Paying the Price

Hospital district officials wanted a simple one-sentence policy on immigrant health care. What they got instead was a criminal probe and plenty of politics.

For Dr. Pat McColloster, she is one of the patients who got away.

He treated the 32-year-old woman in 1995 for a routine case of hypertension at Casa de Amigos, a clinic in the Harris County Hospital District system. Between her regular visits, the robust woman, a house cleaner from Mexico, discovered a lump in her breast. A biopsy at Ben Taub showed cancer, and she underwent a radical mastectomy.

The woman commenced a course of chemotherapy that lasted for several months, during which time she continued to see McColloster for her hypertension. Then she disappeared.

Eckels: Nobody would say, "'I'm sorry, just go home and die.'"
Phillippe Diederich
Eckels: Nobody would say, "'I'm sorry, just go home and die.'"
Casa Juan Diego, with its chained air conditioner, helps treat immigrants.
Deron Neblett
Casa Juan Diego, with its chained air conditioner, helps treat immigrants.
McColloster found out from former patients that the district turned away immigrants.
Deron Neblett
McColloster found out from former patients that the district turned away immigrants.
Guest inherited a deficit-plagued hospital district.
Guest inherited a deficit-plagued hospital district.
Finder says he never dreamed there would be criminal implications from the statute.
Deron Neblett
Finder says he never dreamed there would be criminal implications from the statute.

For more than a year the physician fretted over a patient who had always been a stickler for punctuality. Then, in 1997, he began volunteering on Saturdays at a charity health clinic for immigrants. On just his second week, the missing house cleaner showed up. Her arm was swollen to three times its normal size and her blood pressure was "out of control," he recalls.

The doctor chastised her for not keeping up with her treatments. He was outraged to learn that the woman, an undocumented worker, had been unable to continue because her gold card, the identification required for nonemergency care in the district, had expired. She had been denied a new one because of her inability to provide documents. McColloster says it is likely that the withholding of services caused her health to deteriorate.

"It was a distinct possibility that the cancer had recurred because she had not finished her full course of chemotherapy," he says grimly. "To have that interrupted because of an inability to get a gold card is, in my opinion, tragic."

Under state law, county hospital districts are required to provide care to "needy" inhabitants within their borders. Harris County, like almost all of its counterparts in the state, historically has offered subsidized nonemergency treatment to any county resident who demonstrates financial need. The district has never had a formal policy on undocumented immigrants but, in its silence, has offered a full range of services to county residents regardless of whether they are in the United States legally.

In recent years, however, undocumented immigrants have encountered obstacles. Clerks at the district's various registration centers had different ideas about what constituted requisite documentation. As a result, immigrant advocates charge, many of the county's neediest residents were left standing in the cold.

"We were concerned because there didn't seem to be any rhyme or reason to the district's policy toward immigrants," says Barbara Best, the health committee chair for the Houston Immigration and Refugee Coalition.

Under new leadership, the hospital district last year tried to establish a policy to bring uniformity to eligibility requirements. Instead of producing healthier residents, their efforts yielded a criminal investigation by District Attorney Chuck Rosenthal. Now, embattled hospital district officials are fending off possible jail time.

Looming behind these developments is a 1996 federal law meant to pull the plug on public assistance to noncitizens. Most hospital districts took a "don't ask, don't tell" approach to the law and quietly proceeded with business as usual. But Harris County officials pressed the issue and unwittingly opened a can of worms with implications that extend far beyond Houston's sprawl. The case marks an uneasy standoff between federal policy and local control, highlighting the combustible results when public health issues get mixed with the politics of immigration and use of taxpayer funds.

"[T]his is not a problem only of the taxpayers in Harris County. It is one for the region, if not the nation," says County Judge Robert Eckels.


In 1994, Texas, following the lead of other border states, sued the federal government for failing to control illegal immigration. That failure, said then-attorney general Dan Morales, cost the state hundreds of millions annually in public education, social services, criminal justice, incarceration and health care. Harris County and the hospital district joined as plaintiffs in the litigation.

