Senate bill that would allow pooled hospital funds to receive matching federal dollars heads to governor’s desk

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With Texas leading the nation in the number of residents without health insurance coverage, Central Health and private hospitals in Travis County are looking for ways to provide health care services to low-income and indigent residents.

Now, a bill that has reached Gov. Greg Abbott’s desk may increase the amount of federal dollars coming into the county to pay for these services.

Senate Bill 1350, authored by state Sen. Kirk Watson, D-Austin, and sponsored by state Rep. Gina Hinojosa, D-Austin, allows Central Health to create a local provider participation fund, or LPPF, in Travis County.

LPPFs allow private hospitals to access matched federal funds for uncompensated health care costs incurred while providing services to uninsured patients.

“The ability to capture more federal matching funds to pay for their care is a great benefit to us and to our partners who also provide care. Ultimately, we’ll be better able to help more people while realizing some additional financial support for the services we provide,” said Guadalupe Zamora, chairman of the Central Health board of managers, in a May 23 press release.

Private hospitals in Travis County would pay an established rate of their net revenue and pool it into the LPPF fund. Those pooled funds would then be combined or matched with federal dollars, which would then be redistributed by state and federal government to county hospitals, according to Central Health.

At a March 27 Central Health board of managers work session on the subject, Jeff Knodel, Central Health vice president and chief financial officer, and Monica Crowley, Central Health chief strategy and planning officer, presented information on LPPFs to managers.

“[The LPPF] gives greater flexibility for access to federal dollars,” Crowley said.

Travis County hospitals currently pool uncompensated funds from health care services alongside health care providers in an eight-county region, according to Knodel. The new LPPF would keep those matched federal funds in Travis County instead of being distributed throughout the region, Knodel said.

“Local taxpayer dollars are not required for this, … so we don’t have Travis County taxpayer dollars being diluted across the eight-county region,” Knodel told managers in March.

There are 19 LPPFs currently enacted throughout the state of Texas, including one in Williamson County established by the 85th Texas Legislature.

The Central Health board of managers voted March 27 to officially support SB 1350. Ahead of the vote, Carlos Zaffirini, president and CEO of Adelanto Healthcare Ventures, voiced support for the measure.

Existing LPPFs in Texas receive 70% of all federal return funds sent to the state, according to Zaffirini.

NEXT STEPS

Abbott has not yet signed SB 1350 as of May 23, but the bill is expected to become law without complications.

Several steps have to take place after Abbott’s signature to establish the LPPF.

Knodel told Central Health managers in March all private hospitals in Travis County—which includes entities such as St. David’s HealthCare, Ascension Seton and Baylor Scott & White Health—would have to approve the LPPF for its establishment. He said all of the larger hospital systems in the county are aware of the LPPF bill.

The Central Health board would vote to approve and establish the LPPF, according to the presentation given to the board in March.

The board may additionally adopt rules relating to the administration of the program, including the rate of net revenue that private hospitals have to pay into the pool. In March, Crowley and Knodel said the maximum amount each hospital can put into the pot is 6% of net revenue.

On April 30, Williamson County commissioners set the rate for the Williamson County Health Care Provider Participation Program at 1.59%.

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Iain Oldman
Iain Oldman joined Community Impact Newspaper in 2017 after spending two years in Pittsburgh, Pa., where he covered Pittsburgh City Council. His byline has appeared in PublicSource, WESA-FM and Scranton-Times Tribune. Iain worked as the reporter for Community Impact Newspaper's flagship Round Rock/Pflugerville/Hutto edition and is now working as the reporter for Northwest Austin.
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