ATLANTA — A call for increased audits and greater transparency for community hospitals across Georgia— including the 15 or so in serious financial difficulties — is triggering controversy in the Capitol and throughout the state.
Companion bills sponsored by Republican legislators from opposite corners of the state could lead to the most significant overhaul in how local medical facilities are run since a 1941 law created the mechanism for cities and counties to build their own hospitals.
Sen. Jeff Mullis, from extreme northwest Georgia, and Rep. Jason Spencer, from extreme southeast Georgia, both have hospital boards in their districts that concern them.
“He and I have sort of been in discussion about what needs to be done. We’ve got a mess on our hands,” said Spencer, a Woodbine Republican.
The closing of the south Georgia’s Charlton County Hospital and constituent concerns about how the St. Marys Hospital Authority was spending money prompted him to introduce House Bill 839 requiring regular audits submitted to the state and appointment of a county commissioner to every hospital’s board.
He said the St. Marys board conducted its first audit in 57 years in response to his questions and that 33 accounting deficiencies turned up.
A $60 million debt at the Hospital Authority of the Walker-Dade-Catoosa Counties in northwest Georgia’s Fort Oglethorpe led Mullis of Chickamauga to introduce the Senate version, SB 302.
Spencer’s reputation as a maverick may weaken the chances of his proposals passing, but Mullis’ chairmanship of the Senate Rules Committee could offset that. Every bill must pass through Mullis’ committee to become law.
Hospital officials say there are basic problems with the proposed reforms, such as the inherent conflict of interest a commissioner would have serving on two boards when county commissions underwrite hospital debt.
“The bill appears to be set up to address local issues. If these are local issues, there ought to be local legislation to address the issues,” said Jimmy Lewis, lobbyist for the rural hospital association HomeTown Health “… A statewide bill is probably overkill.”
In the case of the St. Marys Hospital Authority, a court case was filed to compel the panel to spend its $3 million trust fund on care for the indigent in St. Marys. Spencer asserts hospital authority law compels it, but the St. Marys City Council approves the way the trust fund is being spent now, to fund some operations at the city’s Senior Citizen Center, which takes financial pressure off the city.
Jim Stein, the attorney for the hospital authority, said once again the authority didn’t know what Spencer planned until after the fact.
“It was news to us he was doing it and the city was working with him,’’ Stein said.
Stein said he hasn’t seen the proposed bill but believes it would result in the disbanding of the current authority and starting over.
Another issue with the St. Marys Hospital Authority is that it has no hospital or any other medical facility to oversee. It gave up the hospital years ago — it is currently operated by Southeast Georgia Health System — sold the remaining nursing home, invested the proceeds and now administers the resulting trust fund.
The hospital authority recently changed its name to reflect its current mission, Stein said.
“It was the St. Marys Hospital Authority doing business as the St. Marys Convalescent Center. It’s now the St. Marys Hospital Authority doing business as the St. Marys Senior Center Program,’’ Stein said.
While they don’t see eye to eye on the legislation, the bills’ sponsors and the hospitals all agree that the financial problems plaguing rural health centers won’t be fixed by these reforms alone. They also agree lawmakers will need more time to study these proposals than just the 26 days left in the 2014 legislative session.
“It’s a very complex piece of legislation. It’s going to require a lot of discussion,” Spencer said.
Florida Times-Union Georgia Editor Terry Dickson contributed to this report.