The MNA also represents nurses at 158-bed DMC Huron Valley Sinai Hospital in Commerce Township. The nurses voted to organize a union in March 2016 and are still negotiating a contract with DMC after 16 months.
In an email from DMC, CEO Tony Tedeschi said he is disappointed that the MNA cherry-picked data on how DMC provides care to the poor of Detroit. He also disputed MNA's numbers.
"The DMC still leads the way in providing uncompensated and charity care — $99.9 million in uncompensated care and $8.6 million in charity care in 2017," Tedeschi said. Between 2013 and 2017, the DMC provided $698.3 million in uncompensated care and more than $112.3 million in charity care to those who could not afford to pay for their health care services, he said.
"These attempts by the MNA are intended to distract us from what is most important and that is our commitment to provide quality patient care to our community," Tedeschi said.
A DMC spokesman said it used "accepted industry standards" to calculate the uncompensated care figures. The spokesman said Medicare revised its uncompensated care guidelines last September, suggesting that the new formula allows hospitals to refigure their charity care and bad debt.
But Crain's also reviewed uncompensated care data filed by DMC to the Centers for Medicare and Medicaid Services from 2013 to 2016. The Medicare-reported data by DMC show far less uncompensated care than what it presents using the new Medicare guidelines. By adding bad debt to charity care, uncompensated care declined at DMC by 58% to $31.3 million in 2016 from $75.16 million in 2013, Medicare cost reports show. Crain's did not have access to 2017 cost reports because they haven't been filed with Medicare.
A 2017 report by Ann Arbor-based Center for Healthcare Research & Transformation found that Michigan hospitals averaged a 56% drop in uncompensated care, which includes bad debt and charity care, from 2013 to 2015.
In its report, the MNA concluded that the low levels of charity care "is a clear violation of legal commitments made by Tenet at the time of their purchase" of DMC in 2013. Tenet assumed agreements signed in 2011 by Vanguard Health Systems with the Michigan attorney general's office when it originally acquired DMC.
But Crain's has reviewed the 2010 sale and purchase agreement and interviewed experts, and the record is not so clear.
For example, under Section 12.2 of the DMC sale and purchase agreement that covers indigent and low-income care, DMC is not required to hit specific dollar targets for charity care as defined and reported in Medicare cost reports, as the MNA suggests. DMC simply agreed to follow "seller's historic charity care policy" or Vanguard's policy, whichever is more charitable, for at least 10 years, or through 2021. The agreement allows DMC to modify its charity care policies each year, based on federal poverty guidelines, and to extend the existing policy past 10 years.
The agreement also required DMC's uncompensated care policy to identify those patients eligible for free or discounted care and to determine the portion of charges to be billed or written off. DMC also "will provide medically necessary services without payment or at reduced payment to those unable to pay or underinsured without regard to race, religion, age or gender," the so-called community benefit policy said.
Andrea Bitely, a spokeswoman in Michigan Attorney General Bill Schuette's office, said in an email that the AG is aware of the change in charity care numbers in 2016 and is awaiting data to review from DMC for 2017.
Joe Walsh, CEO of Legacy DMC, the nonprofit board assigned to oversee compliance with the sale of DMC, said DMC remains in compliance with sale and purchase agreements. He said Legacy's attorney will look into the MNA's claims and the board will discuss the report, which it received Wednesday.
"Hospitals that spent the most on uncompensated care will have the biggest decline" because Michigan expanded Medicaid and more people in the state have purchased commercial health insurance the past four years, Walsh said.
Because DMC has historically been the largest provider of indigent care in the state, Walsh said it mounted an aggressive program to sign up uninsured people into Medicaid or help them purchase health insurance on the state exchange.
"Their data (on charity care) might be right ... but it shows how well DMC reacted to the ACA" by moving patients they treat from uninsured into Medicaid or private insurance, which could have reduced the amount of charity care, Walsh said.
Two hospital sources, who asked to remain anonymous, told Crain's that they also have been very aggressive in signing uninsured patients into Healthy Michigan Medicaid or helping them enroll in private health insurance policies on the exchange. They declined to comment on whether DMC has initiated specific policies or eliminated services that could have drastically cut its charity care numbers.
Alan Baumgarten, a Minneapolis-based consultant who follows Michigan health care companies, said the MNA study was somewhat flawed because it focused only on charity care funding and not the provision of Medicaid services or the larger uncompensated care numbers. Uncompensated care includes charity care and bad debt.
"It is a funny thing for me to defend a big company like Tenet," Baumgarten said, adding: "DMC provides the most inpatient Medicaid days (in Southeast Michigan), 166,000 days in 2016, an increase from 140,000 in 2013."
Baumgarten said the agreement Vanguard signed with former Attorney General Mike Cox in 2010 required DMC to maintain care for the uninsured and underinsured. "Tenet could say they are providing a lot of care to indigent families," he said.
