The CEO of New Bern, N.C.-based CarolinaEast Health System is speaking out against a recent report alleging shady financial practices, the Sun Journal reported Nov. 11.
The recent report from the North Carolina State Health Plan — compiled with hospitals' self-reported data — alleged hospitals in the state have falsely claimed Medicare losses to justify increasing costs; according to the report, most North Carolina hospitals actually profited from Medicare.
"On average, North Carolina hospitals charge 280 percent of Medicare rates, which forces patients and employers to pay thousands of dollars more for medical care," Dale Folwell, state treasurer, said in the report. "The hospital cartel is overcharging you because they can, not because they need to."
Michael Smith, CEO of CarolinaEast Health, refuted these claims in a series of email responses to the Journal. He said there are differences in the data sets examined by the report, adding that the report filed by hospitals looks only at Medicare information while the IRS Form 990 and consolidated financial statements reflect all activities and payers.
Mr. Smith said CarolinaEast receives increased Medicare payments because it is 35 miles from the next hospital, making it a "sole community hospital." This designation recognizes that rural hospitals see a higher number of uninsured patients and significantly fewer covered by commercial insurance, he said.
"Unlike commercial insurance, we do not negotiate for payments with Medicare or Medicaid. What is not discussed in the report is the unreimbursed costs for charity care and Medicaid patients we care for. These estimated unreimbursed costs totaled $17,500,000 in fiscal year 2020," Mr. Smith told the Journal.