New Rabbit, Same Hat

In 2007 the tax payers of El Paso passed a $120 Million bond to establish an independent and separately licensed Children’s Hospital.  At the time, it was decided to build the El Paso Children’s Hospital on the UMC campus and to employ a Hospital-Within a-Hospital (HwH) concept. However, if the rules of the HwH model are not followed, EPCH could lose some of its funding from Medicare and Medicaid which would no longer make it viable and it could lose its separate license.  If that happens, the intent of the bond would not be satisfied and UMC could have to pay it back.

Hospital-Within A-Hospital (HwH) is an interesting concept.  To ensure that two hospitals occupying the same location are not trying to ‘game’ the system by transferring a patient back and forth, CMS (the Centers for Medicare and Medicaid Services) has put some regulations into place:

  1.  “CMS regulations require a high level of organizational separation between host hospitals and HwHs, including separate governing bodies, separate chief medical and chief executive officers, and separate medical staffs” (
  2. CMS also requires financial independence “the cost of services that an HwH obtains from its host hospital must not exceed 15% of the HwH’s total inpatient operating costs.” (

UMC and EPCH need to have COMPLETELY separate boards and they need to quickly straighten out the service contracts.  Having an interlocking board (i.e. one or more members who are on both boards) is playing with fire.  Service contracts that exceed 15% of the inpatient operating costs are tempting fate.  Charging rent and not using that money to pay down the bond is just criminal. Doesn’t it behoove UMC to use the EPCH rent money to pay down the bond as quickly as possible to protect the El Paso Tax Payers?

Bankruptcy is supposed to be a clean slate for the organization, an opportunity to correct the mistakes that were made before.  To us it would appear that old mistakes are be propagated into the future and new ones are being added.


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