Although the suit ultimately was dismissed, it underscored growing tensions between states and the federal government over who should foot the bill for immigrants. Today local officials are more apt to view undocumented workers in terms of their contributions to the economy, but they still slug it out with Uncle Sam for every dollar spent on health care for such immigrants.

"The issue is not for me whether the care is provided, because it will be provided. It's how it's billed and it's about who pays in the end," Eckels says. "It's the kind of cost that should not be borne totally by the local taxpayers."

The Harris County Hospital District is one of the largest public systems in the country, with two general hospitals, both with trauma centers, a rehabilitation and psychiatric hospital, 11 community clinics and other facilities. The need for its low-cost services is great in an area where more than 30 percent of the general population lacks medical insurance. The uninsured rate is double that for immigrants, according to the Washington, D.C.-based Center for Immigration Studies.

Immigrants represent more than half of Harris County's 1.1 million Hispanics. While the majority of them are here legally, the hospital district incurs significant expenses treating undocumented immigrants from Latin America and, to a far lesser degree, Canada, Vietnam, India and other parts of the world.

Citing attorney-client privilege and privacy exceptions to the Texas Public Information Act, Assistant County Attorney Sarajane Milligan, on behalf of the hospital district, refused to provide data requested by the Houston Press on the number of patients it serves and the costs.

County records show that undocumented immigrants accounted for 22 percent of the 48,909 inpatient visits and 25 percent of the 959,898 outpatient visits recorded in the district's fiscal year that ended in February. The vast majority of cases entered through emergency rooms at Ben Taub and Lyndon B. Johnson hospitals, says King Hillier, the director of legislative relations for Harris County and the district's former director of government relations.

The district racked up $67 million in costs treating undocumented immigrants in fiscal year 2001, representing 13 percent of the total budget. Of that $67 million, taxpayers contributed $59 million, or 88 percent; insurance and reimbursements through Medicaid and other programs accounted for 10 percent; patients kicked in the rest.

The district has struggled to stay solvent in recent years, in part because of declining reimbursements for Medicare, a federal program, and Medicaid, which is both federally and state funded. Reimbursements for the two programs dropped from $151 million in 1996 to $98 million in 2000. Meanwhile, taxpayers have had to pick up the slack.

An increase in the tax rate in fiscal year 2001 raised the local contribution to the district by more than $100 million, to $305 million of a $534 million total budget. Care to immigrants represents only a portion of that, but it's enough to make the issue contentious in a cash-strapped system.

Still, county officials argue that the costs would be much higher if the district did not offer undocumented immigrants a safety net. Without preventive and primary services, more would turn to already overburdened emergency rooms, says Dick Raycraft, the county budget officer. He adds that treatable conditions like diabetes and hypertension often develop into emergencies when not controlled under a doctor's regular care.

"You end up seeing them in the ER, when it's a more acute case and the costs are greater," Raycraft says. "You could have dealt with it in a clinical setting, and in the long term you avoid some costs and you've got a healthier person."

Most immigrants are here to work, often in high-risk industries or in service jobs where they are in close contact with the public, adds Eckels. The community has a vested interest in their health, particularly when it comes to containing contagious diseases like tuberculosis.

"Whether they're documented or not, they are residents of the county. They pay taxes in the county," Eckels says. "I don't think there's anybody who would just turn folks away and say, 'I'm sorry, just go home and die.' "


The weather-beaten frame house on Rose Street sags with age and the ravages of termites. The musty interior thrums with an air conditioner's metallic gasps. Three men -- one from China, the others from Latin America -- wait in silence to see the doctor on this typical morning at Casa Juan Diego, a center for immigrants near Washington Avenue and Shepherd.

A 50-year-old day laborer from Guatemala tells of trying to get a gold card more than a year ago because he was having difficulties walking. He says he was unable to prove county residency because he lived at a friend's apartment and the utility bills, lease and other documents were not in his name. He was later diagnosed with diabetes at Juan Diego, he says.

