Hospital escrow account to grow

Published 8:41 pm Wednesday, May 2, 2012

An escrow account created following the merger of Beaufort Regional Health System with then-University Health Systems of Eastern Carolina is expected to grow following action Wednesday by the board given oversight of that account.

The BRHS Board of Commissioners unanimously agreed to transfer about $1.275 million from the escrow account to the N.C. Department of Health and Human Services over the next several weeks.

The decision was made following nearly two hours of discussion with the board’s lawyer, with the understanding the state will return those funds to the escrow account along with an additional $435,510 in federal funds.

The additional funds will be paid to compensate BRHS for care given to patients who did not have insurance and those covered by Medicaid, the federal insurance system for those who need financial help with medical costs.

Hospitals, generally, are not reimbursed for providing that care in an amount sufficient to cover the cost of that care. The additional funds are an effort to make up for that difference, according to Frank Kirschbaum, a Raleigh lawyer representing the board in the transfer.

The transfer is part of an annual process — begun about 14 years ago — required of all public hospitals in the state in order for any of those hospitals to receive the additional compensation, he said.

However, this is the first year that any actual funds will be transferred, he said.

In previous years, the transfer of funds occurred only on paper, Kirschbaum told the board.

The first transfer — $830,551 — will occur by noon Monday, with the state scheduled to return the money to the BRHS escrow account within seven business days. In about two weeks, a second transfer — $444,614 — will occur, after which $880,124 will be returned to the BRHS escrow account.

The program under which the transfers and reimbursement are being made is generally known as a “Medicaid participation draw down,” according to information presented to the board.

“I have a very strong confidence in this,” Kirschbaum told the board. “It should lead to a large return.”

Last year, when county and hospital officials agreed to the lease and subsequent purchase of the Washington hospital by then-UHS, part of the agreement stipulated to the creation of an account, to be held in escrow, to cover any additional expenses incurred by BRHS following its takeover by UHS, now Vidant Health.

At the same time, a board was established to oversee the money held in that account.