Is the QCCT Agreement That Supports Indigent Care Still In Force?

Current agreement outdated, parties in arguable default.

Is less or more support for University Hospital necessary?
The indefatigable and prolific reporter Laura Ungar covered last week’s board meeting of the Quality and Charity Care Trust (QCCT ) for the Courier-Journal. Apparently the meeting was largely informational with no formal action taken. It was reported to the QCCT board that the percentage of uninsured patients for the first three months of this year decreased to 13% from 23%. This is good news of course, but University Hospital, like all other hospitals and safety-net providers, remains appropriately concerned about the ultimate effects of the accountable Care Act on overall provider revenues. All of us have our fingers crossed. Time will tell.

The substantial decrease in state funding for the QCCT that emerged from the recent Kentucky legislative session from the current year’s $18 million to $6 and $4 million in the next two years was obviously a subject for discussion. Apparently Louisville Metro is also decreasing substantially its annual local government contribution from the current $7 million, but this the first I have heard of that additional reduction. [Anyone out there who can clarify things for us?]

Funding and implementation of current program obscure at best.
What caught my eye and stimulated this article was a statement that in addition to the specific yearly state legislative appropriation, that the University of Louisville augments the state total from its own “fixed general funds” in the amount of an additional $5 million. As hard as I have been trying to learn about the finances and administration of the QCCT, this latter source of funding was also news to me. I confirmed from a University spokesperson that this additional funding is linked to the controversial and mysterious “rent” that has been paid by University Hospital to the University. This “pass-through” of money from University Hospital to the University of Louisville, to the state, and back to the QCCT for clinical care is part of a long-standing intergovernmental transfer (IGT) mechanism used to pull down matching Medicaid money for the state’s use.

Note that previous declarations of the “rent” paid by the Hospital to the University spoke of $8,876,993.  I am not confident that everyone is talking about the same thing!  When talking about public money, it should’t be this confusing.

Payment and rebate system: Acknowledgment of iffy legal status.
As I will explain further in a subsequent article, it has been many years since state or local governments made their annual total payments directly to the QCCT for clinical disbursement. Although those were the terms adopted in 1983 when the Trust was set up, the parties to the QCCT formally agreed in 1993 that both state and local governments would make their contributions directly to the Department of Medicaid Services to enable the state to obtain a handsome match from the Federal Medicaid Program. The Commonwealth in turn promised to return “at least” as much as the QCCT contractual “Base Amount” funding through the Federal and state funded Disproportionate Share Program (DSH). I do not know for sure if the state money goes to the QCCT or to the Hospital or UofL directly. When this switch-over began, whether the Commonwealth ever gave more than the Base Amount, or how the matching Medicaid funds were used is unknown to me. These details do not appear in any of the QCCT agreements available to me or in possession of Louisville Metro government.

If it is assumed that the University of Louisville is a state actor, then it can participate in intergovernmental transfers also– although I am not sure if individual hospitals are allowed to make voluntary contributions for that purpose. Neither do I know the history of the so-called transfer of rent between the Hospital and the University– when it began, its passage through the University and state budgets, how much was returned, or whether the augmented funds were actually used for care of the medically-needy or indigent. When we understand these things, I think it will become clear why UofL protested last year that Louisville Metro was not giving it its million dollar “rebate”!  Similar curious language in state appropriations will also likely become clear. The US Government Accountability Office (GAO) in November 2012 continues to call for more transparency and accountability in Medicaid Supplemental DSH Payments to hospitals for indigent care. I could not agree more. Hopefully the recent report mandated by the Kentucky General Assembly to justify future appropriations to the QCCT will take us to where no man has gone before.

Clarifications available in original documents.
Through a Freedom of Information Act request, I was abel to obtain copies of all the QCCT agreements and its amendments and revisions since inception. I am told I have everything that the city has. On my first read-through, I realized that I held several misconceptions about how the Trust had evolved in the last 30 years. For example, QCCT funds can be used to pay for both inpatient and outpatient care provided by the Hospital itself. I also learned that at its discretion, the Hospital can use QCCT funds to pay for services at selected non-affiliated facilities that can include skilled nursing. (A recent patient told me that too!) Several definitions and terms have change. The amount that the Hospital can collect from the fund has been redefined. There have been operational and organizational changes as well. I plan to organize and summarize the evolution of the QCCT at a later time.

Can KentuckyOne Health honor the QCCT obligations of University Hospital?
The reader will note that no changes were made to the QCCT contractual documents between 1999 and 2012. The QCCT Board came under severe criticism a few years ago when an audit revealed that it was not meeting, and for other reasons. Perhaps that is why the entire QCCT agreement was restated in November 2012 just before the University took on its new corporate hospital manager. I will try to summarize the changes at a later time, but for now, I think is is significant to note that the principal (but not the only) current operator of University Hospital (KentuckyOne Health) is not a signatory to the agreement held by Louisville Metro government. The parties to the current agreement are: Louisville Metro, the University of Lousiville, the Commonwealth of Kentucky, and University Medical Center Inc (UMC).

