El Paso Children’s Hospital responds to latest UMC term sheet; UMC board discusses response

El Paso Children’s Hospital has responded to University Medical Center’s latest term sheet.

County Judge Veronica Escobar and Commissioner David Stout confirmed the response to ABC-7 Monday.

The County officials described the Children’s response as a counter offer, and not a rejection, which they see as progress.

A UMC spokesman last week said Children’s had until today to respond and Wednesday to accept the offer.

Escobar and Stout attended UMC’s board meeting at 3 p.m. Monday. The board went into executive session to discuss Children’s response and UMC’s counter offer.

On Sept. 17, County officials said UMC may simply allow the cash-strapped Children’s Hospital to close.

County officials have said Children’s may owe the federal government between $22 million and $66 million, depending on potential penalties, for reporting it paid $27 million in rent to UMC when it really didn’t.

The federal government used those expense reports to determine how much money in medicaid reimbursements Children’s would receive.

“If you have money that you probably weren’t entitled to you probably have to pay that back to the federal government,” said Andy Krasfur, a former bankruptcy attorney and trustee who has been following the case closely.

Stout said last week that UMC would not be able to take on Children’s debt if it owes that kind of money to the government.

“It would be impossible for UMC to assess a $66 million debt. That’s a liability that UMC cannot assume.”

When asked why Children’s reported the unpaid rent as an expense, Children’s CEO Mark Herbers said last week that Children’s followed general accounting principles.

“Our cost reports are filed consistent with medicaid guidelines which matches our audit report. We’ve recognized the expense, we’ve accrued the expense so we reported it as such,” Herbers said in an interview Thursday.