Press Room Archives

FOR MORE INFORMATION, CONTACT: Amanda Engler, APR Texas Hospital Association, 512/465-1050

Hospitals Thank Perry for Freeing Trauma Funds;
Urge LBB to ‘Do the Right Thing’

August 19, 2005

Texas hospitals are applauding Gov. Rick Perry for today’s signing of a budget execution order that includes appropriating another $76.2 million to the state’s trauma hospitals. The governor’s proposal would allow actual dollars collected in the Designated Trauma Facilities/EMS Account above the legislatively appropriated amounts to be disbursed to trauma centers. The Legislative Budget Board still must approve the governor’s recommendation.

“This money will help shore-up the strained trauma system, and ensure that Texans will continue to have access to life-saving emergency health care services,” said Joe A. DaSilva, CHE, CAE, senior vice president of advocacy and public policy for THA. “We’re counting on the Legislative Budget Board to do the right thing and implement the Governor’s order.”

Through two special sessions, THA and other trauma/EMS advocates worked with Rep. Dianne Delisi (R-Temple), author of the legislation creating the Driver Responsibility Program to fund uncompensated trauma care, to secure allocation of these funds. “The Governor championed the creation of the Driver Responsibility Program in 2003, and hospitals appreciate his leadership to ensure that the funds from this program are used as intended,” DaSilva added.

Assuming the LBB approves the order, some $76.2 million in additional funds will be available to help designated trauma centers – and those pursuing designation.

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FOR MORE INFORMATION, CONTACT: Amanda Engler, APR Texas Hospital Association, 512/465-1050

Texas Hospital Association Installs 2005-06 Chairman, Board

Aug. 17, 2005

The Texas Hospital Association has installed its new Board of Trustees for 2005-06. Patrick L. Wallace, CHE, administrator of East Texas Medical Center Athens, was formally installed as chairman at the board’s annual planning retreat on Aug. 12. Daniel J. Wolterman, president/CEO of Memorial Hermann Healthcare System in Houston, was installed as chairman-elect. Dan Stultz, M.D., CHE, president/CEO of Shannon Health System in San Angelo, became immediate past chairman.

New trustees elected to serve three-year terms include:

• Don A. Beeler, FACHE, president/CEO of CHRISTUS Santa Rosa Health Care in San Antonio;
• Barclay E. Berdan, CHE, president of Harris Methodist Fort Worth Hospital;
• James E. Buckner Jr., CHE, administrator of Uvalde Memorial Hospital;
• Kirk A. Calhoun, M.D., president of The University of Texas Health Center at Tyler;
• Kent H. Wallace, president/CEO of Baptist Health System in San Antonio;
• Ronald M. Stewart, M.D., trauma medical director at University Health System in San Antonio, who will serve as a physician trustee;
• Daniel P. McLean, CHE, chief executive officer/group director of South Texas Health System in McAllen, who will serve as trustee for Region 3; and
• William W. (Bill) Webster, chief executive officer of Medical Center Hospital in Odessa, who will serve as trustee for Region 4.

Other trustees installed to fulfill unexpired terms on the board include Jan A. Reed, CPA, CEO/administrator of Electra Hospital District; and Michael D. Williams, FACHE, president/CEO of Community Health Corporation in Plano.

Trustees continuing as members of the board include:

• Jeff Bourgeois, FACHE, chief executive officer of Hill Country Memorial Hospital in Fredericksburg;
• Jon M. Foster, FACHE, president/CEO of St. David’s Healthcare Partnership in Austin;
• Robert L. Smith, senior vice president of operations for Tenet HealthSystem Texas Region in Dallas,
• James G. Springfield, FACHE, president/CEO of Valley Baptist Health System in Harlingen;
• David M. Cecero, CHE, president/CEO of JPS Health Network in Fort Worth;
• Patricia J. Dorris, administrator/CEO of Palo Pinto General Hospital in Mineral Wells;
• Arthur L. Hohenberger, FACHE, president/CEO of Hillcrest Health System in Waco;
• Rick W. Merrill, president/CEO of Driscoll Children’s Hospital in Corpus Christi;
• Craig E. Sims, CHE, regional strategy special programs for Tenet HealthSystem Texas Region in Dallas;
• Howard M. Chase, FACHE, president/CEO of Methodist Health System in Dallas, representing Region 1;
• Karen Sexton, Ph.D., CHE, vice president and chief executive officer for hospitals and clinics at The University of Texas Medical Branch in Galveston, representing Region 2; and
• David L. Lindzey, M.D., medical director for Scott and White Memorial Hospital in Temple, serving as a physician trustee.

