The increasingly tense battle between the state and private company Vidant Health escalated Thursday, with N.C. Senate budget makers considering an idea to revoke Vidant Medical Center’s status as the teaching hospital for East Carolina University and build a new teaching hospital in Greenville.
Pat Ryan, a spokesman for state Senate leader Phil Berger, told The News & Observer on Thursday that legislative leadership is considering taking the teaching hospital away from Vidant.
“General Assembly leadership is actively crunching the numbers” about how to build a new teaching hospital for ECU’s Brody School of Medicine, Ryan said in an email. “Thirty-five million dollars per year could finance a considerable construction project.”
That figure was a reference to a potential $35 million cut to Vidant’s Medicaid reimbursement at the Greenville hospital.
Ryan said that any new teaching school would likely remain in Greenville.
“This is all preliminary due diligence, but nobody has contemplated any other location,” Ryan said. “The purpose is to serve Brody.”
The Carolina Journal first reported that the Senate was considering the move.
The Senate’s consideration of building a new teaching hospital comes on top of the proposal, introduced in Raleigh this week, to cut the Medicaid reimbursement. That move was in response to an attempt by Vidant to remove the state’s influence from the hospital’s Board of Trustees. Earlier this month, the hospital moved to strip the UNC Board of Governors’ ability to appoint any trustees for Vidant Medical Center.
The UNC system has had a relationship with the Greenville hospital since 1975 and has appointed members of the hospital’s Board of Trustees for years. Under that agreement, the facility became the teaching hospital for East Carolina’s medical school. In return, the university system agreed not to build a separate teaching hospital for the school that would have competed with the existing hospital.
While the agreement has been tweaked over the decades as it was renewed, the most recent agreement, approved in 2013, specifies that the Board of Trustees will have 20 members, 11 of them appointed by the Pitt County Board of Commissioners and the remaining nine named by the UNC Board of Governors.
But, the hospital and the Pitt County commissioners moved to change that because it believed it was in the best interest of the region for a local authority to choose trustees.
Mike Waldrum, Vidant Health’s chief executive, said during a news conference on Wednesday that it would be better if the hospital had trustees that knew the region and its issues “rather than a group of people that sometimes haven’t ever been to Eastern North Carolina or don’t understand the issues that we face.”
The hospital’s move to clear the board of UNC appointees is currently tied up in a lawsuit and the hospital and the UNC System are currently in mediation. But if there are no UNC representatives on the board, Senate leadership contends, then the hospital shouldn’t get any special treatment for Medicaid reimbursements or keep its status as a teaching hospital.
“Vidant has a long-standing partnership with ECU, which is a public university (and) Vidant receives public dollars to benefit financially from this partnership,” State Sen. Raleigh Hise, R-Mitchell, said Wednesday in a statement. “However, despite the decades-old partnership, Vidant has taken action to prevent the university from having any say in the hospital’s affairs. It does not make sense for Vidant to continue receiving financial benefits directed by public policy when it has ended its side of the partnership.”
On Thursday, state Sen. Don Davis, D-Pitt, gave an impassioned speech during the Senate budget debate, calling the moves aimed at Vidant “petty” and an attack on Eastern North Carolina.
“On this issue you have plenty of people down east who are just upset and mad,” Davis said. “This provision, if we call it what it really is, for what it does, it punishes ... the people of Eastern North Carolina, who need it the most. Eastern North Carolina does not deserve this. There are other ways to work out disputes, not just throwing stuff in budgets.”
The Senate’s budget currently calls for the state “to no longer reimburse the primary affiliated teaching hospital for the East Carolina University Brody School of Medicine for the allowable costs for inpatient and outpatient services.”
Instead, the new budget would treat Vidant the same as any other private hospital under the state Medicaid plan. Vidant has said that because it operates as a teaching hospital it sees a higher number of Medicaid patients than a normal hospital.
Waldrum said Wednesday that the move would harm Eastern North Carolina and potentially cause cuts at the hospital.
“In addition to the other cuts that have been proposed,” Waldrum said on Wednesday, “it will have a significant effect and we will have to adjust the services we provide.”
But losing the teaching hospital would be a huge blow to Vidant.
In UNC’s legal complaint against Vidant, it said the state has pumped $60 million to $65 million a year over the past five years into the Brody School of Medicine, directly benefiting the hospital.
But if the university system loses its ability to appoint members to the Board of Trustees, UNC’s complaint says, the only remedy is for the system to build a separate teaching hospital for the medical school. The cost would be more than $500 million, according to the complaint.
Staff writer Dawn Baumgartner Vaughan contributed to this report