District provides medical funding for local uninsured, underinsured

District provides medical funding for local uninsured, underinsured

Written by Christi Covington Friday, 25 July 2008

Just a few years ago, the City of Austin owned the University Medical Center at Brackenridge.

Anyone from anywhere, whether in need of emergency assistance or not, could come for help and the city or Seton, which operated the hospital, might be stuck with the bill if the patient could not pay. Often patients did not live in the city, meaning they did not contribute to city property taxes.

It was largely that situation that led to the creation of a taxing entity, the Travis County Healthcare District, which was designed to bring more residents into the revenue base and provide more uniform care, remembers Pete Perialas, who helped campaign for the district.

“There was no question,” said Perialas, a former board member of People’s Community Clinic, which receives funding from TCHD, “the political and central force of that idea [of the Healthcare District] emanated out of Austin.”

TCHD formed in 2004 by voter approval to serve the uninsured and underinsured in the county, including Austin residents within the county boundary. The city and county each took a portion of its tax and designated it for the district. For the first year, the city was estimated to give $31 million and the county $8.6 million, both numbers approved by an independent auditor that represented how much would have been spent on health care. The county also provided an additional $1.7 million as a one-time resource.

Current status

This last fiscal year, TCHD had revenue of almost $90 million with around $58 million of that coming from property tax revenue paid by Travis County property owners. Approximately $83 million went to healthcare services.

Along with taking over Brackenridge, which it leases to the Seton Family of Hospitals to operate, TCHD is responsible for the 14 Community Health Centers, or CHCs, in Austin for patients needing clinical help.

The Healthcare District does not manage the clinics. It acts more as a monetary and oversight mechanism. The CHCs are still operated by the city — although that will change when a nonprofit organization is scheduled to take over management by March.

 

TCHD funds the CHCs and purchases more clinical services through other agencies to create a safety net so people will not have to wait until their health situation is serious and then visit the emergency room.

Who receives care

Before the district formed to provide health care, the city and county each financed their own programs from money embedded in the general tax revenue.

Travis County then contracted with the city to provide the actual assistance to its residents. The city estimated from 1980 to 2005, it spent more than $650 million from the general fund for city and Travis County residents’ health care.

“Texas has one of the highest rates of uninsured. When you have 25 percent uninsured, the best thing you can do is get them covered by a plan in a clinic to get them care, preventive care, so they don’t have to go to a hospital,” said former Austin City Councilwoman Betty Dunkerley, who also promoted the district’s inception and would like to work with it in the future.

Often, patients needed more clinical-type help or could have prevented the severity of their situation with prior health care, but each county and city provided a different level of service, Perialas said.

That is why, at first, organizers wanted a regional district with Travis, Williamson, Hays and other counties involved. However, Perialas said it was soon obvious that Travis was the only county likely to approve a new taxing district, so the effort was isolated to that area.

According to state statute, each entity was already required to serve those residents who had an annual income of 21 percent of the Federal Poverty Level or less. Using FPL’s standard for this year, a county or city would have to provide health care to someone earning $2,184 or less annually.

By board decision, the Healthcare District helps Travis County residents earning 100 percent of the FPL through the Medical Assistance Program, including primary health care, pharmacy benefits and hospital care at Brackenridge without co-pays. For this year, that means a family of four qualifies if it has an annual income of $21,200 or less.

Those individuals making between 100 and 200 percent, which means no more than $42,400 of the FPL, can receive primary care at Community Health Centers and pharmaceutical services, but will not get their hospital bill paid.

Hospital help

Since the first fiscal year of operation, TCHD’s program enrollee rate has grown by 18 percent, serving more than 35,000 people, according to a 2007 community report.

So far Brackenridge is still busy with patients who cannot pay, according to Ashton Cumberbatch, vice president of advocacy and community relations for Seton.

“Data is preliminary, but it looks like the increase in charity care for fiscal year 2008 could be as much as 29 percent over last fiscal year,” he said.

Charity care is for patients who are not eligible for any governmental assistance or have no insurance.

Cumberbatch attributes most of the increase to a struggling economy and the cost of insurance.

“The Healthcare District is a very important cog in the public safety net, and we value our relationship with them,” he said.

Besides this safety net of clinical care, local hospitals can also benefit from working with TCHD, particularly the Seton-operated Brackenridge. Gerald Hill, the senior vice president of advocacy at Seton, said it is important to have TCHD as a third-party funding source versus working with a county or city because it sometimes has more resources and the ability to leverage those resources quickly, possibly for special projects. He noted recently TCHD gave Seton $2.5 million for expanding the trauma department at Brackenridge.

“The district is very supportive when we need immediate action. Without them we would not have that critical level of care,” he said.

Travis County Healthcare District: The funding body for uninsured and underinsured local health care

What is in a name?

By state definition, the Travis County Healthcare District is a “hospital district.”

A hospital district is an entity with the ability to levy property taxes to establish a hospital or hospital system to furnish medical aid and hospital care to indigent and needy persons residing in the district.