Leaders of THA’s Council on Policy Development also serve on the THA Board of Trustees. Continuing in their roles as COPD representatives to the board are Michael S. (Mike) Potter, FACHE, president/CEO of Wadley Regional Medical Center in Texarkana, and chairman of the COPD; and Tim Lancaster, FACHE, president/CEO of Hendrick Health System in Abilene, and COPD vice-chairman.

Serving on the THA Board of Trustees representing the Texas Healthcare Trustees are THT Chair Peggy Y. Allison, member of the board of governors for Methodist Healthcare System of San Antonio; and THT Chairman-elect Harold D. Samuels, chairman of the board of JPS Health Network in Fort Worth.

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Legislature Addressed Health Care Issues

June 1, 2005

Although health care was not a priority for the majority of legislators in the 79^th Texas Legislature, several important bills dealing with the nursing workforce shortage, niche hospitals, emergency health care and infection reporting were passed. The Legislature also restored several benefits for recipients in Medicaid and the Children’s Health Insurance Program, and funded caseload growth in these programs.

“Hospitals had to compete with school financing and property tax relief to get legislators’ attention,” said Richard Bettis, CAE, president/CEO of the Texas Hospital Association. “With the emphasis on these critical issues, it was difficult to get much traction for hospitals’ concerns,” he added.

Nursing Workforce Shortage

Lawmakers passed several bills intended to increase the capacity of the state’s nursing education programs. Having identified faculty shortages as a critical factor in nursing education, legislators earmarked $6 million for the Nursing Shortage Reduction Fund to help colleges and universities recruit and retain faculty members. Almost $2 million in financial aid for nursing students also was appropriated. Incentives – such as tuition exemptions for nursing faculty members’ children at the institution where the nurse teaches – also were approved.

“Health care is a growth field in Texas, and jobs are available for nursing graduates,” said Bettis. “Hospitals are stable employers, and offer comprehensive benefits to employees. Nurses represent the majority of hospital employees, and THA is pleased that the Legislature took steps to expand the capacity of nursing schools as a strategy to cope with the growing shortages of nurses.”

Niche Hospitals

Legislators approved a study of the impact of niche hospitals on the state’s health care delivery system. The legislation (Senate Bill 872) also requires disclosure of physician ownership in niche hospitals to both patients and the state. “The legislation is not as comprehensive as THA would have preferred, given the proliferation of physician-owned limited service facilities in Texas,” Bettis said. “Limiting the study to niche hospitals fails to address the impact in rural communities of physician referral to facilities in which they have an ownership interest. Niche hospitals aren’t being built in small towns, but doctors are opening imaging centers and ambulatory surgery centers,” he added.

“More than 100 doctor-owned limited service businesses now operate nationally and nearly half – 47 of these are in Texas,” according to Bettis. “An additional 29 are under development in the state.”

“The state’s study should confirm what numerous federal government and academic studies already have shown – physician referral of patients to facilities in which the doctor has ownership has had a negative impact on full service community hospitals,” Bettis added. “Hopefully, Congress will renew the federal moratorium on the construction of new physician-owned limited service facilities. Otherwise, access to health care will be jeopardized in rural communities as well as areas where population growth is low.”

Trauma/Emergency Care

The Legislature extended the Driver Responsibility Program, which provides funding for uncompensated trauma care by levying fines for habitual bad driving. Estimates are that $81 million per year will be available to help offset designated trauma facilities’ uncompensated trauma care costs.

Another bill requires multiple hospitals under one license to provide a minimum level of emergency services at each facility. “This bill will ensure that at least basic emergency services are available at all hospitals, which is what the public expects to find when they arrive at a hospital ER,” Bettis noted.

