Feds demand $10.8M in spat with St. Luke’s, UT

3/17/2014

A dispute between ProMedica St. Luke’s Hospital and a federal agency over a family medicine residency program could cost ProMedica nearly $11 million, and leave the University of Toledo responsible for a large portion of the tab.

The Centers for Medicare and Medicaid Services informed ProMedica recently that the residency program is a transferred program, not a new residency program, and thus ineligible for the reimbursements it had been receiving. The agency wants back money it paid St. Luke’s; though CMS has declined to say how much it’s demanded, UT documents provided to The Blade show the initial demand was for $10.8 million.

Because the residency program is a joint venture between St. Luke’s and the University of Toledo Medical Center, the university has agreed to pay St. Luke’s about 25 percent of the final reimbursement. If the initial demand amount stays, that means UT would have to pay $2.6 million.

ProMedica is appealing the decision, and a first hearing of the appeal will be at 9 a.m. today at a review board in Baltimore. While the final amount owed may not be determined for years, CMS’s ruling that St. Luke’s is ineligible for funding has caused ProMedica to end the residency program.

UTMC, the former Medical College of Ohio, will step in and serve as a sponsor starting July 1.

While the program will remain in Toledo, ProMedica’s Chief Medical Officer, Dr. Lee Hammerling, said CMS’ actions have ramifications throughout northwest Ohio. If the $10.8 million reimbursement demand remains, services in the area will suffer.

“When you have the federal government taking $10 million out of a community hospital, it hurts,” Dr. Hammerling said.

Toledo is lucky UTMC will sponsor the program, Dr. Hammerling said. Primary care will become increasingly important, and a residency program makes it more likely family-medicine doctors remain in northwest Ohio.

The residency program has been at St. Luke’s since 2007, when the hospital assumed sponsorship from UTMC, which started the program in 1977. Residents spend three years at the hospital, working with St. Luke’s staff and being trained by UTMC faculty. The program admits four residents a year.

The crux of the dispute is whether St. Luke’s program is new or a transfer from UTMC. A spokesman for CMS said the program is not new, thus ineligible for the federal funding.

ProMedica argues in its appeal that the program was given accreditation by the Accreditation Council for Graduate Medical Education as a new program and that it made significant changes to the program in 2007. The health system also argues CMS is relying on guidance it issued in 2009, and that guidance should not apply to a program started in 2007.

ProMedica also cites a review-board decision in a similar situation involving a Wayne, Mich., hospital, where the board ruled in favor the hospital.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086, or on Twitter @NolanRosenkrans.