Hospital System Offers Deal In Standoff

Carolinas HealthCare System has offered a proposal to end its longstanding contract with Mecklenburg County and settle a dispute that has escalated in recent months. The hospital's proposal reflects some ideas already discussed by county leaders, including ending a county subsidy to support indigent patients. It also recommends phasing out county money for a psychiatric hospital on Billingsley Road over three years, which County Manager Harry Jones proposed in May. The offer also calls for the hospital to transfer responsibility for other public health services it provides under its contract with the county within the next year. The proposal comes days before Mecklenburg commissioners are expected to discuss how to proceed with the roughly $42 million hospital contract. Some leaders argue the profitable hospital does not need as much support from the county, which has endured three years of budget cuts. Hospital attorney Larry Dagenhart outlined the offer in a Tuesday letter to commissioners Chairman Jennifer Roberts. Dagenhart wrote that the hospital does not believe the county has had the right to cut indigent money and withhold other payments. But he said the offer is a way to "settle the dispute in a manner that serves the best interests of the community." Roberts said she appreciates the hospital's trying to resolve the contract, but said it is too early to know how commissioners will respond. Roberts said she'd like to consider each part of the contract separately. For example, she said she wants to know how county staff would manage taking over all the public health services. Jones told the Observer he was working on a response to Dagenhart's letter for commissioners, but it wasn't completed early Wednesday evening. For the year that ended June 30, the county paid Carolinas HealthCare $60 million for running the psychiatric hospital at CMC Randolph, caring for the indigent and providing public health services. But for the current fiscal year, commissioners backed Jones' recommendation to stop the indigent reimbursement. Jones also recommended phasing out money to the psychiatric hospital over three years. Psychiatric care in dispute As the county debated its budget, officials were at odds over Carolinas HealthCare's bid to build a psychiatric facility in Huntersville. The hospital outlined its plans for the project earlier this year, and originally needed Mecklenburg officials to back a transfer of beds to the new facility. But county officials withheld their support, saying they needed additional information to evaluate the project. In early June, Jones accused the hospital of breaching its contract by failing to provide requested information. That came after Roberts said the hospital threatened legal action. Frustrated by the delay, the hospital successfully appealed to state lawmakers to let it work directly with N.C. officials on the bed transfer. Still, the county and hospital's relationship remained in limbo. In May, Jones said the county should create a "blue ribbon committee" to map out how the county would phase out money to CMC-Randolph. He also proposed giving the building to Carolinas HealthCare or leasing it for $1 a year. The hospital's proposal calls for the county to transfer ownership of the Billingsley Road facility for $1 no later than Dec. 31. It also calls for capping what the county pays toward operating losses at CMC-Randolph to $20 million this year. The amount would fall by $2.5 million the next two years. In the letter, Dagenhart said the move would save the county about $16 million in the next three years, and also would give the hospital time to establish the new Huntersville facility before the county completely phases out its money to CMC-Randolph. Commissioner Bill James said the proposal will help the county get out of paying for the psychiatric hospital and "accomplish that goal while maintaining quality care." Some mental health advocates worry patient care would be compromised if the county ends its relationship with the hospital. Roberts said she wants commissioners to hear from the public before making final decisions.