EDINBURG — Just as the University of Texas Rio Grande Valley reached the goal of being recognized as a Health Related Institution by the state for its new School of Medicine, the moment turned bittersweet as the perks of the designation are at stake statewide.
EDINBURG — Just as the University of Texas Rio Grande Valley reached the goal of being recognized as a Health Related Institution by the state for its new School of Medicine, the moment turned bittersweet as the perks of the designation are at stake statewide.
“It was a great thing to have the medical school created and it’s now though at a time when the budget is strained and that there are a lot of cost-savings being placed that are going to impact our ability to really become self-sufficient,” Veronica Gonzales, UTRGV vice president for governmental and community relations, said.
As state officials seek to find middle ground for the battled budget for the next biennium, there has been another clause introduced that could harm many medical schools and other healthcare institutions.
The clause, or rider, was introduced into the special provision section having to do with formula funding for healthcare providers considered HRIs. This funding is sought after by healthcare institutions as it secures special formula funding, but they must meet certain criteria specified in these riders.
Under the current rider, healthcare institutions are able to negotiate higher rates with private insurance companies than the rates granted to federal programs such as Medicare or Medicaid. This would allow them to get extra revenue from the private companies, but the new rider asks for the same low rates to be provided when treating patients under the Employees Retirement System.
“Already in the Rio Grande Valley, so many of our patients are under Medicare and Medicaid, and very little private pay,” Gonzales said. “If we can’t negotiate what the third-party administrators for a higher rate, then we are receiving less revenue for our medical school.”
Because this would be the first time UTRGV receives such funding, the impact is yet unknown but it would not be as harsh as at established institutions, Gonzales explained. But the concern is that the university, like all others, would lose their bargaining power as third party administrators would know they need to meet certain guidelines.
“If they know that you are going to lose formula funding if you don’t comply then the insurance company would have no incentive to negotiate anything higher than the Medicaid rate,” she said. “For us, we are at the start so our hope was that we would be able to negotiate a higher rate than the Medicaid rate because this is revenue that we would operate off of.”
In the case of UTRGV the School of Medicine would use this revenue to get programs off the ground and grow current programs. The school is still requesting funding as a special item, since at less than a year in existence they don’t have a full cohort of students to get regular funding.
This special funding is also in danger as the Senate proposed budget is doing away with all special items and proposing to fund UTRGV School of Medicine at just under $25 million, while the House is proposing funding at about $55 million. The university requested $70 million, including special item funds, but now it’s up to legislators who must finalize spending plans in conference committees.
Other HRIs have seen only about a 2.5 percent budget cut, and Gonzales said one of their pleas to legislators is to treat UTRGV School of Medicine like every other healthcare institution. At a 2.5 percent cut, the university would be looking at about $59 million in funding.
Gonzales and UTRGV President Guy Bailey have been traveling to Austin practically on a weekly basis, meeting with legislators to convey the need to support the startup institution.
“We’ve actually told them ‘At the $40 million level this is what happens, at the $52 million level this is what happens,’” she said. “And what happens is that it would delay some residency programs, it would possibly stop current residency programs and we are afraid that anything under the mid 50s would raise the eyebrows of the accreditors.”
The school of medicine has received the initial accreditation, but after a few years they must be reviewed again to receive the permanent accreditation designation. The accrediting agency, Liaison Committee on Medical Education (LCME), looks at stable funding as one of the points to grant this designation so the struggle to receive state funding might not sit well under review.
Gonzales said the fear is not that they would lose accreditation, but that it could take longer to receive permanent accreditation on top of having to cut programs.
For now, not much can be done but to wait for the committees to make their decision, Gonzales said there’s a big push in Austin by many university and other healthcare institution officers to consider the damage that this rider would create on top of the already expected budget cuts.
“We are constantly informing our own legislators of the impact,” she said. “We know this is a very tight session and there is a lot of different interest that are going to the table and saying ‘We need money’… but our part of the state is a part of the state that is growing and it’s one that really needs to prosper and if you take away a lot of the funding you really impede the ability to do that.”
