Garrett Regional Medical Center (GRMC) was established in 1950 through a bequest of George W. Loar.
With over 500 team members, 55 inpatient beds and 24/7 Emergency Services, GRMC is one of the largest employers in Garrett County, Maryland.
GRMC is governed by a volunteer Board of Governors. The Board’s membership represents a broad cross section of the community and includes Medical Staff representation.
WVU Health System
Since 2015, GRMC has been a clinical affiliate of West Virginia United Health System. Since 2017, GRMC has been managed by WVU Health System. Recently, WVU Health System offered to make GRMC a full member affiliate of WVU Health System through a transfer of assets, liabilities, and a 50-year lease of Garrett Memorial.
What is the Process of Affiliation?
The WVU Health System offer for further affiliation is contained in its Letter of Intent (LOI) to the County and the GRMC Board of Governors.
The LOI was signed by the County, the Board of Governors, WVU Health System and GRMC, Inc., a Maryland non-profit corporation and wholly-owned subsidiary of WVU Health System (“WVU Lessee”) in September 2021.
While GRMC is currently operated by the GRMC Board of Governors, WVU Lessee is the WVU Health System company that would operate GRMC under the Lease, and its Board of Directors would be the new governing board of GRMC instead of the current Board of Governors.
The LOI is nonbinding which means none of the signatories have agreed to the affiliation. The LOI states the signatories have agreed to negotiate terms for a definitive agreement that will affiliate GRMC with WVU Health System for fifty (50) years, with two possible ten (10) year renewals.
The LOI outlines promises WVU Health System is prepared to make if the affiliation is approved by the signatories.
Important WVU Health System promises include:
- To employ all of GRMC’s employees through WVU Lessee on substantially the same terms and conditions as they are now employed.
- To redeem or prepay GRMC’s bond debt that was issued by the County.
- To assume GRMC’s liabilities.
- To maintain the following clinical services subject to consultation with the WVU Lessee Board in the event WVU Health System proposes to discontinue a service due to financial or quality issues:
- Cancer and infusion care: The WVU Cancer Institute at GRMC
- Heart and vascular services
- Maternity services
- To fund the installation of an electronic medical record system at GRMC and offer the Community Connect platform for those physician practices in the community which request connectivity, subject to compliance with applicable federal and state laws.
- To begin installation of the electronic medical record system within one (1) year of the start of the affiliation.
Frequently asked questions regarding Garrett Regional Medical Center’s proposed full partnership with WVU Medicine:
Question 1: If agreed to, when would the affiliation happen?
The goal is to start the affiliation in the summer of 2022.
Question 2: Will any employee lose his/her job as a result of the affiliation?
No jobs will be lost as a result of the affiliation. WVU Health System’s plan is to grow jobs.
Question 3: What will happen to the GRMC employees?
GRMC will become WVU Health System or WVU Lessee employees with WVU Health System benefits. GRMC Employees will receive credit for their GRMC service in transitioning to the new benefit plans. WVU Health System will not materially reduce the workforce for three (3) years unless approved by the GRMC CEO.
Question 4: Will my doctor still be at GRMC?
Yes. WVU Health System is not requesting any changes to the Medical Staff. The Medical Staff of GRMC will not change as a result of the affiliation, except to recruit new physician specialties to the community, or replace current physicians who resign or retire.
Question 5: How will the Medical Staff be governed?
The Medical Staff will be governed by their Medical Staff Bylaws consistent with how they are currently governed, subject to the WVU Lessee Board of Directors the same way the Medical Staff Bylaws currently are subject to GRMC’s Board of Governors.
Question 6: Will the cost of care go up at GRMC?
No one can predict the cost of health care. The pandemic has caused the cost of labor and supplies to increase. This is not an increase anyone in the U.S. predicted or expected.
Maryland has a state Health Services Cost Review Commission (“HSCRC”) which sets GRMC’s charges. This rate setting process will continue regardless of whether GRMC and WVU Health System affiliate.
WVU Health System has committed to refrain from asking for rate increases at GRMC from the HSCRC for one year from the start of the affiliation and to work with GRMC to reduce the cost of care. However, GRMC Administration may complete a rate request apart from the proposed affiliation.
Question 7: Who has to approve the Affiliation for it to go forward?
GRMC Board of Governors, The County, The WVU Health System Board of Directors and The WVU Lessee (a WVU Health System subsidiary) Board of Directors
Question 8: How will the Board of Governors decide if GRMC should become affiliated with WVU Health System?
The Board of Governors is carefully reviewing the WVU Health System proposal to affiliate. It is aware of the great trust the community has placed in each Governor and the necessity to be thorough, thoughtful and unbiased.
It utilizes the professional experience of the GRMC CEO, CFO and other GRMC staff in assessing the needs of GRMC.
