HARLINGEN, RGV – Carlos Zaffirini, Jr., a consultant who advises South Texas safety net hospitals, thought he had found a way of accessing millions of additional federal dollars to offset the uncompensated healthcare his clients provide border residents.

However, Zaffirini says an unexpected “informational bulletin” issued by the Centers for Medicare & Medicaid Services (CMS) has “upended” a Managed Care Organization (MCO) Pass Through pilot project he was working on for border hospitals from Eagle Pass to Brownsville.

Zaffirini, a native of Laredo who has offices in Austin, Texas, and Washington, D.C., said the pilot project he was working on had the blessing of Governor Greg Abbott’s Office and the state’s Health & Human Services Commission. Had CMS approved the pilot program, “it would most probably have doubled the supplemental payment dollars coming back to the South Texas border region,” Zaffirini said.

Carlos Zaffirini, Jr.
Carlos Zaffirini, Jr.

Zaffirini spoke about the project in an in-depth interview with the Rio Grande Guardian at Harlingen Medical Center last week. Earlier the same day he spoke at a Hidalgo County Commissioners Court meeting, explaining the CMS bulletin.

“We had started the development of a new project, called a Managed Care Organization (MCO) Pass Through, and proposed a pilot program for South Texas in May,” Zaffirini said in the interview.

“Governor Abbott and the Health & Human Services Commission were helpful with it. Their staff was tremendously helpful in submitting the request to the federal government. We had not formally heard back from CMS on the pilot project but have received feedback in the form of an informational bulletin which pretty much says we cannot pursue new MCO Pass Throughs anywhere in the United States.”

Zaffirini said he explained the latest development to Hidalgo County Commissioners.

“I want to work with Hidalgo County Commissioners Court to find a way to better support our regional safety net hospitals. Our region includes Maverick, Webb, Zapata, Starr, Hidalgo, Cameron and Willacy counties,” Zaffirini said. “We have a problem right now in that there is not sufficient funding to support the high volume of Medicaid non-insured costs that our safety net providers have to face every year. Right now we project about $112 million of uncompensated care for the region but we are only able to access about $40 to $50 million to offset those costs. That is just Hidalgo County. Across the region it is probably closer to $200 million to $300 million a year. We are only finding ways to access a very minimal amount.”

Asked how big a blow CMS has dealt South Texas safety net hospitals, Zaffirini said: “It is a very awkward outcome but the question becomes, if we can’t do that how do we find a way to be positive and better fulfill the vision of what the federal government wants us to do, along with the state.”

Zaffirini said he will be suggesting “a couple of new programs” that will have rate enhancements for the safety net providers in South Texas. “Hopefully, we can find a positive way that offsets these costs and helps our safety net providers better serve the patients in our community.”

Asked who is saying his clients cannot pursue a Managed Care Organization(MCO) Pass Through pilot project, Zaffirini said: “CMS released an informational bulletin that pretty much upended the pilot project that we were pursuing. The folks over there, I have worked with them, they have good intentions. But, I think that sometimes there are unintended consequences that disrupts the positive intentions of a region. They probably overlooked what would happen here. It is disappointing because you are talking about a part of the state, one, where I am from, so it is somewhat personal to me, and, two, places like Starr County Memorial Hospital that are in desperate need of money and have a tremendous burden in providing care for their community.”

Zaffirini said that in his opinion, some healthcare officials in Washington, D.C., forget that there is only one public hospital along the U.S. side of the Texas-Mexico border region. That hospital is in El Paso.

“From El Paso, at the tip of West Texas, to Brownsville, at the tip of South Texas, there is only one public hospital. If you are in Brownsville, you are not going to El Paso. It is not going to happen. I think, often times, the folks in D.C., do not understand the geography. At least some of the folks, I do not want to be too cynical. I know that Congressman (Filemon) Vela and Congressman (Rubén) Hinojosa and some of our other friends in Congress do a tremendous job fighting for healthcare in our region and to the extent that we can look for their support, I know that they will be there, in making sure we get what we need in D.C.”

