Central Health’s 2015 budget up 8.8 percent

If you think your health care bill is big and confusing, check out the one at Central Health.

The Travis County’s health care district brought its Fiscal Year 2015 budget to the Commissioner’s Court Tuesday with an 8.8 percent increase over last year’s budget. The main culprits for the larger amounts are construction of the new Southeast Health and Wellness Center and investment in the Sendero Health Plan.

The budget comes from taxpayer dollars through the district’s own set tax rate, a property lease with Seton Healthcare and various fees and investments. Central Health’s Board of Managers adopts the budget and the Commissioner’s Court is in charge of setting its tax rate.

Pct. 2 Commissioner Bruce Todd summed up the budget discussion: “I’ve found that there’s only one thing more confusing than health care itself, it’s the financing of healthcare,” he said.

Central Health’s FY 2015 budget is estimated at $192 million, minus a contingency reserve that’s use hinges on an approval from the state’s Health and Human Services Commission. Last year’s expenditures, also minus this reserve, totaled $175.9 million.

The proposed tax rate would be down from 12.9 cents per $100 from FY 2014 to a proposed 12.64 cents, but the area’s rising property values would increase the average taxpayer’s bills by $16.39.

The Southeast Health and Wellness Center, a former veterans clinic turned new Central Health integrated care clinic, is under construction and due to open in October. When the health district bought the building in 2011 for $8 million, they estimated the entire project would cost $2 million, thinking it needed some retouching.

But Central Health CEO Patricia Young said a more intensive renovation of the building was needed. Next year’s budget would allocate $9.5 million more to the project. Young said the added money is the result of a comprehensive community planning process that signaled a greater need for services within the community than anticipated.

“Where we originally intended to basically give a facelift to the building, we have substantially gutted the building and are rebuilding the interior for much different uses,” Young said. “This is our largest clinic by far and it represents a new model of care. It will not have just medical services, but will have behavioral health, will have pharmacy, there will be WIC services.”

The new clinic will also have a community kitchen, classes for health and wellness and other health education services.

Funding has also been increased for Sendero Health. It’s a licensed and regulated non-profit insurance company that works with other health benefit programs like Medicaid and CHIP to provide uninterrupted coverage to residents.

Next year’s budget would allocate $16.8 million to Sendero, a $14.6 million increase from last year’s allocation of $2.2 million.

Central Health’s 2015 budget, with the contingency reserve included, totals $270.8 million. Last year’s budget with this reserve included summed up at $219.8 million, a 23 percent increase. But Central Health’s Communication Director Monica Crowley said this wouldn’t be an accurate representation of growth in anticipated expenditures, due to an intergovernmental transfer agreement with the federal Centers for Medicare and Medicaid Services.

Central Health uses some of the contingency funds to reimburse safety net health care providers who offer health care to uninsured and underinsured county residents.The funds also are used for healthcare projects aiming to change the county’s health care delivery system toward more integrated care.

The agreement, called a Medicaid 1115 Waiver, allows Central Health to use some of its own budget and federal matching funds to go toward reimbursing medical providers for uncompensated care. Local funds go to reimburse safety net health care providers who offer health care to uninsured and underinsured county residents.

Central Health uses some of the contingency funds to reimburse safety net health care providers who offer health care to uninsured and underinsured county residents.The funds also are used for healthcare projects aiming to change the county’s health care delivery system toward more integrated care.

The funds also are used for healthcare projects aiming to change the county’s health care delivery system, like a mobile care clinic in an area of the county that is not near a hospital or medical clinic.

In order to provide these services, Central Health sends money to the federal government, which then adds a percentage match, depending on the program, and sends it to one of the participating hospitals, including Seton and St. David’s. Many of the federal funds are contingent on completion of services or milestones in the program.

The rest of the contingency reserve is part of the Medicaid 1115 Waiver and the Disproportionate Care programs. In order to provide these services, Central Health sends money to the federal government, which then adds a percentage match, depending on the program, and sends it to one of the participating hospitals, Seton or St. David’s Hospital. Money also goes to the CommUnity Care Collaborative, a partnership between Seton and Central Health. Many of the federal funds are contingent on completion of services or milestones in the programs.

However, there is an estimated $80.8 million sitting in the reserve, inflating the budget and waiting to get sent to the Centers for Medicaid and Medicare. The state’s Health and Human Services Commission directs Central Health when it is time to send the money through the process. However, due to complexities in the rule-making decision surrounding the 1115 waiver, the state and participating hospitals have been talking for a year on the best way to move forward. Some of the funds have been rolled over from the 2013 fiscal year, but most are from 2014.

“By having these funds in the contingency reserve sitting there, waiting for when we get the instruction from HHSC that its time, then we’re able to send the money up, and then draw down the maximum federal match,” Crowley said.

This lounging reserve isn’t specific to Central Health;  it’s happening in all of the health districts across the state that participate in the program.

Crowley said it is likely the $80.8 funds will be sent through by the end of the year, dodging a further buildup of funds in the contingency reserve.

Next year’s budget funds $117.4 million for  intergovernmental transfers, which would bring $279 million toward programs and uncompensated care.

 (This story was updated Aug. 27, 2014, to clarify incorrect information on how the contingency reserve is used and to reflect that the Community Care Collaborative is not a hospital, but a partnership.)