Travis County commissioners push back on Central Health budget, but do approve it

Travis County commissioners approved Central Health's fiscal 2023 budget as well as its property tax rate on Tuesday, but the vote came after weeks of contentious back and forth among Central Health, commissioners and community groups. The commissioners also issued an order for a third-party performance audit of Central Health, Travis County's hospital district.

The tax rate was set at 9.864 cents per $100 valuation, compared with 11.1814 cents per $100 valuation in the fiscal 2022 budget. For the average homeowner in Travis County, that will be a $3.99 savings compared with 2022, according to Central Health.

The total budget is $305 million compared with $208 million last year. The fiscal year begins Oct. 1.

Travis County Commissioner Margaret Gómez was the only commissioner who voted against the budget and the tax rate.

"Central Health has been in creation 18 years," she said. "These questions I have raised are not new; they are not last minute. ... I've never received satisfactory responses. ... I still have hope, … but I'm a little out of patience after 18 years. I hope my vote will catch your attention."

Central Health was created in 2004 by voters to provide health care to people who cannot afford it, typically those making 200% or less of the poverty level. Central Health provides that care by enrolling people who qualify in its Medical Access Program and Medical Access Program Basic plans, which act like insurance plans that pay for health care services. It also enrolls people who qualify in its Sendero Health Plan, a community-based insurance plan, through the federal Affordable Care Act marketplace.

Central Health's board of managers, who are appointed by Austin City Council members and the Travis County Commissioners Court, must have the organization's tax rate and budget approved by the county commissioners because the board of managers are not elected officials. The Central Health board approved the budget on Sept. 7 and expected both the tax rate and the budget to be approved by the Travis County Commissioners Court on Sept. 20.

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No easy budget approval

The commissioners, though, did not have a quorum last week by the time the measures were presented. Commissioners and public commenters also asked questions around the amount in Central Health's reserve funds as well as whether or not Central Health's Sendero Health Plans should submit a bid to be part of the Texas Medicaid program called Star+Plus that provides both health care and long-term care for people with disabilities. To do that, Sendero would need an estimated $30 million in reserves to guarantee it could provide care. Sendero does not have that money and would have to ask Central Health to put up its funds as the reserve.

The Sendero board, which is appointed by Central Health and has members of the Central Health board on it, voted not to pursue putting in a bid with the state to provide Star+Plus care because of the financial risks it saw in that plan. Because the Sendero board voted against it, the proposal never went to the Central Health board to become part of its budget.

This week, though, Central Health announced a commitment to work with the Sendero board to increase the community's use of Sendero's programs, after a bid for Star+Plus came up in the Commissioners Court the week before.

On Sept. 20, though, Gómez asked Central Health to add $100 million from its reserves into its fiscal budget for health care, including $30 million to be the financial backing for Sendero to apply to be a Star+Plus provider. She also pushed for more money for CommUnityCare to expand hours at its clinics, money for more people to be enrolled into the Medical Access Program, more money for health care premium assistance and more money for specialty care appointments. She let it be known she did not intend to vote for the Central Health budget or approve the tax rate without those measures.

Central Health CEO Mike Geeslin told the commissioners on Sept. 20 if they did not approve at least the tax rate by the start of the fiscal year on Oct. 1, Central Health would not be able to provide care and could face the prospect of laying off staff.

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Explaining the $327.7 million in reserves

On Monday, Central Health held a special board meeting with Gómez in attendance to review her requests. At that meeting, Central Health outlined the use of its reserves. In the fiscal 2022 budget, the contingency reserves were $226.5 million. In the fiscal 2023 budget, the contingency reserves were noted to be $327.7 million. (The emergency reserves haven't changed and are $38.7 million.)

Central Health is anticipating that by 2030, about half of the contingency reserves will be spent down with the current programs it operates and the new programs outlined in the health equity plan it launched in February.

Fiscal 2023 will mark the first time Central Health opens its own clinics and hires its own clinic staff rather than using providers like CommUnityCare and Ascension Seton. Central Health plans to open clinics in Hornsby Bend and Del Valle in 2023. It also will update the Rosewood-Zaragosa Health Center to create a specialty care clinic. Central Health will hire a medical team to provide direct specialty care in podiatry, cardiology, neurology, gastroenterology, nephrology and pulmonology, instead of contracting through an existing health provider.

