A Congressional override on President Bush’s veto of a Medicare bill may lessen Erlanger hospital’s financial woes, said Jim Brexler, the hospital’s CEO.

The override of the Medicare Improvements for Patients and Providers Act of 2008 will give Tennessee about $31 million in back payments for charity care, or so-called “disproportionate care,” Mr. Brexler said at Monday’s Chattanooga-Hamilton County Hospital Authority Budget and Finance Committee meeting.

In addition, the override ensures an additional $35 million reimbursement to the state in the 2009 fiscal year for hospital patients who are unable to pay for medical expenses, Mr. Brexler said.

“We don’t know exactly the amount of money that we will receive, but we know it’s more than last year’s allocation in which we received about $2 million,” he said.

Mr. Brexler said the state will receive one payment early this fiscal year and a second payment closer to July or August of 2009. He said the money is good news for the hospital, which has suffered budget woes because many patients can’t pay for treatment.

The week-old Congressional override shot down President Bush's veto of legislation protecting doctors from a 10.6 percent cut in their reimbursement rates when treating Medicare patients.

Hospitals and legislators have pushed for permanent financial assistance and Mr. Brexler said these promised payments over the next 18 months will suffice until more permanent assistance is secured.

“Hopefully by (fiscal year 2011) permanent disproportionate care will have been passed, and we’ll have a different president, so we’ll see what happens with that,” Mr. Brexler said. “That is very good news on that score.”

But Mr. Brexler also reported some bad news. The state of Tennessee has collected less money from tobacco tax increases than expected, he said, and while money from an increase over the last year was allocated for trauma care, the goal fell short.

Tennessee hoped to collect between $10 and $11 million from the increase, but only $8 to $9 million materialized, he said.

“I have heard speculation that cigarette distributors pre-bought their sales-tax stamps on the prospect that there was going to be an increase in the rate,” Mr. Brexler said. “This may have kept the taxes artificially down.”

The hospital board also voted to hire a private company to scour Erlanger’s books, looking for underpayments for worker’s compensation care, said Britt Tabor, the hospital’s chief financial officer.

The deal allows hospital auditors Executive Management Officers to enter worker’s comp claims into a computer system that will calculate whether the hospital was paid completely for its services, Mr. Tabor said. Government rules establish what should be paid for such claims, he said.

“We did check around with other hospitals that used this particular service and found that they have benefited big time,” Mr. Tabor said. “Vanderbilt used this service about a year ago, and it was very beneficial to them.”

Mr. Tabor said Erlanger would be required to repay any overpayments, but he said that risk is “very little.”

Executive Management Officers will keep 35 percent of any underpayments it collects on, he said.

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