Smith County officials approved a program on Tuesday morning to require local hospitals to make payments to the county.
The program, called the Local Provider Participation Fund, will require all local hospitals except UT Health Northeast to make payments to the Smith County government.
Under the program, hospitals will pay the county 4.76 percent of revenue they get from treating patients in the current fiscal year. The hospitals expect to get more money than that back from the federal Medicaid program to help patients who can't afford to pay.
The county will then put the payments into an account and use the money to draw down federal money.
Medicaid matches what local governments spend on health care for low-income people. In this case, the county government will be the vehicle for bringing in the federal money.
Most of the federal money will go back to hospitals to help with patients who can’t afford to pay, and a small portion of the money will be used to help the county administer the program.
Hospitals in the area lobbied Smith County Commissioners Court to set up the program so they could bring in more federal money. Hospitals across the state then lobbied the Texas Legislature during the 2017 session to pass a law allowing counties to create the program.
Commissioners gave preliminary approval to the program on Oct. 31. They approved additional measures on Tuesday that will allow the program to move forward.
“We come willing to the county and ask you to assess a fee based on our revenues,” Mary Elizabeth Jackson, the vice president of government affairs for Christus Trinity Mother Frances Hospital, said at the Tuesday meeting.
“We’re coming today not asking (to be charged) the maximum amount, but asking (to be charged) a very conservative amount, but one that we feel sure will help to provide the funding that we need to get the matching dollars drawn down from Washington,” Jackson said.
She said the hospitals would then work with the county’s auditor to formalize the administrative process for collecting the funds, sending invoices to hospitals and distributing the federal money back to the hospitals.
At UT Health, the mandatory payment is approximately $19.2 million. This includes UT Health Tyler, UT Health East Texas Specialty Hospital and UT Health East Texas Rehabilitation Hospital.
“The UT Health East Texas system supports the Smith County provider participation fund," Eric Roach, chief financial officer of UT Health East Texas, said in an emailed statement. "This fund helps hospitals recoup some of the cost associated with providing care for those unable to pay.”
Smith County Judge Nathaniel Moran, who presides over the Commissioners Court, spoke in favor of the new program before the vote. He said the program is the result of “a coalition effort by all the hospitals in the county.”
“When we first started this process that was really the initial discussion,” Moran said. “Everybody needs to be on board, and everybody wants this to happen, and if they don’t, then we’re not going to move forward.
“But everybody certainly does (want this to happen), so we’re glad to be a part of this process and hopeful that this will actually benefit each of the hospitals that provide such great care,” he said.
Jackson assured the court that the public hospital in Tyler won’t be affected, and that the private hospitals that receive the federal money would not increase how much patients pay for services.
“All the hospitals will be assessed the fee with the exception of UT Health Northeast because it is a state hospital (and) state hospitals are excluded from the fee. So it’s not like we’re going to be assessing a fee out there,” she said.
“The fee that we are being assessed in the legislation, it prohibits us from doing anything to raise our costs or to try to recoup this fee from our patients or from any insurance company,” she said.
Commissioner Jeff Warr, R-Precinct 1, made the motion to approve the new mandatory payment program. Commissioner Terry Phillips, R-Precinct 3, seconded the motion, and it passed 4-0.
Commissioner JoAnn Hampton, D-Precinct 4, was not at the meeting.
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