January 24, 2023
(Austin) – Central Health sued Ascension Texas (Ascension), formerly known as Seton Healthcare Family, Tuesday for failing to meet its contractual obligations to provide healthcare for Travis County residents with low income.
“We are out of options,” said Mike Geeslin, President & CEO of Central Health. “Ascension’s persistent failures to honor its contractual commitments left Central Health with no choice but to file a lawsuit to hold Ascension accountable for not providing adequate, equitable healthcare services for people with low income in Travis County. Their practices have caused real harm to the people we serve.”
History: City of Austin, Ascension, and Central Health
When it was formed in 2004, Central Health inherited the City of Austin’s relationship with Ascension, which was intended to help fulfill Central Health’s mission to care for Travis County residents with low income. As part of that relationship, Ascension operated University Medical Center Brackenridge Hospital and provided healthcare to Travis County’s safety-net population.
After Central Health was formed, it acquired the property on which University Medical Center Brackenridge sat; however, pursuant to a lease, Ascension continued to operate that hospital. Unlike other major urban hospital districts in Texas, Central Health has never operated a public hospital. Instead, it relies on Ascension to keep its long-standing contractual commitments to provide hospital and most specialty care to Travis County’s safety-net population.
Long-Standing Contractual Relationship Between Central Health and Ascension
Between 2004 and 2013, Central Health and Ascension worked together under a Safety Net Agreement to provide healthcare services to Travis County residents with low income. In 2013, Ascension recommitted to its contractual obligation to care for Travis County residents with low income, and it agreed that going forward, it would provide at least “the current levels of healthcare services,” including hospital and specialty care, that it had been providing. These renewed contractual commitments applied to patients enrolled in Central Health’s Medical Access Program (MAP), which is a health coverage program for uninsured Travis County residents with low income (MAP Patients), and to certain patients who are “financially indigent” or “medically indigent,” as defined by Ascension’s Charity Care Policy (Charity Care Patients).
Per the 2013 Safety Net Agreement between Ascension and Central Health, Ascension continued to receive compensation for providing care and participated in projects eligible for Medicaid 1115 Transformation Waiver funding. Ascension also received additional public funding. In addition, Ascension was permitted to affiliate with the Central Health-supported Dell Medical School at The University of Texas at Austin, as part of the development of the new teaching and safety-net hospital—Dell Seton Medical Center at The University of Texas at Austin. In operating Dell Seton Medical Center, Ascension is standing in for Central Health, as the local hospital district, in providing healthcare services to Travis County residents with low income. Thus, Ascension’s right to operate the hospital is conditioned on Ascension fulfilling its contractional obligations to Central Health.
Ascension Caring for Fewer Patients
Ascension’s own data shows that it has failed to provide healthcare services to MAP Patients and Charity Care Patients at the agreed-upon 2013 levels. In the 2022 contract year, Ascension served approximately 8,000 fewer patients in the hospital compared with the 2013 contract year, reflecting a roughly 21% reduction. Patient encounters also dropped. In the 2022 contract year, there were approximately 31,000 fewer patient hospital encounters (including inpatient services, outpatient services, and emergency room visits) compared with the 2013 contract year, reflecting a roughly 33% reduction.
Central Health alleges that Ascension’s failures apply not only to the overall levels of healthcare services, but also to numerous specialty areas, including general surgery, mammography, oncology radiation therapy, orthopedics, otolaryngology, podiatry, plastic surgery, pulmonology, and rheumatology.
“While Ascension substantially benefited from its contracts with Central Health, it failed to meet its commitments to us,” said Dr. Charles Bell, Central Health Board of Managers Chair. “Over the years, Ascension has cared for fewer and fewer patients and that’s neither acceptable nor contractually allowable. We reached a point where our only option was taking Ascension to court. We hoped it would never come to this.”
“We believe Ascension’s failure to provide agreed-upon healthcare cannot be explained by a lack of need in our community or by mere happenstance,” said Casey Dobson of Scott Douglass & McConnico, the law firm representing Central Health. “We believe it stems from Ascension reducing, capping, and eliminating services for MAP Patients and Charity Care Patients. The unfortunate reality is that many Travis County residents with low income who needed critical care from Ascension did not receive that care.”
The End of the Line: Pursuing Equity, Declarations, and Damages
Central Health and Ascension have been talking and negotiating for years to try and rectify the situation. Last week, Central Health and Ascension reached the end of their contractually required alternative dispute resolution efforts. When those efforts failed, Central Health had no other option but to seek court intervention.
In its lawsuit, Central Health asserts breach-of-contract claims against Ascension for the following things:
- Failing to provide agreed-upon healthcare services to low-income Travis County residents, both overall and in relation to several specialty areas;
- Failing to provide healthcare services to MAP Patients and Charity Care Patients on a nondiscriminatory basis;
- Improperly billing Charity Care Patients for healthcare services; and
- Not providing required reports that Central Health needs to monitor, on behalf of Travis County residents, Ascension’s compliance with performance standards.
Additionally, because Ascension’s failures are so consequential, Central Health seeks a judicial declaration that would entitle it to terminate agreements with Ascension and trigger Central Health’s option to purchase Dell Seton Medical Center.
“This option is not something we wanted to pursue,” said Dr. Bell. “But we have to do what is necessary to ensure that, in the future, this safety-net hospital will deliver the level and quality of care that Travis County residents with low income need and deserve.”
Central Health also seeks other declarations to resolve ongoing disagreements with and relating to Ascension. A copy of the complete Original Petition is available here.