BRHS payment overdue|County willing to work with health-care provider

Published 10:50 pm Friday, February 4, 2011

Contributing Writer

A payment due to Beaufort County by Beaufort Regional Health System is past due, according to information obtained by the Daily News.
As of Jan. 31, BRHS owed Beaufort County $845,061 in payments as reimbursement for payments made by the county on debt owed on various construction projects at the local health system.
To date, that money has not been paid to the county, County Manager Paul Spruill said in an interview with the Daily News on Wednesday.
Meanwhile BRHS Public Information and Marketing Director Pam Shadle said the health-care provider is in discussions with Spruill about the timing of the payment as it relates to recent events at BRHS.
“BRHS is aware that its current lease relationship with Beaufort County requires us to reimburse the county for debt payments the county made on behalf of BRHS,” she said. “We are aware that the county anticipated such a reimbursement on January 30 We are in contact with County Manager Paul Spruill about necessary timing for the reimbursement as the due diligence process outlined in the recently executed Letter of Intent unfolds.”
Spruill and other county leaders interviewed by the Daily News said they are willing to work with the financially strapped health-care provider on the payment.
But the county, facing tough budget choices of its own in the coming months, cannot afford to give BRHS as much leeway on its debt payment during the 2010-2011 fiscal year as it did during the previous year, they said.
“Last year, we were able to stretch out the reimbursement over a period of many months … but this year we cannot stretch out the reimbursement in the manner that we did,” Spruill said.
In late 2010, BRHS reimbursed Beaufort County $1.57 million for the debt payment it owed during the 2009-2010 fiscal year after the BRHS Board of Commissioners and Beaufort County agreed on the county’s purchase of 15 pieces of property, or 19 “tax parcels” owned by BRHS.
The county’s purchase of the BRHS property for $4.8 million gave BRHS the money it needed to make its debt payment and some of the operating capital it needed.
The county was able to extend the payment period for BRHS during the past fiscal year because that real-estate transaction was under way, Spruill said.
Since the possibility of a similar transaction doesn’t exist this year, the county cannot afford another similar extension, he said.
The latest concern over the BRHS debt payment comes as the Beaufort County Board of Commissioners is studying a recommendation from the BRHS board to lease the health system to University Health Systems of Eastern North Carolina for 30 years in exchange for a $30 million prepaid lease payment.
Ultimately, the county commissioners will decide whether to accept, amend or reject the BRHS board’s recommendation.
A letter of intent between the BRHS board and UHS signed earlier this week stipulates that a portion of that prepaid lease payment be reimbursed to the county to satisfy the health system’s debt obligations.
As of March 15, those debt obligations will amount to $18,239,354.29, according to Spruill.
The two health systems hope to complete the review by UHS of financial records and operations at BRHS by April 29.
In late 2010, the BRHS board and the county commissioners approved an updated lease agreement that reflected the county’s purchase of BRHS property and stipulated that BRHS reimburse the county this fiscal year $2,555,005.49 in debt payments. Since July 1, 2010 — the start of the current fiscal year — through Jan. 31, 2011, Beaufort County has paid $1,130,848 on behalf of BRHS, Spruill said in information provided to Daily News.
To date, BRHS has reimbursed the county $276,787 for these payments, he said.
Spruill said the difference between payments made and money owed was “not so significant” until the scheduled Dec. 30 and Jan. 30 payments were due by the county to the bank.