💡 What’s Happening?
Federal headlines, breaking stories from other states and emerging healthcare controversies can quickly make their way into Texas’ news feeds. But a headline making waves nationally doesn’t necessarily describe what’s happening here.
Healthcare trends and practices elsewhere frequently play out differently in Texas. Texas regulates hospitals by its own standards, and the populations & communities Texas hospitals serve are unique. These are just two of many reasons the reality at Texas hospitals can look nothing like the national narrative.
Here’s a look at three issues that are often part of the national healthcare conversation, and how they actually play out in the Lone Star State.
👨👩👧👦 Charity Care & Community Benefits
Charity care is a form of community benefit nonprofit hospitals provide to eligible patients, helping reduce or eliminate what they owe for qualifying care. Because charity care is a way that hospitals protect indigent patients from bills and medical debt, and is tied to tax-exempt status, it can also be a source of confusion and misinformation. Most states do not have laws conditioning hospitals’ tax exemptions on the charity care they provide. Texas, on the other hand, has had one of the strongest charity care laws in the nation since 1993. There’s no room for hospitals to be uncharitable around these parts.
Nonprofit hospitals can meet their community benefit obligations in multiple ways. Under the most common standard, hospitals and health systems dedicate at least 5% of their annual net patient revenue to community benefits, with at least 4% going toward charity care and government-sponsored indigent healthcare.
Patients can find information about a hospital’s charity care policy online and at the hospital. Additionally, hospitals are required to notify patients about the availability of financial assistance on their billing statements. In fact, 96% of Texas nonprofit hospitals presumptively evaluate patients for charity care eligibility – many hospitals have an automatic screening process to award discounts to eligible patients without the need for the patient to complete paperwork.
And Texas hospitals aren’t simply doing the bare minimum. Texas Department of State Health Services data consistently show that 100% of Texas nonprofit hospitals are meeting the law’s standards every year. As a state, nonprofit hospitals quadrupled the minimum amount of community benefits the law requires them to deliver. And, a recent state report found that for every dollar in tax exemption, the average nonprofit hospital in Texas gives out an average of $12 in charity care and $33 in total community benefits.
“‘We’re really partnering with the community to address things that are non-medical drivers of health, in order to go to the root cause of some of our health issues so that they don’t become more acute services that are needed in the hospital,’ noted Winjie Miao, senior executive vice president and chief operating officer at Texas Health Resources.” Unseen Savings: Charity Care, Community Benefit and the Safety Net
“‘We want to be an integral part of the community, but there are so many uninsured people that don’t have the money to have a mammogram or have a calcium study,’ said [Joe Bob Burgin, Hopkins County Hospital District Board of Trustees member]. ‘So that’s a way that we can contribute. We contribute millions of dollars of uncompensated care every year to our county.’” The Texas Standard: Champions of Charity Care
❌ Fraud, Waste and Abuse
Fraud, waste and abuse are serious concerns across the healthcare system, and hospitals take their obligation to comply with laws and regulations to prevent these events seriously. Improper payments and misuse of public dollars can divert resources away from the patients and communities those programs are intended to serve.
Texas’s Medicaid program stands out among peers as one of the least hospitable in the nation to fraud, waste and abuse, particularly in supplemental payments. Texas hospitals have extensive reporting and compliance requirements designed to ensure public healthcare dollars are accounted for and used appropriately.
For instance, the Texas Legislature deliberately requires robust transparency in Texas’ complex Medicaid supplement payment system. The Texas Health and Human Services Commission’s Local Funding team publicly reports provider-specific payments for every program and tracks every local nonfederal share dollar used to finance them – practices the nonpartisan Medicaid and CHIP Payment Advisory Commission recently singled out as “a standard way that could be a model for other states.” Almost no other states replicate Texas’ successful model.
