ETMC set to receive funds again

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Published: December 02, 2008 11:39 am

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ETMC set to receive funds again

By Rich Flowers/Athens Review

East Texas Medical Center Athens and the County Hospital Authority

have been reinstated in the Texas Medicaid Rural Upper Payment Limit

Program, Dean , the attorney representing ETMC, said earlier this week.

Word of the reinstatement follows a vote by the Hospital Authority Board

last Thursday to resume participation in the program that has provided $25

million to the Athens facility since 2002. ETMC will not only receive future

funds, but will also recoup all of the money it would have received during

the six-months the payments were suspended.

" The six-month interruption in those funds was extremely costly to ETMC, "

said. " County oftentimes was the number one county in the

state in receiving funds for indigent care because of the number of people

that qualify. "

ETMC was suspended from the program in May after Linea Rose of Athens filed

suit against ETMC Athens and the ETMC system. The lawsuit alleged ETMC had

violated the False Claims Act by submitting claims to the federal government

for over $15 million of federal matching funds. Officials with the Texas

Human Services Commission suspended both entities until the questions raised

in the suit could be resolved.

" The state wrote a letter suspending the authority from the program because

of what Rose alleged. We responded to that and completely answered

everything that had been raised in the letter, " said.

In August, U.S. District Judge T. Ward of the East Texas District Court

in Marshall granted the motion for summary judgment, dismissing a lawsuit

against the ETMC system.

" After Judge Ward granted summary judgment, we began to try to get the

authority and hospital back to where those funds could again be utilized in

County, " said.

Written notification that the reimbursements would resume came Friday,

said. The first payment is expected this week.

According to court records, Rose's suit filed against the defendants argued

that ETMC Athens and the Authority Board " devised and implemented a scheme

to fraudulently receive additional Medicaid matching funds from the United

States by illegally abusing the intergovernmental transfers procedure for

the Medicaid Upper Payment Limits Program. "

The program allows states to reimburse public rural hospitals for specific

uncompensated care provided under Medicaid.

The funds going to HCHA and then the state, attorneys for Rose said, were

taken from the hospital's general revenue account, which is illegal.

ETMC officials have said the transactions are legal because they are

operating a public hospital. Rose attorneys argued the ETMC system was

actually a private corporation. The defendants argued that its lease

agreement with the County makes its fall under the county-owned

facility operated by a private company.

Before reinstatement to the program, Health and Human Services Commission

required ETMC to answer several questions concerning the transactions. The

board was required to document the date and amount of each internal transfer

from HCHA to the state in support of the Rural Upper Payment Limit Program,

from January 2002 through the present.

In addition the board was asked to state whether all funds included in the

transfer were hospital authority funds and identify the source of the funds.

Judge Ward did not state in his opinion whether ETMC is a public hospital or

whether the funds are prohibited. Ward did state that a " private hospital is

defined as 'owned and operated' privately, and a public hospital is 'owned

or operated' by the government.

In addition, Ward ruled that the defendants did not knowingly make a false

claim to the government.