In an attempt to settle the dispute over payment for psychiatric care of indigent residents, Mecklenburg County Manager Harry Jones laid out two "creative solutions" for Carolinas HealthCare System on Wednesday.

Either take ownership of CMC-Randolph, the county's psychiatric hospital, and run it independently, or accept a $750 per bed per day payment from the county for Mecklenburg patients without insurance.

In a letter to hospital CEO Michael Tarwater, Jones said the two leaders "have an obligation to this community" to resolve their differences.

But the letter came as hospital officials awaited news of legislative action that would allow them to circumvent the county and build a new psychiatric hospital in Huntersville. Jones said the county, which has withheld approval of the project, would sign off on it if the hospital system accepted one of his ideas.

Currently, Carolinas HealthCare, a multibillion-dollar public hospital system, holds the license for 66 beds at CMC-Randolph and operates the behavioral health center under a contract with the county.

Under that contract, the county covers operating losses. Since 2005, the county's annual funding has more than doubled, from about $8.5 million to $19.2 million this year.

County General Manager Michelle Lancaster said the cost to the county for the second option would be about $18 million a year if all the beds were occupied every day by indigent patients. But that would be unlikely.

In 2009, 15 percent of patients at CMC-Randolph were uninsured, according to a report by a hospital system consultant. Assuming the county picked up the tab for uninsured patients at $750 a day, the cost to taxpayers would be $2 million to $3 million a year, much less than the current tab.

Contacted Wednesday afternoon, Carolinas HealthCare spokeswoman Gail Rosenberg had no comment on Jones' offer.

Details of the offers

Jones described two options:

Mecklenburg would transfer ownership of CMC-Randolph to the hospital system on July 1, 2012 (or as soon as possible), at a cost of $1. Jones said the county invested about $12 million in 2008 to update the hospital, which is valued at about $20 million.

Carolinas HealthCare would own and operate CMC-Randolph, and the county would cover the operational deficit at CMC-Randolph until the transfer.

Mecklenburg would pay Carolinas HealthCare $750 per bed per day to provide inpatient psychiatric care of uninsured county residents at CMC-Randolph. Jones said the county is negotiating a similar agreement with Presbyterian Hospital for eight psychiatric inpatient beds that were transferred from the state's psychiatric hospital in Morganton.

If Carolinas HealthCare accepts one of the solutions, Jones said the county would immediately sign off on the hospital system's proposal to build a 44-bed psychiatric hospital in Huntersville.

The county has been withholding its approval, worrying that a new hospital would draw paying patients away from CMC-Randolph and increase the need for a taxpayer subsidy.

Carolinas HealthCare officials say the need for more inpatient psychiatric care is great, and that the state secretary of health and human services already has approved their plan.

Frustrated by the county's delay, hospital officials took their case to legislators, who introduced a bill that would allow Carolinas HealthCare to pursue the new hospital without county approval.

The bill has passed the Senate, and this week passed a House committee. It's unclear when or if the bill will get to the House floor before this weekend's expected adjournment. Sponsors have hoped the county and the hospital system could work out their differences.

If Carolinas HealthCare accepts one of Jones' suggested solutions, the county would withdraw its claim that the hospital system breached its contract and would resume paying for indigent care at CMC-Randolph.

The county recently withheld at least one payment to Carolinas HealthCare because Jones said the system failed to provide requested data on patients and finances. Hospital officials said they have provided complete information to help the county evaluate CMC-Randolph's finances and performance.

Recommendations coming

As for the two options, county General Manager Lancaster said the county doesn't have a preference. "These are solutions that Harry has offered to try to move this forward," she said in an email.

County commissioner Bill James said he'd prefer to give the psychiatric hospital to Carolinas HealthCare.

"By giving them the building, they can then design their own psych hospital(s) without our oversight...," James wrote in an email to fellow commissioners Wednesday.

The other option, James said, would require too much monitoring by county officials to determine, among other things, whether patients had lived long enough in Mecklenburg to qualify for subsidies.

Either way, Jones said the county will convene a blue-ribbon committee, with participants from the hospital system and other community groups, to make recommendations to county commissioners about the future role of the county government and taxpayer financing for behavioral health services and other health-related matters.

Staff writers April Bethea and Jim Morrill contributed.