UMC, which is controlled by the University, operated University Hospital until it transferred management of most Hospital services to KentuckyOne Health in 2013. However, UMC has not gone away! It still operates a hospital-within-a-hospital at University Hospital largely concerned with women’s reproductive services. This ungainly and medically unjustifiable cleavage of a single hospital into two was made necessary to allow KentuckyOne and its corporate owner, Catholic Health Initiatives, to maintain what is in my opinion a “don’t ask– don’t tell” illusion that University Hospital is following the Ethical and Religious Directives of the Catholic Church. The most often mentioned medical services that bring the church into “scandal” include contraception, treatment of infertility, treatment of ectopic pregnancies, interruption of pregnancy at any stage, or end-of-life care. I have written much about how in my opinion this academically unholy abdication by the University has compromised its clinical, educational, and research independence.

Hiring and firing.
There may be other problems that might interfere with KentuckyOne’s ability to agree to the terms of the current Agreement. One non-clinical clause relates to a requirement by the corporate manager of the hospital to lay-off and re-hire hospital employees by seniority. There are quite a few other labor-related and non-discrimination stipulations incorporated in the agreement. When KentuckyOne laid-off University Hospital employees earlier this year, would it have been able to comply the rather specific-sounding labor rules? I suspect the such clauses may have been mandatory in state contracts at the time the agreements were signed. Perhaps someone with a grasp labor law can clarify this for us.

Is the QCCT already dead?
So, who is the QCCT writing its checks to? UMC? KentuckyOne? Both? Indeed, who is currently managing the QCCT process? The newspaper article makes it sound like KentuckyOne is. In my opinion the QCCT does not have contractual authority to give money to KentuckyOne, nor does UMC have the authority to give QCCT money to the separate and independent hospital KentuckyOne claims to be. If KentuckyOne is currently the recipient of all QCCT funds, does that mean that medically indigent or needy women are being discriminated against? What if KentuckyOne uses up all of of the indigent care support for its own general hospital services or for non-Jefferson County residents? Who decides on UMC’s share? If KentuckyOne is transferring QCCT money to UMC for the provision of women’s reproductive services, how can it possibly defend what is in my opinion the preposterous pretense that it is not a party to “forbidden” medical practices? Since the state (and now perhaps even Louisville Metro) has defaulted on its contractual obligation to continue their agreed upon payments, has not the entire QCCT program collapsed? How is it that should I even have to propose these inane questions?

What should community support for indigent care look like in the future?
I have argued that the QCCT model, which may have made sense at one time, no longer serves the community well. Since the apple-cart has already been upset, and the current agreement is in apparent shambles, now is the time to take a fresh look. This is a community discussion we should be having, including representatives of the medically needy and those served by the current QCCT program. If a continuation of a QCCT-like program seems best, I suggest that more than just the underlying trust agreement needs to be rewritten. Even more obscure to the general public, but more important to the beneficiaries, is a more transparent and accountable day-to-day implementation of the program. Does the Hospital itself have too much say about of who gets how much for what, and where? Is there enough independent supervision of the Hospital, and in particular its concurrent billing practices for beneficiaries? Charity care implies there is no expectation for payment. That is not the way the Q-Charity-CT is currently set up!

Enough!   For now, I offer links to 18 original QCCT documents below. Some of the amendments relate only to the amount of base funding for a given contract term. I will try to designate the more significant documents with a notation.

As always, if I have made an error of fact, let me know. Better yet, if you can clarify any of the above, or have an alternate perspective, let all of us know.

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
April 27, 2014

Links to QCCT Documents:
1983-Original-Agreement.pdf (1.3 MB)  •  (Page 5 is missing.)
1995-2nd Amendment.pdf  
1995-3rd Amendment.pdf
1996-Revised QCCT Agreement.pdf (0.9 MB)  
1996-1st Amendment to Revised Agreement.pdf
1996-2nd Amendment to Revised Agreement.pdf
1997-3rd Amendment to Revised Agreement.pdf
1997-4th Amendment to Revised Agreement.pdf
1997-5th Amendment to Revised Agreement.pdf
1998-6th Amendment to Revised Agreement.pdf
1998-7th Amendment to Revised Agreement.pdf
1998-8th Amendment to Revised Agreement.pdf
1999-9th Amendment to Revised Agreement.pdf
2007 Affiliation Agmt KY UL UMC 1.pdf (4.4 MB)
2007 Affiliation Agmt KY UL UMC 2.pdf (4.8 MB)
2012-2d Revision QCCT Agreement.pdf (5.4 MB)  

All documents in single wrapper: (18.7 MB)

Let me know if the links don’t work properly.
Unless designated, all files are less than (0.5 MB).
Indicates significant change.