Originally created 05/01/01

MCG Health powers grow



The operating company for Medical College of Georgia Hospital and Clinics now has power to meet in private and to no longer answer directly to the state auditor, officials said.

A bill to allow operating company MCG Health Inc.'s board to meet privately to discuss business strategy was signed into law Saturday by Georgia Gov. Roy Barnes, said the bill's sponsor, House Speaker Pro Tem Jack Connell, D-Augusta.

When MCG Health took over July 1, the nonprofit company raised some concerns about how much oversight the public would have on its operations. MCG Health receives a $35 million annual subsidy from the state, which MCG Health officials say is crucial to support its education and indigent care functions. Also, MCG Health employs about 750 employees who are "leased," or remain under the state benefit system while they work at the hospital and clinics.

Because MCG Health is a separate, nonprofit company, it is not subject to state auditing, as the Medical College of Georgia is, said State Auditor Russell W. Hinton. However, MCG Health operates the hospital and clinics through a series of leases, and those leases dictate that MCG Health be subject to an independent audit, by Augusta firm Cherry, Bekaert & Holland, which must be submitted to the University System of Georgia Board of Regents and to MCG.

The audit must be submitted within 90 days of the beginning of the fiscal year July 1, Mr. Hinton said. MCG Health has pledged to return 40 percent of its margin, or excess revenues, to the school for education and research, and the audit will allow the Regents and the school to verify those numbers, Mr. Hinton said.

"I don't know that this particular situation would imply that there is no oversight," Mr. Hinton said. "The Board of Regents and MCG are most definitely responsible for some sort of oversight of the agreement."

Because MCG will receive a copy of the audit, and a portion of MCG Health's largesse, the state auditor will ultimately verify MCG Health's numbers as part of the audit on the school, Mr. Hinton said. Once the regents receive the audit, it is generally public record, said spokeswoman Arlethia Perry-Johnson.

The situation with MCG Health is not unlike that of University Hospital, said Kip Plowman of Cherry, Bekaert & Holland. Since the early 1970s, University has received an independent audit from Ernst and Young accounting firm. That audit is provided to the Augusta Commission, and a public copy is filed at the municipal building with administrators, said University Chief Financial Officer Robert Taylor.

The audit is also provided to vendors, bankers and anyone who asks for it, Mr. Taylor said. The 35-40 copies of the audit University typically receives are almost always gone by the end of the year, Mr. Taylor said.

MCG Health is also could become more similar University through House Bill 158, which would extend to MCG Health the ability to meet in executive session to discuss "commercially valuable" strategy, although some say MCG Health already has the power to do so.

The bill also contains a provision, inspired by the ruckus over acquiring autopsy photos of NASCAR driver Dale Earnhardt, that would exempt such photos from public records requests except with the family's consent.

Reach Tom Corwin at (706) 823-3213.