November 1 Deadline Looms as Texas Hospitals Struggle to Track Costs Related to Immigration Status

By Kathleen Campbell Walker
Chair, Immigration Practice Group
Dickinson Wright PLLC

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Original Publish Date: November 5, 2024

On November 1, certain Texas hospitals must comply with an Executive Order issued by Governor Greg Abbott on August 8, 2024 (Order), requiring them to document medical costs related to the care of individuals without legal immigration status. Governor Abbott provided the following statement explaining the reasoning behind his Order:

“Due to President Joe Biden and Vice President Kamala Harris’ open border policies, Texas has had to foot the bill for medical costs for individuals illegally in the state,” said Governor Abbott. “Texans should not have to shoulder the burden of financially supporting medical care for illegal immigrants. That is why today I issued an Executive Order requiring the Texas Health and Human Services Commission to collect and report healthcare costs for illegal immigrants in our state. Texas will hold the Biden-Harris Administration accountable for the consequences of their open border policies, and we will fight to ensure that they pay back Texas for their costly and dangerous policies.”

Under the Order, the Texas Health and Human Services Commission (HHSC) must collect data on the use of Texas acute care hospitals for inpatient and emergency care for “illegal immigrants.” Beginning November 1, covered hospitals and designated providers must collect this data and report it to HHSC on a quarterly basis starting March 1, 2025. Additionally, hospitals and providers must inform patients that under federal law, their responses to questions about immigration status will NOT impact the care they receive. The Order also mandates that starting January 1, 2026, HHSC must submit an annual report to the Governor, Lieutenant Governor, and Speaker of the House outlining the previous year’s costs for medical care provided to illegal immigrants.

One of the main challenges to this Order in implementation is the terminology used. While the purpose described in the statement issued appears to focus on “illegal immigrants,” the Order itself refers to those not “lawfully present” in the United States (U.S.). It is hard to comply with any order or law without clear language. In addition, there are valid concerns that this sort of intake question could cause those needing care not to seek it and increase illness as well as public health risks.

1. What hospitals are subject to the Order?

Acute care hospitals enrolled in Medicaid or the Children’s Health Insurance Program (CHIP), as well as other designated providers selected by HHSC. The Texas Hospital Association (THA) issued an FAQ dated September 3, 2024 indicating that any directives issued by HHSC are not limited to public hospitals. Thus, the Order allegedly includes each hospital owned or operated by a hospital system, if they participate in either Medicaid or CHIP.

2. How does the Order jumble legal immigration concepts?

The recitals to the Order assert that the current Administration has abdicated the federal government’s responsibility to prevent the entry of thousands of foreign nationals daily in violation of federal criminal laws. To an immigration lawyer, that would typically make you think of the federal misdemeanor, which may be charged when a foreign national improperly enters the U.S. (8 USC §1325). An “improper” entry basically refers to those entering or attempting to enter the U.S. at “any time or place other than as designated by immigration officers” or by “eluding examination or inspection by immigration officers.”

The recitals to the Order also refer to the State of Texas absorbing a large percentage of costs for the medical care of foreign nationals, who are “not lawfully present” in the U.S. Of course, a foreign national may legally enter the U.S., but no longer be lawfully present for a variety of reasons. In some cases, the foreign national can regain lawful presence. For example, a foreign national visitor who remains in the U.S. longer than authorized for legal admission, who later marries a U.S. citizen can be eligible to apply for legal permanent residence (aka a green card). So, is the focus of the data collection lawful presence or illegal entry at our borders?

3. What immigration-related information is required under the Order?

The Order directs affected public hospitals to gather information on patients “not lawfully present” in the U.S. Interestingly, the Order does not use the terms “illegal” or “undocumented.” Under Texas law (TAC §358.205), individuals may qualify for Medicaid emergency treatment as either a “qualified alien” or an “undocumented non-qualifying alien,” based on federal definitions found in 8 U.S.C. §§1611, 1612, and 1641. These terms are not referenced, however, in the Order.

Trying to sort the qualified from the undocumented non-qualifying alien is challenging enough. Those considered “unlawfully present” would be a different group of foreign nationals.

4. Who are the unlawfully present?

U.S. immigration law is often cited as “one of,” if not “the” most complex of legal areas. How does U.S. Citizenship and Immigration Services (USCIS) describe lawful presence? We can review how USCIS defines the accrual of unlawful presence for guidance. Unlawful presence can subject a foreign national to the civil process (not criminal) of removal (formerly known as deportation) under U.S. immigration laws.

It is important to remember that asylees and refugees are lawfully present. Asylum applicants pending approval are generally treated as being lawfully present, while a bonafide application for asylum is pending. For that matter, asylum applicants are able to apply for work authorization in the U.S.

5. When are foreign nationals exempt from ‘unlawful presence’ accrual?

USCIS outlines the following as examples where foreign nationals are not penalized for unlawful presence:

Minors: Noncitizens under 18 years old do not accumulate unlawful presence.
Family Unity beneficiaries: Individuals protected under the Family Unity Program, established by the Immigration Act of 1990, are not subject to unlawful presence penalties during the protection period.
Battered spouses and children (VAWA petitioners): Self-petitioners under the Violence Against Women Act (VAWA) and their dependents are exempt from unlawful presence if the abuse is linked to their visa violation.
Victims of human trafficking: Victims of severe trafficking are not penalized for unlawful presence if they can show that the trafficking was a significant reason for their unauthorized stay.

6. What questions might hospitals ask to comply with the Order?

In English, the intake might be phrased as: “I am not lawfully present in the U.S. in accordance with U.S. immigration law.” In Spanish, suggested translations from native Spanish-speaking immigration attorney colleagues are:

No tengo presencia legal en Estados Unidos para efectos migratorios.
Para efectos inmigratorios, no tengo presencia legal dentro de los EEUU.

