NASHVILLE -- TennCare and Tennessee Hospital Association executives are concerned about gubernatorial candidate Zach Wamp's promise that if he's elected, he'll pledge an extra $50 million in TennCare funds to support the Regional Medical Center at Memphis.
The executives fear the proposal promoted by the Shelby County Commission could blow a $150 million hole in TennCare's budget, counting federal matching dollars.
"To single out the Med, I think, is just a dangerous situation because it will absolutely split the (hospital) industry, and it'll start a war in the legislature to be sure," warned Craig Becker, president of the Tennessee Hospital Association.
Another GOP gubernatorial candidate, Lt. Gov. Ron Ramsey, already is pounding Rep. Wamp's willingness to sign the pledge as "irresponsible political pandering."
In an e-mailed statement late Friday, Rep. Wamp said his pledge was to "do everything in my power as governor to provide the federal funds received by the state based on the Med's uncompensated care back to the Med."
Based on $50 million in uncompensated care, that would appear to result in providing the Med $100 million more per year in federal matching funds.
Rep. Wamp's e-mail noted that there are "many other hospitals" providing uncompensated care and said the state must take "a comprehensive look at this problem statewide and not pick winners or losers or pit one part of our state against any other."
He promised if elected to convene a "comprehensive health care summit" to examine the issue.
The GOP gubernatorial candidates are scrambling to pick up supporters of Shelby County District Attorney Bill Gibbons, who dropped out of the GOP primary. Shelby County is home to some 20 percent of Republican primary voters.
HELPING THE MED
Last week, it was all smiles in Memphis when the Chattanooga congressman, surrounded by beaming Shelby County Republican and Democratic commissioners, went before Memphis news media and announced he had signed Shelby County government's pledge.
"It's not an unreasonable request," Rep. Wamp told reporters. "When candidates say Memphis matters -- in my opinion, you can't say that without signing this pledge, or you don't mean it."
In signing the pledge, the congressman committed "to do all in my power to provide all federal funds received by the state based on the Med's uncompensated care."
He also vowed to support federal matching funds for Shelby County's new $10 million annual appropriation to the financially beleaguered public hospital.
No other major gubernatorial candidates -- Lt. Gov. Ramsey, Knoxville's Republican Mayor Bill Haslam and Democrat Mike McWherter -- signed or intend to sign the $50 million TennCare pledge.
All have said they will do all they reasonably can to assist the Med, as the hospital is called in Memphis.
"Given the uncertainty right now over the impact of the new health care reform laws ... and knowing that our state is in the midst of an unprecedented budget crisis, it would not be fiscally responsible for me to make a definitive statement on precisely what level of financial support the State will be able to provide," Jackson, Tenn., businessman Mr. McWherter wrote Friday to Shelby County officials.
Memphis and Shelby County officials want a larger return on what they say is $80 million to $90 million in charity care they provide for the huge number of poor patients in Shelby County and the surrounding region. County officials say they get back only about $30 million to $39 million from TennCare.
"The Med currently only receives a fraction of these reimbursements from the state of Tennessee," said County Commission Chairman Joyce Avery, a Republican. "Shelby County commissioners want new funding in the future."
She said commissioners want the next governor to support the Med.
"We're underfunded," she said. "The state is not doing its part. They're not doing the right thing by Shelby County."
Asked whether Rep. Wamp's move would benefit him politically in Shelby County, Ms. Avery said, "I really don't know. It was not about an endorsement. We told him that. This is not about politics. It's about doing the right thing."
TennCare Director Darin Gordon said in his view Shelby County officials don't appear to have a clear understanding of TennCare's complex financing, a combination of state tax dollars, special health care industry taxes and other funds.
Among other things, he disputes the validity of the $90 million figure and the $50 million Shelby County officials say Memphis is owed.
COMPLEX FINANCING
Since TennCare was created in 1994, Mr. Gordon said, the key has been the federal government's acceptance of hospitals' uncompensated care and TennCare losses as "certified public expenditures."
Currently, the state has been able to get the federal government to sign off on $200 million generated by hospitals statewide, including Chattanooga's Erlanger hospital, Mr. Gordon said.
This $200 million brings about $400 million in federal Medicaid matching funds, Mr. Gordon said. That generates about $600 million in state and federal funds for the overall $7.6 billion TennCare program.
It was several years after TennCare started when the state began using some TennCare funds to make supplemental payments to hospitals, Mr. Gordon said.
The state estimates the Med last year had about $70 million, not $90 million, in audited certified public expenditures that would draw down federal matching funds. It received about $42.7 million in various supplemental payments.
But Mr. Gordon noted the Med also received nearly $60 million in direct payments from the managed care organizations that reimburse providers for patient care. That brings the total reimbursement to $102.6 million.
Giving the Med $50 million will hurt the program, Mr. Gordon warned.
"I can't match that. So I've got to go cut somebody in order to give them (the Med) $50 million," Mr. Gordon said. "Who do I take it from? Who do you choose? ... There is no extra money."
He noted that to stave off some $659 million in cuts to hospitals, the Tennessee Hospital Association this year agreed to pay a $310 million "assessment" that will offset reductions to the industry and other aspects of TennCare.
Mr. Becker with the hospital association said he is "not unsympathetic" to the Med's plight.
But he noted that "if you do this, then you're going to take away CPE (certified public expenditures), which will take away matching dollars for the TennCare program which will then be taken away in rates (cuts) to the Med."
Moreover, he said, "what's to stop other safety net hospitals from coming in and saying, 'What about me?'"
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