HB 2300 will raise your taxes and decrease your access to medical care

March 22, 2017

Representative Mike Schofield has introduced House Bill 2300 (HB 2300), titled Relating to the recovery in a civil action of medical or health care expenses as economic damages. This bill seeks to limit payments to hospitals and emergency room physicians for treating patients injured in automobile collisions. Simply put, the net effect of HB 2300 is to remove a major source of revenue from Hospitals to increase automobile insurance companies' profits, at the expense of Texas taxpayers, and to the detriment of all Texans' health. This bill is a bad deal for hospitals, emergency physicians, patients, and property tax payers.

There is a funding crisis in emergency rooms throughout the United States, and especially in Texas, where emergency departments are already on life support

It is a full-blown crisis. Threatening the economic viability of hospitals throughout the state and the safety and welfare of every citizen. According to the American College of Emergency Physicians ("ACEP"), the most pressing economic issue confronting emergency medicine today is "uncompensated care." As ACEP most recently described the diminishing revenue for emergency care facilities: "the lack of adequate reimbursement for emergency care has led to the closure of hundreds of emergency departments."

The Texas Hospital Association ("THA") has echoed the danger of diminishing reimbursement rates for emergency medical providers and hospitals in Texas. As the THA's website explains: "Texas hospitals annually bear more than $330 million in uncompensated trauma care costs."

Insurance Payments from Negligent Motorists Provide a Critical Revenue Stream for Texas Hospitals

One way Texas Hospitals offset their losses from uncompensated trauma care services is through third party payments by automobile insurance companies whose insured driver has caused a victim to undergo emergency medical care at a hospital. If the victim does not have health insurance, hospitals routinely collect well in excess of the comparatively paltry Medicare and Medicaid rates from the at fault driver's insurance company. Isn't that what automobile insurance is for? To pay out economic losses incurred by a victim and their medical providers for necessary medical treatment that was imposed on the victim and the hospital as the result of a negligent motorist?

HB 2300 would force a hospital and its medical providers to accept payment for their services at a rate that most private healthcare practitioners would never consider accepting. But unlike private medical providers, hospitals don't have an option as to what patients they treat based on reimbursement rates. That's why any source of revenue for patient care services is critical to their survival.

When a drunk driver causes a collision that requires a hospital and its doctors to provide the victim medical services at a cost of $50,000.00, HB 2300 would slash payment of those services to Medicare or Medicaid rates. That could reduce the Hospitals payment from $50,000.00 to $2,000.00. Why should the drunk driver's insurance company be permitted to dictate the amount of money a hospital can be paid for providing emergency services?

That is what HB 2300 will do. As it stands now, the hospital in the drunk driver case can file a lien to protect its right to reimbursement for the value of its services-or $50,000.00. If the drunk driver had automobile insurance, the hospital has the first right to the proceeds from that insurance policy. This is money the hospital needs. For staff, doctors, equipment, and even capital improvement projects that increase the level of patient care for all Texans.

House Bill 2300 will cost Texas Hospitals millions of dollars, simply for the benefit of Automobile Insurance Companies

Cases like the one cited above are not infrequent and are a significant source of revenue for emergency care facilities throughout our state. In just one example, at Ben Taub Hospital in Houston, third party settlements like the one HB 2300 seeks to prohibit have resulted in payments of $7,788,000.00 in fiscal years 2014 and 2015.

If HB 2300 passes, that $7.8 million paid to Ben Taub is reduced to less than $1,000,000.00. For the benefit of Automobile Insurance companies. What could Ben Taub do with an additional $6.8 million that HB 2300 will take away? How many staff members could Ben Taub hire? How many EKG machines could it purchase? How many attending physicians could Ben Taub have available to treat everyone that comes through its doors? How many physicians and staff members will Ben Taub be forced to lay off because of the funding that HB 2300 will eliminate from its budget?

Ben Taub in Houston is already underwater. As the Houston Chronicle recently reported:

Harris Health (Ben Taub) is operating at a loss this year and had to cut staffing and services to limit the deficit to $14 million. The health system projects a $45 million deficit for next fiscal year, beginning March 1, despite a projected increase in property tax revenues that provide the bulk of its funding. Last year the system recorded nearly 36,000 hospital admissions and 1.8 million outpatient clinic visits. See the link here.

Ben Taub has already been forced to eliminate certain services, has been unable to purchase important medical equipment, and has been unable to afford the nursing and medical professionals required to treat Houstonians in need of their services. See the link here."Public hospitals are already underwater, and Ben Taub is underwater deeper than most." Says George Masi, president and CEO of Harris Health, which operates Ben Taub.

Ben Taub hospital is used here because of the ease of accessing its audited financial statements. But make no mistake: HB 2300 would have the same disastrous financial impact on similar hospitals throughout our state.

These hospitals are underwater right now. And just like a thunderstorm after a flood, HB 2300 will make sure they stay underwater.

House Bill 2300 will force Texas taxpayers to pay even more in property taxes to make up the resulting deficits

Emergency Departments at Hospitals from Abilene to Yoakum and everywhere in between, will be permanently-and perhaps fatally-wounded if HB 2300 passes. The need for funding emergency care is so profound, and the reliance on property taxpayers so great, that Counties across the State are forced into a Hobson's choice: fund hospitals or build infrastructure. The need for funding for emergency care facilities is too great to ignore, and it creates a ripple effect across the State where resources are already stretched too thin. As Harris County Budget Officer Bill Jackson has stated regarding the limited resources available due to increased financial needs of hospitals: "If they [Hospital Emergency Departments] are to supply the same amount of services to a growing population, they need more money." "The question is if Harris County, the property tax holders, just continue to write a check, we're not going to have money for roads. It's all a matter of priorities."

If the hospitals are to recover the funds that will be lost (to the pockets of automobile insurance companies) as a result of HB 2300, where will those funds come from? The most logical answer-if there is one-is increasing revenue from property taxes. I urge you to think about the impact this will have on you. Even if you have never been injured by a reckless driver and have never been to the emergency room, HB 2300 still hits you in the pocket book. Transferring money from you directly to the coffers of big insurance companies.  

CEO Masi put it bluntly regarding hospital deficits and property tax increases: "So every resident in Texas and in particularly Houston is getting pumped because of the decisions that are being made," Masi said.

HB 2300 is a bad deal for Texas. It is a theft from the hospitals that provide care to all of us, for the benefit of the automobile insurance industry. It will increase property taxes and decrease the quality of care in our emergency rooms. All for the benefit of a drunk driver's insurance company?

Call your State Representative TODAY and tell them you are not going to get "pumped" for big insurance companies. Here is an easy link to find your State Representative.

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