If patients ask for clarification, hospital staff should confirm that their response does not affect the provision of care. Any explanation though of “unlawful status” accurately is challenging. A simple response might be to direct the patient to the USCIS webpage on unlawful presence: USCIS Unlawful Presence Information. Hospital staff should not be placed in the position of guessing what lawful or unlawful status is. After the issuance of the Order, the Texas Department of Health and Human Services (TDSHS) removed its former guidelines advising health care workers not to ask for immigration status information. That guidance should be reposted with some exception tied only to the questions required for patient intake under the Order.

It is also relevant to consider that U.S. immigration law can approve waivers of unlawful presence in certain circumstances and that pending applications for a variety of immigration benefits can provide a period of stay authorized by the Attorney General of the U.S. (Posabag) So, for example, I may be legally in the U.S. as an H-1B or TN nonimmigrant worker, but my I-94 admission record governing my period of stay has expired and I have a timely extension application pending with USCIS. I am authorized to continue to work in the U.S. for up to 240 days or until the application is adjudicated, whichever is earlier in this situation. Take a look at Section 7.7 of the M-274 Handbook for Employers as to the completion of Form I-9 to determine work authorization to appreciate the issue in greater depth.

7. Why is this lawful presence minutiae important?

As the saying goes, “Garbage in, garbage out”—the quality of the data collected will depend on how accurately patients understand and respond to these questions. Certainly, hospitals are not receiving state funding to implement their compliance with the Order. If patients answer truthfully and correctly, will the data truly reflect the costs incurred for individuals who entered the U.S. illegally? No. If the goal is to document how uncompensated care costs relate to individuals without legal immigration status, the Order falls severely short.

8. Who must be treated by hospitals?

According to the Fact Sheet published by the Texas Hospital Association (THA), hospitals are required by the Emergency Medical Treatment and Labor Act (EMTALA) to screen and treat anyone arriving at an emergency room, regardless of their ability to pay or their immigration status. Texas hospitals provide significant amounts of free or discounted care with THA estimating the amount to be around $4.6 billion in uncompensated care costs annually.

In addition, the Fact Sheet reports that approximately 64% of Texas hospitals have reduced services due to staff shortages, and nearly 1 in 10 Texas hospitals is at risk of closure. 26% of hospitals in rural communities, in particular, are at an increased risk of closure.

Most undocumented immigrants (Those without legal status in the U.S.) do not have any health coverage apart from emergency care provided under emergency Medicaid, as well as emergency room access under the Emergency Medical Treatment and Labor Act (EMTALA). Of course, those individuals with sufficient income can purchase private healthcare insurance (without the benefit of federal subsidies). EMTALA provides that all patients regardless of citizenship or immigration status have access to emergency medical treatment. Undocumented immigrants use of EMTALA-related care is often covered via emergency Medicaid.

9. What has Texas Claimed in federal funds for Medicaid uncompensated care payments?

As background regarding the challenges related to state requests for federal reimbursement of uncompensated care costs, in September of 2022, the Office of the Inspector General of the U.S. Department of Health and Human Services (HHS) evaluated Texas’s claims for uncompensated care (UC) reimbursements from federal funds. Medicaid, which is jointly funded by federal and state governments, provides medical care to low-income individuals and those with disabilities. The Texas UC program aims to offset qualifying costs incurred by hospitals and approved providers caring for Medicaid-eligible and uninsured patients. When a hospital’s initial UC payments exceed its actual costs, the HHSC identifies the excess as an overpayment, which hospitals typically return.

The HHS report found that Texas improperly claimed $18.90 million in UC payments and that HHSC may have overclaimed $33.78 million by not accounting for Medicare payments when calculating actual costs. Accurately determining these costs is complex and poses significant challenges without the added complexity of apportioning costs to the Undocumented/Unlawfully Present.

10. Does the healthcare industry rely on a foreign workforce?

Yes, it does. The healthcare sector in Texas is significantly impacted by staffing shortages. A report by the National Foundation for American Policy (NFAP) from October 2024 reveals that foreign-born individuals make up 40% of home health aides and 28% of personal care aides, according to Bureau of Labor Statistics data.

The American Hospital Association (AHA) predicts a shortage of 124,000 physicians by 2033 and estimates that at least 200,000 nurses will need to be hired each year to meet increasing care demands and replace retiring staff. Additionally, recent studies cited by the AHA indicate that 18.2% of all U.S. healthcare workers are foreign-born, with 29% of U.S. physicians and 15% of nurses coming from other countries. These facts underscore the vital role immigrants play in sustaining the healthcare workforce in the U.S.

In conclusion, Texas should be able to address both issues through rational and effective legislative changes: “illegal” immigration and healthcare shortages depending on foreign workforce options. As it stands at the moment, Texas clearly relies on foreign workers and current immigration laws do not solve state workforce shortages that affect all facets of healthcare. Current immigration laws and policies also are tone deaf to addressing international crises resulting in global migration flows. The state must recognize its reliance on foreign nationals for essential healthcare roles appreciating that the burden placed on overextended hospital resources to implement the Order as to questions surrounding “unlawful presence” is an optical act not a solution.

Kathleen Campbell Walker is chair of the Immigration Practice Group at Dickinson Wright PLLC. She is also a national past president and general counsel of the American Immigration Lawyers Association (AILA), and an emeritus member of its Board of Governors. Internationally recognized as a leading authority in immigration law & policy and renowned for her extensive experience, Kathleen has testified before Congress six times. For her clients, Kathleen excels as a strategist in navigating complex immigration issues, offering solutions across diverse areas, including business immigration, compliance, audits, cross-border challenges, admissions, waivers, worksite enforcement, and consular processing. She can be reached at kwalker@dickinsonwright.com.