Written by Michelle Crouch
Three North Carolina state legislators say they are interested in overhauling the state law that gives special privileges to hospital authorities such as Atrium Health, adding that today's multibillion-dollar hospital systems are one of the things lawmakers had in mind when drafting the bill. He pointed out that it was completely different from the one he had placed there.
Rep. Donnie Lambeth (R-Winston-Salem), a former hospital administrator and co-chair, said the Hospital Authority Act was written in 1943, adding that “many county hospitals struggled to keep their doors open. “When I was there,” he said. Member of the State House of Representatives Health Committee.
“It's different today when they're making billions of dollars.”
Rep. Larry Potts (R-Lexington) and Sen. Jim Bergin (R-Angers) told The Ledger/North Carolina Health News that they too have concerns about the law. Mr. Potts is the ranking chairman of the House Health Committee, and Mr. Bergin is co-chairman of the Senate Health Committee.
Lawmakers' call for review comes after a recent article in the Charlotte Ledger/North Carolina Health News examined the benefits Atrium enjoys as a unit of local government called a “hospital authority.” It is something that
These benefits include prominent land power. This means hospitals can force landowners to sell to make room for hospital expansion. Additional tax relief is also available for properties that are not used for medical purposes. protection from certain federal regulations, including antitrust damages;
These benefits have helped Atrium grow into a powerful multi-state hospital chain, and its executives receive millions of dollars in compensation. The hospital system, which works with authorities, reported annual revenue of his $9.3 billion in 2023. Additionally, the company has an additional $19 billion in revenue due to its partnership with Wake Forest, Baptist and Advocate Aurora Health.
Mr Lambeth said he wanted to consider whether the Hospital Powers Act gave Atrium “sufficient advantages that would require the law to be implemented or changed”.
Bergin said he wanted to have a “very frank, frank, adult conversation” about the laws and asked, “Do these (laws) make sense?” And is it right and fair? Because I think some of them are unfair. ”
Potts noted that much has changed in the 75 years since the first Hospital Authority Act was enacted. “We need their services and their benefits,” he said. “You also have to consider the costs associated with those benefits.”
Lawmakers also expressed disappointment that while Atrium enjoys these benefits, it does not operate in the same open and transparent manner as other government agencies.
Atrium: Fulfilling the original purpose of the law
Asked to respond to lawmakers' concerns, an Atrium spokesperson emailed a statement saying the Charlotte-Mecklenburg Hospital Authority, which does business as Atrium Health, “will continue to operate and comply with the law.” Ta.
He also said:
Atrium Health continues to fulfill the original purpose of the North Carolina Hospital Authority Act to “protect the health, safety, and welfare of the public, including low-income residents…all the communities we are privileged to serve.” We are deeply rooted in this and take pride in our work. Embrace our “For Everyone” approach to ensure no patient in need of care is turned away because they can or cannot pay for their care.
In 2022, Atrium provided $2.8 billion in free care and other community benefits across its broader service area, according to the statement.
Lambeth: “They can't have it both ways.”
In its court filing, Atrium emphasized that as a government agency, it “must comply with North Carolina's public records and open meetings laws.” However, it does not interpret the Open Records and Meetings Act in the same way as other government committees.
For example, authorities do not publish the agenda of board meetings in advance or set aside time for the public to speak. Committee meetings are also closed to the public, although most deliberations take place there.
For comparison, Carolina East, a hospital authority in Craven County, North Carolina, allows the public to attend commission meetings and speak at board meetings.
“Frankly, they can't have it both ways,” Lambeth said of Atrium. “I don't think you can have an advantage in one arena and not have an advantage in another. Either you act like a government agency or you act like a nonprofit system. ”
All three council members said they believe Atrium's board should be subject to the state's open meetings law like other appointed and elected government boards. That means deliberating in public, Bergin said.
“If they're going to be a quasi-governmental entity, they have to act within those rules,” Bergin said. “If they don't want it, they need to become something else. They may be forced to choose – you can do it this way, or you can do it that way.” You can do it one way, but you can’t do it both ways.”
