• A local home health business owner tells the board of commissioners selling county home health agencies would cut the tax rate by 14 cents.
By NICOLE CARTRETTE
Staff Writer
Columbus County Commissioners are looking for money to reduce a possible 10 to 12-cent tax increase included in the $76 million fiscal 2007-2008 budget proposal.
Steve M. Smith, owner of a local home health agency, said he has found a few ways to do it.
Selling the county’s Medicare-Certified Home Health Agency for at least $4 million and stopping the Department of Aging from continuing to charge Medicaid less than allowable or get out of the home health business, are a few recommendations Smith made to commissioners at a public hearing held last week. Smith has addressed the board before about selling the separate agencies.
“I don’t know anything about sewer pipes but I do know about healthcare,” Smith said as he passed out folders of information to commissioners.
Included in the folder was an 11-by-17 inch, bulleted list of recommendations printed on bright yellow paper.
“Recommendations to cut county tax rate by 14 cents,” the document was titled.
Smith said selling the Medicare Home Health for $4 million on a limited auction sale could produce annual revenue for the county.
He projects that at a 10 percent interest rate the county could withdraw $750,000 from the healthcare trust fund account for nearly eight years.
“Home health takes nothing from the county,” County Health Director Kim Smith said Friday. “We get no local appropriations (for home health).” She said the agency is self-supporting.
Steve Smith made it clear he had no interest in purchasing the county’s Medicare certified home health agency operated under the department of health.
“I sold mine last year,” he told commissioners and pointed out there was a signed and notarized document included in the folders he gave to each of them indicating he would not be a bidder.
“I would not benefit in any way other than as a county taxpayer,” the signed statement reads, in part.
He said the value of the agency is high now but will decline in the future.
He included an article written by Dexter Braff, president of a merger and acquisition firm that specializes in home health care, that was published in the January 2007 edition of “Caring,” a healthcare industry magazine.
Braff wrote that numerous private equity groups’ 2005 and 2006 acquisitions “produced an extraordinary imbalance of demand versus supply of premium acquisition targets.”
He explains that the supply and demand is beginning to level off and the potential risk of reimbursement cuts is greater.
“Taken together then, while we expect valuations to remain quite strong in 2007 and 2008, the top end of the premium value range has likely peaked.”
Smith pointed out the health department’s contracted services total $1.4 million and represents 39 percent of the department’s overall budget.
“It is a staffing contract that has been awarded to the same company for nearly the past 20 years. These are not county employees,” Smith wrote.
Health Director Kim Smith said the contracts were in place before she became the director. The department contracted with individual nurses from 1983 to 1990, she said, and points out Steve Smith was the director from January to December of 1983.
Since 1990 they have been contracted out with two companies. The advantage of contract employees is that the company pays the workers’ compensation and insurance. “We don’t have to pay benefits,” she said.
She acknowledged that Medicare changes expected to take place would make reimbursement more difficult.
As for the County Department of Aging, Smith said the department “should either cease being a direct provider of in-home aide services, or at least stop discounting their rates to what is now a 7 percent discount.”
According to information gathered by The News Reporter, the department was in fact billing Medicaid roughly a $1 less per hour than the allowable rate.
Medicaid is funded primarily through federal and state dollars. The county pays a 15-percent share of the state’s cost.
That discount could total $151,521 in the 2008 budget.
“Medicaid may interpret this discount as an inducement, which is not allowable,” Smith explained, and included a legal opinion prepared by Raleigh Attorney Renee Montgomery.
Montgomery asserts that the Medicare program guarantees freedom of choice to patients in the selection of healthcare providers and inducement is prohibited under the federal anti-kickback statute.
“In addition, under section 11289a0(5) of the Social Security Act, the Civil Monetary Penalties Law, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider of Medicare or Medicaid services is in violation of the Act,” Montgomery wrote in an executive summary provided to the board.
Department of Aging Director Ed Worley could not be reached for comment Friday.