A deal to allow Erie County to spread out payments into the future for care at Erie County Medical Center and its nursing home passed the County Legislature on Thursday with little discussion.
County and hospital officials expect the agreement will help the county better manage payments to the hospital that have sharply risen in recent years and have the potential to grow well beyond what the county budgets.
“What it does is it helps us balance and adjust that cost,” said Legislator Timothy Hogues, a Buffalo Democrat who is chairman of the Legislature’s Finance and Management Committee.
The Legislature on Thursday voted unanimously to ratify the proposed agreement, but spent no time discussing the proposal since it had previously been vetted in committee.
County Executive Mark C. Poloncarz warned earlier this year that the hospital payments were one of the biggest financial concerns facing the county because it could owe “tens of millions of dollars” more than it budgets for the expense each year.
Under the agreement with ECMC, the county would still make the payments, as required by federal law but could seek a reimbursement for higher-than-budgeted amounts from the hospital up to $28 million through a credit system. The county would then pay that money back to the hospital in annual installments of $2 million starting in 2015.
“This is something that we’ve got to give a lot of credit to the folks over at ECMC for working with us on this,” said Legislator Kevin Hardwick, a City of Tonawanda Republican who also sits on the Legislature’s Finance and Management Committee. “They don’t have to do this, but they’re partners in this. They understand the county’s financial situation.”
The county budgets $16.2 million for the hospital payments, but last year got billed by the state for $40.4 million. An earlier credit system between the hospital and the county that helped offset those higher-than-expected amounts was used up last year.
While the amount the county must pay for the care of poor and underinsured patients at the hospital and its nursing home has increased in recent years, hospital officials expect those amounts to drop after changes in federal health care law take effect under the Affordable Care Act.
The new arrangement is an amendment to a 2009 agreement struck between the hospital and the county that sought to define the obligations between the two entities. Attorneys for ECMC and county government also plan to seek approval from a State Supreme Court justice who oversaw the implementation of the 2009 agreement.