Do public hospitals have an unfair advantage?
Lawmakers said they have heard complaints for years that Atrium and other public hospitals have an unfair advantage over the state's private hospitals. In particular, critics say the reduced level of federal antitrust oversight could make it easier for Atrium to merge and consolidate with other hospitals and demand higher reimbursement rates from insurance companies. It is claimed that
(The other large public systems in the state are UNC Health and ECU Health, which are not hospital authorities but are considered agents of the state government.)
Lawmakers said they want to level the playing field.
Lambeth said that at a time when important issues such as Medicaid expansion and health insurance expansion are occurring, laws regulating hospitals, such as the Hospital Authority Act, which governs where and how hospitals can add facilities, are needed. He said that a review of the Required Certificates Act) is high on his list of legislative priorities. Mental health has been viewed as an issue.
Barak Richman, a law professor at Duke University who studies health financing, said it's surprising that it took lawmakers this long to consider the hospital powers law.
“This is one of the examples where this law has become significantly outdated and seriously inconsistent with current reality,” he said. “Atrium used the law to the detriment of the law's original purpose and other principles of health care policy.”
Richman argued in court filings that Atrium is not a legal unit of government. However, in two cases, courts have ruled that hospital systems are indeed government entities. This is primarily because North Carolina law provides so. Richman also conducted research criticizing Atrium's now-rescinded policy of suing patients for payments.
What can the Legislature do?
The three Republicans are influential members of the committee governing the health care law coming out of Raleigh. Republicans hold supermajorities in both houses of Congress, and their support is essential for the bill to pass in the General Assembly.
The General Assembly is likely to consider a number of legislative changes. This could completely repeal the Hospital Authority Act and force Atrium to transform into a private nonprofit corporation like Novant Health. Hospital authority committees could make it clear that they must follow the same rules as other public bodies, including allowing the public to speak and attend committee meetings. Or it could take away some of the authority's powers, such as the power to exempt land for hospital expansion or avoid property taxes on property not used for medical purposes.
Richman said he's glad that lawmakers want to change the law, but he's not sure if the law would be influenced by hospital lobbyists and ultimately give Atrium more power. He said he was concerned about this. Atrium Health spent $334,452 on lobbyists to influence North Carolina state legislators in 2022 and $383,798 in 2023, according to public filings.
Richman said recent legislative efforts have largely been geared toward giving hospital systems more power and control, rather than giving them more control.
In fact, recently proposed changes to the Hospital Authority Act, a relatively unnoticed sentence in the 2023 Senate budget, were not incorporated into the final state budget.
That would have removed the portion of the law that prevents hospital authorities from expanding beyond county lines. This restriction is one of the reasons why Atrium had to “combine” with Wake Forest's Baptist, rather than merging with or acquiring the system.
Once the restrictions were lifted, Atrium would have been able to begin exercising its hospital powers outside the Charlotte area and throughout the state.
Other hospital reform topics
Lawmakers speaking to The Ledger/NC Health News said hospital laws are complex and many need reform. Other topics they said they would like to address include:
- Tax exemptions: Burgin wants to know how much North Carolina hospitals save each year through tax exemptions and whether they are giving back enough to match that amount.
- Calculating community benefits: Bergin could also require hospitals to use a consistent formula to calculate how much they give back to their communities that doesn't rely on sticker prices that no one pays. Also mentioned.
- Sales tax refunds for hospitals: Lambeth questioned the law that allows nonprofit hospitals to receive up to $31.7 million in annual sales tax refunds in addition to other tax credits.
- Regulation of mergers and acquisitions: Bergin wants to revive legislation he introduced this year to increase transparency and oversight of hospital mergers and acquisitions.
- Certificate of Necessity (CON) Regulations: The General Assembly has already made several changes to these laws regulating where and how big hospitals can expand, but Lambeth said the said further reforms were needed.
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