Erie County Medical Center’s second surplus in a row would never have happened if the hospital were properly reimbursing the county for Medicaid money earmarked for hospitals serving the poor, Comptroller Mark C. Poloncarz said Tuesday.

But hospital officials say they are only following the rules in a way that maximizes the original intent of the money, and they feel confident the law is on their side. They say they would have reported a surplus this year even without the funds disputed by Poloncarz.

The hospital-comptroller controversy kicked off at an afternoon news conference in the Rath County Office Building, where Poloncarz called on ECMC to return a portion of a $17.6 million Medicaid “bonus” provided by Washington through the state and county for public hospitals that never get compensated for services they provide.

Before it became a public benefit corporation, ECMC would repay the county half of the money, Poloncarz said.

But even with the county assuming other ECMC expenses such as operational and debt service subsidies, Poloncarz said, the hospital is now not reimbursing the county the way it previously did. That means the $7.5 million surplus ECMC reported last week would not have resulted under its previous arrangements with the county, he added.

Other counties encounter the same issue, he said, but they get reimbursed for many of the other costs they absorb for similar public benefit corporations.

“If not for the almost $9 million it got from Erie County, it would have ended up with a . . . deficit,” Poloncarz said.

But ECMC spokesman Thomas J. Quatroche said Poloncarz was making a wrong interpretation of the budget surplus, saying the hospital would have reported the surplus even without the funds in question, all from a host of savings programs.

In addition, he said the federal government has changed the rules on how the earmarked funds are to be allocated.

“The rules changed to make sure the money goes to providers,” he said. “We’re trying to work through all these things with the county.”

Poloncarz added that the administration of former County Executive Joel A. Giambra was attempting to negotiate a settlement of the situation with ECMC, but those talks got nowhere. And while he said new County Executive Chris Collins is engaged in the same talks, he believes the county may have to consider suing ECMC soon to resolve the situation.

“I want the administration to do it,” he said. “If he doesn’t, I can. And maybe it’s something I will do.”

Collins, however, said late Tuesday that he is fully aware of the situation and that he hopes his ongoing negotiations with the hospital will yield a solution.

“I’m negotiating that now with ECMC,” he said. “I’ve been working on it.”

rmccarthy@buffnews.com

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