Hot Over Funding Plan, Private Hospitals Seek Meeting With Perry

Three days before Health and Human Services Commissioner Tom Suehs announced his upcoming retirement, the chief executives of Texas’ five biggest private hospital systems asked Gov. Rick Perry for a sit-down meeting, saying negotiations with the health agency over how they’re reimbursed for uncompensated care were breaking down and could lead “to government-run health care in Texas.”

In the letter, the presidents and chief executives of Baylor Health Care System, CHRISTUS Health, HCA Texas, Memorial Hermann and Texas Health Resources suggested that state deliberations over how to reimburse private hospitals for caring for the indigent — including the details of a federal Medicaid waiver — favored public hospitals in a way unfair to private hospitals. 

“We are now faced with the real possibility of government largesse at the expense of the private sector,” the private hospital systems wrote, adding that they have an $8 billion annual payroll and “provide most of the care for the uninsured and Medicaid recipients in Texas.”

It's the latest salvo in a running back-and-forth between public and private hospitals; public hospital systems have argued the supplemental Medicaid funding system has long favored private hospitals.

HHSC spokeswoman Stephanie Goodman said that for years, public hospitals have been putting up their local tax dollars to draw down a federal match to support uncompensated care at urban private hospitals and rural hospitals across the state, often in different counties. She said under the new Medicaid waiver, public hospitals have a strong incentive to put those dollars into new waiver pools where they’ll “get a better return on their investment … and the funding will be used to reduce uncompensated care and improve outcomes in their communities.”  

"The public hospitals are the ones putting up the dollars and providing the most uncompensated care, and it’s appropriate that they’ll fare the best under the new waiver," she said in an email. "This aspect of the waiver has gotten widespread praise from everyone except private hospitals."

Perry spokeswoman Allison Castle confirmed receipt of the private hospital systems' letter. But she said that the governor’s scheduling office had not yet received the letter, and that no meeting had been set. She said Suehs’ resignation — he had been considering retiring for quite some time — had nothing to do with the letter.

The private hospitals, meanwhile, are still stewing. They say a funding agreement letter Suehs sent to the state’s major public hospital systems on Wednesday maintains the transfer of dollars until 2013 — but after that, all bets are off. They say the funding hole means lawmakers could be left to come up with the difference, estimated at about half a billion dollars a year.

We'll update this post when we hear back from the public hospitals.