This article was updated 12:21pm October 4, 2022, to reflect what the final order for a performance audit contains, and to replace the linked draft order with the final order.
The audit was ordered August 2nd but the final scope of work had to be approved
“It ain’t over till it’s over” is an oft repeated phrase first uttered by American baseball legend Yogi Berra. When he said that he was coaching the New York Mets in 1973 and his team was way behind in the pennant race. The the Mets went on to win the National League Pennant.
It turns out the same scenario applies to an important order passed unanimously by the Travis County Commissioners Court August 2nd, as the Bulldog reported. The motion called for an independent third-party audit of Central Health and the healthcare providers that agency hires to provide healthcare services for Travis County residents at or below 200 percent of the federal poverty level.
After that vote, all that was needed was for the staff to finalize the scope of work for the commissioners to approve. Then the county would issue a request for proposals to find qualified auditors and hire them.
But, as it turned out, it wasn’t over. The final scope of work had not been officially approved, despite the fact that the draft order approved August 2nd and the draft for the September 27th are similar.
Which is why the Commissioners Court had to dig into the matter again September 27th, when a new and improved version was back on the agenda.
Advocates again supported performance audit
The new version of the order was supported September 27th in public comments by pretty much the same cast of characters who advocated for the performance audit August 2nd. Prominent among them was retired State Senator Gonzalo Barrientos, who in 2003 coauthored SB 1905 with Jeff Wentworth (R-San Antonio). That legislation would have provided statutory authority to allow voters to authorize establishment of the Travis County Hospital District. Their bill did not pass but its provisions were made part of House Bill 2292, which did.
“My intent when we passed legislation nearly two decades ago was to pay for healthcare for people who could not afford it,” Barrientos said. “It does frustrate me it’s taken so long to come to this point.”
Others calling for approval of the order included longtime political consultant Peck Young (speaking on behalf of NAACP Austin President Nelson Linder); Frank Ortega, the immediate past director of LULAC District VII; retired Travis County Auditor Susan Spataro; and Cynthia Valadez, a Travis County appointee to the Central Health Board of Managers.
Attorney Fred Lewis, who was in North Carolina at the time, addressed the Commissioners Court via telephone to encourage approval. He said the proposed order for the performance audit was effective because it requires the auditors to focus on financial controls that Central Health has or doesn’t have related to its providers. This is a critical point because Central Health is not a healthcare services provider, per se, but an agency funded by property taxes that contracts and pays for care provided by others.
“Those financial controls are essential to ensure that taxpayer funds are being spent according to the law and efficiently and effectively,” Lewis said.
“The problem is that Central Health has entered into a number of contracts which are really greatly abnormal with its providers. I say that as someone who has looked at many insurance contracts. I used to head up insurance practices at the Attorney General’s office. Central Health contracts have no payor protections vis-à-vis the medical school and less than are normal regarding the other providers.
Records that Lewis said he obtained through discovery in a lawsuit against Central Health shows that the agency through Fiscal Year 2021 had transferred $233 million to the University of Texas Dell Medical School. Those records show that “73 percent of that money has been spent on administration and only 3.8 percent on clinical (care).…Those are the University of Texas medical school’s own descriptions of how they spent these funds.” (See accompanying graphic.)
“That’s why we need an audit where people can find out what the facts are from a neutral party and they can decide whether or not these expenditures are in line with what Central Health’s legal mission is and its purpose.”
Central Health honcho supports performance audit
The last person to address commissioners on this issue was Central Health President and CEO Mike Geeslin. He prefaced his remarks by saying his Board of Managers hadn’t had the opportunity to deliberate the scope of work involved and anything he said would be subject to redirection from the board. He said he had only briefly reviewed the proposal but wanted to offer suggestions to expand on—not substitute for—requirements in the order being considered. He called for:
2018 assessment scorecard—”[E]nsure that the independent third party actually presents a scorecard that measures us relative to our last performance review,” Geeslin said. He was referring to the Central Health Performance Assessment performed by Germane Solutions and Whitecap Health Advisors that was completed in January 2018. The Bulldog reported February 14, 2018, that the end result was presented to the Central Health Board of Managers by Germane Solutions Vice President Tracy Kulik. Even then, Central Health’s leaders were told the agency lacked financial controls. Concerning where funds flow, “there needs to be more of a mechanism that shows a return on investment,” Kulik said.
Whether performing mission—“Second, that the (auditors conducting the) independent performance review be qualified and able to look at some of the healthcare equity plan, the community needs assessment, and related work that we’ve done and is also currently underway. Because we would appreciate a third-party review as to whether or not our work previously performed and underway is consistent with creating a high-functioning healthcare system. In other words, performing our mission.”
