As a safety-net hospital, Medical Center Health System is tasked with covering the cost of indigent and uncompensated care.
Unable to cover that cost with property and sales tax dollars alone, MCHS has been utilizing funds from the 1115 Medicaid Waiver to help bridge the ever-expanding gap, but until recently, the future of continuing to receive assistance through the waiver was uncertain.
On Dec. 21 Gov. Greg Abbott announced the Texas Health and Human Services Commission and the Centers for Medicare and Medicaid Services reached an agreement for the approval of the 1115 Demonstration Waiver for the next five years.
Abbott stated in the news release the new 1115 Waiver ensures funding will remain available for hospitals to treat and serve people across the state in need of top-quality healthcare. There was originally a 5-year Medicaid waiver started in 2012.
The renewal came at the end of a two-year effort by Abbott and Texas HHSC Executive Commissioner Charles Smith to “solidify an agreement that was workable, efficient and beneficial to Medicaid clients and healthcare facilities in Texas while maintaining responsibility with taxpayers,” the release stated.
“I committed to the people of Texas that we would focus on preserving access to care without expanding a broken Medicaid system under Obamacare,” Abbott said in the release.
MCH’s new President and CEO Rick Napper said the impact of that extension to MCH will be a positive one.
“We at MCH carry a heavy load of the indigent population and so that uncompensated care is why the 1115 Waiver was actually created, to be able to help cover that. So for us, that’s an important part. We can continue to serve the community in ways that other people aren’t serving them,” Napper said.
MCHS’ most recent annual report from 2016 shows a “summary of obligations for district tax support” for twelve months ending Sept. 30, 2016 — the end of the 2016 fiscal year. The Ector County Hospital District collected about $40 million in tax revenue, but the cost of uncompensated and indigent care at cost totaled about $88 million, leaving a shortfall of nearly $48 million.
Year-end totals for Fiscal Year 2017 included in a November finance committee board packet show the hospital district collected about $48 million in tax revenue. The cost of uncompensated and indigent care was not listed in the financial report.
Through the 1115 Waiver, the health system received about $14 million in net in Fiscal Year 2017, MCHS Spokesperson Rhonda Lewallen said.
As far as the final impact the extension will have on MCH, Napper said they do not yet know what that will look like because there were changes made recently in how hospitals have to submit for the waiver.
“We are actually in the process of making that transition, so as far as what it’s going to impact, I don’t have answers for you other than the fact that the extension in and by itself is a positive thing,” Napper said.
With Vice President and Chief Strategy Officer John O’Hearn leaving the administration team, Napper said they are transitioning the task to others who are working with the Texas Hospital Association and some of the consultants to make sure they continue with it.
The five-year extension is, fortunately, more that what Napper expected and the THA played a significant part in lobbying on behalf of it, he said. The CEO also gave kudos to area legislators who he said were “very supportive in the process of getting the 1115 Waiver extended” and it was a “big help.”
Rep. Brooks Landgraf, R-Odessa, said the renewal of the waiver was certainly a good policy for the entire state, but having a safety net hospital locally, it was very important for healthcare in Odessa and throughout the Permian Basin. Many who benefit from it come from rural areas and having that access to care at Medical Center Hospital is crucial, he said.
“I was very proud to advocate for renewing the 1115 Waiver,” Landgraf said.
MCH serves as an anchor hospital, coordinating and assisting smaller area hospitals with their respective 1115 Waiver funding. The waivers help, primarily, with covering the high cost of indigent care, Napper said.
The hospital has previously used those funds to expand the MCHS campus in hopes of filtering people to clinics rather than emergency rooms. The OA previously reported projects under the waiver included a West Odessa Family Health Clinic, A MCHS Health Kids Program, and a diabetes outreach project with education and screening.
The ECHD board also approved a $10.9 million contract to build The Center for Primary Care-JBS Parkway and The Center for Primary Care-West University with the idea to shift toward preventing emergency room visits by adding more primary care locations. Former CEO Bill Webster at the time said most of the funding for the construction on the two clinics would come from the statewide Medicaid 1115 Waiver.
Napper said people who do not have insurance, Medicaid or Medicare have a tendency to use the Emergency Room as their primary care facility. The problem with that is it doesn’t provide them with the continuity that a primary clinic provides.
“So those funds allow us to help get them into a place that can give them prolonged care, not just a one-time emergency care,” he added.
The funds also help with disease management and specific chronic illnesses, he said.
“I don’t know if anybody’s brought this to the forefront or not, but diabetes is much more prevalent in the Hispanic population. So we use a lot of the 1115 Waiver funds towards diabetes management. It’s not just a primary care piece, it does do specific disease management,” Napper said.
Having been a CEO for about 20 years, Napper said when the five-year extension is up he is hopeful a solution will be reached, but he has no idea what that will look like yet.
“The thing I do know is you cannot force hospitals to fund care that they can’t afford to give. It eventually will break down,” he said.