That direct care is seen in the budget at $5.7 million in addition to $126.8 million in purchased health services. In subsequent years, that direct care budget will increase when Central Health providers cover a full year and as the use of the clinics increases.

"In order to make these commitments, we need to make sure we have a very strong fiscal sustainability program," Geeslin said Tuesday.

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A different year of budgeting

This is also the first fiscal year that the money Central Health provides to Dell Medical School is not offset by a federal program called Delivery System Reform Incentive Payment to fund the collaborative. In the previous fiscal year, that federal money was $15 million, but that program has now ended.

For 2023, Central Health's budget calls for putting $22 million of its money into the Community Care Collaborative, the nonprofit group it founded with the Ascension Seton hospital system in 2014. Dell Medical School receives $35 million annually through the collaborative, according to an agreement for a 25-year period with an automatic renewal for another 25 years.

Central Health is in the middle of mediation with Ascension Seton regarding the collaborative. Central Health wants Ascension Seton to provide more care for the people Central Health serves; Ascension Seton wants to be paid more by Central Health to do so.

At its board meeting Monday, Geeslin noted that the reserves were important to fulfill the health equity plan, which found "significant gaps" in hospital care in the community. Gómez specifically asked Monday if Central Health was planning on opening its own hospital.

"As far as getting its own hospital, right now we are putting together our operational plans, and those will be put together in spring," Geeslin said. "We're going to be thoughtful about it and get it right. ... It's going to spell out, what is the most efficacious way to go after these gaps we have in the health care system."

He also said that once the mediation with Ascension Seton is resolved, there could be additional conversations about the gaps in hospital care and the potential for adding a hospital. In Travis County, only Baylor Scott & White in Pflugerville and Dell Children's Medical Center are located east of Interstate 35.

That mention of a theoretical Central Health hospital set off a letter from League of United Latin American Citizens District VII against a potential hospital, which has not yet appeared in Central Health's operational plan.

Central Health has received criticism previously for being the only hospital district in Texas that does not operate a hospital. Instead, Ascension Seton runs the local safety net hospital, Dell Seton Medical Center.

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Measuring the taxpayer value

Central Health also has run into struggles with the agreement to give Dell Medical School $35 million a year. That is the subject of a 2017 lawsuit by community members that has not been resolved. This July, Central Health asked Dell Medical School for more details about where the money the collaborative gives is going as well as quantifying how that funding has helped the medical school serve people to whom Central Health is mandated to provide care. Central Health said it has received some of those answers, but not all.

Community groups such as LULAC and the NAACP have been asking for a performance audit of Central Health to assess how Central Health is using taxpayer money to provide care. Many of their questions surround Central Health's funding of Dell Medical School; its agreements with Ascension Seton and CommUnityCare; and the records it receives from these partners about how taxpayer money is being used.

Central Health was planning on doing an audit in 2023, as it did in 2018. Travis County commissioners have now ordered one. In a closed session Tuesday, commissioners went over the language of a court order for an independent performance audit of Central Health. It then read the order in open session.

"This is the best way of determining how the tax dollars are being spent in Travis County and how we are accomplishing our mission," Central Health Board Manager Cynthia Valdez said Tuesday of the audit.

This is something attorney Fred Lewis has been asking for; he brought the 2017 lawsuit against Central Health. On Tuesday, he said: "There needs to be a neutral observer of what is going on with its providers and the medical school. People have a right to know."

Geeslin said that, while his board has not had a chance to look at the order yet, he would take it a step forward. He is hoping for a score card that looks at Central Health's performance; its health equity plan and the work it has started; as well as compares Central Health to other hospital districts. "We support a financial review," he said. "We look forward to working on this project."

In addition to passing Central Health's budget, tax rate and the order for a performance audit, Travis County commissioners also set the expectation of having quarterly work sessions with Central Health surrounding its budget and its priorities.

This article originally appeared on Austin American-Statesman: Travis County approves Central Health budget after weeks of scrutiny