Pat McColloster looks right at home in the threadbare setting of the clinic, which runs on charitable donations. A tall, curly-haired man of 40 who wears jeans and a T-shirt under his white lab coat, he says that when he first came to work for the hospital district in 1993, there was no need for him to volunteer at Juan Diego. Back then, undocumented immigrants had no problem gaining access to the district's clinics.

Starting around 1996, the New Orleans native began to notice fewer and fewer Spanish-speaking hospital district patients but had no idea why.

When he began working Saturdays at Juan Diego, he saw many former patients and learned they were having trouble getting their gold cards renewed at some registration centers. District policy allows applicants to use a variety of documents to prove their identity, address and income, but in some cases clerks insisted on those that undocumented immigrants can't get, like a Texas driver's license, McColloster says. In other cases, the patients simply didn't have any of the requisite proof. His patient with breast cancer tried to renew at the North Loop Registration Center but didn't have a license, passport, picture ID from work, birth certificate or any of the other documents to establish her identity.

"So many of my patients were getting booted out of the system that I ended up taking off one day a week to do volunteer work" at Juan Diego, he says.

Hospital district spokeswoman Dinah Massie says she heard "gossip" to the effect that some registration centers were more exacting than others, but doesn't know if that was true. The apparent obstacles for undocumented immigrants dovetailed with a drop in the overall number of new gold cards being issued, from 205,000 in 1997 to 155,000 in 2000.

Meanwhile, from 1998 to 1999 Casa Juan Diego documented a 400 percent increase in the number of people seeking medical services at its clinic. Mark and Louise Zwick, the center's co-founders, were unable to provide specific data on the number of patients, but both assert the situation deteriorated.

"Medical services to the Spanish-speaking in Harris County are in a state of crisis," Louise Zwick wrote last year in the Houston Catholic Worker, a newspaper published by Casa Juan Diego. "[P]eople come from all over Houston asking us to help them get a gold card. They are desperate."

There was plenty of desperation to go around. By the end of 1999 the hospital district itself was in a state of crisis, with day-to-day operations threatened by a looming multimillion-dollar deficit. Longtime CEO Lois Jean Moore had stepped down. All eyes turned expectantly toward a man who soon would arrive from San Antonio to take the reins of the beleaguered system.


John Guest was 51 years old when he arrived in Houston last year, having spent half of his life in Bexar County's University Health System, the final 16 years as president. The fact that the Bexar County system had built up huge cash reserves made Guest appealing to county officials determined to pull the district out of its budgetary abyss. At the same time, his conversion to a community health model that focused on prevention and brought medical care to the city's barrios appealed to champions of the poor.

Houston activists met with the new CEO to discuss what they found to be erratic handling of undocumented residents. Best, of the Houston Immigration and Refugee Coalition, pointed out that the district's lack of a policy on undocumented immigrants contributed to the confusion at the five eligibility centers. She found him receptive to their concerns.

"He basically understood that there wasn't a clear eligibility policy and said he would consider the issue," she recalls.

Guest, who declined comment to the Press, asked board members at a December 7 meeting to vote on a modest reform. It read: "An applicant's citizenship or immigration status will not be considered in determining residency."

Immigrant advocates, including the Zwicks, McColloster and University of Houston immigration law professor Joe Vail, attended the meeting to urge support for the measure. The issue quickly dominated the proceedings. Minutes show that Larry Finder, chairman of the nine-member board, was wary of doing anything that would incur the wrath of county commissioners, who controlled the embattled district's purse strings. He asked if the provision would open the floodgates for immigrants into the system.

A lawyer and former prosecutor, Finder also had legal questions. Then-county attorney Michael Fleming had recently brought to his attention a 1996 federal law aimed, in part, at cutting off public benefits to undocumented immigrants. Prior to the meeting, Finder asked the county attorney whether Guest's proposal would violate the Welfare Reform Act and jeopardize federal funding for district programs like Medicaid.

"The county attorney didn't have an answer," Finder recalls.

