Travis County commissioners held off on giving final approval to the local hospital district's budget Tuesday in echoes of last year's drawn-out budget process.
Commissioners said they needed another week to parse out concerns about Central Health’s payments to UT's Dell Medical School, as well as an ongoing conflict between Central Health and its partner clinic, CommUnityCare. There is a ticking clock on Travis County’s decision as Central Health’s new fiscal year begins Oct. 1.
Central Health’s proposed nearly $889 million budget would be primarily funded by taxpayers, who pay for the hospital district to provide health care to Travis County’s poor and indigent residents. Central Health is also asking the county to green light a tax rate of 10.8 cents per $100 of a home's value, which translates into a $66 increase to the average taxpayer’s annual bill.
Audit brings more questions than answers
Debate over the budget this year has come against the backdrop of a contentious audit by Mazars USA, a firm hired by Travis County in 2023 to do an independent review of Central Health. The audit was commissioned after community groups called for transparency into Central Health’s operations, including its oversight of a $35 million annual payment to Dell Medical School.
Voters authorized that payment in 2012 as “support for a new medical school consistent with the mission of Central Health.” It is also the subject of a lawsuit from a group of taxpayers who say the money has gone toward things like education, research and administrative costs when they believe it should be spent only on services for low-income patients.
Mazars presented its report to Travis County commissioners on Sept. 10. Overall, it found no violations of law or “significant deficiencies” in the agency’s operations, but it had recommendations for reforms aimed at improving financial transparency and oversight.
Central Health took issue with aspects of the report and issued a formal response, saying Mazars had mischaracterized some of its complex relationships with other local health care entities.
“This was, in my mind, a poorly written affiliation agreement, if there's no requirement that they actually provide care to the poor."Travis County Commissioner Brigid Shea
As to the $35 million annual payment to Dell Medical School, Mazars found the university’s use of funds was compliant with the agreement between Central Health and Dell Medical School, which outlines a range of permitted uses. But Steve Herbst, a partner with Mazars, said his firm was unable to answer the key question of how many of those dollars had translated into patient care for the poor.
“We couldn't directly connect the dots between the salaries that are being paid for at the clinical level to a granular line item — ‘Hey, did patient Mary show up on Tuesday the 5th at the doctor’s office, and were they seen by Dr. Nancy?’" Herbst said. "That level of specificity we could not get to."
Herbst said Mazars received a statement from the school that “billable patient services” are not permitted under the affiliation agreement. However, Herbst said Mazars believes they are allowed.
County Commissioner Brigid Shea said she was alarmed by this difference of opinion and believed there was a “social contract” that Dell Medical School was expected to use the money on direct provision of care.
“This was, in my mind, a poorly written affiliation agreement, if there's no requirement that they actually provide care to the poor,” Shea said.
Commissioners entered a private session on Sept. 10 to discuss what “legal recourse” commissioners have to address the agreement between the medical school and Central Health. On Tuesday, Shea cited those ongoing discussions as a reason for delaying the scheduled vote on Central Health’s budget and tax rate.
“One of the things we are looking at is ... accounting and control procedures, because of a concern which we have voiced repeatedly, at least since 2017, over the expenditure of the $35 million,” she said.
Dell Medical School issued a statement, noting Central Health’s annual payment has been critical to the school’s development and its expansion of local health care infrastructure.
“We are grateful to the people of Travis County for the trust placed in us in 2012 — an investment that continues to result in improved health,” the statement said.
Leadership conflicts with CommUnityCare
Another area of tension that emerged this budget season involves Central Health’s relationship with CommUnityCare, a chain of clinics that serve low-income Austin residents in partnership with Central Health.
The entities are at odds about the leadership structure of the two organizations after Jason Fournier, the CEO of CommUnityCare, was placed on leave by Central Health CEO Patrick Lee in early September.
Lee sent an email to staff at both Central Health and CommUnityCare on Sept. 4 notifying them that Fournier had been put on leave and instructing them not to communicate with him. No reason was given for the decision.
“During this time, I will be working with the CommUnityCare Senior Leadership team and Board of Directors to ensure operations continue smoothly and without interruption,” Lee said in the email.
Central Health and CommUnityCare are separate entities, but the organizations are closely entwined and share a human resources department. CommUnityCare took over clinics previously run by Austin and Travis County. The nonprofit applies jointly with Central Health to receive federal funding to treat poor residents at its clinics. Central Health contributes significant funding to CommUnityCare, which has requested around $74 million from Central Health for the upcoming fiscal year.
According to a representative from CommUnityCare, Fournier is employed under a joint agreement with Central Health. CommUnityCare representatives have argued that only their board has the authority to make employment decisions relating to Fournier — not Lee.
During a meeting of Central Health’s board of managers Monday, Fournier said he learned he was being put on leave for alleged professional misconduct several days after pushing back on a presentation from Central Health staff in August. He said the presentation “felt like an attempt to consolidate control over health center operations.”
“My response was clear: decisions of this magnitude should be made by our boards with full due diligence, transparency and input from the community,” he said.
Fournier said he had not been given a reason for the allegations of professional misconduct. He asked Central Health’s board of managers to launch a third-party investigation into the decision, which he called an attempt to “remove me as an obstacle to gain more control.”
In a comment to Travis County commissioners on Sept. 10, Lee suggested the conflict with Fournier related to a proposal to streamline the two organizations' budgeting process.
“What has been proposed is actually to shift into a common bottom line model where we plan together, we budget together, we manage together,” Lee said.
Lee also said he believed that facts would "come to light" that clarify the relationship between the two organizations and reinforce his perspective on recent events.
Travis County Judge Andy Brown expressed concern about the abrupt change to Fournier’s employment and said Fournier had earned the trust of the community due to his work addressing the COVID-19 pandemic.
“There's just so many questions over what has happened the last couple of weeks,” Brown said. “I would love it if y'all could resolve them with CommUnityCare over the next week so that I'm not getting bombarded with different opinions or theories about who has the right to do what.”
