Travis County approves 6.5% tax rate increase for Central Health budget amid financial controversy

Travis County commissioners unanimously approved a 6.5 percent tax rate increase and a $888 million Fiscal Year 2025 budget for the county’s health care district, Central Health, on Tuesday – amid uncertainty about a potential conflict between Central Health’s mission and exactly how the district spends its tax dollars.

Last week, the Commissioners Court postponed their vote due to confusion about Central Health’s affiliation agreement with the University of Texas’ Dell Medical School and whether it required UT to use the $35 million it gives the school every year directly on health care for the poor. UT told the county it wasn’t even permitted to under the terms of the agreement. Soon after, attorney Fred Lewis filed a complaint alleging that Mazars, the consultant that conducted a clean performance audit of Central Health, misled commissioners when it found no violation of law on the district’s part. Lewis argued that the state statute that governs the district mandates it to use taxpayer money on indigent care and that Mazars is not qualified to make that legal judgment.

Upon the passage of the budget including the $35 million annual transfer, Lewis wrote in a press release, “the Commissioners undeniably knew from Mazars performance review and publicly available documents that Central Health has no financial controls, and UT provides no health care for the poor. Who would continue to pay them?” 

Along with the passage of the budget, commissioners did request better transparency and an outside review of the affiliation agreement.

“One of the fundamental things that has to happen is renegotiating that affiliation agreement,” Commissioner Brigid Shea said. “It’s been made more difficult by UT’s response to our performance review, when they sent a letter saying that health care for the poor was not a permissible expenditure, which is kind of a shocking thing to hear. I think it’s a stain on (UT) to say that they’re not allowed to provide health care to the poor.”

Lewis advocates for the agreement to be scrapped completely, writing in a press release Tuesday, “As any competent, independent Texas attorney knows, a contract is void if it contravenes state law.” 

Aside from the affiliation agreement, overall, Central Health’s Fiscal Year 2025 budget increased by $58.2 million, with 88 percent of the total budget going toward health care delivery. Key increases were made in the specialty and mental health care areas, as well as improving post-hospital care in skilled nursing facilities and boosting patient enrollment in Central Health services. By the end of FY 2025, the district aims to increase its specialty care visits sixfold, establish a dedicated respite facility for patients experiencing homelessness after leaving the hospital and improve how the district coordinates care to reduce hospital readmissions.

Central Health CEO Dr. Patrick Lee placed special emphasis in his briefing on the diversity of the medical trainees at Dell Med and said that nearly all clinical services they provide “occur in environments serving the safety net.” The higher UT’s output of physicians, the shorter wait times are for services, Lee explained.

“There’s a highly diverse body of students, residents and fellows who are coming through these programs – 70 percent of these trainees are people of color. Nearly 50 percent of the total graduates stay in practice in Central Texas,” he said.

Lee noted that retention is important because “there are advanced services that our patients need and cannot effectively access by going to Dallas, Houston, San Antonio – amongst those, advanced cancer care, transplant services, advanced surgical services.”

However, the quality of Dell Medical’s graduates was not the issue at stake, and Lee did address the affiliation agreement issue, framing it as more about transparency than a violation of Central Heath’s mission: “My belief is that there is clear value that the medical school is adding to the access of care in our community. However, there are opportunities to improve how we’re communicating that value.”

Central Health Board Chair Ann Kitchen added that the board and CommUnityCare’s board are also planning to clarify their relationship, saying “we will set up meetings over the coming months to talk through the relationship and reach consensus in a collaborative manner about exactly what that looks like.” 

Before the unanimous vote, Commissioner Ann Howard summed up commissioners’ consensus on the issue, saying, “It seems like the medical school is doing the work. It is sort of a communications issue, I believe, and perhaps a more detailed accounting issue. We’ve all been rereading the ballot language and the affiliation agreement and just trying to find a way forward.” All commissioners expressed trust in Lee’s stewardship of the district going forward, which he pledged would include better transparency: “We just need to just be very clear and draw the line between the intent of the vote of the public aligning with our mission.”

As those transparency efforts go forward, Lewis contends that the county should hire “independent outside counsel with expertise in special purpose district law to advise them whether a gift of taxpayer funds is illegal under Texas law.” The central question remains, as Shea put it, “the public needs to understand – what are we getting for that $35 million?”

Photo by Larry D. Moore, CC BY-SA 4.0, Link.

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