Focus Report, Volume 76, Number 5, February 1999 Page: 8
This periodical is part of the collection entitled: Texas State Publications and was provided to The Portal to Texas History by the UNT Libraries Government Documents Department.
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providing fewer services than do counties and public
hospitals and by paying for fewer services for
indigent residents, who must travel outside the
district for further care.
- Cross-government spending and accountability.
Counties, public hospitals, and hospital districts are
responsible for paying for an eligible indigent's care
regardless of where that care is provided. As a result,
payment disputes often arise between those entities
and are exacerbated by different eligibility criteria in
indigent health-care programs across the state. No
state entity is authorized to mediate payment disputes
nor to hold counties, public hospitals, and hospital
districts accountable for meeting statutory minimum
requirements. Some say such authority is needed.
" State and local spending. As noted above, counties
must spend at least 10 percent of their GRTL on
indigent care to qualify for state assistance. This
across-the-board threshold does not take into account
a county's fiscal capacity, health-care resources, and
population characteristics. Critics say this unfairly
burdens counties that have large percentages of
uninsured individuals. Many counties, believing that
they will never cross the 10 percent threshold, do not
bother to submit payment reports to the state for
credit. Therefore, the state has no reliable means of
measuring local indigent health-care expenditures and
of assessing whether and to what degree the counties
are meeting indigent health-care needs.
Also, some counties are asking for specific authority
to participate in cost-effective methods of financing
indigent care, such as managed care or coverage
through a private insurer, and to count such
expenditures toward state assistance.
Nonprofit Hospital Charity
Obligations
Nonprofit hospitals are required by the Health and
Safety Code, ch. 311, and the Tax Code, ch. 11, to provide
charitable care, government-sponsored health care, and
other services that constitute community benefits, such as
donations, education, research, and subsidized health
services. Charity care offered by nonprofit hospitals must
reach specified minimum levels that take into account
community needs and the hospital's resources and tax
benefits. Nonprofit hospitals must submit to TDH specified
financial data indicating their ability to meet one of the
following standards for charity care and government-" community needs at a level determined by a
community needs assessment;
" an amount equal to at least 100 percent of a hospital
or hospital system's tax-exempt benefits, excluding
income tax; or
" an amount equal to at least 4 percent of the hospital
or hospital system's net patient revenue, with a
requirement that combined charity care and community
benefits equal at least 5 percent of net patient revenue.
Charity obligations for nonprofit hospitals were
placed into statute in 1993 (SB 427 by Ellis), and
reporting requirements were amended in 1995 (SB 1190
by Ellis) and 1997 (SB 788 by Ellis). In 1997, 146
nonprofit Texas hospitals reported spending $752 million
on charity care.
Major issues:
" Enforcement. Critics say the state is not adequately
overseeing and enforcing nonprofit hospitals'
obligations under the law. Initial data submitted to
TDH indicate that some hospitals are not meeting the
standards, yet no hospitals have been sanctioned.
TDH is required to forward hospitals' financial data
to the attorney general and the comptroller, including
a list of hospitals that did not meet their charity care
obligations, but enforcement actions are unspecified.
State officials say evaluation on the basis of the
submitted data is difficult and requires additional
information from the hospitals and an expert in
hospital management to audit the submitted
calculations. Others say strict enforcement is neither
necessary nor desirable now because hospitals have
a year to make up unmet charity care obligations. In
addition, changing reporting requirements make it
difficult to evaluate hospitals' charity care activities
and trends.
" State requirements. Critics say the charitable care
standard of at least 4 percent of net revenue is too
low and fails to ensure that nonprofit hospitals direct
toward the public all the benefits they accrue by
nonprofit status. They say the percentage should at
least reflect the tax breaks that nonprofits receive,
such as 6.25 percent for the state sales tax or some
higher percentage that also takes into account their
exemption from ad valorem taxes. Some also say that
the standard has "lowered the bar" for what
constitutes adequate community benefit because some
nonprofit hospitals are providing fewer services nowthan they did in the past. Hospital advocates say the
House Research Organization
Page 8
sponsored indigent health care:
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 76, Number 5, February 1999, periodical, February 4, 1999; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth641172/m1/8/?q=%22~1~1%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.