December 15, 2006

District Leverages Property Tax Revenues to Meet Local Healthcare Needs
More Than $30 Million in New Federal Funds on Horizon

On Friday December 15th, the Travis County Healthcare District Board of Managers agreed to enter into a plan with the Seton Family of Hospitals and St. David’s Healthcare to take advantage of a newly approved program to use local tax revenues to draw down additional federal matching funds. These funds will expand the dollars available to local hospitals that treat Medicaid patients, thus increasing capacity to care for the medically underserved.

A recently approved change to the State Medicaid Plan enables the Healthcare District to use a Regional Upper Payment Limit program to leverage local property tax revenue to compensate certain hospitals within the Seton Family of Hospitals (excluding Brackenridge Hospital which already receives federal matching funds) and St. David’s Healthcare for their part in providing care to Medicaid patients. The compensation these hospitals receive from providing care to Medicaid patients does not cover the cost of that care. "Current Medicaid reimbursement rates are more than fifty percent below most private insurance rates, which doesn't come close to covering the cost of treating a patient," Richard Hammett, Senior Vice President for St. David's HealthCare, said. "This is a positive beginning step toward recognizing the true cost of this care for hospitals."

“It is our hope that the hospitals in Travis County will be better positioned financially to treat individuals with Medicaid, which will, in effect, create better access to services,” said Trish Young Brown, President and CEO of the Healthcare District. "We welcome the opportunity to expand our collaborations with the Healthcare District," said Ashton Cumberbatch, Vice President, Advocacy & Communications, Seton Family of Hospitals. "By joining forces to administer this new program, the District is able to fulfill its mission to seek innovative ways to help address community healthcare needs and Seton is able to pursue its call to provide ‘healthcare that leaves no one behind.’”

The total net increase in funds to these Travis County hospitals will be approximately $30 million annually. There may also be an opportunity to bring in additional funds on a retroactive basis. The transaction does not affect the District’s tax rate and is also expense neutral to the District while giving these hospitals access to newly available federal funds.

District Board Chairperson Clarke Heidrick added, “The District strives to leverage our local dollars to bring additional funds for healthcare to our community. This action follows our strategy to take full advantage of any opportunity to bring creative solutions to the table. Hospitals in Travis County bear a significant burden for care of the medically unfunded and under-funded. Our utilization of local funds to leverage federal funds to ease this burden is a benefit to the community.”