“Hospitals agreed to assess a fee on themselves for every outpatient served and put that money into a fund that is then sent to the federal government to be multiplied.” TRANSLATION: Hospitals inflate medical charges to consumers, put these additional inflated dollars into a fund that Uncle Sam will match with money taken from working men and women through forced taxation. Consumers are charged twice, once in the form of onerous taxation and second when they seek medical care.
“Many opponents believe the district would mostly benefit the shareholders at Doctors Hospital at Renaissance. The physician-owned hospital is one of the biggest supporters of Proposition 1.” TRANSLATION: Hospital can’t lose. They fund through overcharging patients which Uncle Sam matches, then these funds which are now double return back to the hospitals in the form of patient revenue.
Healthcare district on the line today
Voters will decide future of indigent care in the county
NAXIELY LOPEZ | STAFF WRITER Follow @naxiely
EDINBURG,Tx- Election Day is finally here.
Voters will have one last chance to cast their ballot today. More than 139,000 Hidalgo County residents have already voted, surpassing the total number of votes cast in the last three previous presidential races.
A divisive race for the White House and a controversial local measure that seeks to create a new taxing entity are some of the issues driving local voters to the polls.
Residents here will have to determine the future of how the poorest of the poor access medical care. The indigent healthcare program is currently run by Hidalgo County, which has been slashing its indigent care budget in recent years.
The county has relied heavily on two programs that help fund care for the uninsured and cover costs for uncompensated care: a federal program called the 1115 Waiver and the Local Provider Participation Fund.
Proposition 1 aims to take this responsibility from the county’s hands by creating an entity that will oversee the indigent program under the auspices of a healthcare district, which will have the authority to levy local taxes. (Such districts are more commonly known throughout the state as hospital districts.)
A successful district would initially levy a tax of eight cents per $100 property valuation and use the funds to operate as its board sees fit to address indigent health care needs. The county and four cities — McAllen, Edinburg, Mission and Pharr — would appoint the board of managers as specified in the law that was drafted by state Rep. Bobby Guerra, D-McAllen.
Guerra is currently in a tight race to keep his seat. Challenger Hilda Garza DeShazo, a former McAllen school board member, has used Proposition 1 against him. One of her main platforms is her refusal to support a healthcare district, which has drawn criticism from her opponent, who has reminded voters that, as a school board member, DeShazo sought passage of a $297 million bond for McAllen schools.
Like the House race, Proposition 1 has become an issue that has spilled over into many other aspects of the community. It has divided elected officials and has even led to a battle in court.
1115 WAIVER
Most of the people who work in the field call this program “Godsent.”
The Center for Medicare and Medicaid Services allowed Texas to participate in the 1115 Waiver program in 2011 after Congress passed Obamacare. The five-year program was supposed to help Texas expand Medicaid, but the state refused to do so and successfully challenged the federal government in court to avoid expansion.
Since then, local governmental entities have used the program to help offset the cost of uncompensated care and to fund new medical initiatives that aim to keep people out of emergency rooms by giving patients access to primary care.
In the past five years, Hidalgo County has received more than $729 million through this federal program.
One of the drawbacks, however, is that the program has a shelf life that is coming to an end. The waiver was supposed to end in September, but earlier this year CMS gave Texas a year-and-a-half extension, which set the program’s expiration date for December 2017.
The waiver’s end has many across the state worried about the future of the uninsured. In Hidalgo County, there are about 250,000 people without insurance, but the county only provides aid to the poorest of the poor, which amounts to a little more than 5,000 people.
LPPF
When the waiver was first offered to local regions, the regions that wished to participate had to have a certain tax base in order to participate. Hidalgo County, which is the anchor for Region 5, did not have enough taxpayer funds to take full advantage of the program, so state Sen. Juan “Chuy” Hinojosa, D-McAllen, drafted legislation that created the Local Provider Participation Fund.
The region — which comprises the counties of Hidalgo, Starr, Cameron and Willacy — was offered $829 million worth of matching funds over a five-year period. But because the counties couldn’t pull together enough taxpayer money, they were set to leave about $400 million on the table.
LPPF helped solve this problem. It is a partnership between the county and local hospitals. Hospitals agreed to assess a fee on themselves for every outpatient served and put that money into a fund that is then sent to the federal government to be multiplied.
This partnership is responsible for drawing down hundreds of millions of dollars, but critics argue the hospital’s investment could be even greater if the hospitals used more recent figures. County commissioners learned the hospitals were using profit figures from 2010 instead of figures from 2016. Opponents of Proposition 1 argue more money could be drawn down if the hospitals’ reported profits from 2016.
