Lawmakers Request AG Opinion on Erlanger Bonus Discussions

The Tennessee General Assembly’s Hamilton County delegation has requested Attorney General Herbert Slatery’s opinion on whether or not Erlanger Health System’s Board of Trustees violated the state’s sunshine laws.

The questions arose when the board  held two private meetings to discuss awarding millions in performance bonuses to management-level employees.

Earlier in 2014, Erlanger, in danger of ending the year with a financial shortfall, came to lawmakers seeking financial help. Politicians at all levels of government went to bat for the hospital, and helped Erlanger get a $19 million federal benefit.  Because of the hospital’s danger of ending the year in the negative — as well as the secret nature of the discussions — state lawmakers were upset with the board’s decision to pay out nearly $2 million in bonuses.

Erlanger announced it would delay payment of half of the bonuses until Summer 2015 after attorneys assured them they had operated within state law.

However, lawmakers told the Chattanooga Times Free Press editorial board Tuesday that they were going to ask Slatery to look into whether the board violated the open meetings law with their discussion of the bonuses. Members of the Hamilton County legislative delegation also said they plan to consider legislation to address their concerns in the upcoming session — such as by removing the public meetings exemption from Erlanger.

Additionally, the decision by the hospital board to pay out bonuses after receiving public assistance has caused some lawmakers doubt over the feasibility of supporting Gov. Bill Haslam’s proposed “Insure Tennessee” plan to expand Medicaid eligibility using federal funds under the Affordable Care Act.

In December, Republican state Sen. Todd Gardenhire told TNReport he was concerned about taking “the political hit” for expanding Medicaid if it just meant hospitals were going to pay out bonuses to its management-level employees.

State Sen. Bo Watson, a Hixson Republican and the Senate Speaker pro tem, echoed Gardenhire’s comments last week, and questioned whether hospitals would use the increase in funds from the expansion to better serve their communities or to pay out large bonuses to their administrative components.

Haslam announced recently that he’s calling an “extraordinary session” of the Legislature to discuss his proposal beginning in early February.