Finder recommended to the board that it seek a state attorney general's opinion on the legalities of the proposed immigrant policy. By a one-vote margin, the board voted to table the provision pending further clarification from Attorney General John Cornyn.

Today, Finder says he was simply trying to do the responsible thing for the district. He declines to discuss his personal views on what kinds of treatment the hospital district should extend to undocumented immigrants, calling his opinions "irrelevant." He does concede that his decision to seek an A.G.'s opinion proved fateful.

"At no time did I or anybody else in that room, that I know of, ever think that there would be criminal considerations associated with this federal statute," Finder says. He adds, with a laugh, "Little did I know, right?"


The Personal Responsibility and Work Opportunity Reconciliation Act passed in 1996 with all the subtlety of a tidal wave. Democrats and Republicans alike scrambled to take credit for the measure that would "end welfare as we know it."

Sweeping in scope, the law, dubbed the Welfare Reform Act, impacted a host of public assistance programs. In the realm of health care, undocumented immigrants and those who provided health care to them stood to take a hit.

Under the federal law, immunizations, treatment for communicable diseases, emergency care and other critical services would remain available. However, in the area of subsidized or free primary and preventive care, it was less clear-cut. Under the law, many services no longer could be provided, but it did not set penalties for those who continued to do so. The Justice Department was expected to issue guidelines to help states and local governments implement the law, but it never did, says Vail, the UH law professor.

"The federal government was saying, 'We are going to tell you what you can and cannot do…but we're not going to give you guidelines about how to do it,' " Vail says.

The law essentially put local health care personnel in the role of immigration officers, he adds, calling upon them to make determinations of legal standing for people with temporary protective status, pending legalization claims, temporary work authorizations and a variety of complex scenarios.

"You just can't implement it. It's virtually impossible," says Dr. Robert Jimenez, chairman of the Bexar County hospital district board.

Jimenez recalls anxious deliberations with Guest and others about how to respond. Ultimately, officials in the San Antonio system decided to continue to deliver services to all county residents who sought them until they received further clarification from the federal government. Those guidelines never came.

"The thing was virtually ignored by everyone, including the feds," Jimenez says.

Public hospital systems in cities with large immigrant populations such as New York, Los Angeles and Miami appeared to take a wait-and-see position like San Antonio. Only Tarrant County and San Diego County cut off subsidized nonemergency care to immigrants, says Hillier, Harris County's director of legislative relations.

Both the county attorney's office and the current hospital district administration declined to provide information to the Press about what they knew about the law, and their response to it. However, it would appear that someone fell asleep at the wheel. Finder, who has served on the hospital district board since 1995, says he was ignorant of the much ballyhooed welfare act until sometime around the board's deliberations last December.

"It was a very arcane provision that I knew nothing about, and I'm a lawyer," he says. "So I imagine the laypeople on the board knew nothing about it."

Thus, Attorney General Cornyn's opinion, rendered July 10, exploded like a firecracker in the hand of an unsuspecting child.

The federal law prohibits the district from providing "free or discounted nonemergency health care to undocumented aliens, even if they reside within the district's boundaries," the attorney general stated unequivocally. The only way to circumvent the law is for the state to enact legislation making undocumented immigrants eligible for publicly funded nonemergency health care, something Texas has not done since the federal law went into effect in August 1996, Cornyn said.

Cornyn noted that federal funding for programs like Medicaid and Medicare are contingent upon compliance with the law. He also spoke ominously of possible legal consequences to the district and its officers for using public money for unauthorized expenditures.

The opinion sent officials reeling. John Guest fumed that the policy "sucked." County Attorney Michael Stafford preached caution. After taking time to collect themselves, hospital district brass, on the county attorney's recommendation, agreed to continue providing free and discounted nonemergency care to the undocumented, while they huddled to find a long-term solution.

Not everybody seemed so eager to preserve the status quo. County Commissioner Steve Radack, a longtime opponent of taxpayer-subsidized health care to the undocumented, contacted District Attorney Chuck Rosenthal's office to find out if he and the other commissioners could face criminal charges.

