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UPDATED: UMC proposes plan for funding and more control of El Paso Children’s Hospital

UPDATE 8 PM: El Paso Children’s Hospital has released a statement setting mediation between it and UMC for Monday. In the statement, Rosemary Castillo, chair of the El Paso Children’s Hospital Board, said the mediation is waiting on acceptance from UMC.

“We want to move forward to find fair and common ground on the differences left on the table with UMC from the last mediation sessions,” she said. Castillo said the Children’s Hospital scheduled the mediation on Monday because it was the earliest time possible to allow both parties to have a full day, or more, to address critical points in any agreement.

Original story:

The county and University Medical Center have said they now have a plan to keep El Paso Children’s Hospital running by bringing it under UMC’s umbrella of organization.

UMC CEO Jim Valenti and his staff met with county commissioners in a special meeting Thursday to explain the plan. UMC terminated a confidentiality agreement about the negotiations with El Paso Children’s that would have kept this plan from being released to the public.

It offers tens of millions of dollars to support the children’s hospital’s operations, but a clock is ticking to put an agreement in place ahead of upcoming funding deadlines.

“Well, there are various application deadlines that we need to achieve,” said UMC spokesman Ryan Mielke. “And that’s for medicare reimbursement scenarios that I think we can help the children’s hospital with and we need to apply for very quickly. In order to do that on their behalf, we would have to have some sort of agreement between the two organizations. So we’re working towards that end with these deadlines.”

An actual figure has not been determined, but it could range between $37 and $47 million in outside funding or savings for El Paso Children’s. That would be spread over numerous factors like extra medicaid funding, combining things like accounting services to cut expenses, and other funding only available for public hospitals and their subsidiaries.

The money is just an estimate for now, as the plan would require info and action from El Paso Children’s as well. Included in that are immediate access to the hospital’s financial and market data, getting a transaction agreement approved that would place the children’s hospital as a subsidiary of UMC, and installing a new board for the children’s hospital approved by UMC.

Mielke said that none of this would put a burden on the taxpayer.

“Absolutely not,” Mielke said. “In fact, I think in the first year, we don’t see it as a burden at all at UMC. We see it as an opportunity to help the children’s hospital survive. And as part of a partnership with UMC, we can do that.”

The entire plan hinges on some tight deadlines. UMC has been asking El Paso Children’s to head back to mediation, and said Thursday that it’s ready for talks to resume as soon as tomorrow.

UMC staff said the children’s hospital would need to agree as soon as possible to the terms of the plan so an estimated 45 to 60 day due diligence period can begin. Looming over that are two big deadlines that UMC said would need to be met to bring in around $20 million for El Paso Children’s in new funding.

May 1 is the deadline for the Medicaid supplement reimbursement for disproportionate share hospitals, for hospitals that serve large number of medicaid and uninsured individuals. June 1 is the Medicaid uncompensated care deadline that supplements the DSH.

Both UMC and the county are pushing for the children’s hospital to head back to the table over this coming weekend.

“They don’t just owe UMC money,” said County Judge Veronica Escobar. “They also owe Texas Tech money. These are debts that need to be settled up. And this… These various buckets of money that are available through the state are critical to the success and long term viability of El Paso Children’s Hospital.”

ABC-7 contacted El Paso Children’s media relations and board chair Rosemary Castillo for a response to this plan, but have not received one yet. Check back for the latest updates as this story develops.

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