Compare to peers—Geeslin wants Central Health compared to other hospital and healthcare districts.
“This is part of getting better. It is part of fulfilling our mission. And we look forward to working on this project and doing everything that we can legally do to assist and support and ensure that it is successful,” Geeslin said in closing.
Commissioners again approve
Before voting on the matter, the commissioners went into executive session with their attorney lasting more than three hours. During the closed-door session the commissioners made changes to the draft order that was posted with the agenda. Then, after reconvening in open session the Commissioners Court voted unanimously to approve the edited order. (The final version of the order, which had to be signed individually by each member of the court before being filed with the county clerk, was not publicly available when this article was published. It will be uploaded and linked when obtained.)
What’s in the order?
The draft order specifies at length what the audit would accomplish.
The Commissioners Court ordered a comprehensive independent performance audit because of public concerns. The order notes that contractual provisions that might prevent Central Health’s access to healthcare providers’ records do not apply to the Commissioners Court, which has statutory financial oversight authority to obtain records.
The county’s Purchasing Office will present a list of audit firm candidates qualified to do the work to the Commissioners Court and prepare a contract for services for court approval.
Central Health is to pay for the performance audit, the cost to be offset somewhat by cancelling an assessment that Central Health itself would oversee, previously scheduled for 2023. Auditors will be directed by and report directly to the Commissioners Court. They are to have full access to necessary records but must maintain confidentiality of privileged records.
The auditor’s qualifications are specified in the order, to include being free from conflicts of interest that might arise from its work for or relation to any of the organizations involved.
The scope of work would include assessing:
- How well providers have served the healthcare needs of Travis County’s medically indigent,
- The integrated delivery healthcare system,
- Central Health’s Health Equity Assessment and Health Equity Plan,
- Central Health’s financial accountability procedures and controls,
- Central Health’s public transparency,
- The amount and type of healthcare services Dell Medical School provides to the medically indigent in return for the $35 million annual transfers that Central Health makes—$280 million through Fiscal Year 2022.
- The appropriateness of the records Dell Medical School maintains pertaining to financial accountability and statutory compliance for these funds, and Dell Medical School’s reporting to Central Health and the public to ensure financial accountability and statutory compliance.
- Performance metrics for Central Health and its providers.
- Compliance with applicable laws.
The auditors shall immediately report to commissioners any ongoing violations of the law or any lack of cooperation in carrying out the performance audit.
When the work’s completed auditors would provide written reports of findings and recommendations to correct any problems in accounting, operations, management or other practices. That would include identifying significant deficiencies in internal controls that would adversely affect Central Health’s ability to fulfill its statutory responsibility and comply with the law.
All reports prepared by the auditors would be made public.
What can Central Health ‘legally do’?
Geeslin’s closing remarks, stating that Central Health would do “everything that we can legally do” to facilitate the performance audit, suggests there may be legal limitations on what auditors can do in carrying out the scope of work in the performance review.
To find out more about what Geeslin meant, the Bulldog asked Central Health via email September 28th, “What legal obstacles does Central Health foresee might be involved in carrying out this performance audit?”
Ted Burton, Central Health’s vice president of communications, replied via email September 29th, “We will do whatever we can that’s legally permissible to make the audit successful.
“We believe the Commissioner’s Court shares our commitment to creating a high-functioning healthcare system for people in our community that rely on Central Health to access the best possible care. We cannot lose sight of that vision.”
To which the Bulldog replied, “Since you know you didn’t answer the question, I’m guessing that’s all you say?”
Burton reiterated, “Yes, that’s our response.”
Trust indicators: Ken Martin has been doing investigative reporting in the three-county Austin metro area since 1981. His aggressive reporting twice garnered first-place national awards for investigative reporting. Both of those projects resulted in successful criminal prosecutions. His 2011 investigation of the Austin City Council’s open meetings violations triggered a 20-month investigation by the Travis County attorney that resulted in the mayor and council members signing deferred prosecution agreements to avoid being charged, tried, and if convicted serving one to six months in jail and forfeiting their elective offices. See more on Ken on the About page. Email [email protected].
Central Health Performance Assessment, January 2018 (42 pages)
Related Bulldog coverage:
Commissioners opt for tougher Central Health audit, August 3, 2022
New documentary takes aim at diversion of indigent healthcare funds, November 15, 2021
Lawsuit challenges Central Health spending, October 18, 2017