Radack's nervous query was the first anyone in the D.A.'s office had heard of Cornyn's opinion, Rosenthal says. They told the commissioner they would look into it. Within days Rosenthal concluded that indeed it might be a crime to use public money to provide free or discounted nonemergency care to undocumented immigrants. Misapplication of fiduciary property is a felony under state law, one that carries up to 99 years in prison.

"The statute says if you misapply money and spend money in violation of some law…then somebody could be guilty under those circumstances," Rosenthal says.

In late July, Rosenthal told the Chronicle he would not launch a formal investigation unless someone filed a complaint with his office. After the article appeared, the complaints came pouring in. Marc Levin, vice chairman of the Young Conservatives of Texas and a law student at the University of Texas, was among those who "decided to take him up on his offer."

"This question of whether to provide fee [sic] health care for all Mexican citizens is…critical because unlimited free American health care, which is far superior to the health services available in most parts of Mexico, surely encourages the ongoing flood of illegal immigration into Texas," he wrote in a July 30 complaint, later filed with the district attorneys of Dallas, El Paso and Bexar counties. "In short, Texas could become Mexico's nursing home."

After the irrepressible Levin filed his complaint, he dashed off a press release alerting the Texas media of the group's action. That same day Rosenthal began an investigation, becoming the only district attorney in Texas to turn the issue into a criminal matter.

Harris County's Hillier says, "Other parts of the country are watching us very closely now."


"I don't have a political agenda…I understand that when I run for office I step into politics, but I've got to be probably the most apolitical person you've ever met," Chuck Rosenthal says.

In his first year in office, the district attorney has shown a knack for picking unpopular fights. Many reacted with shock to his decision to seek the death penalty for Andrea Yates. The investigation of the hospital district has raised eyebrows and generated ink in publications like The New York Times.

Rosenthal seems acutely aware that he is walking a lonely road. He bristles at the suggestion that he is acting out of any considerations other than upholding the law. Yes, he says, of the hundreds of complaints that his office receives, he has discretion to choose which he will investigate. But if he spots a possible violation, his only course is to go after it.

"I don't get to pick and choose what laws I enforce," he says.

Even those under investigation by Rosenthal express confidence that the D.A. is not on a witch-hunt. But defense attorney Rusty Hardin, who is representing the district, says the prosecutor didn't help his case by appearing to invite citizens' complaints in the Chronicle.

"That's just going to blow up in everybody's face," he recalls thinking when he read article.

Rosenthal denies that he was fishing for complaints.

"I've got enough to do around here without worrying about the hospital district," he says.

A particular sore spot with the district attorney is the perceived link between him and the Young Conservatives of Texas. Rosenthal dismisses the group of right-wing law students as "probably idiots." Contrary to media reports, he says they had nothing to do with his investigation, noting that the first person to complain to his office "had a Hispanic surname."

In a letter dated August 2, Rosenthal laid into the callow Levin for his bit of "chest-thumping" to the media.

"If you believed that you were bringing pressure to bear on this office, or me, you were sadly mistaken," he wrote. "Your sanctimonious correspondence has given media types, who believe that there is politics in everything, something to chew on and have [sic] in some way already cast a pall over this investigation."

Rosenthal says it does not bother him that no other prosecutor in Texas has launched an investigation like his. Nevertheless, in August he asked John Cornyn to bring together the district attorneys from several large Texas counties to discuss the immigrant health care matter.

"It was not my reason for asking the attorney general to get this together just to have everybody say, 'Go, Chuck, you're our man,' " he says. Rather, he hoped they could delve into the finer points of the law.

In late August Cornyn arranged a conference call that included D.A.'s from Dallas, Tarrant, El Paso, Travis and Bexar counties. Rosenthal found the discussion disappointing.

"Basically what I got from most of it was 'Well, if we kind of ignore it, it will go away,' " he recalls. "I don't think that's the case. I think there's potentially a lot of money to be lost by Texas in repaying the federal government for some of the things that happened here."


