Twenty Texas counties received approximately $5.6 million in state matching funds in 2004 to help offset the cost of indigent health care, said Jan Maberry, County Indigent Health Care Program (CIHCP) manager for the Texas Department of State Health Services.
The Indigent Health Care and Treatment Act of 1985 requires counties that are not completely covered by a hospital district or public hospital to provide basic health services to indigent residents through a county-run CIHCP; there are currently 142 CIHCPs in the state. Each fiscal year, a county is liable for $30,000 or 30 days of hospitalization or nursing-home care per eligible resident, whichever comes first.
Once a county spends 8 percent of its general revenue tax levy (GRTL) on indigent care, the county can then tap into state matching funds, with the state paying 90 percent of all costs and the county paying the remaining 10 percent. If the department fails to provide state assistance funds, the county is not liable for payments for health care services provided to its eligible residents after the county reaches the 8 percent expenditure level, Maberry said.
This year, FY2005, the department has $5.1 million to dispense to county programs, a portion of the $11.2 million allotted by the state for the 2004-2005 biennium. This amount is considerably less than the previous biennium, which saw the disbursement of almost $15 million to counties. The state program has asked for approximately $5.1 million for FY2006, and the same amount for FY2007, Maberry said.
The CIHCP program sustained a 36 percent to 38 percent cut in funding during the 78th Legislative Session, forcing the program to reduce its staff from 18 to eight, move all training operations from regional offices to headquarters in Austin, and significantly decrease matching funds available to counties.
It is difficult to determine whether or not the decrease in available matching funds has had a direct impact on client serves, Maberry said, as several counties reported shutting their doors due to limited county funds.
For example, DeWitt County closed its doors after spending all of its funds budgeted for indigent health care, said Tom Foegelle, DeWitt County indigent health care coordinator.
The decrease in matching funds has not yet affected Atascosa County, said Janeane Hester, coordinator of her county’s indigent health care. However, budget cuts to other programs have resulted in an increased indigent client load. For example, a number of single parents told Hester that they no longer qualified for Temporary Assistance to Needy Families or Medicaid and were referred to the county for indigent care. Hester also has received referrals from the Department of Assistive and Rehabilitative Services.
One definitive area affected by budget cuts was the elimination of regional resource coordinators, “a valuable asset to county coordinators,” Hester said. The CIHCP staff now provides all training in Austin, Maberry said. Six sessions have been conducted since September 2003, and all were well attended. As of press time, the February 2005 training class was at full capacity.
Maberry encouraged commissioners courts to contact the Austin office for training and technical support for any new CIHCP staff. In addition, the county needs to ensure that the Austin office is updated on all changes, including personnel and contact information, especially e-mail addresses as all policy and procedure information is sent to counties via the Internet.
Finally, the court needs to verify that county indigent health care coordinators continue to submit Form 105, the CIHCP Monthly Financial/Activity Report.
Indigent Health Care and Treatment Act of 1985
A 1983 task force investigation into health care for the poor revealed an inequitable and unstable delivery system. The task force reported that hospitals providing charity care, particularly public hospitals in urban areas, shouldered a disproportionate financial burden because they served medically indigent residents from counties without a public hospital and were not compensated by those counties. It also found that the type of basic medical services needed to prevent medical problems or to identify and treat them early (and spare public entities the expense of treating more serious disorders later) often were unavailable to the medically indigent.
County responsibility for providing medical services required a better definition in state law. Art. 9, sec. 14 of the Texas Constitution authorizes but does not require counties to care for their indigent residents. An 1876 statute required counties “to provide for the support of paupers,” which the courts had interpreted to include medical care. Until 1985, state law was silent on who qualified as a “pauper” and what services constituted support.
The Indigent Health Care and Treatment Act, Chapter 61 of the Health and Safety Code, sought to define the responsibilities for counties without a public hospital or hospital district so that all counties more equitably would pay for indigent care. The law requires counties to offer basic health services to indigent residents as the payer of last resort, meaning that residents who have private insurance, Medicaid, or another form of health insurance are not eligible.
The income eligibility level, revised in 2001, is 21 percent of the federal poverty level (FPL), or $163 per month for an individual, with certain restrictions on asset values similar to those in the state cash assistance program. Counties can choose to serve this population through the creation of a hospital district, administration of a public hospital, or participation in a County Indigent Health Care Program (CIHCP).