The Travis County district decided to change its name in May 2006 because the term “hospital district” was confusing when it really offered more than just hospital services.

Who runs the district?

The board of managers for the Travis County Healthcare District includes four city council appointees and four county commissioner appointees with one joint appointee.

All of the members are volunteers. The board meets regularly on the fourth Thursday of each month at 5:30 p.m. in the Granger Building, first floor, Commissioners Courtroom; 314 W. 11th St.

The University Medical Center at Brackenridge is owned by the Travis County Healthcare District.

Who receives care in the Travis County Healthcare District

The district provides basic healthcare services for Travis County residents not eligible for other private or public insurance programs. By state law, each county, hospital district or public hospital is required to offer health care to all residents earning 21 percent of the Federal Poverty Level or less annually, although TCHD goes beyond those requirements. TCHD programs are limited due to funding constraints.

Up to 21 percent of FPL - Example: A family of four could earn no more than $4,452 annually to qualify. TCHD is required to provide basic health service to these residents by state law.

Up to 100 percent of FPL - Example: A family of four could earn no more than $21,200 annually to qualify. By policy, TCHD provides full benefits through the Medical Assistance Program to eligible residents, including primary health care, pharmaceutical benefits and hospital care at University Medical Center at Brackenridge. MAP does have co-pays.

Between 100 percent and 200 percent of FPL - Example: A family of four could earn no more than $42,400 annually to qualify. By policy, TCHD pays for benefits on a sliding fee scale for eligible residents, including primary care access at Community Health Centers, as well as pharmaceutical services. These individuals do not receive hospital funding. The 14 CHCs in Austin are currently operated by a city department and funded by TCHD.

Background on Brackenridge

The University Medical Campus at Brackenridge, which is owned by the Travis County Healthcare District, could soon be partnering with a major medical school. Announcements are expected sometime this summer disclosing more about an Austin-based campus. The actual relationship between a medical school and TCHD is not yet decided. Christie Garbe, TCHD chief communications officer, said that TCHD’s purpose is not to fund medical education, but medical service. However, she added that they still might be able to help each other, particularly since the district owns Brackenridge, which is considered the public hospital.

“They need patients,” she said. “We need physicians. So hopefully we can work something out and make it a win-win situation for all of us.”

1880s - The City of Austin and Travis County partnered to fund the “City-County Hospital.” The county sold its interests by 1907.

1915 - The city opened a new facility known as the “City Hospital.” It included 40 beds and was later named Brackenridge Hospital.

1988 - The city established the Children’s Hospital on the Brackenridge campus.

1995 - Until this year, the city operated the Brackenridge Hospital as a city department. As the healthcare industry became more complex, Daughters of Charity Health Services of Austin began to rent and operate the campus. It was still used for the city’s indigent care under the lease agreement.

2004 - Travis County Healthcare District was created. It took over the city’s ownership of Brackenridge and the lease with Seton continued.

2008 - University Medical Center at Brackenridge is considered a possible partner for a future medical school.

History source: City of Austin, 2004 Approved Budget/Community Care

Where the money goes

The budget for the Travis County Healthcare District was almost $90 million this year. The majority of it came from tax revenue, although other funds were accessed, such as those that came from a facility lease. As the new TCHD budget is adopted this summer, the fiscal year for 2009 will begin in October. For the full budget in detail, visit www.traviscountyhd.org.

REVENUE

• Property taxes - $58,452,387
• Seton lease-The base amount - $1,096,656
• Seton lease-Additional amount based on Medicaid’s Disproportionate Share Hospital and Upper Payment Limit payment programs - $18,754,887
• Tobacco litigation settlement - $2,500,000
• Transfers in from reserves - $5,355,423
• Interest - $3,492,055
• University of Texas Medical Branch contract - $58,740
• Total - $89,710,148

EXPENSE

• Personnel - $1,804,840
• Operations - $4,097,589
• Tax collection - $715,929
• Healthcare delivery - $83,091,789‡*
• Total - $89,710,148*

‡Healthcare delivery expenses - Budget in detail • Total=$83,091,789*

• Medicaid payments (Physician) - $6,257,386
• Medicaid payments (Through the Medical Assistance Program) - $25,789,132
• Outside agency contracts with Mediview - $707,422
• Outside agency contracts with Specialty Care - $86,400
• Seton Brackenridge Pharmacy - $159,628
• Austin Cancer Centers/Orthotics - $172,928
• Outside agency contracts with the City of Austin for the Community Health Centers and the Medical Assistance Program - $27,267,574
• Outside agency contracts with Seton Hospital - $4,010,891
• Outside agency contracts with University of Texas Medical Branch - $3,877,048
• Outside agency contracts with People’s Community Clinic - $590,990
• Outside agency contracts with Project Access - $300,000
• Outside agency contracts with Women’s Services - $450,000
• Outside agency contracts with the Indigent Care Collaboration - $500,000
• Outside agency contracts with Walgreens - $1,521,498
• Outside agency contracts with Seton Mental Health - $2,339,971
• Service expansion funds - $9,060,922

*The sum is off by $1 due to rounding