Feds eye county over health care

March 30, 2011 • Local News

Chaves County officials say intensified scrutiny by the federal government on how New Mexico administers the state’s [auth] indigent health care services may have a harmful effect on the county’s ability to provide medical care to its most needy residents.

The news came in a statement issued by the Chaves County Commission late last week after local officials drastically lowered the amount of money set aside to send to the state for matching funds from the federal government under New Mexico’s Sole Community Provider Program.

The program requires counties to send funds to the state, which then draw matching federal dollars that are paid to local hospitals for providing health care services for the indigent.

The commission approved sending only $2 million to the state for matching federal funds after a directive issued from the federal government ordered the state not to accept any funds that may have derived from cash or inkind donations from a private hospital. Chaves County only sent funds made available from its gross receipts taxes.

Beginning around the year 2000, the county received what amounted to millions of dollars worth of donations over the years from Eastern New Mexico Medical Center.

The most recent donation, worth $6 million, was accepted by the County Commission in September. “It has become clear that the federal government, through the Centers for Medicare and Medicaid Services, disapproves of New Mexico’s program and the method by which counties have been funding the program,” read the statement issued by the county.

“This will have an impact on the amount of funds available to pay for the indigent care provided by both of the hospitals in our county, and may also have a detrimental ef fect on other indigent health care providers.”

The issue of whether the hospital and its parent company, Community Health Systems Inc., is knowingly violating Medicaid rules by making donations to counties, has been the subject of two separate lawsuits, including one that is being pursued by the United States Department of Justice.

The DOJ alleges the donations are made with the agreement that the counties then use the money to obtain the matching funds under the Sole Community Provider Fund — which matches contributions at a three-to-one rate, meaning hospitals receive four times their original donations.

“Apparently, the state of New Mexico has been told that it is has not been administrating the program properly and they are under some pressure from the federal government,” said Commissioner Greg Nibert, commission chairman.

“They were requiring of us to execute a certificate that, in essence, stated that we have not received any donations from the medical community,” he said.

“We cannot say that because we have received donations from the medical community, specifically from ENMMC.” According to county officials, Roswell Regional Hospital has never made any donations to the county.

The state agency in charge of receiving the state funds and forwarding them to the federal government, the New Mexico Human Services Department, responded to the county’s statement by saying that it appeared to be in reference to a review by CMS of how the program is administered in the state.

“The CMS draft review does not disapprove of New Mexico’s Sole Community Hospital Program, but rather found some disallowable donations of cash and donations of in-kind services from private hospitals to the counties under the program,” stated Betina Gonzales-McCracken , spokeswoman for the Human Services Department, in an email.

“The draft review found that nine of the 13 Sole Community Providers that are private hospitals in New Mexico did contribute to the local unit of government either by cash donation or services to offset the expense for indigent care,” she continued.

“Contrary to Chaves County’s news release, this is not now, nor has it ever been, an allowable practice under the Sole Community Hospital Fund.” County officials, including County Manager Stan Riggs, have long asserted that the donations from ENMMC have not, and will not, be used to receive the matching funds. “

The law says you can have bona fide donations, and that’s clear,” Riggs said. “No judge has told us to stop. The state didn’t really tell us to stop. It’s just that we can’t sign (the federal government’s new certification) because we do get bona fide donations.”

However, a county employee charged with heading its indigent health care program testified during a deposition in a separate lawsuit against ENMMC, that the money had traditionally been used in order for the county to make the matching payments to the state. Sometime after the deposition, Chaves County sought legal advice from a Washington D.C.-based law firm’s Denver office, Patton Boggs LLP, which specializes in health care reimbursements.

“We received advice from council as to how to structure donations to avoid having to report that the donation was made for a quid pro quo for indigent health care,” Nibert said.

“So, what we’ve done is set up a mechanism to take a donation from … ENMMC (that) was donated for a specific purpose un-related to indigent health care, and then we took money elsewhere available to the county and sent (that) money up to the state,” he said.

“They have called into question that, and as a result, we’re having to basically deal with only sending money up that (is) tied directly to the gross receipts tax — which is about $2 million a year.” CMS declined to give further details on its draft review until it has conducted its final report, but a spokesman indicated that the preliminary report may have signaled some red flags.

“… We can only say that, based on preliminary information received during a recent financial management review of the (state’s program),” stated Bob Moos, spokesman for CMS Region 6, in an email.

“(That) it appears that some of the funding of the nonfederal share comes from provider-related donations that are not in accordance with federal regulations.” CMS’ draft review, which was obtained by the Roswell Daily Record from the state’s Human Services Department, called into question the legality of nine hospitals’ donations in the state made to their respective counties.

“The review discovered that the hospitals that provided donations in cash make monthly payments to the local unit of government. At which time the end of the federal fiscal quarter, the local unit of government pays the state the agreed upon amount which serves as the state match for the Sole Community Provider supplemental payments,” reads the CMS draft review issued in February.

“In no situation during the review did CMS discover a deviation of this pattern,” it continues. “Furthermore, the payment schedule is established in the memorandum of understanding between the local unit of government and the participating hospitals.”

The report recommends that CMS recoup $53,029,478 from the state of New Mexico in its findings.

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