As Congress flounders in another messy immigration debate, medical contracts worth hundreds of millions of dollars could grow amid the fallout of President Donald Trump's executive order to halt his own policy to separate families illegally entering the country.
Healthcare for detained immigrants—both children and adults—is a sprawling, confusing system where various government agencies contract with networks of doctors and community hospitals. It is also an expensive system whose costs are hard to predict and manage since they are based on unexpected surges in people crossing the border.
In the first six weeks of the Trump administration's policy to separate kids and parents at the U.S.-Mexico border, more than 2,300 children were sent to HHS-contracted shelters and facilities or foster care. The HHS Office of Refugee Resettlement (ORR) currently houses 12,000 children across 17 states and in 100 facilities managed by contractors.
On Wednesday, Trump issued an executive order to detain families together, potentially adding more strain on facilities and the federal government's budget to provide healthcare to those detainees.
The system is fragmented under current law. Immigrant adults fall under jurisdiction of the Department of Homeland Security and get processed by the U.S. Immigration and Customs Enforcement (ICE) and moved into the Department of Justice system. HHS takes responsibility for unaccompanied immigrant children under 18.
Both HHS and ICE pay for the medical care for the children and adults they detain. According to an official, HHS uses a private payer, Point Comfort Underwriters of Indiana, to reimburse provider claims, and ICE uses an agency under the Veterans Affairs Department to process claims from hospitals and physicians that treat detained immigrants. Point Comfort Underwriters did not respond to a request for confirmation.
Both departments reimburse at Medicare fee-for-service rates.
Treatment costs can run up here. During the 2014 immigrant surge, the Texas Hospital Association warned its hospitals that mandatory medical screenings of detainees often identify "serious and chronic health conditions that were previously undiagnosed."
This outside medical treatment is separate from the clinical work managed by the detainment centers for children.
Southwest Key—a not-for-profit that has contracted with HHS to run shelters for unaccompanied minors for the past 20 years—has 26 ORR facilities for the children in Texas, California and Arizona, with licensed medical assistants on staff, a medical director and licensed vocational nurses who oversee basic care. Lawmakers who visited the facilities over the last weekend also noted a significant number of psychiatrists as officials struggled to manage the trauma of kids, often very young, who had been taken from their parents.
HHS pays outside physicians and doctors when they are needed. There are subcontracts with local physicians to visit the facilities three times per week for kids who need specialty or additional care, and contracts with local hospitals and specialists for more acute cases, according to Cindy Casares a Southwest Key spokesperson. This can include childbirth: three young immigrants under age 18 who were housed in one of Southwest Key's Texas facilities had just given birth, a Democratic lawmaker recently back from a tour told Modern Healthcare.
Hospitals contacted by Modern Healthcare declined to comment on whether they were currently treating detained immigrants, or how many.
But the contracts for Southwest Key have been spiking over the last decade according to tax filings from the organization, whose mission is "opening doors to opportunity so individuals can achieve their dreams."
From fiscal 2013 to fiscal 2014, contracts and grants rose from $95 million to more than $165 million. By fiscal 2016, revenue had grown to $242.8 million, almost 99% from grants and contracts, with $16.6 million in profits—nearly double the profit from 2015. Meantime, Southwest Key CEO Juan Sanchez's salary has gone from about $269,000 in 2010 to $1.5 million in 2016, according to tax records. The company's contracts are poised to balloon to $458 million in fiscal 2018.
Healthcare for temporary youth shelters, whose numbers fluctuate, are contracted to the Florida-based Comprehensive Health Services. The company won two five-year contracts in 2015 with HHS and ORR that could be worth up to $388 million, according to a 2015 press release.
HHS has paid out periodic disbursements to the company for "staffing infrastructure" that have ranged from $586,000 to more than $179 million. The company's program coordinator for the shelters, Keith Rigdon, is a former market manager of the physicians group owned by healthcare giant Hospital Corporation of America. He also worked as a site director for an unidentified shelter described as "HHS' largest Unaccompanied Alien Children shelter facility" and as a program manager at the state department.
A spokesperson for Comprehensive Health Services referred all questions about how the company contracts with local providers to ORR. As of press time, the spokesperson for ORR did not respond to a request for more details on how the HHS agency works with the company.
As contracts grow, the grantees themselves are undergoing more intense scrutiny. Democratic lawmakers who visited Southwest Key facilities in Texas as well as the federal processing center weren't concerned about the standards of healthcare offered for the children and adults being detained.
Modern Healthcare could not independently verify the quality and continuity of medical treatment offered out in the community for the people in detention centers. On the contractor side, lawsuits and reports have emerged detailing alleged abuse and mistreatment at residential facilities and juvenile detention centers.
Spending on healthcare for the detainees isn't likely to let up even as the House votes on two bills Thursday. Both proposals on the table would detain families together the way Trump's executive order does. This would change the longtime policy set by the 1997 Flores Agreement, which mandates that children under 18 must be kept in the "least restrictive" setting possible and released to parents, family or foster care as soon as possible, while adults move through the DOJ system.
In the meantime, Rep. Tom Cole (R-Okla.), lead House appropriator for HHS, said he is already talking to HHS Secretary Alex Azar about what funding the agency needs to address overwhelmed facilities for children and youth.
"I think this is a really tricky problem, because the flow is unpredictable," he said. "And frankly, last year we'd had a decline, and this year a surge that wasn't expected."
A swell in 2014 and again in 2016 left Obama's HHS struggling to house tens of thousands of unaccompanied kids in temporary shelters that included military bases. One of these bases, Fort Sill in Cole's district, housed 1,200 kids from age 6 to 16 in 2014, Cole said.
Sen. Roy Blunt (R-Mo.), chair of the HHS appropriations subcommittee in the Senate, said HHS has been in talks with appropriators about additional funding but hasn't yet made a specific request and he does not expect one before the Senate committee marks up its HHS appropriations bill next week. He added that appropriators and HHS went back and forth over funding increases under the Obama administration and he expects it to continue.
As Democrats blast the Trump executive order as tantamount to indefinite detention of entire families, a group of Senate Republicans is broaching negotiations on a narrow bill that would establish residential facilities and standards and add more adjudication judges to speed up review of families' cases.
A GOP proposal that focuses only on keeping families together would do the same although lawmakers have not decided which department should have jurisdiction over the families. Under Flores, minors can't be held in custody more than 20 days and currently there are only three federal centers for families, two in Texas built by the Obama administration and one in Pennsylvania.
Apart from the legislative push, Attorney General Jeff Sessions is facing at least one lawsuit, filed in April, castigating the system for how some treatment centers are being run and detailing abuse that goes back more than 20 years.
One 16-year-old Mexican immigrant cited in the case describes being kept in the Shiloh Residential Treatment Center in Manvel, Texas, for nine months after three months in a Southwest Key facility, even though the teen's father had sponsored her trip to the U.S. and had been cleared to receive her.
The young immigrant was told that "I am a bit aggressive so I am still here." The teen said in the lawsuit that her brother recently had been murdered.
Another letter from the National Center for Youth Law included in the lawsuit deposition described a Texas facility called Daystar where three children died of asphyxiation between 1993 and 2002. The facility maintained its license to house more than 140 unaccompanied minors until 2011 even though a fourth death by asphyxiation occurred in November 2010.
"Beyond these deaths, there were reports of sexual abuse and staff making developmentally disabled girls fight for snacks," the letter said.