ST. FRANCIS MAY FACE REVIEW OF MRI BUY

St. Francis Medical Center officials say the hospital's decision to purchase a magnetic resonance imaging system it had leased since 1990 doesn't violate Missouri's certificate of need program.

But the director of the state program, which reviews hospital requests for major capital improvements and equipment purchases, says the Health Facilities Review Committee needs to take a closer look at the purchase.

The committee issued a certificate of need in 1989 to permit St. Francis to lease the MRI system.

The hospital last year asked to replace the MRI system at a cost of $1.65 million. But in October, the committee denied that request, saying St. Francis was unable to document a need for the new MRI.

Since then, the hospital went ahead and bought the leased system.

Now the Missouri Health Facilities Review Committee plans to meet Feb. 5 in Jefferson City to discuss whether St. Francis must acquire a new certificate of need or whether the purchase is an extension of the 1989 certificate.

Hospital officials argue that the 1989 certificate of need permitted a lease-purchase arrangement, and that the purchase of the MRI system fell within the limits of that certificate.

Tom Piper, director of the Missouri Department of Health's Certificate of Need program, said the hospital exceeded the threshold of spending that triggers the program review.

"When they acquired it, according to reports, the acquisition cost was $895,000, with installation costs of $200,000 to $300,000," Piper said.

Certificates of need apply to equipment purchases or capital improvements related to direct patient care services. Equipment purchases that exceed $400,000, capital improvements that exceed $600,000 or the addition of long-term care beds require the certificate of need review.

Piper said the committee and the hospital don't disagree on the costs associated with the MRI purchase. What's disputed is whether that expenditure falls under the old certificate of need or requires a new review.

"When they expend the money to acquire the system, the question to the committee is whether or not they believe this requires a new certificate of need or if it is a cost overrun on the old certificate of need," Piper said. "That's really the question to our committee."

The 1989 certificate stipulated a $1.9 million ceiling on expenditures for the MRI, said John Fidler, president and CEO of St. Francis Medical Center. Fidler said the lease payments combined with the purchase came in under that ceiling.

The lease cost $850,000 through last year and the purchase price was $895,000 for a total of $1,745,000.

It isn't clear what installation costs were included in the committee's report since the MRI system already was in place.

Fidler said buying a new system would have saved the hospital money in the long run because of lower maintenance and operations costs.

After the state denied the hospital's request to replace the leased MRI system, Fidler said, "we just went ahead and exercised the purchase part of the agreement."

If committee members determine that St. Francis Medical Center violated the rules for the certificate of need program, the state could seek an injunction requiring the hospital to stop using the MRI, Piper said.

"But that's only been done a couple of times in the 16 years the committee's been in existence," he said.

Committee members could opt to allow the hospital to continue the service since a certificate of need had previously been issued, Piper said.

Fidler said the hospital is making a good-faith effort to comply with state regulations that "don't make any sense," while ensuring the best possible facility for its patients.

Under current regulations, he said, a hospital has to perform more than 2,500 MRI procedures annually in order to add a second MRI system. To replace an existing system, a hospital must perform more than 4,000 procedures annually.

At the 4,000 level, Fidler said, "even a Barnes (hospital) couldn't replace their MRI." St. Francis currently performs approximately 2,700 procedures annually.

Fidler said St. Francis doesn't care whether it's a second MRI or a replacement system -- the hospital simply wants, and needs, a new MRI system.

"We wish they'd make up their minds and let us know what the rules and regulations are," he said. "Bottom line, we're going to do what we need to do to care for the people of this area and continue to provide the services and the technology that's necessary."

That, Fidler said, is something the Health Facilities Review Committee doesn't have the burden of doing.