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Waldrum's contract extension comes same day Senate pursues Medicaid cuts

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By Ginger Livingston
The Daily Reflector

Sunday, June 9, 2019

Vidant Health’s CEO received a contract extension the same day the state Senate released its budget stripping the health system’s flagship hospital of part of its Medicaid reimbursements.

News of the five-year contract extension granted CEO Michael Waldrum broke during a week that also saw candidates for the 3rd Congressional District and Gov. Roy Cooper join the list of politicians weighing in on the governance battle between the UNC System and Vidant Medical Center.

Vidant Health’s Board of Directors unanimously approved Waldrum’s five-year contract extension on May 28, eight days after the University of North Carolina and East Carolina filed suit against the hospital and Pitt County government to prevent the governance changes these entities approved.

While Waldrum’s contract was extended, there was no change to his compensation, Bob Greczyn, chairman of the board’s Compensation and Benefits Committee, said in a statement released  onThursday.

“We recently evaluated Dr. Waldrum’s contact, which was to expire in less than a year. We took that opportunity to extend it for five years,” said Greczyn, former president and CEO of Blue Cross and Blue Shield of North Carolina and former chairman of ECU’s Board of Trustees.

“It reflects our confidence in his leadership and secures his leadership for Vidant into the foreseeable future,” Greczyn said. “There are no changes in compensation associated with the extension of his contract.”

According to the 990 Form Vidant must file with the Internal Revenue Service as a tax-exempt organization, Waldrum’s salary and other compensation is slightly more than $1.23 million.

The Senate budget included a proposal to stop the hospital from receiving Medicaid reimbursements associated with its status as the teaching hospital for the Brody School of Medicine. Senate leaders said the hospital didn’t deserve the money because it made governance changes that prevented ECU and the UNC System from having any say in the hospital’s affairs.

Vidant Medical Center, doing business as Pitt County Memorial Hospital, filed on April 24 amendments to its articles of incorporation that ended the UNC Board of Governors’ ability to appoint nine members to the hospital Board of Trustees. The changes were made without consulting the governors, said Harry Smith, chairman of the Board of Governors.

The UNC system began recommending members to the hospital’s governing board in the mid-1970s when Pitt County Memorial Hospital became the teaching hospital for the newly organize East Carolina University medical school, later named the Brody School of Medicine.

Prior to the change, Pitt County Board of Commissioners appointed 11 members to the hospital’s 20-person board and the UNC Board of Governors appointed nine members.

Along with the budget cut, it was reported Senate leaders were discussing building a new hospital to serve as Brody’s teaching hospital.

When the Senate convened May 30 to adopt its budget, Pitt County Democratic Sen. Don Davis delivered a passionate speech, saying “Eastern North Carolina again is under attack” because of the funding cut. Through a procedural vote, the Senate rejected Davis’ effort to remove the funding cut from the Senate budget, which passed.

The Senate and the House now must negotiate a final budget to present to Gov. Roy Cooper.

With the start of a new month, other political leaders starting weighing in on Vidant’s situation, including Greg Murphy and Joan Perry, the two doctors vying for the Republican nomination in the 3rd Congressional District special election.

Murphy, a Greenville urologist who represents Pitt County in the state House of Representatives, said he and members of the state House are working on the issue.

“I’ve been working with both parties to find some mutual ground,” Murphy said. “The last thing we want to do is endanger the lives of people in eastern North Carolina or the jobs of the people in the Vidant health care system.”

Murphy is the senior chairman of the House Committee on Health and said given that position he will “essentially demand that (the funding cut) be removed from the budget.

“Now they don’t have to do what I demand … but I’ll be plain and clear I won’t vote to hurt the interests of eastern North Carolina.”

Murphy also is one of 25 vice chairmen of the House Appropriations Committee. Pitt County representatives Kandie Smith, a Democrat, and Chris Humphrey, a Lenoir County Republican, also sit on the Appropriations committee.

The Senate budget also didn’t include funding to begin planning for a new building to house the Brody School of Medicine. The House budget had $28 million to be spent over a two-year period.

“I am hopeful with the mediation process that we’ll have good people who come together that care about ENC and put this issue beside us and continue to do the good work we do,” he said.

Murphy said he couldn’t speak to the decision of the hospital and county commissioners to change the governance structure without consulting UNC leaders.

“I think it’s a lot of political discussion and the best course, which I think everybody agrees, is to restore funding, come to an agreement on the structure of the people and let’s get back to doing the state’s business,” Murphy said.

Perry, a Kinston pediatrician, released the following statement: "As a former adjunct faculty member with Brody School of Medicine, I’m hopeful stakeholders will settle their differences quickly because Vidant is too valuable to eastern North Carolina. We have good leadership and I know they are working hard on this."

Senate President Pro Tempore Phil Berger released a statement Monday saying Republican senators from eastern North Carolina, Jim Perry, Bob Steinburg, Brent Jackson and Norm Sanderson were “standing with their constituents and ECU in working to find a resolution to the challenge in eastern North Carolina and were “prime examples of how to work behind the scenes to build consensus and find solutions.”

Berger said the senators were working with Davis and Sen. Rick Horner “to resolve the issues created by recent governance changes."

Horner was the one Republican senator who voted against the procedural move that blocked Davis’ effort to remove the funding cut from the budget.

Gov. Roy Cooper briefly addressed the issue on Tuesday, according to The News and Observer.

According to a video posted by the newspaper, Cooper said he was concerned about the situation’s effects on the medical school and rural health care.

“It looks like a political vendetta and I am concerned when political vendettas affect rural health care,” Cooper said.

Vidant Health earlier in the week took the first step in the mediation process by releasing a proposed settlement agreement where Pitt County would continue appointing 11 members to the hospital board. Among the nine seats in contention, the dean of the Brody School of Medicine would hold one and the Board of Governors and the hospital board would each appoint four members.

Proposal also sought the $28 million for planning the new medical school and removal of the budget provision that would have cut Vidant’s Medicaid reimbursements.

The agreement also sought continued discussions on a variety of issues.

The UNC System’s response didn’t directly address the Vidant’s proposal. Spokesman Josh Ellis stated the system’s commitment to the mediation process, “which the UNC System views as the best way to resolve the concerns of all parties and to provide a stable platform for medical education and health care in eastern North Carolina.”

Ellis said the UNC System continues to believe returning to the original governance agreement is “the best path forward.”

“We welcome future dialogue with Vidant leadership and look forward to hearing their concerns, as well as resolving problems that have arisen in the relationship with Vidant and its support of the Brody School of Medicine," Ellis said.

Contact Ginger Livingston at glivingston@reflector.com or 252-329-9570.