While opportunities for improvement remain, Texas should also address payer practices that drive costly denials, disputes and payment delays, which make up a substantial share of hospital spending. Reducing this friction can help lower the overall cost of care. Texas can continue to lead nationally in safeguarding public funds while reducing unnecessary, complex administrative burdens on good actors; this will protect the resources for the care patients need.
“ …Until the One Big Beautiful Bill Act, which passed July 2025, started requiring Medicaid recipients to reapply every six months instead of annually, and prove they are working, trying to work or are volunteering in an effort to address fraud. Even though data from the Texas HHSC has not shown fraud is widespread in Texas, the state’s backlog is climbing back up. In July, 65% of Medicaid applications were processed in a timely manner compared to 81% a year ago, according to most recent data from Texas Health and Human Services Commission, which administers Medicaid on the state level. The federal government wants 95% of them processed in a timely manner. In August, 211,000 applications were still waiting to be processed by the state.”
The Texas Tribune: More than 200,000 Texans are waiting for Medicaid approval as enrollment declines
🤝 Consolidation
Hospital and healthcare consolidation is often discussed as if mergers and acquisitions happen in a vacuum. In reality, ownership decisions are shaped by a range of financial and operational pressures, including fluctuating market conditions, low payments, workforce costs, supply chain expenses and the resources required to maintain increasingly complex services.
Texas has the largest number of hospitals in any state in the country, and close to the national median number of hospitals per-capita. Given Texas’ diverse geographies, industries and population centers, some serve depopulated rural areas that can’t sustain more than a single hospital, while others operate in hyper-competitive urban markets; such is the case in Houston, where the Texas Medical Center holds six major system flagship hospitals over a few city blocks. Data bear out that Texas is not a highly consolidated state for hospital care. In fact, according to consolidation critics’ own data, Texas is the 3rd least consolidated state in the nation.
So when consolidation does occur, it’s usually because a hospital is experiencing financial difficulty. In these challenging situations, consolidation can preserve access to care in a community, instead of closing and forcing patients to seek that care elsewhere. A merger or affiliation can allow organizations to share resources, maintain local services, invest in infrastructure and expand the care available to a community.
The issue is particularly important in rural Texas, where hospitals face many of the financial and workforce pressures affecting rural healthcare nationwide. Twenty-six rural Texas hospitals have closed over the last 16 years, underscoring the consequences when communities lose local access to hospital care.
Consolidation also isn’t occurring solely on the provider side. Texas’ healthcare market is shaped in response to greater rates of consolidation in the commercial health insurance market; with three commercial health insurers controlling more than 87% of the large-group insurance market in the state, contributing to high costs for patients and providers alike. Conversely, the market share is somewhat evenly disbursed between major health systems in Texas. Understanding consolidation therefore requires looking at the entire healthcare marketplace – not simply counting hospital mergers and assuming they tell the whole story.
“All employees of Titus Regional Medical Center in ‘good standing’ will keep their jobs after May 1 as part of the hospital’s sale to Christus Health, officials said. The news comes almost three months after the board of directors of Titus Regional, the last independently owned and operated hospital in Northeast Texas, announced that the facility is being sold to Christus after years of financial difficulty.
…Rural hospitals across the nation have closed or reduced services amid soaring inflation and low reimbursement rates from insurance companies and the federal government. Joining a large healthcare system generally brings operational savings and potentially stronger revenue to smaller hospitals, healthcare officials have said. … [Titus Regional CEO] called the sale a ‘tremendous financial upside for the community.’”
CBS 19: All Titus County hospital employees ‘in good standing’ will keep jobs after May 1, Christus says
⭐ Healthcare headlines can make national trends feel universal. But healthcare is local, and Texas has its own laws, funding structures, market conditions and challenges.
📖 Learn More
Charity Care and Community Benefit: Myth vs. Fact
THA’s Comments on Comprehensive Regulations to Uncover Suspicious Healthcare
Hospital Mergers Preserve Access to Care
How Does “Free” Care Get Paid?