It has retained special health care transaction counsel from its long term outside counsel, Baker Donelson.
It will be reaching out to peer hospital board members at WVU Health System hospitals similar to GRMC to learn of their affiliation experience.
They are working closely with the County Commissioners, the County Administrator and the County Attorney.
At our request, the CEO has held information meetings with the Medical Staff and Employees.
Lastly, the Board of Governors will conduct business diligence on WVU Health System just as WVU Health System is doing business diligence on GRMC.
Question 9: Are any other Maryland hospitals owned or leased by WVU Health System?
No. Currently, WVU Health System includes hospitals in West Virginia, Ohio, and Pennsylvania.
Question 10: What will happen to the bonds the County issued for the benefit of GRMC?
The County’s obligation to pay the bonds will be extinguished through redemption or prepayment of the bonds, or through the establishment of funds to pay all future principal and interest, if the bonds do not allow for redemption or prepayment.
WVU Lessee will refinance the bond debt with commercial bank financing which shall become an obligation of WVU Lessee to be paid from GRMC revenues.The provisions of this plan are subject to concurrence by the County’s counsel.
Question 11: Who will be the CEO of GRMC?
The CEO of GRMC will not change. The CEO will be Mark Boucot.
Question 12: Who will be the Chief of the Medical Staff of GRMC?
The Chief of the Medical Staff of GRMC will not change. The Chief of Staff is Dr. Lambert, who is in the middle of a six year term of office.
Question 13: The CEO is a WVU Health System Employee and reports to the Board of Governors. How is that conflict being handled?
The Board of Governors, WVU Health System and Mr. Boucot have put in place procedures governing Mr. Boucot while the discussions between the Board of Governors and WVU Health System are happening. As CEO, Mr. Boucot is a valuable resource to the Board of Governors; however, Mr. Boucot has not and will not be making any decisions about the proposed affiliation nor may he discuss the matters the Board of Governors speak with him about with WVU Health System nor will WVU Health System ask Mr. Boucot about Board of Governors discussions.
Question 14: Will my insurance still be accepted by GRMC, including Medicare and Medicaid?
Yes, all insurance payor contracts in place now will remain in place.
Question 15: Why is GRMC considering this affiliation?
WVU Health System has been a good manager of GRMC, has faithfully executed the obligations of its Management Agreement, and has improved the breadth of health care services offered in Garrett County. Moving forward with the affiliation allows GRMC to install the EPIC electronic medical system at GRMC, which will be funded by WVU Health System and is necessary to achieve true integration/interoperability as GRMC moves toward improved population health outcomes.
WVU Health System has provided services and expanded services in the community including:
• The WVU Cancer Institute at GRMC
• A location for the Heart and Vascular Institute in Garrett County
• Virtual ICU services at GRMC, where Critical Care Intensivists work with GRMC’s hospitalist to care for ICU patients
• Urology Services
• Dermatology Services
• Nephrology Services and Chronic Kidney Disease Clinic
• Pulmonology Services through Potomac Valley Hospital
The pandemic has demonstrated to the Board of Governors clearly how isolating it is to be a small rural hospital and affiliating with WVU Health System will allow GRMC access to the expertise and resources of a large health system.
Question 16: Why is the County considering this affiliation?
When GRMC was created, through the bequest of George W. Loar, he chose to have the County own GRMC’s real property. As a result, the County has maintained a role in the ownership of GRMC since its creation.
The County wants to make sure its residents continue to have access to high quality health care in what is a very challenging health care environment. The County will assure that the charity care policy put in place, should the affiliation be approved, must be as generous or more generous than the charity care policy currently in place at GRMC. Lastly, the County believes the prepayment or defeasance of the bond debt is of financial benefit to the County and its residents.
Question 17: Will any individual benefit financially from the affiliation?
No. The assets to be transferred and leased are owned by GRMC and the County, not by any individuals.
WVU Health System and WVU Lessee are non-profit corporations and not owned by any individuals.
Question 18: Will GRMC become part of the WVU Health System Obligated Group, meaning will GRMC become jointly obligated to pay and subject to the WVU Health System bonded debt of approximately $1.4 billion dollars?
No, GRMC will not become part of the WVU Health System Obligated Group as part of the lease agreement on the closing date.
Question 19: What happens if the lease terminates early or at the end of the lease?
GRMC l will be returned to GRMC’s Board of Governors and the County’s leased assets will return to the County.
The County and GRMC Board of Governors would then have to decide the best way to operate GRMC going forward.
Question 20: Who will govern the hospital?
There are many different models of governance. No one model has been finalized. GRMC’s Board of Governors will continue to exist and will be a co-lessor to WVU Health System of those assets it owns. The County will be a co-lessor to WVU Health System of the assets owned by the County and used by GRMC in its operations.