Travis County commissioners postpone tax rate increase for Central Health amid financial transparency concerns

After last week’s confusing and concerning audit report on Travis County’s health care district Central Health, the Commissioners Court this week put off voting on the district’s budget and a 6.5 percent tax rate increase for Fiscal Year 2025 amid more concerns from the community – including from Central Health’s own board of managers and its main partner, CommUnityCare.

Last week, audit consultant Mazars found that the affiliation agreement that governs Central Health and UT Dell Medical School’s relationship is not necessarily what commissioners thought it was. They were under the impression that the taxpayer money given to Central Health’s partners should go toward funding Central Health’s mission of providing clinical health care to those who can’t afford it. Mazars found that $35 million annually given to Dell Medical School had no record of being used for clinical care at all. However, Mazars concluded that the other uses it went toward – education and research, for example – were actually permitted under the parameters of the affiliation agreement.

Fred Lewis, an attorney for plaintiffs in a lawsuit against Central Health for this very issue (filed in 2017 and still ongoing), argues that UT is illegally classifying the $35 million as a gift in their budget. Though not explicitly in the “gifts” category, UT classifies it as “state/local sponsored programs – nonoperating,” which it defines as “funding received from state or local governments for which no exchange of goods or services is perceived to have occurred. This typically includes … funding for the U. T. Austin Medical School provided by the local health care district.” 

Even if this is allowed under the affiliation agreement, Lewis says, “the issue is whether the affiliation agreement complies with higher hospital district law: the Texas Constitution and state law in Texas Health and Safety Code.” That legal question will be answered when that case goes to trial, along with whether Central Health should be prevented from transferring funds not used for clinical treatment in the future. 

In a statement responding to those concerns, Dell Medical School wrote that Central Health’s support “was critical to the construction of Dell Medical School and the continued expansion of our clinical services, medical education and research capabilities,” back when the agreement was written in 2012. “Since 2014, we have recruited nearly 450 faculty physicians to Austin. Most of the care provided by these faculty physicians, our residents and our fellows – over a million hours each year – occurs at clinical sites operated by partners across Travis and surrounding counties. In addition, Dell Med’s clinical practice treated more than 12,000 patients in 2023-2024, with 38% covered by MAP, Medicare or Medicaid.”

Despite these numbers, commissioners still have not seen any clear financial reporting, angering members of the community and Central Health’s board of managers. Board Member Cynthia Valadez told commissioners, “We must be given all the information for us to make responsible decisions. … If we’re not, I think that someone is lacking in compliance with their jobs.”

Some have clear demands for commissioners before they approve Central Health’s next budget. In a press release the day of the meeting, Lewis wrote, “It is undisputed the poor receive NO health care for our property tax dollars to UT-Austin Dell Medical School. It is undisputed UT treats the funds as a gift and uses the monies as a slush fund. It is undisputed that Central Health has no financial controls over the funds and is precluded from inspecting Dell Medical School’s expenditures under its affiliation agreement with UT. The Commissioners should: 1) reject a tax rate increase; 2) reject Central Health’s budget until the $35 million is removed; and 3) and hire outside, independent expert counsel to advise it on Central Health’s Affiliation Agreement.”

Jaeson Fournier, the CEO of Central Health’s main collaborator, CommUnityCare, agreed with the need for more transparency, telling commissioners that communication between Central Health and CommUnityCare has likewise been lacking: “From my perspective, Central Health leadership has often responded to challenges by focusing inward, while outwardly expressing his desire for collaboration. Their actions unfortunately seem more aligned with consolidating power and controlling the narrative, the funding, and the services, with limited community engagement.” Fournier requested there be formal, written agreements to govern the relationship between CommUnityCare and Central Health as well.

Upon postponement of the vote, Commissioner Brigid Shea noted that “in a budget resolution that Central Health presented to this court in 2022, and then passed, they indicated that they would provide details on clear reporting of the expenditures from the permitted investment of $35 million a year – but we have yet to see that. It’s really important documentation that the public needs, that we need, and we would also request that in our next quarterly meeting, that the dean of the UT Medical School present information to the public and to us on how they are spending the $35 million, particularly as it fits with Central Health’s mission.”

County Judge Andy Brown added, “I do want to emphasize just how much work Central Health has put into communicating with us over the last year, and how terrific (new CEO Dr. Patrick Lee) has been at going in new directions, and has really made it a very different process this year than it was last year. But there’s still obviously some questions that we want to work through over the next week.”

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

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