published Thursday, April 10th, 2014

Hamilton County commissioners approve Erlanger funding deal

The Erlanger hospital campus is shown from South Crest Drive.
The Erlanger hospital campus is shown from South Crest Drive.
Photo by Angela Lewis.

Erlanger Health System will get to turn $10 million into $30 million after Hamilton County commissioners agreed Wednesday to help the hospital tap into a pool of federal money for treating uninsured patients.

But the hospital still is seeking an increase in funding from the county -- and any kind of funding from Chattanooga.

Commissioners unanimously agreed to take Erlanger's cash and be a part of what is called an intergovernmental transfer, a common funding mechanism hospitals across the nation rely on to help them underwrite the cost of treating patients who do not have insurance.

The county will take the money and send it to the state TennCare program. Then the money will increase by about $20 million from a federal match from the Public Hospital Supplemental Payment Pool.

After that, the money goes straight back to Erlanger, a big shot in the arm for the public hospital that has struggled financially through the last several years.

It may seem like funny math, or some kind of shell game, but Steve Johnson, the hospital's vice president of governmental and payer relations, said this is the way many hospitals get paid for uninsured health care.

"It's not uncommon. It's actually the way it's done all over the country," Johnson said. "The financing of charity care is unusual and complex, but the intergovernmental transfer has been done for years and years."

The vote Wednesday was the last administrative hoop the hospital had to jump through.

And this is only the first bite at the pool of funds. Another transfer can be done in July, getting the hospital another estimated $20 million bump, and again next July.

After that, unless something drastic changes with the state's TennCare waiver, Johnson said he expects it will become a permanent funding source for Erlanger as waivers renew.

Meantime, he said the hospital is still talking with city and county officials to get a combined $10 million a year in local contributions.

Now, the county pays Erlanger $1.5 million a year, and the city of Chattanooga pays nothing. The city hasn't paid since a city-county sales tax agreement expired under Mayor Ron Littlefield's administration.

Hamilton County Mayor Jim Coppinger said Wednesday the $1.5 million for Erlanger is in the budget, but not the $5 million the hospital wants.

"Obviously, what we are looking at is we will continue to contribute our $1.5 million and we will look at other ways to help Erlanger financially. This is one of those ways," Coppinger said.

Chattanooga spokeswoman Lacie Stone said the city is "in the review phase" of budgeting. But Erlanger has applied to be included in Chattanooga's next budget -- along with all the city departments, local nonprofits and others wanting money from the city -- and it's under consideration. She added that Mayor Andy Berke encouraged Erlanger CEO Kevin Spiegel to make a budget offer.

On Wednesday, Johnson said hospital executives are pleased that the county is still contributing.

"We will obviously have continuing discussions for local support, but right now we are very excited that Mayor Coppinger is including the $1.5 million in the budget. We will continue discussions with the city about offering local support. Obviously Mayor Berke hasn't completed his budget, but we will continue talking with them," Johnson said.

Erlanger executives learned in early April that the hospital would have access to the supplemental payment pool.

Erlanger had been left out of the pool while both Nashville General Hospital and the Regional Medical Center in Memphis have received millions from it. The Centers for Medicaid and Medicare Services approved a waiver to include Erlanger.

Contact staff writer Louie Brogdon at lbrog or at 423-757-6481.

about Louie Brogdon...

Louie Brogdon began reporting with the Chattanooga Times Free Press in February 2013. Before he came to the Scenic City, Louie lived on St. Simons Island, Ga. and covered crime, courts, environment and government at the Brunswick News, a 17,000-circulation daily on the Georgia coast. While there, he was awarded for investigative reporting on police discipline and other law enforcement issues by the Georgia Press Association. For the Times Free Press, Louie covers Hamilton County ...

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