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‘This is the hammer’: Residents bring lawsuit in fight against Central Health

Thursday, October 19, 2017 by Caleb Pritchard

On Tuesday afternoon, after Fred Lewis declared new financial rules imposed on Central Health were inadequate, the Austin Monitor asked the attorney, activist and reliable thorn in the hospital district’s side if he had a lawsuit in the works.

His response: “Stay tuned.”

Less than 24 hours later, Lewis stood before a gaggle of press in downtown Austin to formally announce his support of three plaintiffs who are suing Central Health and its president, Mike Geeslin, over the district’s annual $35 million transfer to the University of Texas’ Dell Medical School. That transfer is part of the affiliation agreement that created the partnership between the district, the medical school and Seton Healthcare Family known as the Community Care Collaborative.

As he has so often done at Commissioners Court meetings over the past year, Lewis insisted that state law mandates that Central Health’s spending be limited exclusively to medical services for Travis County’s poorest residents. Most of the $105 million the district has transferred in the past three years has been spent on things outside of that scope, Lewis said.

He explained, “Some of the examples that will be coming out during this litigation is that Central Health has funded fundraising, public relations, accounting, business operations and student admissions staff for the medical school. Central Health has funded health care by Seton for nonresidents who do not live in Travis County. They have funded economic development plans of the nonprofit Capital City Innovation. And they’ve given donations to unrelated nonprofits such as the Chamber of Commerce.”

Lewis said he will provide assistance to lead attorney Phil Durst in the case brought by eastern Travis County residents Rebecca Birch, Esther Govea and Richard Franklin III. The suit seeks a declaratory judgment affirming Lewis’ strict interpretation of the district’s legal spending powers and also an injunction against any use of its funds outside of the permitted limits.

Franklin, who ran unsuccessfully for the Democratic nomination for county commissioner in Precinct 1 in 2016, railed against Central Health, accusing the district of not providing adequate medical services in the eastern half of the county.

“The reality is what’s happening in Del Valle and southeastern Travis County is a travesty. And people are dying because of that travesty,” Franklin said. “And at some point in time, we have got to realize that we haven’t gotten their attention. This is the hammer. Hopefully, we’ll get their attention now.”

Central Health issued a statement on Tuesday morning that said Lewis’ claims appear to be “nothing new” and asserted that the agreement between the district and medical school is “legal and appropriate.”

“As a result of our affiliation agreement with Dell Med, today nearly 300 medical residents are working in Travis County hospitals and clinics serving people with low income. We’re also improving specialty care services for people who are low-income and uninsured,” the statement reads.

Lewis and fellow attorney Bob Ozer have made frequent visits to the Commissioners Court in the past year to challenge Central Health’s financial operations. By law, the court exercises oversight on the hospital district and has final approval over its annual budget.

On Tuesday, the court amended the financial policies that guide Central Health’s board of directors and staff. The framework mandates an annual audit of the district’s finances as well as a broader performance review conducted at least once every five years by a third-party entity.

However, the court did not require a backward-looking investigation into how the previous transfers were spent, a point that Lewis and his allies, including the League of United Latin American Citizens District VII and La Raza Roundtable, found unacceptable.

LULAC’s District Director Frank Ortega and La Raza Roundtable’s Jane Rivera spoke at Tuesday’s press conference in support of the lawsuit. Other speakers included the Austin NAACP’s Nelson Linder, Save Our Springs Alliance’s Bill Bunch and Austin Neighborhoods Council President Mary Ingle.

County Judge Sarah Eckhardt said in a statement that she welcomes the lawsuit as a vehicle to seek “finality” on the ongoing legal dispute. She also noted that the court has responded to public demand in recent years by tightening its oversight of Central Health and that the district has in turn been responsive.

“Regardless of the outcome of this lawsuit over what investments Central Health can make, the Commissioners Court will continue its search and demand for honesty and accountability when Central Health makes investments,” she said.

Both Central Health and UT officials have repeatedly pointed out that county voters in 2012 approved a five-cent tax increase in order to raise funds to support the new medical school.

At his press conference, Lewis cited the 2012 ballot language.

“It said it would be consistent with Central Health’s mission. It only has one mission: To take care of poor people,” he said. “So it was a bait and switch.”

However, Central Health, UT officials and other supporters have maintained that the Community Care Collaborative is creating a new model for medical service in the county and that it is already providing real benefits to low-income residents.

State Sen. Kirk Watson, one of the masterminds of the medical school and the campaign that birthed it, said in a statement on Tuesday that County Attorney David Escamilla affirmed last year that the affiliation agreement is legal.

He added, “Equally important to me is that the partnership is fulfilling the promise we made to the community to transform health care delivery so that everyone has access to high-quality care, regardless of their ability to pay. Systemic change takes time, but we’re already seeing improvements in access to specialty care, reduced wait times and proactive outreach to folks facing barriers to care.”

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

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