Vidant Health could lose millions over hospital board make up

GREENVILLE, NC (WITN) - The largest health system in the East could lose millions of dollars in state funding as a legal battle continues over its board make up.

The UNC Board of Governors is suing Vidant Health and Pitt County after it's appointment power to Vidant's board was removed. Now the hospital says a state proposed budget could cut $35 million from it's finances.

Vidant Health CEO Michael Waldrum said during a press conference Wednesday that administrators were surprised by the budget proposal introduced to the state senate. Waldrum said the hospital remains committed to it's partnership with the Brody School of Medicine.

"We're gonna do everything we can to preserve that," said Waldrum.

The State Senate's proposed budget comes after Pitt County Commissioners unanimously voted in April to eliminate ECU's appointments to Vidant's board and give those to Vidant.

"We made the best decision to build the best governance for our organization," said Waldrum.

For years, Pitt County appointed 11 members to what used to be the county-owned hospital and the university system appointed the other nine members. ECU gained appointments to the hospital board after the Brody School of Medicine was created back in 1975.

The university system filed a lawsuit because of the appointment change, saying it violates terms of Vidant's agreement to serve as a teaching hospital for the Brody School of Medicine.

State senator and GOP leadership member Ralph Hise released a statement that read in part:

"Without the affiliation agreement in place, Vidant is just like any other hospital. The Senate budget therefore treats Vidant the same way as other private hospitals, as is only fair."

Vidant CEO Michael Waldrum says if passed, these cuts would damage patient care when combined with another $38 million cut set to take effect in 2020.

"It will have a significant effect and we will have to accommodate by adjusting the services that we provide," said Waldrum.

The hospital says it agreed to voluntary mediation between all parties to settle the dispute and administrators say they are willing to look at solutions.

Vidant's CEO says there were no conversations with the University about the change in appointments but two ECU physicians now serving on the board were consulted and they approved of the decision.

If the proposed budget passes it would go into effect by July 1st.

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A lawsuit against Vidant Health and Pitt County is headed to mediation.

The UNC Board of Governors sued Vidant Health and Pitt County after county commissioners unanimously approved changes to how the Vidant board is made up.

For years, Pitt County appointed 11 members to what used to be the county-owned hospital and the university system appointed the other nine members.

Commissioners voted in April to eliminate the university's appointments and give those to Vidant.

ECU gained appointments to the hospital board after the Brody School of Medicine was created back in 1975.

The hospital agreed to serve as the primary teaching hospital for the medical school.

The lawsuit claims that changing the make-up of the board violates the agreement.

In a court order filed Tuesday afternoon, the university system, the hospital, and the county agreed to have the case moved to Pitt County and participate in voluntary mediation in an effort to resolve the dispute.

The original case was filed in Orange County where the UNC System is headquartered.

A temporary restraining order that prevents changes to the current Vidant Medical Center Board of Trustees will continue as talks progress.

Meanwhile, a proposal in the Senate's state budget would cut funding to Vidant by $35 million each year, money it receives as the primary teaching hospital for the medical school.



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A temporary restraining order has been granted to the UNC System and ECU preventing the changing of the current membership of the Vidant Medical Center Board of Trustees.

Superior Court Judge R. Allen Baddour made the ruling today in the case that involves a lawsuit by the UNC System against the county and Vidant Health.

The case returns to court on May 29th.

Last month, Pitt County commissioners unanimously approved changing the makeup of the Vidant board.

For years, Pitt County appointed 11 members to what used to be the county-owned hospital, and the university system appointed the other 9 members. The change approved April 22nd would eliminate the university's appointments and give those to Vidant.

ECU gained appointments to the hospital board after the creation of the Brody School of Medicine back in 1975. The hospital agreed to serve as the primary teaching hospital for the medical school and has had an affiliation agreement with Brody and ECU, the latest approved in 2013.

The lawsuit claims that changing the makeup of the hospital board violates that 2013 agreement.



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Pitt County leaders say they're trying to maintain local governance of healthcare in the east in response to a lawsuit filed against the county and Vidant Health.

This week, the UNC System filed for an injunction to stop changes Pitt County commissioners approved to the make-up of Vidant's Board of Trustees. The lawsuit claims the changes violate a 2013 agreement.

Pitt County responded in a statement, saying the county "received a lawsuit filed by the University of North Carolina and East Carolina University, challenging the recent change in governance of Vidant Medical Center. Pitt County values the longstanding affiliation between the Brody School of Medicine and Vidant Medical Center. The county’s consent to the amendment to Vidant’s governance was intended to strengthen this relationship and assure local governance over healthcare in eastern North Carolina. We look forward to a positive result that is beneficial for all Pitt County residents."

The lawsuit is expected to be heard by an Orange County judge Wednesday.



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The UNC System wants an injunction to stop changes as to who appoints board members for Vidant Medical Center.

Last month, Pitt County commissioners unanimously approved changing the makeup of the Vidant board.

For years, Pitt County appointed 11 members to what used to be the county-owned hospital, and the university system appointed the other 9 members. The change approved April 22nd would eliminate the university's appointments and give those to Vidant.

ECU gained appointments to the hospital board after the creation of the Brody School of Medicine back in 1975. The hospital agreed to serve as the primary teaching hospital for the medical school and has had an affiliation agreement with Brody and ECU, the latest approved in 2013.

The lawsuit claims that changing the makeup of the hospital board violates that 2013 agreement. It is asking an Orange County judge for a temporary injunction.

Pitt County says it just became aware of the lawsuit this afternoon and can't yet comment.

Vidant late this afternoon issued a statement that said they look forward to a positive resolution to the lawsuit. "There is nothing about the governance changes that materially or fundamentally changes the academic affiliation or the more than forty-year relationship between the Brody School of Medicine and Vidant Medical Center."