THE PAST
This isn’t the first time the question of a healthcare or hospital district has been on the local ballot.
Proponents placed the measure on the ballot two years ago, but it failed in large part due to the high tax rate cap of 75 cents per $100 property valuation. That rate cap was set by the state law that allowed for the creation of special districts. So, when it failed, Guerra and Hinojosa helped pass legislation that capped the tax rate at a stricter 25 cents — just as opponents had suggested.
The lawmakers call it one of the most comprehensive and conservative pieces of legislation regarding hospital districts in the state.
In order to set a tax rate higher than 25 cents per $100 valuation, county voters must first approve it through an election. It also includes a rollback provision that the lawmakers said will help keep taxes low and a mandate to the county to lower its tax rate based on what it spends on indigent care.
Supporters of Proposition 1 have varied in their interpretation of the county’s tax rate cut. Some argue the county should reduce its tax rate by eight cents; others say it should be six cents and many others claimed the county would cut it by 3 cents.
A few months ago, Hidalgo County Judge Ramon Garcia said the county would likely cut its tax rate by 2.13 cents.
Opponents were not satisfied with the taxpayer safeguards put in place and vowed to defeat the measure once more.
ARGUMENTS
Opponents have stood mostly on two platforms — no more taxes and special interests. They argue a new tax on residents will cripple the community and cost people their homes. They often point to the county’s high poverty rate and an inability to pay taxes on time.
Proponents argue low-income residents can not afford to not have a district. The average homeowner would pay about $64 per year in new taxes. This could help cover costs for those who are not poor enough to qualify for indigent care and not wealthy enough to purchase insurance through Obamacare.
One proposed plan for the district aims to split the money levied into three initiatives: to expand access to care to more people; to help fund the new medical school at the University of Texas Rio Grande Valley; and to give money to federally qualified clinics that treat the underinsured.
But even though the proposal has the support of local hospitals and several grassroots organizations, there’s no guarantee the district will operate in such a manner. That would be left to an eventual board to decide.
Proponents also argue the district could be a catalyst for economic growth and transform the community into one with a thriving healthcare market. Creating a district would help draw much-needed specialists, diabetes research dollars and other ancillary services.
Opponents argue those benefits come hand in hand with the birth of a medical school, which they believe, does not need additional funding.
At the center of the argument is an agreement that was made between the county and its four major cities when Hidalgo County fought with Cameron County to keep the first two years of the medical school in Hidalgo County.
In 2014, McAllen, Pharr, Mission, Edinburg and the county agreed to come up with $5 million per year for the next 10 years to help fund the medical school. In return, the county would keep the most lucrative years of medical school training for students.
Since then, Mission has reneged on its commitment to fund the school and McAllen has delayed payments. The non-binding agreement stipulates that the local government entities could withdraw from the agreement once a healthcare district was created and the financial responsibility was shifted to the district.
SPECIAL INTEREST
Many opponents believe the district would mostly benefit the shareholders at Doctors Hospital at Renaissance. The physician-owned hospital is one of the biggest supporters of Proposition 1.
It is responsible for 90 percent of the money used to promote the issue through the Healthy Hidalgo County PAC, a political action committee created in 2014 to help pass the measure.
This year, the PAC raised over $660,000 to run a campaign in support of the creation of a district. The money helped the PAC pay for numerous consultants, a campaign manager, the production of high-quality videos and other advertising costs.
In contrast, opponents spent less than $200,000 on their campaign, and much of it came from a statewide PAC that joined at the last minute. Mission Mayor Norberto “Beto” Salinas recently came under fire for allegedly failing to file campaign finance reports that reflected he spent over $42,000 fighting the measure. The Texas Ethics Commission, however, rejected the complaint due to lack of documentation on the filer’s behalf.
Opponents argue the physician-owned hospital contributed the most money because it stands to gain the most if a district is created— a claim that has not been verified one way or another.
The hospital’s involvement in the election took the issue to court. Opponents of Proposition 1 filed a temporary injunction against the county because it used hospitals, businesses and schools as mobile polling sites during early voting.
Critics of the district argued the county was helping the measure pass by placing the mobile sites at locations tied to supporters of Proposition 1, including Doctors Hospital at Renaissance. After about a week of delays, a visiting judge refused to sign the order and early voting continued at the mobile sites, with a record breaking number of people voting at those locations.