Measures also were approved that will create a statewide stroke emergency transport plan and ensure that sexual assault victims receive a minimum standard of care in hospital emergency rooms.  

Infection Reporting

In response to consumers’ requests for more information about hospital quality, THA supported legislation to create a process for comparing health care-related infections among hospitals and ambulatory surgery centers. A panel of experts – including physicians, infection control practitioners, hospital executives and the public – will submit recommendations to the Legislature by November 2006 for what information should be collected and how it should be presented.

“Other states have rushed into infection reporting without considering the science as well as the national activities in this area,” Bettis said. “Texas is taking the right approach – get the experts involved, study what other states and federal agencies are doing, and develop a plan that compliments others’ efforts and benefits both hospitals and patients.”

Workers’ Compensation

Injured workers in Texas will receive better coordinated health care as a result of the overhaul of the state’s workers’ compensation system. “Using a managed care approach – with networks of doctors, hospitals and other providers – and establishing guidelines for care make good sense for treating injured workers,” Bettis said.

Medicaid/CHIP

Through the budget, the Legislature restored mental health, podiatric, hearing and vision benefits to adult Medicaid recipients. Lawmakers also restored dental, vision, hospice and mental health benefits in the CHIP program. “Texas has the largest uninsured population in the nation with 28.4 percent of all Texans under age 65 lacking coverage,” Bettis said. “It’s critical that Texas Medicaid and CHIP provide primary and preventive care to qualifying low-income Texans. This helps reduce the burden on over-crowded emergency departments,” he added.

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Bill to Study Issue of Physician Self-Referral Advances

May 19, 2005

Senate Bill 872, authored by Sen. Jane Nelson (R-Flower Mound), which requires the state to study the potential harm to the community health safety net caused by niche hospitals, was passed out of the House Public Health Committee last night. The Senate already has approved the bill.

“We applaud Rep. Dianne Delisi and her colleagues on the House Public Health Committee for recognizing that this problem warrants greater scrutiny and that policymakers should have a better understanding of the impact it is having on the community health care system,” said Joe A. DaSilva, CHE, CAE, senior vice president of advocacy and public policy for the Texas Hospital Association. “Texas needs to ensure that our community health safety net is not jeopardized by the proliferation of physician-owned limited service or niche businesses.”

The ability of physician owners to steer well-insured, less complicated patients to their specialty facilities creates a hardship on community hospitals. A recent study of the issue conducted by THA substantiates national studies which show that many physician-owned limited service facilities treat fewer Medicaid and uninsured patients than full service community hospitals. As a result, full service community hospitals are losing their broad base of patients needed to sustain necessary but unprofitable services, like emergency and trauma services and neonatal intensive care units.

In his testimony, DaSilva noted that the study mandated by S.B. 872 will “validate that what other groups say is correct.” He noted that the following entities have conducted/published studies showing that referral of patients to facilities in which the physician has ownership has had a negative impact on full service community hospitals; he mentioned studies conducted by:

• The U.S. Government Accountability Office;
• The Medicare Payment Advisory Commission;
• The Texas Hospital Association;
• The New England Journal of Medicine; and
• Georgetown University.

“Full service community hospitals – particularly those in rural areas – remain at risk until this issue is fully addressed,” said DaSilva. “This study will document conclusively what is occurring in Texas, and give lawmakers state-specific facts on which to base public policy decisions in 2007,” he added.

He noted that a number of physician groups and independent physicians support a continuation of a federal moratorium prohibiting physician self-referral to facilities in which they have an ownership interest. Those groups supporting the continuation of the moratorium or indicating serious concern with the impact of these facilities on community hospitals include:

• The American Academy of Family Physicians;
• The Texas Radiological Association;
• The American College of Emergency Physicians; and
• The Arizona College of Emergency Physicians.

Texas leads the nation in the number of doctor-owned, limited service health care businesses. “More than 100 doctor-owned limited service businesses now operate nationally and nearly half – 47 of these are in Texas,” according to DaSilva. “An additional 29 are under development in the state.”

As passed, S.B. 872 would:

• Require the Texas Department of State Health Services to conduct a comprehensive study regarding the impact of niche hospitals on the financial viability of other general hospitals located in the state.
• Compare the referral patterns of physicians with an ownership interest in a niche hospital to the referral patterns of physicians with privileges at a niche hospital who do not have an ownership interest.
• Mandate physicians to disclose their ownership interest in a niche hospital.

