Two Tucson hospitals will receive an additional $6.4 million in federal funding in the coming months thanks to a somewhat complicated agreement with Pima County.

Tucson Medical Center and St. Mary’s Hospital qualified for the funding after the county pledged $3.3 million in matching grants.

The federal funds will be used to pay for unreimbursed care in previous fiscal years with $4.1 million going to TMC and nearly $1.2 million going to St. Mary’s.

The funds will pay only a small portion of the bad debt incurred by TMC, said Julia Strange, the vice president for Community Benefit at Tucson Medical Center.

TMC wrote off $25.5 million in “charity care” and bad debt in 2010, $38 million in 2011 and $48 million in 2012, according to its annual report to the community.

The two hospitals were eligible for funding because they met a minimum standard set by the federal government: More than 25 percent of both hospitals’ patients are poor.

“TMC and St. Mary’s Hospital have struggled to maintain their financial viability in spite of the rising levels of uninsured,” County Administrator Chuck Huckelberry wrote in a memo to the county staff last week.

“The impact is particularly severe for hospitals serving many lower-income patients as the uninsured frequently resort to emergency rooms for medical or behavioral health issues. Federal law prohibits hospitals from turning them away; forcing the hospitals, at a minimum, to respond with triage and essential care without regard to the individual’s ability to pay.”

Carondelet St. Joseph’s, Northwest Medical Center and Northwest Oro Valley Hospital were not eligible for federal funding, according to a county memo.

Local matching funds offered by the University of Arizona and Pima County — worth $97.4 million alone — have generated $216.2 million in new federal funds for local hospitals.

The financial mechanism allowing local governments provide the local match for federal healthcare funds emerged in 2008 after state funding dried up, Huckelberry said.

“The number of uninsured has risen significantly since 2008 when the state made the decision to eliminate essentially all funding for Graduate Medical Education, restrict eligibility for Medicaid and reduce the scope of reimbursed services,” he wrote.

There are an estimated 133,000 uninsured people in Pima County, according an estimate by county officials using U.S. census data.

The roughly $3.3 million in county funds will be used by a nonprofit associated with TMC for the construction of a park designed by the county near Julian Wash, including the cost of county staff oversight.

Huckelberry said the county funds are protected and can be returned to the county in the unlikely chance that the federal funding falls through.

“There is no jeopardy to taxpayers,” Huckelberry said.

The completion of the project is tied to a multi-use path known at The Loop, offering locals more options to exercise outdoors.

Developed by Pima County, The Loop will be 131 miles when completed and will connect the Rillito, Santa Cruz and Pantano River Parks with the Julian Wash and Harrison greenways.

Contact reporter Joe Ferguson at or 573-4346.