Saying he is "frustrated by what appears to be a threatening attitude," Mecklenburg County Manager Harry Jones has told the top executive at Carolinas HealthCare System that he will not support the system's plan for a new psychiatric hospital until it provides better data.

Jones' letter this week to hospital system CEO Michael Tarwater came one day after Tarwater said he would consider building a new psychiatric hospital outside Mecklenburg if the county continues to withhold approval.

The rare exchange of sternly worded letters comes as the county and its largest health care contractor are talking about renegotiating longstanding contracts that cover psychiatric care, public health services and care for indigent patients.

Earlier this year, Carolinas HealthCare presented county staffers with plans for a new 44-bed hospital in Huntersville to meet the growing need for psychiatric care. An Observer investigation last year showed that soaring demand on Mecklenburg's mental health system has made it harder for dangerously ill patients to get hospital beds.

County officials have yet to approve the plans. In his letter dated Tuesday, Jones told Tarwater he needs data to confirm the need for the new hospital and determine how it might affect Carolinas Medical Center-Randolph, the county's existing psychiatric hospital on Billingsley Road. CMC-Randolph is managed by Carolinas HealthCare under a contract with the county.

Carolinas HealthCare's proposal for a new psychiatric hospital has met with a chilly reception from county officials, who questioned whether it could wind up costing taxpayers more money - even if the hospital system picks up construction costs and operating losses as it has promised.

Some county officials questioned whether a new hospital in Huntersville would draw paying patients away from CMC-Randolph, the 66-bed county-owned psychiatric hospital that treats thousands of people each year. That could increase the need for county government subsidies.

Carolinas HealthCare has pledged to take steps to ensure the new hospital doesn't hurt the county financially. But in his letter to county commissioners, Tarwater questioned the county's delay in signing off on the hospital's request for state approval to build the new psychiatric hospital. He said the county should separate that decision from the renegotiation of existing contracts.

"We need to move forward with the building of these beds...," Tarwater wrote. "The appearance that (the county) approval is being withheld due to the desire to change the county contract with CHS, in our view, is not appropriate and is a conflict of interest..."

In his response to Tarwater, Jones said the county is waiting for necessary information.

"As I have repeatedly told you, the (county) is ready to evaluate your proposal if it can receive from CHS the appropriate data," Jones wrote. "...I will not be in a position to support your request until this evaluation is complete."

A long relationship

Carolinas HealthCare is a multibillion-dollar public hospital system that owns Carolinas Medical Center. Its relationship with the county goes back to the 1940s. Until the early 1980s, the county backed revenue bonds to raise capital for hospital improvements, and for years the county has reimbursed the hospital system for care of uninsured and underinsured patients.

Until now, Carolinas HealthCare officials have been careful to avoid public comments that might offend county officials. The change in approach comes as county and hospital officials say they feel frustrated by delays and incomplete information.

Hospital officials, who feel an urgency to move forward with the new hospital, question why county officials would withhold their approval. Jones said he and his staff have "not been able to obtain regular and reasonable data regarding what it is paying CHS for."

Mecklenburg County is looking to save millions by renegotiating its contracts with Carolinas HealthCare. The hospital system receives about $60million from the county each year for managing CMC-Randolph, for taking care of indigent patients and for running the public health department.

The county spends more than $40million of its $1.35billion annual budget on mental health, far more than any other N.C. county. About $16million of that goes to CMC-Randolph. No other N.C. county owns a psychiatric hospital, and some Mecklenburg officials have begun to question whether they should be in the business of psychiatric hospitalization.

Carolinas HealthCare officials have said they're open to altering their agreements with the county. They have extended an offer that would save the county $10million in the coming fiscal year - and $135million over the next decade.

In his letter to Jones, Tarwater expressed surprise that the county manager's office had not shared that proposal with commissioners. In his response, Jones took sharp issue with Tarwater's questions.

"I acted in what I thought was respect for you and our relationship and the fact that you sent this 'confidentially,'" Jones wrote. "Obviously your intentions are not what I had thought."

Ongoing talks

Tarwater said Wednesday he doesn't understand Jones' reference to the hospital system's refusal to provide information.

"We have always provided all the information the county has ever asked of us going back through decades of our relationship," he said through a spokeswoman. "We actually gave the county a timeline of when we would be able to provide (additional) data, and the county has agreed to that timeline."

Despite the tenor of the letters, Tarwater expressed optimism about ongoing talks.

"Our discussion may be strained at the moment, but we expect our longstanding relationship with the county to endure," he said. "We believe we're all interested in the same thing, and that is what's best for the people of the county."

County commissioner Bill James has questioned why the county needs to spend so much money on the psychiatric hospital or for reimbursing the cost of indigent care.

Though Carolinas HealthCare may see the approval of the new hospital as a no-brainer, James said county staff has more questions, including what it will mean for CMC-Randolph. James said he thinks Carolinas HealthCare may not completely understand the county's budget situation, noting that if the county renegotiates its contract, that could possibly free up money for schools, libraries or other services.

Still, James acknowledged that the hospital system and county both have valid - if not conflicting - positions, and leaders will need to figure out what will work best for everyone. "Sure we need to deal with it, but the question is how?" James said. "What do we do?"

Mecklenburg commissioners Chair Jennifer Roberts said she's not worried about permanent damage to the county's relationship with the hospital system.

"There's a bump in the road right now," she said. "It's been a tremendous relationship. There's been miscommunication. But it's not anything that's not resolvable."

Roberts said she would like to convene a citizens task force to study how the county can best support health care.

"It's a good time, when issues arise, to pull in our community." Staff writer April Bethea contributed.