For more information on this issue or to download THA’s study, visit THA’s Web site at http://www.thaonline.org/Advocacy/PriorityIssues/SelfReferral.asp.

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Hospitals Urge Action by Legislators
to Ensure Rural Texans Do Not Lose Health Care Options

Physician-owned limited care businesses draining essential resources from
 rural full service community hospitals

May 5, 2005

The Texas Hospital Association is urging legislative support for a measure that would rein in “physician self-referral” in rural and underserved areas of the state, where the practice appears to be having its most serious impact on the community health care system. The legislation, a committee substitute for House Bill 3316 by Rep. Betty Brown (R-Terrell), is pending in the House Public Health Committee.

CSHB 3316 calls for a comprehensive study of the practice by some physicians of referring patients to businesses where they have an ownership interest – known as “self-referral” – and the impact it has on full service community hospitals. The legislation also requires physician disclosure of ownership interests; access to data needed to conduct the study; and a two-year rural moratorium on patient referrals to facilities in which the doctor is an owner, applicable to facilities in counties with 80,000 or less population and not in operation as of Sept. 1, 2005.

“Texans living in rural areas of our state already have limited access to quality health care,” said Charles Bailey, J.D., THA’s general counsel. “Rather than creating more health care choice for rural Texans, these limited care facilities are draining away resources from full service community hospitals that rely on a broad patient base to sustain unprofitable services like emergency care.”  

THA’s recent Report on Limited Service Providers determined that the practice of self-referral undermines the well-being of full service community hospitals, especially in rural and underserved areas of the state. Because physician-owned businesses tend to treat patients who have fewer complications and are well-insured, full service hospitals bear the burden of providing emergency room services, care to the acutely ill and services for those without the ability to pay for their care.

 “Rural community hospitals provide essential medical care to diverse populations and often are the only option for medical services for many residents in their communities,” noted Bailey. “When a doctor-owned niche hospital or limited care clinic in an area with a small population begins to supplant the full service community hospital, the quality of community health care suffers.”

Texas leads the nation in the number of these doctor-owned, limited service health care businesses. More than 100 doctor-owned limited service businesses now operate nationally; 47 of these are in Texas, with an additional 29 under development in the state. Additionally, 61 Texas counties – nearly one-quarter – have no community hospital while another 105 counties have only one hospital. A total of 65 percent of Texas counties have only one or no hospital to serve patients when they need it most.

A case study of Palo Pinto General Hospital, a 99-bed full service community hospital in Mineral Wells, further illustrates the negative impact physician self-referral has on rural community hospitals. To meet community needs and increase its revenues, Palo Pinto General Hospital invested $11 million to renovate its facilities and expand its surgical, radiology and cardiac rehabilitation services. In 2003, a group of approximately 40 physicians invested in and opened a cardiac diagnostic imaging center, duplicating services offered by the full service hospital. Since the center opened, Palo Pinto has experienced a 67 percent reduction in reimbursements for nuclear medicine services and a 23 percent reduction in reimbursements for CT scans. Palo Pinto General Hospital’s cardiac center has gone from a $524,646 profit to a loss of $20,786.

“Since both doctors and hospitals agree that this is a problem significant enough to study, reason dictates that we have a two-year moratorium – at least in rural areas – to prevent further expansion and potential harm while the study is conducted,” said Bailey. “When access to emergency rooms and basic hospital services are threatened, lawmakers must take quick and decisive action to ensure the continued strength and sustainability of full service community hospitals. Rural community hospitals represent a health care safety net that millions of Texans and their families rely upon when they are most in need.”

The House Public Health Committee also heard testimony on House Bill 3102 by Rep. Jim McReynolds (D-Lufkin), which offered an additional way to preserve access to health care in rural areas. The bill would allow hospitals designated as sole community or critical access hospitals to employ physicians. The exception to the state’s current prohibition on hospitals employing physicians also would be applicable in counties with a population of 50,000 or less. Texas is one of only a few states where doctors may not be employed. The bill was left pending.

