MONROE -- No agreement was reached to build an emergency department in Waxhaw.

Representatives from Carolinas Healthcare Systems and Carolinas Medical Center-Union met Wednesday with the Union County Board of Commissioners and county staff to hash out a lease agreement for an emergency department on Providence Road near Gray Byrum Road. No agreement was reached and the CMC-Waxhaw pavilion stayed only a proposal.

“I’m disappointed,” said Dennis Phillips, CHS regional vice president. “I don’t understand why we couldn’t come to some sort of a conclusion (Wednesday).”

County commissioners said the main problems involved rent costs and a concern about what would happen with the license to operate the emergency department if the county’s relationship with CMC-Union changed.

In addition to equipment, the building must be upgraded to house an emergency department, CHS offered to pay the money up front for upgrades and charge CMC-Union what amounts to an additional rent payment.

CHS representatives provided county finance staff with the proposed rent payments and building improvement costs that CMC-Union would pay out of its operating budget. CMC-Union’s portion of the building­ — about 35 percent of the 73,743-square-foot building — cost about $6.14 million and the upgrades to make it emergency-grade will total about $6.57 million. CHS proposed charging CMC-Union a combined $47.02 per square foot, or about $1.21 million annually, for the combined costs.

CHS proposed a 10-year lease, the same length as is remaining on the CMC-Union lease with the county for the Monroe hospital. The county finance department determined from CHS’s figures that CMC-Union would pay $5.61 million in 10 years for the building portion of the rent, even though it will be usable for 40 years.

That means CMC-Union would pay for 69.1 percent of the building during 25 percent of the building’s life, something Commissioner Tracy Kuehler said was unfair.

The rent amount is based on fair-market-value compared to other medical centers in the area, Phillips said. Presbyterian Hospital in Monroe, for example, charges $24 per square foot. CHS wants to charge $21.72 per square foot in Waxhaw.

Certificate of need

Kuehler said she had more of an issue with what would happen to the certificate of need, the state-issued license that allows for an emergency department in western Union County. CMC-Union holds the certificate in Union County, not CHS, because it must be tied to a hospital already in the county. Because it was applied for through a building owned by CHS, however, the certificate is valid only in that specific building in Waxhaw.

In other areas, like Steele Creek, all those components are owned by CHS. In Waxhaw, different entities control the parts and must come to an agreement for the emergency department to operate.

Who owns what?

CHS owns the building and property where the Waxhaw emergency pavilion would be located; CMC-Union would operate the medical services and controls the certificate of need through its hospital license in Monroe. CMC-Union would pay about $5.2 million for equipment.

Commissioners own the building and property for the hospital in Monroe and lease it to CMC-Union as the operator. Per the lease agreement, CMC-Union must seek commissioner approval if it wants to spend more than $500,000 out of its excess revenues-over-expenditures fund. Therefore, CHS and CMC-Union must convince the commissioners to release the money from CMC-Union.

The commissioners are openly shopping the Monroe hospital lease and Kuehler worried what would happen with the certificate if the hospital lease, and license, were transferred. A real possibility, she said, was that the emergency department could be taken away.

Phillips said transferring the certificate was simple enough that it could be worked around through a process called “expedited review” which he said takes about 30 days. If the entity holding the certificate knew its lease were to expire, Phillips said there would be ample time to get paperwork changed in that an emergency department would not need to be closed.

Not enough info

Commissioners denied CHS’s request Wednesday mainly because county staff said they did not have enough information to recommend that it pass. Commissioners Allan Baucom and Parker Mills suggested that the board get together with the decision makers at CHS to work something out, but the board majority if Kuehler, Lanny Openshaw and Kim Rogers decided to have Phillips and other CHS staff communicate with county staff first.

Commissioners left the meeting asking CHS to provide its staff with further information and Phillips said it would clear up the rent and CON questions and anything else county staff request.

There was no date set for another meeting, but all sides said they wanted to get together again sooner rather than later.