Smith County commissioners have approved a mandatory fee on local private hospitals for Fiscal Year 2027. County leaders say it will help bring more federal Medicaid dollars back to East Texas, and it won’t use any taxpayer money.
The vote at Tuesday’s Commissioners Court meeting was unanimous. Commissioners Christina Drewry and John Moore were absent.
How the Fee Works
Mary Elizabeth Jackson, a Christus Health employee who presented on behalf of the law firm handling the program, walked the court through the plan.
She explained that Chapter 291A of the Texas Health and Safety Code lets Smith County set up a Local Provider Participation Fund, or LPPF. It works like a local tax, but only private hospitals pay it. Regular taxpayers don’t.
The fee can’t go above 6% of a hospital’s net patient revenue. It applies only to private hospitals in the county that provide inpatient care. These include Christus Trinity Mother Frances and some UT Health and Baylor Scott & White locations.
Jackson said the program is important because hospitals pay the fee, and that payment is what lets the county get matching money from the federal government. She stressed that no taxpayer money is involved.
Where the Money Goes
The money collected from the hospitals goes into its own bank account. Smith County manages that account, and the money can’t be mixed with general county tax dollars, Jackson said.
From there, the county sends the pooled money to the Texas Health and Human Services Commission. Medicaid requires a state or local share before federal dollars are released, so this transfer lets the state draw down a much bigger federal match.
The combined state and federal money then goes back to local hospitals. It helps them cover the cost of treating Medicaid patients and people without insurance.
Jackson said this isn’t extra money from Washington. In her words, it’s taxpayer money that’s already there, and the goal is to bring it back to Texas and to Smith County.
A Small Rule Change This Year
Jackson said there is one new change to how the program runs. Hospitals will now send the county separate audited filings for their inpatient and outpatient net revenue. Before, those numbers were combined. She called it the only change that affects how the program works, but said it’s an important one.
She added that presenting at a public meeting makes sure residents know the fee is happening. It also confirms that commissioners and county officials are aware of the changes. An attestation will be signed as part of the process.
What the County Gets
Thomas Wilson, an assistant district attorney with the Smith County District Attorney’s Office, said the county keeps a small administrative fee, set by the state, for running the program.
Wilson said it isn’t a large amount. It covers what it costs the county to operate the program and move the money through.
County Judge Neal Franklin said the court knows how much local hospitals rely on the LPPF money and was glad to approve it.
Other Items Approved Tuesday
Commissioners also approved these items:
- Proclaiming Nov. 10, 2026, as “East Texas State Fair Rodeo Day” in Smith County
- A resolution supporting the Old Hopewell/Swan Freedom Colony’s application to the Texas Historical Commission for an “Undertold Stories” historical marker
- Fiscal Year 2027 public service interlocal agreements with:
- Alzheimer’s Alliance of Smith County
- CASA for Kids of East Texas
- The Children’s Advocacy Center of Smith County
- Civil Air Patrol
- Meals on Wheels Ministry, Inc.
- People Attempting to Help (PATH)
- Smith County Historical Society
- St. Paul’s Children’s Foundation
- Tyler Economic Development Council (TEDC)
- Tyler Family Circle of Care
- A cooperative agreement with Texas A&M AgriLife Extension Service
- Two automobile claim settlements from the Texas Association of Counties (Claim Nos. APD20266310-1 and APD20266655-1)
- A resolution for the Texas Department of Agriculture’s Texans Feeding Texans: Home-Delivered Meal Grant Program, which funds Meals on Wheels Ministry for FY27