A House and Senate Bill seemingly targeting CRMC were the subject of much discussion last week. Expressing surprise at the legislative action, the City Council passed a resolution in protest, alongside the board of CRMC, which also passed a resolution for communication to the State Legislature. The bills, if passed, would make it unlawful for CRMC to have “third-party contracts” for state employee health care.
The true debate will come in the Health and Human Resources committee meetings and in the legislature. But in an effort to help citizens understand the dynamics and nature of this legislation, CookevilleTimes asked both CEO Bernie Mattingly and Rep. Henry Fincher to address concerns with the bill.
Representative Fincher responded to CookevilleTimes, addressing the legislation today in an article published on CookevilleTimes and CRMC CEO Bernie Mattingly issued this response:
"It is not the desire or intention of Cookeville Regional Medical Center (CRMC) to engage any legislator in a private or public dispute over proposed legislation. CRMC has expressed its concerns through a public resolution opposing SB 3020 / HB 3171 which was unanimously approved by CRMC’s Board of Trustees and the Cookeville City Council.
Recently, several officers of the Board of Trustees and representatives of hospital administration met with Representative Fincher to discuss this matter. There was an open and frank discussion regarding all aspects of this piece of legislation. Suffice to say at the end of the meeting both parties respectfully agreed to disagree. As far as CRMC is concerned the debate on SB 3020 / HB 3171 belongs in the legislature and not in the press.
However, Representative Fincher’s latest comments, as reported in the CookevilleTimes.com, can only be interpreted as a personal attack on the mission and integrity of CRMC and every employee and physician who works at the medical center to provide services for the people of our community and region, and cannot go unanswered.
The representative stated that “ CRMC has abused its market share.” That is an irresponsible statement. When healthcare reform and healthcare cost have been media headlines for the last six to twelve months it is strange that any legislator would want to prohibit healthcare providers from entering into agreements that actually lower the cost of healthcare.
Exclusive contracting is legal and acceptable in healthcare as well as many other businesses and industries. Courts and legislatures both have approved and encouraged exclusive contracting. In this particular instance exclusive contracting lowers the cost of healthcare for the state and state employees who have selected CIGNA as their healthcare plan. Because of exclusive contracting with CIGNA, CRMC is able to offer significant discounts for the healthcare services provided for state employees enrolled in the CIGNA plan. This results in financial savings for the state and state employees.
CRMC’s other major objection to this legislation is that it targets ONLY Putnam County and ONLY CRMC. Representative Fincher has stated that he supports this legislation because it’s in the best interest of state employees.
If the representative sincerely believes that this bill is in the best interest of state employees, why is the bill not in the interest of ALL state employees and not just those in Putnam County? Why is CRMC being targeted as the ONLY hospital in the state of Tennessee that cannot enter into an exclusive contracts with health plans providing coverage for state employees?
If Representative Fincher’s real concern is to prohibit exclusive contracts because it is in the interest of state employees, why does the bill not prohibit exclusive contracts for all healthcare providers in Putnam County? If this bill becomes law, the true effect of the bill would prohibit CRMC from entering into exclusive contracts, but would not prohibit any other health care provider from doing so.
It would appear that the real purpose of the bill is to provide legislation designed to benefit the private interest of only one provider of health care services in Putnam County.
Finally, Representative Fincher stated, “the hospital is trying to make Cookeville a company town. They want to own the entire market.” That statement is absurd and amusing. Yes it is true that CRMC is the Only hospital in Putnam County and the ONLY regional medical center in the Upper Cumberland , offering advanced healthcare services not offered by other hospitals in the region.
However, there are ten other hospitals in the region, all of which are owned by an entity other than CRMC. There are at least three Ambulatory Surgery Centers in Cookeville which compete with the surgical services offered by CRMC. There is a private Imaging Center in Cookeville which competes with CRMC’s imaging services. There are two Sleep Labs in Cookeville which compete with CRMC’s Sleep Center. There are many other healthcare services in Cookeville which CRMC doesn’t offer including retail pharmacies, nursing homes, durable medical equipment providers and urgent care centers, just to name a few.
There are over one hundred fifty physicians who practice medicine in Cookeville who are free to refer their patients, including state employees, to any healthcare entity they feel best meets the needs for their patients. “Company town?” Absurd and amusing!
CRMC is very proud of its mission, obligation and privilege of serving the public welfare of ALL patients from our community and region regardless of their ability to pay and to do so without any financial support from the City of Cookeville and its citizens. In 2009 alone CRMC provided over $21 million in charity care and uncompensated care for participants in government sponsored health programs.
Do all healthcare providers in our community accept all patients regardless of their ability to pay? CRMC is not suggesting that they should, but the role of CRMC in our community and region is to provide care for the insured, the underinsured and the uninsured at the lowest cost possible. CRMC is able to achieve this mission in part through exclusive contracting.
Last, but not least, every dollar of net income (profit) that CRMC earns is reinvested in the medical center to improve the programs, services and facilities necessary to meet the healthcare needs for our community and region.
It is indeed unfortunate that Representative Fincher has chosen to confuse facts with fiction to support this bill. It appears the representative has all the answers, but doesn’t know what the right questions are. CRMC regrets that Representative Fincher has chosen to support SB 3020 / HB 3171. It is certainly the representative's right to do so as it is CRMC’s right to disagree with him.
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In an earlier article (included below), CookevilleTimes asked CRMC CEO Bernie Mattingly to help clarify public questions on the bills, and help consumers understand why these bills are of concern to the hospital.