Not long after Rosenthal launched his probe, the hospital district came back swinging behind the one-two punch of defense attorneys Rusty Hardin and Joel Androphy. Before long, the high-dollar barristers filed briefs rebutting the attorney general's opinion, which, they emphasize, is just that -- an opinion.

"The criminal justice system should not be trying to resolve social policy," Hardin says.

Area lawmakers wasted no time getting into the act. Congressman Gene Green introduced legislation that would authorize hospital districts to provide a full range of care to undocumented immigrants. State Representative Garnet Coleman vowed to introduce a similar bill when the legislature meets in 2003.

The final piece fell into place when County Attorney Michael Stafford issued an opinion of his own on August 30. In it, he argues that state law -- including 1999 amendments to the Texas Constitution -- and previous attorneys general opinions, enable the district to provide subsidized nonemergency care to the undocumented, the federal law notwithstanding.

If the federal law did take away that local power, Stafford argues, it in effect would authorize states to discriminate in varying degrees against noncitizens in violation of the U.S. Constitution's equal protection clause; would draft state and local officials into enforcing national immigration laws; and would usurp Texas's power to determine how to spend funds on state and local medical care.

The sureness of Stafford's opinion calls into question why the county attorney's office didn't reach a similar judgment last year, without taking the matter to the state and creating the ensuing brouhaha. For after all the hand-wringing and high-powered lawyering, the hospital district is going forward with the same policy it wanted -- the same policy as always, really.

Adopting a philosophical view of the controversy, Eckels faults neither the county attorney nor Rosenthal. The episode marks the latest skirmish in the battle between the federal government and states over the costs of immigration, he says.

The federal law was an attempt to discourage illegal immigration and reduce costs to the federal government, "but what it did was not eliminate the service, it just eliminated the payment for the service," he says. "So where one place quits paying, someplace has to pay." The county will not join in any more lawsuits against the national government, he adds, but will continue to lobby Congress to cough up more funds.

Other counties have seen themselves impacted by Harris County's fight. In the wake of Cornyn's decision, hospital districts in Montgomery and Nueces counties have limited subsidized services to the undocumented.

Watching the forces mass, Larry Finder, who set the events in motion, laments the use of the district's strained financial resources for expensive lawyers.

Does he regret having asked for the opinion?

"Oh, no," he says emphatically. "I have second thoughts about whether or not I should be doing this as my pro bono activities. It just doesn't send a good message to people who are asked to do volunteer work and serve."

But he's not losing any sleep over the investigation.

"Even if there's an indictment…to convince a jury of 12 people that somebody knowingly, intentionally or recklessly tried to break the law would be a very, very high burden," the former prosecutor says.

Rosenthal acknowledges that he is still trying to figure out who, if anybody, committed a crime. The possibilities, he says, include members of the hospital district board, its administration, county commissioners, even health care providers.

"If this was a marathon run, we're in the first couple of hundred yards in terms of knowing where we're going to be ultimately or how the race will turn out," he says.


Back at Casa Juan Diego, Pat McColloster says that despite the unresolved litigation, services to the undocumented have become more consistent.

"It's gotten significantly better, but there's still significant need," he says in a New Orleans brogue. "There are still a lot of people who can't get" a gold card.

These days McColloster spends much of his time as a social worker, brokering conference calls between his patients at Juan Diego and hospital district registration centers. That way, he says, any confusion over necessary documents will get resolved before the patient goes to apply for a gold card.

The most important thing, the physician says, is to make sure no more of his patients fall through the cracks. On that day in 1997 when the ailing house cleaner showed up unexpectedly at the clinic, McColloster treated her hypertension. But it was her massively swollen arm, on the same side of her body as the breast that had been removed, that really worried him.

He made her another appointment to get a gold card to resume chemotherapy. Weeks passed and he didn't hear back from her. McColloster reviewed district records and learned his former patient never received the card.

"I don't know what happened to her," he says today. "It's possible that she might have died."

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