Asked when he learned his MCO Pass Through pilot project had been upended, Zaffirini said: “We learned that as part of the final Medicaid Managed Care Rule, MCO Pass Throughs were permissible and then about a month later we learned via an informational bulletin that we could not do new MCO Pass Throughs. It was difficult for me to explain to the Hidalgo County Commissioners that you could have a rule upended by a bulletin. It is disappointing but, again, I think it is unintended consequences here. We are looking to pivot and find a positive way to better serve patients in the region.”

Asked how far along the road to developing the pilot project he was, Zaffirini said: “We were pretty far down the road. The request had gotten to CMS. We met with HHSC and the Governor’s Office and they were tremendously helpful, Commissioner Smith, Commissioner Traylor before him, the Governor’s Office, Kara Crawford was great, Drew Deberry was great. It was very positive. I have got to say, they were very responsive to the requests of the local delegation, very thoughtful about how they pursued this. It had just gotten to CMS and it was a bit funny because the rules don’t put a timeline on it but they became effective July 6, 2016. They said if you do not have an MCO Pass Through by July 6, 2016, then you cannot do a new one. In other words, dinging everything and it is very frustrating.”

What makes matters worse, Zaffirini said, is that CMS gave other states “a ten-year runway” to develop their pass through programs.

“Other states get ten years but South Texas cannot access a dollar. As an advocate for the safety net providers, you are left confused. I do not know Vicki Wachino, the director in charge of this, but everything you read about her, she is a tremendous advocate and somebody that believes in the things I believe in. I am confused. Hopefully, we find a way to better serve and get that from CMS.”

Vicki Wachino is CMS director for Medicaid and CHIP Services. Last month she said creating a new payment plan through a pass through arrangement would “exacerbate a problematic practice that is inconsistent with statutory and regulatory requirements, complicates the required transition of pass-through payments to permissible provider payment models and reduced managed care plans’ ability to effectively use value-based purchasing strategies and implement provider-based quality initiatives.”

Her bulletin noted that CMS will have “future rulemaking” that will limit pass through payments to those already in place as of July 5, 2016.

Asked where the South Texas safety net hospitals go from here, Zaffirini said: “In Hidalgo County Commissioners Court we talked about going to the rest of the border delegation, the rest of the border region, and regrouping, in order to find a way to solve this problem. We think we have a couple of ideas that could work but, as you know, sometimes putting regional partnerships together is challenging. Hopefully, this becomes a more positive relationship, from Cameron County all the way to Maverick County because we are going to have to work together if we are going to solve it.”

Acknowledging that some Hidalgo County Commissioners were left confused by the latest developments, Zaffirini said: ‘It is a thankless position to be in where you have rolled something out that you said was permissible and you put your credibility on the line and then have that confused by a couple of other comments. Although no decision was taken, commissioners expressed their desire to pass a resolution in favor of bringing together all the counties in order to build a delegation that would go to Austin and D.C., in order to find a solution. It is too important. It is too important to our safety net hospitals not to do something about this.”

Asked if the existing plan that he helped develop is still in place, Zaffirini said: “The original program we set up five years ago is still very much in place. It is functional. It has been tremendous in helping develop a delivery service for projects, about $600 million in increased access here. And, frankly, that would not have happened without the leadership of CMS and the State of Texas. There is no question about that. We got that. That was good. But, certainly, we wished that we could have had this other concept so we could do more and serve more. We were trying to take this to the next level.”

Asked if the hospital chiefs for safety net hospitals in South Texas have been left devastated by CMS’s decision, Zaffirini said: “I think everybody is trying to be optimistic in finding a way to get to where we were going to be. Maybe things have gotten a little bit more complicated, maybe it is a step removed from what we originally thought we could do but we are going to find a way to get there. We just need the continued support of our legislative delegation, of the visionary hospital leaders we have in South Texas, and of the federal government.”

Asked why the residents of South Texas border counties should care about this, Zaffirini said: “In order to have access to care and for people that are unable to access care because they do not have insurance, the indigent, you have to have supplemental payment programs to help support the services that are provided to the community. Without those services, without those supplemental payments, those services are harder to deliver. Every hospital in the region always fulfills its mission of serving but it sure helps to have the support of these supplemental payments.”

Editor’s Note: The main image accompanying this story shows Starr County Memorial Hospital in Rio Grande City, Texas.