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Texas hospitals prepare to pick up the tab for uninsured COVID-19 patients as federal funds dry up

Providers in Texas, which has the lowest rate of insurance coverage in the nation, have gotten some $1.8 billion in federal help for uninsured patients.
Credit: Annie Mulligan

More than $3 billion in federal money has flowed to Texas health care providers in recent months to help pay for COVID-19 treatments, tests and vaccines for patients without health insurance, according to national health officials.

Of that, a tiny fraction — some $2.2 million — went to the local independent hospital in rural Titus County for treating patients during wave after overwhelming wave of the devastating virus in an area where 1 in 3 residents are uninsured.

But the 174-bed Titus Regional Medical Center in northeast Texas needed every penny it could get as it struggled to cover the sudden, skyrocketing expenses of the pandemic: paying staff competitive wages to keep them on the job, keeping up with federal safety rules and managing record-breaking numbers of patients pouring into in the intensive care unit from a 150-mile radius, said CEO Terry Scoggin.

Now, after sending some $19 billion to hospitals and other health care providers nationwide, the fund known as the Health Resources and Services Administration COVID-19 Uninsured Program — created to help hospitals like Titus Regional pay for the care of uninsured COVID patients — has dried up.

While the halting of funds comes as Texas has seen infection numbers fall dramatically, the virus is still largely uncontrolled, causing surges and lockdowns in other countries. In the past, those surges abroad have always occurred before new cases rise again here in the United States, including Texas, which has more uninsured residents than any other state.

The failure to renew the program in time to continue reimbursing providers means that hospitals, clinics, private practices and others that don’t get public health funding from the state will have to “eat the cost” if they don’t charge for COVID-related services, Scoggin said.

“It’s a huge issue for us because we have so many adults who are uninsured,” Scoggin said. “And so it was kind of a kick in the gut for us when they shut that program off because I thought it was a good use of funds for the COVID piece.”

RELATED: Yes, federal coverage of COVID-19 testing and treatment for uninsured Americans has ended

Refusing care to those patients who can’t pay is not an option, legally or morally, he said.

“We can’t turn people away, so we’re still going to pay for it,” Scoggin said. “It just shifted the expense of the uninsured from federal funds to individual hospitals.”

Throughout the pandemic, the federal government has used tax dollars to alleviate the cost of COVID response on government and health care providers.

Much of that assistance has come through the direct purchasing of tests, vaccines and treatments that are then distributed to providers at no cost to them, allowing them to provide care at no cost to the public while still being able to cover their operating budgets during the onslaught of patients.

It’s also come in the form of the HRSA reimbursements to state providers to cover a portion of the cost of treating uninsured COVID patients, as well as administering tests and vaccines.

In Texas, providers have received some $1.8 billion for the treatment of uninsured COVID-19 patients, according to the U.S. Centers for Disease Control and Prevention.

RELATED: Moderna announces step toward updating COVID shots for fall

Texas has the nation’s lowest rate of insurance coverage and is one of 11 states that have chosen not to expand Medicaid coverage to include more adults living in poverty. The percentage of Texans covered by that government insurance program is just over half the national average.

The cost of treating a COVID-19 patient goes far beyond the cost of the actual therapy, with so-called “wrap-around infection control” measures that include isolation wings inside a facility and personal protective equipment like masks, as well as other costs.

Recent studies have shown that the cost of treating one COVID patient on an outpatient basis averages more than $1,200. Put that patient on a ventilator in the ICU, and the cost can go up to $300,000.

In March, just weeks after some hospitals saw record-breaking numbers of people hospitalized with COVID-19 in Texas and other states, the U.S. Centers for Medicare and Medicaid Services announced that claims for uninsured patients being treated or tested for coronavirus would no longer be accepted and that prior claims would be filled as funds became available.

In April, vaccines for uninsured people were also excluded from reimbursement, and the federal government has said there is no more money after the current supply of tests, treatments and vaccines runs out if Congress doesn’t act.

An attempt by the White House to add billions more to the program has become a casualty of political arguments in Washington over the use of tax dollars to respond to the pandemic.

Health care experts say that the impact of that could include fewer independent or private providers offering some of the services they could previously have been reimbursed for, which could reduce access to care in underserved areas. And it could mean those providers are no longer willing or able to take on overflow from safety net hospitals in the event of another surge.

It puts the squeeze on teaching hospitals and rural providers like Titus Regional, which offers those treatments regardless of a patient’s ability to pay.

“Whichever way providers respond, the result will likely be reduced access for uninsured patients in most states due to more limited provider access and/or potential out-of-pocket costs,” Kaiser health researchers said in a recent analysis of the announcement.

The halting of the program hints that U.S. lawmakers are ready to shift the responsibility for pandemic response back to the states and local providers — even as hospital officials and national health leaders warn of the continuing toll the pandemic is taking, waning vaccine efficacy, new variants and the potential for a fall surge in infections.

“The funding was great but came up well short of the need,” said Carrie Williams, spokesperson for the Texas Hospital Association. “The pandemic’s impact is far from over for hospitals. We’re left with staffing shortages and soaring labor and supply costs. We’re vulnerable, especially if there is another surge.”

The death of the COVID-19 reimbursement program, if it stays dead, is a clear indicator that those in charge of the money don’t understand that the pandemic battle continues for health care providers, advocates say.

“Hospitals that provide essential community health services have disproportionately treated uninsured COVID patients during previous surges of the virus and will be on the front lines not only of any … future spikes in cases and hospitalizations, but also community testing since most communities have shut down their testing sites,” read a recent statement from the Teaching Hospitals of Texas, urging Congress to fund the program again.

Right now, there hasn’t been a patient hospitalized at Titus Regional with COVID in a week, Scoggin said.

But the majority of residents in Titus and surrounding counties still aren’t fully vaccinated. Only a small percentage have booster shots. The numbers of new cases are still low, but they’re starting to tick up, slightly.

The idea that an uninsured local resident could get COVID-19, wind up on a ventilator and require $100,000 worth of treatment they can’t pay for is not an unlikely scenario, Scoggin said.

And while uncompensated care reimbursements for providers are still available through other funding streams, as they have been for years, the addition of COVID-19 to the mix just means more competition for fewer dollars to help pay for an especially expensive illness, he said.

“We’ve taken care of our community throughout COVID and we’re going to continue doing it, but this is just another unfunded mandate by the federal government,” Scoggin said. “It’s just a question of how many of these mandates can you handle? That’s the hard part.”

Disclosure: The Texas Hospital Association has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here. 

This story comes from our KHOU 11 News partners at The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans - and engages with them - about public policy, politics, government, and statewide issues.

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