Senate Bill 1623, authored by state Sen. Juan ‘Chuy’ Hinojosa, passed 28-3. It now goes to the Texas House for consideration. If it becomes law, hospitals in Cameron, Hidalgo and Webb counties would be able to leverage a self-imposed fee to access more federal funds under the federal 1115 Waiver program.

“S.B. 1623 is a unique and innovative way of coming up with a structure that does not cost taxpayers any money,” Hinojosa said, after his legislation was passed by the Senate. He said the legislation is “critical” for Hidalgo, Cameron and Webb counties because they do not have public hospital system. He said that because they do not have a public hospital system these counties do not have enough intergovernmental transfer funds to draw down all the federal funds that are available.

Hinojosa said hospitals in Cameron, Hidalgo and Webb counties serve the largest uninsured population in the United States. “In Hidalgo County alone, almost 40 percent of residents are uninsured, compared to 24% in Texas,” Hinojosa said.

In a news release, Hinojosa explained that the absence of a public hospital system is overcome under SB 1623 thanks to the creation of a “Local Provider Participation Fund.” This is a fund set up by the hospitals for services to outpatients.

“The hospitals would assess a fee on themselves based on each outpatient that is served,” Hinojosa said. He said his bill would prohibit the fee from being passed on to a patient. “That fee is put into the Local Provider Fund and used to draw down federal monies on a 60-40 match. It is a win-win situation because the hospitals also recapture the 40 percent they contributed,” Hinojosa said.

Hinojosa said that roughly $541 million in federal funds is available to hospitals in Cameron, Hidalgo and Webb counties to pay for uncompensated healthcare. However, he said a funding mechanism is needed to take advantage of this. Otherwise the money will be left sitting on the table in Washington.

"Health care is not a luxury, it is a necessity as our population continues to grow and age. We have to find ways to fund healthcare locally. I am proud of the bipartisan support that was shown in the Senate today for our Rio Grande Valley communities and recognizing that this legislation is critical for our hospitals to be able to treat our indigent population," Hinojosa added.

The three senators to vote against SB 1623 were Sens. Brian Birdwell, R-Waco, Craig Estes, R-Wichita Falls, and Ken Paxton, R-McKinney.

Hospitals in South Texas have helped Hinojosa craft his legislation. Their attorneys and lobbyists have engaged with the Health and Human Services Commission to make sure the legislation is acceptable to the Centers for Medicare and Medicaid Services. Hospital chiefs from across the Valley testified in support of Hinojosa’s bill when it was heard by the Senate Committee on Intergovernmental Relations.

“We are leaving $39 million on the table under the 1115 Waiver,” said Javier Iruegas, CEO of Mission Regional Medical Center. “If we can access that federal money it will not only go towards uncompensated care for the indigent but also projects that the community needs. So, we will be able to provide extra care.”

Iruegas told the Guardian that the 1115 Waiver program is a “great” resource. “Unfortunately, it does not hit every area of the state equally. South Texas is affected in a negative way and it has the greatest need. We are the ones being hurt the most. This is a way of leveling the playing field a bit,” he said.

Israel Rocha, an administrator at Doctors Hospital at Renaissance, said SB 1623 will serve as a “good bridge” until a local hospital district is set up. “Being the largest urban county in the country without a hospital district, it is something we have to look at. We are one of the largest uninsured regions in the nation. We have the highest percentage on Medicaid due to socio-economics. So, a hospital district is something we have to think about seriously. But, right now we cannot even consider it because of some of the limitations in place.”

Rocha told the Guardian that Hidalgo County is currently leaving more than $100 million on the table each year due to a lack of intergovernmental transfer options.

Manny Vela, CEO of Valley Baptist Health System, said his hospital is accessing about $10 million under the 1115 Waiver program but is leaving about $100 million on the table. “I do not want anyone to get the impression this is a windfall or gravy for the hospitals. This is the money that would be paid for services that have already been rendered,” he said.

Vela told the Guardian that passage of Hinojosa’s bill, along with a positive outcome in the negotiations over the Disproportionate Share program, is crucial for the survival of hospitals along the South Texas border.

“The passage of SB 1623 will allow us access to federal matching dollars. We have never had access to these funds at this level before. Valley Baptist has a cap of $100 million and we have been able to get $10 million in intergovernmental transfer funding from Cameron County. There are no additional sources in our county,” Vela said.

“Because we do not have a hospital district, we do not have tax dollars that will qualify as IGT dollars. Access to those federal dollars will allow us to expand upon the services we are currently offering as well as help fund the residency programs we currently have in place. So, it will help with the development of our medical school.”

The companion bill in the House is HB 3710. Its author is state Rep. Bobby Guerra, D-McAllen. The bill was heard by the House Committee on Public Health last week. It was left pending and may come up for a vote next week.