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Hinojosa's bill would finance uncompensated care at hospitals

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Posted: Sunday, March 10, 2013 9:00 am

A proposed fee for local hospitals could help Hidalgo County raise funds that it lacks without a hospital taxing district.

State Sen. Juan “Chuy” Hinojosa, D-McAllen, filed two bills to impose a so-called uncompensated care fee on hospitals. The bills, filed days before Friday’s deadline to introduce legislation in the session, would generate revenues to bring down matching federal dollars for providing care to the uninsured in emergency rooms.

The uncompensated care fee is one of several different mechanisms under consideration to help local hospitals that are under strain from cuts to their reimbursement rates for Medicaid patients, Hinojosa said. Although urban Texas counties have access to local tax dollars to draw down federal matching aid, Hidalgo County lacks that option.

“Most of the other large counties, like Dallas, San Antonio and Houston, have hospital districts that impose a property tax to support the hospital district and use that to bring down matching funds from the federal government to help fund and pay for indigent patients that are unable to pay for their medical care,” Hinojosa said. “This money would help (Hidalgo County hospitals) pay for their costs to care for indigent patients who use our hospitals.”

Hinojosa’s proposed uncompensated care fee — called a hospital bed tax by some — has been explored for years. But the idea has gained steam as the Medicaid program has undergone dramatic changes in recent years.

Medicaid has historically been a losing game for hospitals, which are reimbursed by the federal-state program for the poor only about 60 percent of the actual costs to provide the care. Other federal programs are instead used to help hospitals recoup dollars lost from caring for Medicaid patients.

But Hidalgo County is challenged by its lack of tax dollars that it can contribute toward those programs. The state’s shift to a managed care model — where Texas placed the care of its Medicaid beneficiaries under privately-operated health maintenance organizations — is one example of that problem.

Under a new Medicaid program that accompanied the state’s switch to managed care, the Rio Grande Valley qualified for $802 million in federal funds over a five-year period that is allocated for uncompensated care. In order to receive the federal funding, the Valley first had to come up with more than $300 million to match it.

With no dedicated source of healthcare dollars from a hospital district, the Valley’s governmental entities and hospitals have only managed to come up with half of that figure.

By allowing hospitals to essentially tax themselves, Hinojosa’s proposed legislation would help raise more cash for uncompensated care.

The bill allows the state or individuals counties to levy an uncompensated care fee on hospitals based on the number of beds they have in their system or patients they treat in a year. The overall fee could be calculated as a percentage of a hospital’s overall gross or net inpatient revenues.

Hinojosa filed two bills: one that allows the fee to be assessed on a statewide basis and another that allows it only in Texas-Mexico border counties.

Hidalgo County health director Eddie Olivarez said the fee is an innovative approach to help hospitals that are burdened by an abundance of uncompensated care in the Valley. But Hinojosa said the legislation could also help insured people who pay higher bills at hospitals. 

 “It would increase the number of dollars that we would draw from the (Centers for Medicaid and Medicare Services) to help pay for indigent healthcare that’s provided,” Hinojosa said. “Right now, the uncompensated care has to be paid for by people who carry insurance.”


Jared Janes covers Hidalgo County government, Edinburg, legislative issues and general assignments at The Monitor. He can be reached at jjanes@themonitor.com, (956) 683-4424 or on Twitter, @moncounty. 

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