Second effort to find Central Health auditors

HomeCentral HealthSecond effort to find Central Health auditors

Lack of response caused Travis County to issue another solicitation

In response to concerted pressure from groups alleging that Central Health lacked sufficient financial controls and accountability, the Travis County Commissioners Court in September voted to approve a scope of work for an independent third-party performance audit of the agency.

Central Health is solely responsible for providing healthcare services for residents below 200 percent of the federal poverty level. For that purpose it will collect $281.6 million in property tax revenue, according to its 2023 budget, while also sitting on reserves of more than $366 million.

A 40-page Red Flags Report presented to commissioners goes into deep-dive detail about the agency’s alleged shortcomings, including its failure to account for Dell Medical School’s use of $280 million in funding, amounting to an unconstitutional gift of public funds. The report claims Central Health lacks sufficient accountability and public visibility for money paid to third-party providers CommUnityCare, Community Care Collaborative, and Ascension Seton.

In carrying out the Commissioners Court’s order, the Travis County Purchasing Office issued Solicitation 2209-014-BB in October 2022 and called for responses by November 15th. In that document, the proposed timeline for the audit called for starting work in March 2023, completing work by the end of July (about five months) and making a final presentation to the Commissioners Court in early August 2023.

No submissions were received so the Purchasing Office issued a new Solicitation 2301-004-BB January 18th. The deadline for interested firms to respond is 2pm February 22nd.

Margaret Gomez
Margaret Gomez

Commissioner Margaret Gomez, who was involved in devising the scope of the performance audit, told the Bulldog, “I’m hoping we see a better response that what we got last time. I expect when the deadline closes I’ll get a report on responses.”

The Solicitation calls for work to begin in May 2023 and be completed by the end of November 2023 (about seven months), with a final presentation to the Commissioners Court by January 2024. Unlike in the first solicitation, the county will allow alternative timelines to be submitted. That would give interested auditors an opportunity to take more time to do the work and schedule its efforts to fit with other projects.

It’s not a hopeful sign that none of the firms that received the solicitation called to participate in a pre-response conference Thursday morning.

Fred Lewis

Attorney Fred Lewis was a leading critic of Central Health in bringing about the order for a performance audit. He wrote the Red Flags Report on behalf of LULAC and the NAACP. He is also involved in the 2017 lawsuit against the agency that is pending resolution. He told the Bulldog he believes requiring submissions from auditors by February 22nd does not provide enough time for interested firms to prepare responses, especially after the first solicitation drew no interest.

Audit would add pressure

While the performance audit is aimed at improving Central Health’s operations and especially its financial controls, it’s coming to the fore at a time when Central Health is engaged in a legal firefight with Ascension Seton.

As the Bulldog reported January 25th, these two have sued each other over disputes about the how many within Central Health’s patient population are being treated by Seton and how much Central Health should be paying for that care. Central Health is claiming Seton has breached its contract and aims to exercise its option to take over the Dell Seton Teaching Hospital.

The New York Times published a story December 15th that said Seton’s parent company, Ascension—one of the country’s largest healthcare systems—ignited a staffing shortage by cutting jobs in search of higher profits, leaving it flat-footed when the pandemic hit. “It spent years reducing staffing levels in an effort to improve profitability, even though the chain is a nonprofit organization with nearly $18 billion in cash reserves,” the story states.

Nelson Linder

NAACP Austin President Nelson Linder told the Bulldog that all this wrangling locally between Ascension Seton and Central Health “is a classic case of ineffective government and a reflection of how African Americans and Latinos are treated in Travis County. It is very clear that there is no urgency to uncover and disclose the wrongdoings here that have been a tremendous failure to the taxpayers of Travis County. The fact that these two entities are going to court is an admission that the needle is moving closer to full disclosure.

“Our concern is that the Travis County Commissioners Court must accept the responsibility of ensuring that while Central Health and Ascension Seton are displaying obvious cracks in their armor, the voters and taxpayers who bear the burden of this government promise and failure are still experiencing inadequate healthcare, shorter life expectancy, and abandonment by local elected county officials.”

Scope of work in the audit

Central Health is the sole government agency responsible for providing healthcare services to Travis County residents at or below 200 percent of the federal poverty level. It provides little or no healthcare services itself but instead pays other providers to deliver the necessary care.

The scope of services called for each in each of the two solicitations is identical, and involves a dozen deliverables, including assessments of:

  • How well Central Health and its providers have served the needs of poor people and how its performance compares to similar hospital districts.
  • Central Health’s financial accountability.
  • Central Health’s transparency and quality of its public information.
  • Amount and type of healthcare services provided by Dell Medical Center to medically indigent patients in return for $35 million a year it gets from Central Health.
  • Records Dell Medical School maintains and the school’s reporting to Central Health and the public for financial accountability.
  • Compliance with applicable city, state and federal laws.

The auditor is to provide a written report of findings and recommendations, reportable conditions found, and any violations of law. These reports “shall be public and reported to the Commissioner’s Court.”

For greater detail about the scope of work see pages 13-14 of the Solicitation.

Attorney Lewis said he sees errors and omissions in the scope of work. Instead of asking for auditors to compare Central Health’s performance to similar hospital districts, he said the audit should take a broader view and encompass public hospitals across the country and other analogous healthcare programs for the poor, such as those provided by Federally Qualified Health Centers.

He said the applicable statute for analysis of the amount and type of healthcare services provided by Dell Medical School should be Texas Health and Safety Code Section 61, not Section 281, as cited in the scope.

How respondents would be evaluated

Submissions will be evaluated by county staff and presented to the Commissioners Court for consideration and possible approval of a contract.

Evaluations will be based on a 100-point scale: 30 points for experience with compatible projects, 30 points for the technical approach in conducting the audit and providing deliverables, 30 points for professional qualifications of the personnel to do the work, and 10 points for the proposed cost.

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].

Related documents:

Solicitation 2209-014-BB, October 2022 (50 pages)

Solicitation 2301-004-BB, January 17, 2023 (54 pages)

Travis County Commissioners Court Final Order for an Independent Performance Audit of the Travis County Healthcare District, September 27, 2022 (3 pages)

Related Bulldog coverage:

Central Health seeks control of Dell Teaching Hospital, January 25, 2023

Watson circumvented law to fund new medical school, November 1, 2022

Commissioners order Central Health performance audit, again, October 3, 2022

Central Health’s quest for Medical School accountability blocked by 2014 agreement, August 5, 2022

Commissioners opt for tougher Central Health audit, August 3, 2022

Central Health critics ramp up pressure ahead of vote on audit, July 25, 2022

Central Health’s $35 million payments to Dell Medical School an unlawful ‘gift of public funds’ that exceed statutory authority, June 30, 2022

New documentary takes aim at diversion of indigent healthcare funds, November 15, 2021

Lawsuit challenges Central Health spending, October 18, 2017

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