INDIAN RIVER COUNTY — The Indian River Medical Center and the Hospital District appear to be headed for legal arbitration because negotiations on how the District will reimburse the hospital for indigent care have come to a standstill.
While the District has made several offers in the negotiations, the hospital has not made any counter-offers, but, instead, remained adamant that it must continue to receive the $8.2 million a year it currently gets from the District.
Because that amount has increased by unexpected bills from the hospital for hundreds of thousands of dollars, which cut into District reserve funds, the seven elected District trustees will request arbitration rather than request a property tax increase of between 19.9 and 25.4 percent to pay the hospital’s anticipated bills for 2015.
In its latest offer to the hospital, the District said in order to break even it would give the hospital $7,047,000 for fiscal year 2015 for an increase of 4.7 percent. But the hospital said that amount was unacceptable and stuck with its initial position.
The negotiation teams were supposed to consist of three people on each side – the executive directors of the hospital and the District, the treasurer for each board and the attorney for each side – but the hospital added a second attorney, its CFO and a finance officer.
“With six people on the hospital team, including two attorneys, it makes the negotiations somewhat lopsided,” said District Treasurer Trevor Smith in his latest report to the trustees.
“But you have done a marvelous job. You have done what we asked you to do, and you went on further, which is admirable,” District trustee Alma Lee Loy told Smith.
As a last minute stopgap measure to avoid arbitration, the hospital suggested hiring an unofficial healthcare mediator, which would be less expensive than arbitration. But negotiations with a healthcare mediator would likely be confidential, whereas arbitration would be mostly public and include discovery, which District trustees favor.
“I don’t really feel we’ve had an attempt by the hospital to help in this process – to say ‘let’s sit down and work this out’,” said Smith.
“I couldn’t be more disappointed in the process. Our initial proposal to the hospital was well considered and thoughtful. Trevor Smith has gone significantly past what was required … Our current proposal is constructive and reasonable, but I don’t see a lot of information coming the other way,” said District Trustee Gene Feinour.
At their monthly scheduled meeting in two weeks, District trustees are likely to vote for arbitration. Then, they will put the hospital on notice that negotiations have come to a dead end and the hospital has 30 days to accept the current offer or arbitration begins.
“It’s time for them to come to us,” said District Chairman Tom Spackman.