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FOR MORE INFORMATION, CONTACT: Amanda Engler, APR Texas Hospital Association, 512/465-1050

Advocates Support Integrated Care Management
Alternative Model Preserves Federal Medicaid Dollars

April 19, 2005

Today (April 19), a group of House members announced that some 128 House members have signed on as co-authors of House Bill 1771 by Rep. Dianne Delisi (R-Temple), a bill that authorizes an alternative health care delivery model for some Medicaid patients. The Integrated Care Management model, or ICM, saves the state money, avoids cost-shifting to local taxpayers and provides quality medical care. The Texas House of Representatives will vote on H.B. 1771 this week. Hospital, physician and county government leaders joined the joint authors to voice their unified support of ICM.

“The large number of co-authors indicates the support that ICM has earned in the Texas House of Representatives,” said Rep. Vicki Truitt (R-Southlake). “House members want to protect our safety net hospitals by preserving access to federal funds that would be jeopardized if a capitated HMO model were implemented,” Truitt explained. “We also want to ensure that the needs of Medicaid clients are met, and the integrated care management model provides a medical home, as well as appropriate, ongoing coordination of care.”

Rep. Delisi’s legislation instructs the Texas Health and Human Services Commission to offer the ICM model in the state’s eight largest urban areas as an alternative to the planned expansion of STAR+PLUS, a Medicaid HMO program developed by the THHSC to serve elderly clients and clients with disabilities. The STAR+PLUS model, if implemented, will cost public hospitals more than $150 million in lost federal funds during fiscal years 2006 and 2007.

“That $150 million loss would force local taxpayers to make up the difference,” Rep. Delisi said. “Plus, it’s very poor fiscal policy to leave taxpayer money in Washington, D.C. ICM is an innovative approach to keep the federal dollars Texas needs while ensuring that more of the dollars allocated for Medicaid clients goes directly to patient care.”

The lost funds are the result of a federal formula, called Upper Payment Limit (UPL), for reimbursing hospitals the difference between what the state Medicaid program pays and what the federal Medicare program would have paid for a service. If an HMO model is forced on hospitals, the federal government won’t pay more than the HMO. That amount can be less than Medicaid since for-profit HMOs often discount deeply what they pay hospitals or deny payments inappropriately in order to make their profit.

“ICM is the only managed care model proposed to date that preserves federal UPL dollars,” said Dan Stultz, M.D., CHE, chairman of the Texas Hospital Association Board of Trustees and CEO of Shannon Health System in San Angelo. “The federal UPL dollars are critical to help preserve the health care safety net across this state. Our full-service community hospitals staff emergency departments 24/7, and care for those without health insurance. Most of the state’s large public hospitals have Level I trauma facilities, meaning that they receive the most critically ill and injured patients – they are the referral centers for hospitals across the state. Losing these federal funds would harm not only Medicaid patients, but all patients across Texas.”

The nine public hospitals that would lose the $150 million – and shift the financial burden to local taxpayers – include:

• Brackenridge Hospital-Austin                                                           
• Harris County Hospital District-Houston                                            
• JPS Health Network-Fort Worth                                                        
• Medical Center Hospital-Odessa                                                      
• Parkland Health & Hospital System-Dallas                            
• R.E. Thomason-El Paso                                                                  
• Spohn Memorial Hospital-Corpus Christi                                                       
• University Health System-San Antonio                                              
• University Medical Center-Lubbock                                       

“The ICM model provides budget certainty of at least $109.5 million in savings to the state through better management of care and reduced administrative costs,” Rep. Delisi said. “ICM protects federal funds, preserves tax equity for counties and protects the health care safety net. Administrative simplicity will help patients and providers, and ICM will improve access to primary care physicians for Medicaid clients,” she added.

“ICM is what managed care was supposed to be,” said Robert T. Gunby, Jr., MD, president-elect of the 40,000-member Texas Medical Association. “It creates a medical home, monitors best practices, seamlessly integrates care and does it for less money. ICM ultimately reduces emergency department visits, shortens hospital stays, improves health care for Medicaid clients and allows patients with disabilities to stay in their communities. All of the state’s investment in ICM stays in the Texas economy,” he added.

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