With the clock ticking on the process that would allow Lee Health to convert from a public to a private nonprofit structure, questions raised by the Lee County Board of Commissioners make it clear the system has a way to go before the October deadline to reach a final mission agreement with the county.
At a July 30 workshop on the potential conversion, commissioners asked system officials for more information and questioned why they hadn’t had more time to focus on details involved in the conversion.
In addition to time pressures, commissioners had questions about the new roles the county would play if a conversion occurs, including oversight, enforceability and responsibility for intergovernmental transfers of funds related to Medicaid.
In the workshop meeting, commissioners questioned the timing, which is dictated by the legislative Enabling Act in 2023 that made it possible for Lee Health to explore the conversion.
Under the timeline set up by the Enabling Act, the process that started last August must conclude by October. And when the Lee Health board of directors voted 9-1 on June 13 to proceed with the conversion process and send it to the county, it kicked off a 120-day period that will end with a vote by commissioners on whether or not to confirm an agreement that will protect the health system’s safety net/charity care mission and ensure existing programs and services continue for county residents.
Lee Health says the conversion would allow the system to expand beyond Lee County, increasing its competitive edge, while still fulfilling its safety net/charity care “in perpetuity.”
As part of a presentation to the workshop, Lee Health President and CEO Dr. Larry Antonucci reiterated that the system is “not for sale” and said the system has been “completely transparent” during the conversion process.
“We commit to being bound to safety net care in perpetuity,” Antonucci told the commission. “We will not shift any liabilities to Lee County government or its residents. We will not have taxing authority, as we do not have taxing authority now, and we do not want to place any financial burden on Lee County government.”
Any agreement would need to be posted, along with supporting materials, by Aug. 27 to meet the required 45 days for public posting prior to a final vote from the county in October.
Questions on timing and content from Board of Commissioners
Cecil Pendergrass
During a presentation at the July 30 workshop by Assistant County Manager Glen Salyer about the roles the county commission would play after a potential conversion, District 2 Commissioner Cecil Pendergrass and District 5 Commissioner and board Chair Mike Greenwell expressed concern at the short timeline the commissioners have to review the proposed agreement and take action to meet the deadline.
Pendergrass said he wished “we had this conversation a year ago” and expressed frustration that this was the first public meeting the commission was able to have.
“And that’s why I’m really concerned about this whole process because we should have been approached before, actually before they voted on June 13; I wish their board would have met with us,” Pendergrass said during the workshop.
Pendergrass also asked for additional information on exactly how the county would be involved with monitoring and enforceability, assets and liabilities, and for details on how long the agreement would be in effect.
Greenwell said he is supportive of the conversion but remained concerned about the lack of time.
“I believe the conversion is maybe the right thing for Lee County, but my concern is the timeline of making this crucial decision by five people [the commission] that don’t have the information fully in front of them,” Greenwell said during the workshop. After additional discussion, he said “I think [Lee Health] is a wonderful asset to Lee County, and I want to make sure you continue to do that. I just want to make sure that I feel comfortable that I’m making the right decision, and I need more in front of me to do that.”
On Aug. 5, Pendergrass said he had received the answers he was looking for prior to the Aug. 6 meeting.
Pendergrass, who said he sees Lee Health as “one of the most important systems in our community as far as services,” also said that while he understands Lee Health’s desire to expand outside of Lee County for competitive reasons, he hopes “they don’t take our assets and our resources out of Lee County and use them somewhere else.”
“If this can help improve health care, that’s great,” Pendergrass said. “I understand they want to go outside the county for the business model. I just want to make sure we preserve the quality of health care in Lee County that all our residents deserve.”
Lee Health’s current structure
It’s important to understand the existing structure to understand more about the proposed changes. Under its existing public nonprofit structure, while the Lee Health website says the health care system is owned by Lee County, that doesn’t mean that the county controls day-to-day operations of the system or its financial assets.
Currently, Lee Health is an independent special district/government health system, without taxing authority. According to its website, “although direct support from tax payors is common for public special district/government health systems like Lee Health, Lee Health does not receive direct tax support to fund its day-to-day operations.”
Proposed roles for Lee County Board of Commissioners
If the system changes from a public to private nonprofit status, the county commissioners would still not be responsible for day-to-day operations but would play a larger role in monitoring/oversight and enforceability and would also be responsible for intergovernmental transfers for the state of Florida’s Medicaid program through a Lee County Local Provider Participation Fund, or LPPF.
Asked about costs for administering oversight, enforceability and LPPF management, Lee County and Lee Health representatives said that the health care system would reimburse the county for those costs.
Michael Nachef
The LPPF would be generated by “eligible [health care] providers” who would receive a “voluntary non-ad valorem assessment against their real property” and would be used to cover Medicaid supplemental payment programs, Lee Health Vice President of Government Relations Michael Nachef said.
“There are counties across Florida that have implemented them, including Collier and Charlotte counties, and they’re meant to collect an assessment from hospital providers to cover Medicaid supplemental payment programs,” Nachef said.
Following the workshop, Dr. Raymond Kordonowy, a longtime Fort Myers physician who has been one of the most vocal critics of the conversion, sent an email to the commissioners that included his most recent blog post in which he called the LPPF a “work-around to reclaim federal health care dollars that will be given up should Lee Health be allowed to disband its public district charter.”
Kordonowy’s post said the U.S. Department of Health and Human Services Office of the Inspector General is “reviewing the legality” of LPPFs and “anticipates penning a decision of their analysis sometime this year.”
The OIG website says: “Local units or jurisdictions of government have the option to use Local Provider Participation Funds to generate and collect local funding to finance the state share of Medicaid supplemental and directed payment programs. In the past several years, some states and local units of governments have increasingly used LPPFs to fund the state share of Medicaid payments. As such, we will determine whether the LPPFs the state agency used as the state share of Medicaid payments were permissible and in accordance with applicable Federal and State requirements.”
Next steps on a tight timeline
Lee Health board of directors met in a special meeting July 31 to make revisions to the draft mission agreement to present to county commissioners at their regular meeting Aug. 6. After that, the Lee Health board meets again in a regular meeting Aug. 8 to take any other action necessary after the commissioners vote in their Aug. 6 meeting.