All counties are required to provide basic health services to indigent residents, including: primary and preventive care, such as immunizations, screenings, and annual exams; inpatient and outpatient hospital services; rural health clinics; laboratory and X-ray services; family planning services; physician services; up to three prescription drugs per month; and nursing home services regardless of the patient’s age. In addition, counties are authorized, but not required, to offer the following optional services: emergency care; medical supplies and durable medical equipment; home and community health care services; social work services; counseling; dental care; and vision care.
Liability for Indigent Care
Counties’ liability for indigent health care is capped in statute, and the state reimburses counties for a portion of their costs. Each state fiscal year, a county is liable, per eligible county resident, for $30,000 or 30 days of hospitalization or nursing home care, whichever comes first. The state established a county indigent health care fund, administered by the Texas Department of Health (now the Department of State Health Services – DSHS), which is used to reimburse counties for a portion of their indigent care costs. To obtain reimbursement, counties must spend at least 8 percent of the county general tax levy for that year on basic health services. Once a county has reached that threshold, it must notify the state and then is eligible for reimbursement of 90 percent of the actual payments for health services for the remainder of the fiscal year. If the state fails to provide assistance, the county is not liable for payments after it has reached the 8 percent threshold.
A common misperception is that the state requires counties to spend 8 percent of their general revenue tax levy on indigent care, which is not the case, although at the current required eligibility level many counties spend that much and more. Their first responsibility is to reimburse providers and other counties and hospital districts for basic services rendered to eligible county residents, although this captures only residents with incomes below 21 percent of the FPL and does not include emergency services.
Tax Code sec. 26.04 permits voters to petition to hold a rollback election if a local government imposes a property tax rate that is 8 percent above the effective tax rate. (The 8 percent rollback trigger for tax rate increases is unrelated to the 8 percent spending threshold requirement for indigent care before counties receive state reimbursement.) Under Health and Safety Code sec. 61.10, counties that dedicate to indigent health spending any revenue derived from a tax rate beyond the rollback rate may not spend that revenue for any other purpose. This restriction is meant to protect voters from a potential “bait and switch.” According to the Texas Taxpayers and Research Association, from 1982 to 2003 there have been 42 county rollback elections, 83 percent of which were successful in rolling back the tax rate. If voters decide to roll back a county tax rate, even when the additional revenue was dedicated to indigent care, the county still must meet its indigent care obligation, which may require cutting other services.
In the past, a large portion of state indigent care funds has gone to two counties: Cameron and Hidalgo in the Rio Grande Valley. In 2003, Cameron County received $1 million, and Hidalgo County alone received $3.2 million – more than 40 percent – of the total $7.7 million disbursed for that fiscal year. Rider 53, attached to TDH’s fiscal 2004-05 appropriation in Article 2 of the general appropriations act, limits distribution of indigent care funds to a single county to no more than 35 percent of the total funds appropriated.
The basic level of services required by Chapter 61 represents a significant portion of many counties’ budgets, but their total health care expenditures sometimes can be significantly greater. As part of the state’s tobacco settlement, Texas established a permanent fund to offset unreimbursed health care provided by local governments, and their spending reports for that purpose paint a more complete picture of counties’ total health expenditures.
Counties, cities and hospital districts are eligible for disbursement from the fund based on the amount they spend on county indigent care services, unreimbursed care provided in jail, optional or other health care services that are not part of the required basic services, and other facility-related costs. While no county reported indigent care spending above 15 percent of its general revenue tax levy for purposes of the county indigent care reimbursement program, some counties reported spending more than half their general revenue tax levy on unreimbursed health care services. Reimbursement from tobacco funds offset only 2 percent of counties’ unreimbursed health care expenditures in fiscal 2003.
This text is an excerpt from an article that appeared in the Interim News, No. 78-7, a publication of the House Research Organization, written by Kelli Soika and published July 22, 2004. The House Research Organization is an independent, nonpartisan administrative department of the Texas House of Representatives that reports on legislation and issues considered by the Texas Legislature. To read the article in its entirety, go to www.capitol.state.tx.us/hrofr/interim/int78-7.pdf.