Travis County is in its fifth year under the 1115 Waiver—a program that has allowed health care districts throughout Texas, including Travis County’s Central Health, to leverage millions of federal dollars to increase health services and develop new programs.
The waiver was slated to end in September. On May 2, the Centers for Medicare and Medicaid Service, or CMS, and the Texas Health and Human Services Commission agreed to extend the waiver for a 15-month period that will maintain funding for the program through December 2017.
After that, Central Health hopes there will be another waiver, Central Health CEO and President Patricia Young Brown said. HHSC and CMS will continue negotiating a longer- term extension.
Background
Central Health is a local governmental entity founded in 2004 by Travis County residents’ vote to create a health care district. The entity’s job is to fund health care for the low-income and uninsured in Central Texas.
The population Central Health serves is those at or below 200 percent of the federal poverty level. For a family of four, that would be $47,700 in annual household income, and that number is expected to grow.
Central Health leverages federal funds through a system called intergovernmental transfer, or IGT. Central Health is budgeting it will receive $160 million in revenue for fiscal year 2015-16 in tax revenue from Travis County homes and businesses. About 94 percent of all Central Health revenue directly funds health care services.
Because costs exceed that, Central Health sends a request to Washington, D.C., to seek additional funding through the IGT system and typically sends the maximum amount the state has said it could send to maximize the outcome, said Anne Kennedy, the controller at Central Health.
“If we just had … those local funds, we may not see the system that we’re seeing today,” Young Brown said.
How funding works
The federal funds Central Health receives are divided into three categories.
The first, Uncompensated Care, subsidizes costs incurred by St. David’s and Seton hospitals for unreimbursed services provided to Medicaid and uninsured patients. The second, Disproportionate Share, or DSH, provides payments to qualifying hospitals that serve large numbers of Medicaid and uninsured patients, including Dell Children’s.
The third, Delivery System Reform Incentive Payment, known as DSRIP, provides incentive payments to hospitals and other providers to develop programs to transform health care delivery, of which there are 33 programs based in Travis County.
Clarke Heidrick, who serves on the Central Health board of managers, said in an April board meeting that DSRIP has served its purpose, but the county needs sustainable funding.
“I worry about how we’re going to keep the music going when DSRIP’s over,” he said.
Potential changes
The last time Central Health raised its tax rate was in 2013. Young Brown said the health care district would like to work with the state and CMS to see if it could accomplish more with the waiver in the future.
“We’ve done a lot under this waiver, but could we take it [to] the next step and look at some projects or pilots that would take our model here and advance it further?” Young Brown said. “[That effort] would have to do with ways trying to come up with some different ways for us to receive the federal funds.”
Projects and programs executed with the waiver have included expanding its hours, establishing specialty-care areas, developing mobile health care teams that provide health care for homeless patients, developing a community paramedic program to prevent community members from relying on EMS as a primary provider of health care, and providing more programs to prevent unplanned pregnancies.
Central Health also serves as the anchor for Region 7 as part of the waiver and led a community needs assessment for the region, Young Brown said.
In the future, Central Health would like to get federal funds on the front end instead of retroactively, she said.
