When the General Assembly adopted a new approval process that allowed Cancer Treatment Centers of America to build a “destination cancer hospital” in Georgia, lawmakers mandated some good deeds: The hospital was required to provide charity care, serve patients covered by Medicaid and attract most of its patients from other states.
The for-profit hospital in Newnan says it has done precisely what the legislature asked since it opened its doors two years ago.
An Atlanta Journal-Constitution study of the hospital’s first public reports, however, found that it saw no Medicaid patients in 2013. While the hospital said it provided the state-mandated amount of uncompensated charity care, the reports also show that fewer than 1 percent of its hospitalized patients— no more than six admissions — were uninsured, the AJC found.
The hospital said it spent 2013 going through the complicated, multi-faceted process to get approved by the Medicaid program in Georgia. The hospital said it started seeing Medicaid patients this year, but declined to say how many, saying it would report the numbers on next year’s report. The hospital also said it met its charity care requirement by providing $4 million worth of indigent and charity care to 111 Georgia patients in 2013.
“Cancer Treatment Centers of America at Southeastern Regional Medical Center has met all of the requirements that are applicable to it under Georgia law,” said Mike Rieman, a hospital spokesman, in an email to the AJC. “As the filings show, we have provided services to hundreds of cancer patients including indigent and charity patients.”
The state Department of Community Health said it was reviewing the matter and had no immediate comment on whether the hospital had met its special requirements.
Georgia hospitals that bitterly opposed the 2008 legislation that allowed Cancer Treatment Centers of America to build a facility here said the initial public reports showed a failure to serve the state’s patients in the way the law intended.
“They are about what we thought they would be,” said Monty M. Veazey, president of the Georgia Alliance of Community Hospitals. “In our arguments before the Legislature, we said they would not meet their Medicaid requirements nor would they be a partner of the state in providing Medicaid… They provide nothing.”
Special process created
Cancer Treatment Centers of America is a national chain with hospitals in Philadelphia, Chicago, Tulsa and Phoenix, in addition to Newnan. The chain bills itself as having a unique, patient-centered approach to cancer that combines the latest treatments with natural therapies.
When CTCA decided it wanted to come to Georgia, it couldn’t simply buy the land and build a hospital. Georgia has a “Certificate of Need” process that is intended to hold down health care costs by preventing an oversupply of expensive medical facilities. Health care companies and non-profits must demonstrate through a rigorous process that a new facility is needed.
But the General Assembly approved a separate approval process for a “destination” hospital serving a national patient base, not just filling a need for Georgia patients.
As the company pressed its case for the new designation, it made thousands of dollars in political contributions. Since 2006, the company has contributed about $340,000.
The hospital opened in August 2012. Late last month, Gov. Nathan Deal was the featured guest at a special “grand reveal” of CTCA at Southeastern Regional’s expansion to 50 beds from 25. The expansion also included a four-story outpatient clinic and infusion center, a radiation therapy suite and two additional surgical suites.
Immediately afterward, a fundraiser for Deal’s reelection campaign was held in Newnan. The hospital said it was involved, along with others from the Newnan community, in organizing the fundraiser, which hospital executives and board members attended.
Out-of-state patients served
Under the Georgia law, CTCA at Southeastern Regional is required to have 65 percent of its patients come from other states.
A spreadsheet it submitted to the state shows that 65.5 percent of its 1,437 patients in 2013 came from outside of Georgia. The hospital attracted 158 patients from Alabama and 109 from Florida, according to the records. The top county for CTCA-Southeastern patients within Georgia was Fulton, with 54 residents going to the Newnan hospital for inpatient or outpatient care last year.
With that challenging requirement met, the hospital also had to demonstrate its compliance with the law’s Medicaid and charity care components.
Medicaid is the joint federal and state insurance plan for low-income patients, and it offers relatively low payments to doctors and hospitals. CTCA says the fact that it saw no Medicaid patients last year isn’t a compliance issue. The state itself was in the driver’s seat for approval, the hospital said, and gaining the various approvals was expected to take time as the hospital ramped up its operation.
“The fact that no Medicaid was done in 2013 is perfectly fine,” said Victor Moldovan, an attorney representing the cancer hospital. “Once Medicaid was approved they were doing Medicaid.”
Charity care questioned
In terms of charity care, the law says the cancer hospital will provide uncompensated indigent or charity care “which shall meet or exceed 3 percent of its adjusted gross revenues.”
In a financial report filed with the state that covered its first 10 months of operations, the hospital reported no uncompensated charity care provided for inpatients.
CTCA filed another report with the state that demonstrated that the cancer hospital provided $4 million worth of uncompensated indigent and charity care to Georgia residents in 2013. That amounted to 3.5 percent of the adjusted gross revenues it earned from its Georgia patients only. The cancer hospital said it was instructed to demonstrate its charity care using that approach.
Moldovan said he believes the state law calls for the Georgia-only approach. The state “wanted the three percent to be done on Georgia patients and using Georgia revenue,” he said.
State health officials wouldn’t comment, but the community hospitals that fought against CTCA questioned the approach, saying that’s not how they demonstrate their own charity care commitments.
Because the cancer hospital attracts most of its revenues from out of state patients, it would have to spend much more on uncompensated charity care to reach the 3 percent threshold if those revenues were included in the calculation.
The cancer hospital’s reports also suggest it rarely served patients without insurance. For inpatients in 2013, the hospital’s report shows that 91 percent of its admissions were for patients with private insurance, and nearly 8 percent were Medicare. Less than 1 percent were self-pay — which is how most hospitals categorize uninsured patients.
The hospital confirmed that only six uninsured patients were admitted. “The remainder of the completely uninsured/charity patients were outpatients,” the hospital said.
The cancer hospital also reported no uncompensated care and no self-pay patients in a report on radiation therapy, which is generally done in an outpatient setting. The hospital said 22.5 percent of its radiation patients received indigent or charity care assistance of some kind.
“A patient can be indigent or charity and still be insured to some extent, or have third party coverage to some extent,” the hospital said in an email.
Most Georgia hospitals can barely imagine a world where 90 percent of patients have private insurance, the coverage that usually pays hospitals more than Medicare or Medicaid. Most hospitals use private insurance payments to make up for the money they lose taking care of the uninsured and patients covered by Medicaid.
“We are taking a disproportionate share of the Medicaid and indigent patients,” Veazey said. “What they are doing is taking patients that would normally be at our hospitals – the commercially insured. They are taking that patient away from our Georgia-based hospitals.”
CTCA at Southeastern Regional says it clearly has met requirements and is benefiting the state in numerous ways: bringing people to Georgia for care, offering hundreds of good jobs and giving Georgians a new option if they get a cancer diagnosis.
“As the state’s only destination cancer hospital, CTCA at Southeastern’s mission is to provide the highest quality of care to patients and families, and we’re fulfilling that mission,” the hospital said in an email. “The demand for our services has been overwhelming and we are proud that patients continue to choose us for their care.”
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