'Much better': More people are getting health care — but is the program legal?

Hidalgo and Cameron county officials say their cooperatives with local hospitals are helping more of the region's poorest residents obtain needed health care.

But the federal government is now questioning the legality of the partnerships.

The state of Texas requires counties that don't have a public hospital to set aside money to pay medical bills for residents who make 21 percent or less of the federal poverty level.

In the state's poorest regions, like the Rio Grande Valley, that money doesn't go very far.

In 2006, the federal government began to allow hospitals and local governments to form cooperatives so hospitals could get funds from Medicaid to offset the cost of treating poor patients. In these partnerships, the counties set aside funds to serve as a local match for Medicaid.

In return, the hospitals typically contribute money to a non-profit corporation run by hospital officials to care for patients enrolled in a county's indigent health-care program.

More than 60 Texas hospitals enrolled in the program in early 2007, and Cameron and Hidalgo counties jumped on board as well. It seemed to be a win-win situation - hospitals and counties suddenly had more federal money to care for impoverished patients.

But a year ago, federal officials began questioning the legality of the public-private agreements, said Stephanie Goodman, spokeswoman for the Texas Health and Human Services Commission. HHSC oversees the state's Medicaid programs.

"They're questioning the source of the funding used to draw the federal match," Goodman said. The hospital cannot merely get money from the Medicaid program, then donate that same money to the counties, she said.

As a result, the federal Centers for Medicare and Medicaid Services suspended some Medicaid payments to Texas hospitals in late 2007 as they investigated the partnerships.

And earlier this year, Hidalgo County's hospitals received more bad news - they had to pay back $6.5 million of the $43 million in Medicaid payments they'd received under the program because CMS didn't agree with how the money transfers between county and hospitals had been handled.

But county health officials continue to defend the program, saying it is helping patients.

"More people are getting served, (health-care providers) are getting paid, and you're seeing far more patients than ever before," said Eduardo Olivarez, CEO of the Hidalgo County Health Department. "Compared to years past, things are much better."

CMS lifted the payment freeze this spring, but has yet to send payments to area hospitals.

Despite not receiving the Medicaid funds they had anticipated, the hospital system and nonprofit are still committed to administering the county's indigent health-care program, said Pam Magouirk, Rio Grande Valley Indigent Health Care Corp. director. The organization oversees the indigent program in Cameron County.

Magouirk said the hospitals involved in the partnership - Valley Baptist hospitals in Brownsville and Harlingen - should receive their first Medicaid payment sometime this summer.

Ultimately, the organization will do more than pay medical bills for the poor - it will help them find a primary doctor and receive preventive care, which costs less, Magouirk said.

"If we can provide that, we'll help them have a better quality of life through access to health care," she said.

Although any program that improves the poor's access to health care is helpful, the public-private model the counties are using has its problems, said Dr. Linda Villarreal, former chairwoman of the now-defunct Rio Grande Valley Health Services District.

The district, which formed in 2002 and dissolved last year, was intended to be a centralized health-care system for the region's poor and would have provided oversight that these programs are lacking, she said.

"When you ask the fox to take care of the chickens in the henhouse, that's an issue," Villarreal said, meaning that the hospitals are, in part, paying their own bills with this program.

County officials say that they have checks and balances in place to make sure the hospitals are managing the indigent programs effectively. The hospitals' nonprofits must give regular reports to county commissioners, officials have said.

Villarreal hopes these programs will focus more on providing poor patients with a "medical home," rather than only paying bills for the emergency room and hospital.

"Otherwise, it's not really indigent health care, it's indigent ‘sick' care," she said.

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Melissa McEver covers health and environment issues for Valley Freedom Newspapers. She is based in Harlingen and you can reach her at (956) 430-6252.