RALEIGH — The North Carolina Senate voted 30-16 to cut $35 million in funding to Vidant Medical Center (VMC) on the same day a lawsuit was filed by the UNC System accusing Vidant and Pitt County of a breach of contract.
The VMC cuts would go into effect July 1 and would be on top of an estimated $38 million cut related to state health changes that involve a new pricing model using Medicare rates to reimburse providers for their services set to take effect next year.
Vidant currently has more than 12,500 employees and operates eight hospitals that serve 29 counties. One of the hospitals Vidant has operated for decades is a teaching hospital associated with the East Carolina University Brody School of Medicine.
Gov. Roy Cooper took a political line to the situation, tweeting that “The ECU medical school and health care are too important to get caught up in political vendettas.”
But the situation seems less about politics and more about a breach of contract involving taxpayer funds.
“Vidant had a contractual relationship with ECU in which Vidant received the taxpayer-funded benefits of being classified as a teaching hospital and the UNC System received nine appointments to Vidant’s Board of Trustees,” Sen. Ralph Hise (R-Mitchell) said in a press release. “Vidant ended that contract. Now, Vidant is upset that it is not still receiving the taxpayer-funded benefits afforded from the contract that Vidant ended.
“Without the affiliation agreement in place, Vidant is just like any other hospital,” added Hise. “The Senate budget therefore treats Vidant the same way as other private hospitals, as is only fair. Otherwise, Vidant would be receiving public benefits that other hospitals do not receive even though Vidant now has the same relationship with the public university system as other private hospitals have.”
Since 1975, the UNC System and Vidant have had a contractual agreement which gives the UNC Board of Governors the power to appoint members to the hospital’s board of trustees. In exchange for board members appointments, UNC agreed not to build another teaching hospital in the area.
The updated 2013 agreement between UNC and Vidant stipulates a 20-member board, 11 of which are appointed by Pitt County commissioners, nine by the UNC Board of Governors and one board member appointee must be a physician. The agreement is for a 20-year term.
The breach of contract complaint stems from a vote by Pitt County Commissioners on April 2 that removed the nine board seats of the UNC Board of and gave them to Vidant.
Following the Pitt County vote, the UNC system filed a complaint May 20 in North Carolina Superior Court of Orange County that states Vidant had no authority to change the appointment structure.
UNC’s complaint suggests the only remedy for losing their appointment seats is for a separate teaching hospital to be built for the medical school. The cost would be more than $500 million, according to the complaint.