Ascension Texas sends new letter to Central Health as partnership continues to sour

The partnership between Central Health and Ascension Texas to provide care for Travis County's poorest families is showing another sign of strain.

On Tuesday, Ascension Texas sent Central Health a "deadlock" letter to formally announce the hospital system considers negotiations officially stalled with the county hospital district over the budget and governance of their joint nonprofit, the Community Care Collaborative.

The collaborative was established by the two health entities in 2013 to coordinate care for uninsured populations and those getting health benefits through Central Health's Medical Access Program. The contract runs through 2038, but both sides essentially stopped funding that nonprofit in 2020.

Ascension Texas, which includes Ascension Seton hospitals, sees this letter as a way to get both parties back to the negotiation table. "We have got to stop working in silos," said Ascension Texas attorney Ed McHorse of McGinnis Lochridge.

Central Health sees it as a distraction to the lawsuits the two health entities filed against each other in January, said Central Health CEO and President Mike Geeslin.

Two separate roles in health care

Both groups provide care to the poorest people in Central Texas, but in different ways. Traditionally, Central Health is the funder and Ascension Texas is the provider.

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Central Health is legally tasked with providing care to anyone in Travis County living at or below 200% of poverty level, which is $59,356 for a family of four with two children younger than 18. It is funded by a property tax rate of 9.864 cents per $100 of valuation. It uses this taxpayer money to pay for patient care provided by clinics run by entities such as CommUnity Care, LoneStar Circle of Care and People's Community Clinic. It also funds care provided through Dell Seton Medical Center, the area's safety net hospital run by Ascension Texas.

If the two health care entities don't work together, they could duplicate care, especially as Central Health is opening its own clinics.

"It's confusing for those seeking services," McHorse said. "We need to get back to coordinated services."

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A growing Central Health and Ascension Texas footprint

Central Health has announced plans that further move from a funder of health care to a provider of health care. This year it is opening up primary care clinics at Del Valle and Hornsby Bend. It also is planning for a clinic at Colony Park, renovating the Rosewood-Zaragosa clinic to provide more specialty care and buying a complex at 7901 Cameron Road in Northeast Austin to open a respite care clinic for people experiencing homelessness.

"What we're focused on is building out a high-functioning safety-net health care system through partnerships and direct care services," Geeslin said.

Ascension Seton is starting a $280 million expansion at Dell Seton Medical Center that will add four stories to one tower and another floor to a second tower of the safety-net hospital that opened in 2017. Ascension Seton owns the building. Central Health has a ground lease and the University of Texas owns the land.

In the lawsuit with Ascension Texas, Central Health is asking for a judge to dissolve agreements between Central Health and Ascension Seton and to allow Central Health to take over running Dell Seton Medical Center.

Ascension Texas wants to continue operating the area's safety-net hospital, which it has since 1995, before Central Health was created in 2004. It wants to be paid more by Central Health for the care it is providing.

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What happened to cause Ascension Texas to write this letter?

Community Care Collaborative's board is made up of three Central Health appointees and two Ascension Texas appointees.

The board has not been able to agree on a budget since 2020. Without a new budget set, the 2021, 2022 and 2023 fiscal years automatically had to follow the 2020 budget.

That has been problematic because previous budgets included federal money known as Delivery System Reform Incentive Payment created to improve health care. Central Health and Ascension Seton created the Community Care Collaborative in part to manage those funds as well as to pool resources and coordinate care by setting up unified contracts with local health providers.

Since 2012, $500.6 million in DSRIP funds have been received by the collaborative. These funds were required to be matched. Ascension Seton gave $208.3 million in payments and Central Health $137.3 million, Central Health said previously.

A 2019 audit of the collaborative showed that DSRIP funds contributed $75 million, Ascension Seton gave $21 million and Central Health $35 million toward the collaborative's $127 million budget that year. In 2020, though, the audit showed $60 million in DSRIP funding with no contributions from Central Health or Ascension Seton for the collaborative's $60 million budget. That has been the case since the 2020 budget.

After DSRIP funding went away in September 2021, the Community Care Collaborative's coffers have been dwindling. In January it had $12.9 million compared with $21 million the year before.

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The programming of the collaborative also has shrunk with the funding. Many of the collaborative contracts with clinics and physicians have since expired. What remains under contract with the collaborative are orthopedics, ear nose and throat, and ophthalmology. Other specialty services are now covered by separate contracts with Central Health or Ascension Seton has its own providers delivering care.

Central Health has been legally obligated to continue to fund $35 million annually to Dell Medical School — a payment required by a tax-payer vote in 2012. That funding went through the collaborative, but starting in the 2023 Central Health budget, that funding is now part of Central Health's budget.

What happens next after the deadlock letter?

The Community Care Collaborative's Master Agreement outlines this process:

• The CEO of Ascension Texas, Andy Davis, and the CEO of Central Health, Mike Geeslin, have to meet within 30 days.

• If they can't come to an agreement, they go into mediation.

• If mediation doesn't work, they can seek judicial resolution.

• Each side can send a notice to terminate the Community Care Collaborative after completing mediation.

With the ongoing lawsuits, Geeslin was not sure if Central Health could follow this resolution process. "Dispute resolution needs to be considered in light of the litigation," he said.

This article originally appeared on Austin American-Statesman: Ascension Texas send Central Health new letter in strained partnership