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Each week, WFAE's "Morning Edition" hosts get a rundown of the biggest business and development stories from The Charlotte Ledger Business Newsletter.

New report shows North Carolina hospitals' Medicare finances don't add up

Jodie Valade/WFAE / Atrium Health

Some North Carolina hospitals that said they lose money treating Medicare patients have actually made money treating them. That’s according to a new report from the state treasurer’s office, which examined federal Medicare records. The report found Charlotte-based Atrium Health had the largest difference between its stated Medicare losses and the Medicare profits it self-reported.

That’s according to the Charlotte Ledger Business Newsletter. For more, WFAE's Marshall Terry talks to the Ledger’s Tony Mecia.

Marshall Terry: Tony, just how big was the difference?

Tony Mecia: Well, Marshall, in the case of Atrium Health, this report from the state treasurer said that Atrium Health had the largest disparity between what it had said that it spends on Medicare patients. It said it had lost $640 million in 2019. But then at the same time, it self-reported to the federal government that it made $119 million in profit from Medicare patients.

So, Novant had the second biggest discrepancy between the two. It claimed losses of about $600 million, while reports of the federal government said it lost less than $100 million.

Terry: OK. So what’s behind these discrepancies then?

Mecia: Well, I probably don't have to explain to you that hospital billing and health care cost — it's a very complicated topic. And so what we really have here are a couple of different reports. We have the numbers that Atrium reports that it spends on charitable care for Medicare patients. And then we have the number that it reports to the federal government as far as its finances on Medicare patients. Those are two different things. And the way that it allocates costs and what the actual cost of something are as it relates to health care can be very different.

I mean, we can sit here and we can say, "well, how much does it cost for Atrium to conduct gallbladder surgery?" That sounds like an easy question, but it's actually a very complicated answer because in health care, not only do you have different costs that factor into that, how much are they allocating for the room space? Various doctors? Anesthesia? But you also have contracted rates. And so the amount that people pay depends a lot on who they're insured by.

Is the money coming from the federal government? Do they not have insurance? Those are all very different rates. And so these two different reports are really measuring different things. And so, you know, it's a very opaque process of how health care costs are set. This provides a little bit of more light on that, but certainly not the end of the discussion.

Terry: How has Atrium and other hospitals responded to this report?

Mecia: Well, Marshall, they don't like it. They say it's not entirely accurate. As you know, Atrium and Novant, and a lot of other major hospitals are nonprofits. And the reason that they're classified as nonprofits is that they have a charitable mission to provide health care. You know, they don't pay property taxes or income taxes. This sort of undermines that idea.

Atrium said in a statement to Kaiser Health News that it thinks that the numbers are not fully accurate. It says that it believes it loses money on Medicare.

The North Carolina Health Care Association, which represents hospitals, said that this latest report by the state treasurer is part of a pattern of reports that have used misinformation and half-truths that make inaccurate conclusions.

Terry: And did State Treasurer Dale Folwell mention if he’s planning to do anything about the report’s findings?

Mecia: Well, this is really just more information that's coming out. You know, he couches it as providing more transparency into the operations of the hospital systems. He has been a frequent critic of the size of the hospital systems, the way they price their procedures — a critic of mergers that they've undertaken.

You know, he does have a responsibility for the state health plan. So he does have an interest in keeping the prices low.

But it's also probably worth mentioning, Marshall, that Dale Folwell is a Republican who was widely seen as a candidate for governor in 2024. So there is a political dimension to this as well.

Terry: All right. Well, not far from the hospitals in Charlotte is Independence Park in the Elizabeth neighborhood. And you report some changes are coming to the park. Please tell me they’re not making way for more apartments?

Mecia: Well, Marshall, that's a good guess in Charlotte. But in this case, it's not accurate. You're right. The county is redoing Independence Park. It's been under construction for a number of months. It's a $5.9 million project. We're going to add winding trails and natural elements.

The interesting thing here is they're going to — we had an article in The Ledger this week on this — they're going to restore it more to the vision of its original landscape architect John Nolan. John Nolan is pretty well-known in Charlotte. He designed the Myers Park neighborhood and a lot of other places. And so it's really taking it back to that earlier vision for the park more than 100 years ago.

Terry: On now to an update on remote working, at least for one of Charlotte’s largest employers, Bank of America. In a recent memo to employees, the bank said it’s OK for some workers to work remotely two days a week. I thought Bank of America was pushing hard to bring its employees back full-time. Are they giving up on that now?

Mecia: It does look a little bit like they're waving the white flag on that issue. Bank of America CEO Brian Moynihan had been very consistent in saying, "we're a work-from-work company. We want our people back in the office."

But I think it's really a nod to the reality that a lot of people don't want to come back into the office full-time and that, with the labor market being as tight as it is, workers have a lot of options.

So this memo from the bank said, you know, workers in certain roles that don't need to be in the office, that they don't really need to come into the office more than three days a week if they don't want to.

Terry: I want to end this week on the Caribbean. It’s obviously a good way from Charlotte, but you report one developer is trying to bring some of it to Lake Norman. How so?

Mecia: Yeah. The developer told Cornelius Today that he wants to build a crystal lagoon in Huntersville. He says he has 270 acres under contract — plans to start the rezoning process on those pretty soon. Said that it's an environmentally friendly way to create clear water, white sand beaches and water sports off of sand for a road.

So I guess the thinking is, Marshall, you know, why go to the islands when you can go to Huntersville?

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Marshall came to WFAE after graduating from Appalachian State University, where he worked at the campus radio station and earned a degree in communication. Outside of radio, he loves listening to music and going to see bands - preferably in small, dingy clubs.