discussed some ideas of what to do with the third floor that is currently vacant, Young said, adding that some people on the district’s indigent care list have had trouble getting into see certain health care specialists and CHS has agreed to solve that issue, as well.
Doctor voices concern
The voice of lone dissent about the payment, Floyd has been an elected at-large representative on the board since 2006. He resigned as chief of medical staff at the hospital in 2007 following an issue he had with the parent company of WRMC. At the time, Floyd publicly stated that ER doctor contractual issues were between CHS and ER doctors regarding hospital admittance and financial screening practices, something the hospital CEO disputed.
But, his concern over the payment, he said, has to do with what he believes is wasteful spending.
“I believe this $9 million payment to CHS from the taxpayers of Parker County was wasteful, unnecessary and unwise,” Floyd said.
Additionally, Floyd said he believes there should have been a contractual or written agreement detailing specifically how taxpayers would benefit before the board agreed to the payment.
“In return for $9 million, the PCHD received several verbal promises,” Floyd said. “There is no written contract for the terms of this $9 million payment.”
“Cory Countryman [CEO of Weatherford Regional Medical Center] made the verbal promises to several board members, not personally to me,” Floyd said. “He promised the funds would stay in Parker County and not be sent to other CHS hospitals. He also agreed to make payments to physicians who see outpatient indigent patients for five years. He also promised to make unspecified improvements to the hospital. Again, these are verbal promises with nothing in writing and therefore the PCHD has no enforcement if these promises are not kept.”
Floyd said he believes it is wrong to voluntarily give tax money to a for-profit company with nothing in writing.
The hospital district could have done something of more direct benefit to Parker County taxpayers with that money, Floyd said.
Now that the district has fulfilled its obligation to CHS for indigent care coverage for the next 20-plus years, Floyd said he doesn’t think the district needs to give such a large amount of money to CHS.
“The first thing we need to be doing is reducing taxes,” Floyd said.
Now that the vote is over, he wouldn’t be making an issue about the payment if it wasn’t so large, Floyd said.
An $8 million to $9 million payment would be the majority of a year’s worth of taxes for the district.
The current year’s tax rate should bring in about $10.36 million, according to information from the Parker County Appraisal District.
Others support payment
Since taking over the hospital six years ago, CHS has done needed things for the hospital that the district could not do, such as upgrading the facilities and bringing in more doctors, said Woody, who joined the district in 1994.
Using money that has been matched by the government through the UPL program, they recently opened a wing with private rooms, as well as a cath lab that has seen a tremendous response, according to Woody.
“Myself, I could not be more happy with what the hospital has done,” Woody said. “It’s really just a miracle to us.”
He added that hospitals across the state would like to be in the position of Parker County.
“That’s what the hospital has done,” Woody said. “Then we had an opportunity to put in $9 million more into the hospital [that will be matched by government funds].”
“We did have the money available,” Woody said, adding that they were guaranteed that the money would stay in Parker County.
The hospital district board doesn’t want to tie down CHS by saying certain things must be done by certain dates and wants the company to be able to use their best judgement, Woody said.
“What is good for the hospital is good for Parker County,” Woody said.
At the same time, the hospital will listen to the ideas of the district about what is done with the money, said Woody.
“We’re not going to just give them the money and say here it is, no,” Woody said.
The two entities have built a relationship and the district has asked the company to do things not covered in the lease contract that have been done, according to Woody.
“They’ve done everything they said they were going to do, plus,” Woody said, who added that he’d like to see renovation on the second and third floors of the facility.
“Then there’s other things besides that,” Woody said. “I have no idea what can be done.
“We just think that this is a wonderful opportunity for us. It’s just been a wonderful partnership. It couldn’t be better.”
Countryman agreed with Woody’s sentiment — but wouldn’t answer other questions in regards to the payment.
“It’s a great program that benefits the community in many ways,” Countryman wrote in an emailed statement. “However, it’s a district program so I will defer to them to define how it works on [sic] what those benefits are.”
Countryman declined to answer questions about what the hospital expected to do with the money or what promises had been made to the board.
“The government does not want you doing a quid pro quo,” Young said, adding the hospital district can’t just write a contract for a UPL payment, though there are restrictions on how the money can be used.
“We could probably said we’d like to see this done,” he said, adding that if they didn’t spend the money as agreed, they would face legal problems from the district and it would be a very public thing. “We will get something. It may just be a letter of agreement or memorandum of understanding. That’s what I would anticipate you would see.”
That will likely happen at the same time as the payment, Young said.
“There’s just got to be some trust there that they are going to do what they say,” he said.
CHS has met every obligation since the contract with the district began and the company has gone above and beyond as far as recruitment of doctors, according to Young.
“Right now, it’s ‘Hey we’ve got a chance to make the improvements. We didn’t know we had a chance to make those improvements two months ago,’” Young said. “It came up kind of quickly.”
Because the district has seen five and a half years of efforts and results on the part of CHS, they trust that the company is going to come back and do what they say they are going to do, Young said.