The Need to Insure Against Something

Switching from Medicare/Medicaid reimbursement to other health plan reimbursements.  In papers filed with the court, El Paso Children’s Hospital alleged that El Paso First, a UMC “wholly owned subsidiary” was underpaying EPCH for services to the tune of $15 million (you can read their filing here).  Just as a reminder, here is the board for El Paso First:

El Paso First Board

James Stephen DeGroat – Also current Chair of the UMC Board

Ron Acton – UMC appointee to the new EPCH Board

Michael Nunez – UMC CFO

Jim Valenti – Current UMC CEO

So, if El Paso First was underpaying the El Paso Children’s Hospital, UMC knew about it and was complicit in doing it.  As a recap of where we stand:

  1.  UMC has some control over El Paso first and its reimbursements and was underpaying El Paso Children’s so much that EPCH was losing money in providing services to these patients.
  2. UMC and the County Commissioners have setup a situation at EPCH which could result in El Paso Children’s losing $5- $20 million in Medicare/Medicaid reimbursement.  Not only that, if CMS determines that the Hospital within a Hospital rules have been broken, they can GO BACK AND ADJUST ALL OF THE REIMBURSEMENTS THAT EPCH HAS RECEIVED – This would be even more than the $5 – $20 million that El Paso Children’s could miss out on.
  3. El Paso Children’s Hospital is paying almost $6 million a year in rent for a building that was paid for by tax payers but that money is not going to pay down the tax payer funded bond.
  4. As we have stated in some of our other posts, UMC was over charging El Paso Children’s Hospital for services in addition to charging El Paso Children’s Hospital in various ways to pay down the bond, was this money actually used to pay down the bond or was it just added to UMC’s bank accounts?

Exactly how are all of these situations going to be resolved?  Because, make no mistake, they MUST be resolved if the El Paso Children’s Hospital is going to remain an independent hospital and off of the tax payer’s bill.




3 thoughts on “The Need to Insure Against Something

  1. That’s an interesting comment – since both sides settled before the trial, the judge did not rule on the contracts or the El Paso First reimbursements. The idea being that both sides would settle these matters outside of court. As for CMS – the judge is a bankruptcy judge, not a healthcare one. His primary concern was reaching an agreement that had the El Paso Children’s Hospital paying off its creditors so that it could emerge from bankruptcy. It would appear that he relied on the lawyers to come up with a viable plan and a proforma based off of that plan.


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