Health & Medicine

Squabbling Fayette health boards could cause loss of federal dollars

The two volunteer boards overseeing health care for the poor in Fayette County continue to bicker over such basics as scheduling meetings even as the federal government threatens to cut off $2.3 million in funding.

As each side blames the other for foot dragging, the Health Services Resources Administration has given HealthFirst until April 28 to resolve ongoing issues or potentially lose the millions of dollars in grant money it receives each year.

At the heart of the issue is what the feds call "operationalizing the co-applicant agreement." That means formalizing a long list of already-agreed upon measures that completely separate HealthFirst and its board from the control of the Lexington Fayette County Health Department and the Board of Health.

Until February 2011, HealthFirst was called the Primary Care Center and operated as a public health clinic serving about 16,000 patients a year, many of them poor. It had been controlled by the Board of Health for decades. It is now an independent non-profit. But the two groups remain intrinsically linked.

For example, the 170 employees of the health department and 140 HealthFirst employees are all still considered part of the health department when it comes to human resource issues such as pension, insurance and pay. HealthFirst operates the public health clinic serving about 16,000 patients a year, many of them poor.

Separating the two has long been a point of contention.

It was identified as a core issue in a state audit of the health department in October 2010 and had been debated for years before that. It is also frequently cited by both sides as an issue that could push HRSA to take back a $11.7 million grant dedicated to building a new health clinic which is planned for Southland Drive.

So why can't the boards separate the entities?

Dr. Gary Wallace, Board of Health chair, said he's at a loss to explain the continued impasse. He said there was some initial resentment by members of the Board of Health when HealthFirst took over the clinic operation. But, he said, that seems to have been resolved.

But, as the HRSA notification makes clear, that hasn't translated into action.

According to the minutes of the February Board of Health meeting, board member Dr. Cindy Derer laid the blame on the lack of willingness of HealthFirst Board members to even get together.

"We have been turned away month after month because they were busy doing other things," she said.

However, HealthFirst Executive Director William North said board minutes going back 20 months show he has repeatedly asked the Board of Health to resolve the separation issues without success.

The ongoing tension was evident at the Board of Health meeting Monday. Several board members questioned the accuracy of HealthFirst Bluegrass budget numbers. The Board of Health has a stake in how it's operating because it extended HealthFirst a $1.867 million line of credit.

"They don't know what their finances are," said Board of Health member Dr. Robert Lynch. "They say they are having a better than expected year, and they keep coming to us to borrow money."

North happened to be out of the meeting room when this discussion was taking place yet the Board of Health members did not air their concerns to him when he returned to the room.

Derer and board member Dr. Nat Sandler also said they each had been excluded from executive session discussions by the HealthFirst Board even though a Board of Health representative is a full member. Sandler was excluded in February. Derer in March.

North said that the budget information he's delivered to the Board of Health is accurate and that the exclusion of the Board of Health members in the executive sessions meeting was an oversight.

Derer said she can't understand how it could happen twice.

"We were pretty direct after it happened the first time," she said.

The Board of Health recently took several steps toward complete separation of the two organizations, including ending leases on several health department buildings and setting a June 2014 deadline to resolve human resources issues. It's unclear whether those measures will be enough for the HRSA or whether the grant money will be cut.

A HRSA spokeswoman Elizabeth Senerchia said only that the federal agency continues to work with local officials to solve the problems.

Health Commissioner Dr. Rice Leach declined to comment beyond saying he is working with HRSA on the issue.

"There's nothing to indicate to us that the two groups can't work together," said Shaye Rabold, senior adviser to Mayor Jim Gray who is working with the boards. Recently, "they have been talking very seriously about making progress."

But the wrangling seems to be far from over. The Board of Health recently voted to cut in half the amount of money HealthFirst receives from Fayette County's public health tax. That drops the amount from roughly $1.2 million to $600,000. North said HealthFirst opposes the move.

By the numbers


Volunteer boards overseeing public health in Fayette County


Employees of HealthFirst Bluegrass and Lexington Fayette County Health Department

$2.3 million

Annual grant threatened by ongoing board disagreements


Number of patients served by HealthFirst each year

Nothing simple when 2 boards are involved

Even something as seemingly simple as rewarding staff members becomes complicated when two boards are involved.

Take Monday's vote by the Lexington Fayette County Board of Health for example.

Dr. Rice Leach asked the board to approve a one-time special payment of $350 for each of the department's 170 employees. The employees are not getting merit raises this year.

The board approved the measure, but the employees can't get their checks unless the HealthFirst Bluegrass board also approves a similar measure for its 140 employees. Why? All the employees are technically employed by the health department. If only a portion received the payment, Leach said, those who didn't could file a grievance.

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