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Central Health critics turn up the heat ahead of decision

Tuesday, November 15, 2016 by Caleb Pritchard

Critics of Central Health have renewed their demand for the Travis County Commissioners Court to require an “independent and comprehensive” audit of the hospital district’s spending.

A handful of activists gathered outside of Travis County’s downtown headquarters on Monday afternoon to highlight a new report that accuses the University of Texas’ Dell Medical School of improperly managing $105 million that Central Health has channeled its way since 2014.

Attorney Fred Lewis, the report’s author, said that UT has failed to keep financial records as required by state law. He also charged that the money has “co-mingled improperly” with other funds and thus been spent on medical school operations rather than on Central Health’s explicit charge to provide health care for low-income residents.

“Frankly, there are people who will suffer and die because the money is being used for purposes other than indigent care,” Lewis said.

In a statement sent out after the activists’ press conference, Dell Medical School Dean Clay Johnston refuted the report’s claims. He asserted that the money from Central Health is segregated from other funds and “subject to the university’s internal and external audit procedures.”

“We also are working with Central Health on additional financial reviews regarding these funds,” Johnston said.

The Commissioners Court is set to consider on Tuesday proposed changes to its oversight requirements of Central Health. The hospital district is a separate governmental entity, but the court has ultimate say on its annual budget and, along with the city of Austin, appoints members to its board of directors.

In September, Lewis and other activists representing groups such as the League of United Latin American Citizens and La Raza Roundtable urged the court to reject Central Health’s proposed budget unless the district agreed to the transparency reforms, including the independent audit.

The court approved the budget but only after County Judge Sarah Eckhardt promised to revisit the issue and change the county’s requirements of the district. A subsequent proposal has since made mention of an audit, but one performed by a firm hired by Central Health. On Tuesday, Lewis said that would be akin to “the fox guarding the henhouse.”

The critics’ paramount concern regards Central Health’s annual payment of $35 million as part of its partnership with Seton Healthcare Family and Dell Medical School. The money comes from Central Health’s own coffers as well as state and federal grants. The district has been budgeting the transfer since 2014, adding the total amount to $105 million.

In his statement, Johnston noted that the medical school has not spent most of the money.

“Through our startup period, we have been careful to only utilize this money when appropriate, and not to use it in a way that might compromise its effectiveness improving health in the community, specifically among low-income and uninsured residents,” he added.

Lewis’ report suggests potential legal action to block the school from spending any of the unused money. He notes that “Texas courts have held repeatedly that taxpayers may sue to enjoin the expenditure of public funds not yet expended under an agreement in violation of the Constitution or otherwise illegal.”

On Monday, Lewis stopped short of committing to a lawsuit. However, he did not express much hope that the Commissioners Court will impose the reforms he and his allies are demanding.

“I have a feeling they are going to buckle under pressure from UT and Central Health,” Lewis said. “Frankly, I think that’s a tragic mistake.”

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