CT: The world of health care can be confusing. My understanding of these bills is that they are targeted to Cookeville Regional Medical Center only in regard to the ability of the hospital to enter into health care contracts with state employees. Can you help us understand what these House and Senate bills would do, if passed, and why that is of concern to CRMC?
Bernie Mattingly: Health care IS confusing, I agree. These bills are about limiting the ability of CRMC to make any contracts related to government employees. We have a contract, through CIGNA, that covers state employees who choose that health care plan. Essentially, it gives folks who choose that plan over the Blue Cross option a significantly reduced rate on comprehensive services at CRMC. That is the contract, I believe, that is in question. But to understand our position and why it’s important to us, we have to back up a bit.
CT: That’s a good idea. The explanation for the bill is that it ‘evens the playing field.’ What is your response to that?
Bernie Mattingly: The playing field is already a tilted one…and not in our direction. First, it’s important for citizens to know that while we are owned by the City of Cookeville, CRMC receives NO financial support from the City. So, in that sense we are no different than any other private health facility. In order to continue to provide excellent services to the citizens of this region, we have to be competitive and make ends meet.
But unlike private health providers, who often limit the number of TennCare and Medicare patients that they can take, we are mandated to take all TennCare or Medicare patients who come to us for services. Through TennCare and Medicare, the federal and state governments are the single largest buyers and payers of health care services. So our biggest “customer” in terms of payment is likely to be Tenn Care and Medicare. The TennCare and Medicare systems are not set up equitably in terms of payment.
You don’t negotiate with state or federal governments for the price or payment for the services rendered…those are dictated. Like hospitals across the country, we are paid a fixed price by the government. That becomes a problem because, nationally, hospitals are reimbursed 90 cents for every dollar of cost spent in patient care.
CT: So, CRMC actually incurs losses on the TennCare and Medicare patients?
Bernie Mattingly: We hope to break even. If a patient goes in for a gall bladder surgery, Medicare may say that surgery is worth a reimbursement of (for the sake of discussion) $5,000. Now, if everything goes well and we treat only the gall bladder, we may find that the surgery only costs the hospital $4,700. The good news for CRMC is that we keep the difference.
The bad news is that if that patient requires additional care, for diabetes or a some other health condition, the bill can easily exceed $5,000….let’s say it reaches $7,000. Medicare will only pay the $5,000, no matter the cost to the health care facility. TennCare reimbursement rates are even lower than Medicare, which makes the challenge of providing high quality care even more difficult.
The Governor has submitted a budget to the legislature which recommends an additional $200 million in cuts for TennCare reimbursement for all healthcare providers. If this budget item is approved, talk about challenges!
CT: And you are mandated to take all who come to you, so you have no control on the number of Medicare and TennCare patients?
Bernie Mattingly: As a public hospital and the only regional medical center in the Upper Cumberland It’s CRMC’s mission, obligation and privilege to serve all of the folks of our region, regardless of the type of insurance they have. But it does create a business that is difficult to manage, financially.
CT: So how does that relate to the bills?
Bernie Mattingly: The House and Senate bills that have been introduced target our ability to contract with health care plans for other types of services, beyond TennCare and Medicare for state employees. Almost every other health care plan pays higher rates than TennCare and Medicare. Public or private health care providers couldn’t afford to stay in business if they didn’t. So, it’s important for us to be the provider of choice wherever we can, outside of the TennCare and Medicare systems.
CT: This bill just refers to state employees – why is that?
Bernie Mattingly: I can’t say for certain, but there are a large number of state employees in our area. Those employees have options today, between Blue Cross and CIGNA. We work with both health care plans. But with CIGNA, we have provided a comprehensive plan at a significantly reduced rates. If they use Blue Cross, we have competitive rates for them. If they use CIGNA, and use CRMC, state employees should pay a generally lower rate. It’s our mission to provide inpatient and outpatient services to those employees and we’re excited to have that opportunity.
CT: Since these bills are targeted only at a major health care center in Cookeville – you – do you think that this legislation could be at the request of a single provider or a group of private providers?
Bernie Mattingly: I can’t make sense of it any other way. But, what concerns me is not that those providers might want more state employee health care business, or that CRMC would suffer financially from such a move. What concerns me most is that, if approved, the Bill might ultimately raise the cost of services for those state employees and their families.
Since there are no other truly comprehensive health care centers in our immediate region, private providers might be able to negotiate better rates for some portion of service – a specialty area. But the employee may pay more in other areas of health care.
CT: Do other health care providers have third-party contracts for services?
Bernie Mattingly: The larger ones do, for certain. Health care facilities try to leverage any negotiating means that they can to gain a larger share of the business so that they may offer the best possible services at the best possible price.
CT: So it’s not just about lining the coffers of CRMC?
Bernie Mattingly: (Laughs) Hardly. Our mission is to serve the health care needs of our region. Our challenge is to figure out how to do that without being a financial burden on the city. We’re proud of the fact that we are growing, that we’re self-supporting, and that any dollar that we keep at the end of the day goes into more equipment, better facilities and more physician expertise. CRMC is one of our best assets in this community. We need to protect that.
CT: How could this legislation be changed to be something you could support?
Bernie Mattingly: What I would love to see is some legislation that increases competition for TennCare and Medicare services. Right now -- the largest buyer of health care services is the government. And not every health provider wants that business due to the lower reimbursement rates. Legislation that helped shift that could really "even the playing field" in a good way.
