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Bill overhauling UNC Health Care narrowly approved

UNC Health Care is gearing up to fight a legislative proposal that would dramatically overhaul its governance structure and hamper its ability to expand.

The hastily passed recommendation has generated a firestorm of opposition — from legislators, members of the UNC-system Board of Governors and UNC Health Care’s leadership — regarding its provisions and the way the committee passed it.

The bill, authored by Rep. Tim Moffitt, R-Buncombe, was narrowly approved by one vote Tuesday by a N.C. House of Representatives committee tasked with examining state-owned assets.

But members of the committee were not given a chance to read the bill before the meeting, said Rep. Becky Carney, D-Mecklenburg, who voted against the proposal.

The UNC Health Care system came under increased scrutiny in the fall, when the committee began to consider an unsolicited bid from Raleigh-based WakeMed Health and Hospitals to buy Rex Healthcare, an affiliate of UNC Health Care.

If the bill passes the full N.C. General Assembly during the short session in May, it would give the Board of Governors the authority to appoint UNC Health Care’s Board of Directors. The board is currently appointed internally.

The bill would also forbid the expansion of the health care system without the explicit permission of the state legislature.

Sen. Tom Apodaca, R-Buncombe and chairman of the N.C. Senate’s rules committee, issued a statement criticizing the bill and said he will work to ensure its defeat.

Carney said the bill would politicize the governance of UNC Health Care by giving members of the Board of Governors, who are appointed by the legislature, control of the system’s board.

“I was bothered by the need to come in and do a major overhaul of the university system governance structure when there has been no compelling reason for that change to occur,” she said.

And the chairwoman of the Board of Governors, Hannah Gage, said she was not excited by the prospect of having more control over UNC Health Care.

“A lot of the things that they are recommending are bad ideas,” she said. “It sounds to me like somehow this thing grew legs and shipped on through and most people didn’t have a full understanding on what it would do.”

Karen McCall, spokeswoman for UNC Health Care, said the bill would cost the state in the long term.

“If we are not able to have the flexibility we’ve had in the past, UNC Health Care might not be able to support the (UNC) School of Medicine,” she said. “The school could very well have to go to the state for additional support.”

But supporters of the proposal claim that the state must regulate UNC Health Care’s growth.

“Perhaps UNC’s goals and the legislature’s goals are not always aligned,” said Rep. Edgar Starnes, R-Caldwell, who voted in favor of the bill. “I just felt like we need to continue this conversation and this is a good way to do that.”

UNC Health Care has been engaged in a year-long public row with WakeMed since WakeMed issued its bid to buy Rex. WakeMed claims UNC Health Care’s state funding and preferential Medicaid reimbursement treatment give the system an unfair competitive advantage.

“UNC will not reform. There are no internal reforms to come,” said WakeMed CEO Bill Atkinson. “UNC should be held to a higher standard. The standard is being written by UNC Health Care as to how they operate, and they have very little transparency.”

Atkinson said he did not know enough about the bill to fully support it, but said UNC Health Care’s strong relationship with the legislature will make reforms difficult to pass.

“UNC’s political ties are so strong historically and are still so strong today,” he said.

Carney said she expects the bill to die upon further scrutiny.

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“We’re not health care officials or experts,” she said. “This was just unnecessary.”

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