Vidant faces retaliatory $35M funding cut amid board controversy, leaders say

Under North Carolina's proposed budget, Vidant Medical Center, a county-owned hospital in Greenville, N.C., would lose $35 million in funding — a move some hospital leaders say is in retaliation to changes Vidant made to its governance, according to the Washington Daily News.

The proposed budget would change how the state's Department of Health and Human Services reimburses Vidant for Medicaid costs. Under the proposal, DHHS would stop reimbursing Vidant's affiliated teaching hospital, East Carolina University Brody School of Medicine, for allowable costs for inpatient and outpatient care. Rather, DHHS would reimburse Vidant at the same rate as private hospitals.

Leaders said the cuts are in retaliation to a controversy involving Vidant's decision to overhaul its board of trustees. Vidant is owned by Pitt County, but the University of North Carolina in Chapel Hill has operated the facility since 1975. Under an affiliation agreement, most recently renewed in 2013, Pitt County appointed 11 members to Vidant's board, and UNC appointed the other nine. However, that changed in April when Pitt County commissioners approved eliminating UNC's board appointments and giving them to Vidant.

That prompted UNC and ECU to sue Vidant and Pitt County over the change on May 20, accusing the county-owned system of violating the affiliation agreement. On May 24, a judge granted UNC a 10-day temporary restraining order against Vidant to halt the change.

The proposed cuts could create financial hardship at Vidant, which sees a disproportionate amount of Medicaid patients as a teaching hospital, according to the report. The possible $35 million in cuts would add to a projected $38 million loss under proposed changes to North Carolina's Medicaid program. Combined, Vidant CEO Mike Waldrum, MD, told the Washington Daily News the changes represent about 3 percent of the hospital's budget but 100 percent of its bottom line.

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