Progressive Health of Fayette & Rural Health Care – PART I

To the editor:

The hospital in La Grange is supposed to reopen soon as “Progressive Health of Fayette.” (FCR 9-18-25, 1-1926) It will be operated by Progressive Health Group of Mississippi. After buying St. Mark’s Medical Center mortgage note from the U.S. Department of Housing and Urban Development at auction in 2024 for $806,199, Mark Young of Atlanta assigned ownership of the note to Green Jay Capital, LLC, a Texas company (Assignment 9-27-24, Fayette County Deed Records, Vol. 2155 / Pg. 460).

Green Jay then sold the hospital property (building with 19.96 acres) to Core-Gro 1 La Grange, a Florida corporation (28% share) and LGRH, LLC, a Delaware corporation (72% share) for $4.18 million (Deed 8-22-25, FCDR V2187/P958). For 2025, the Fayette Appraisal District has the property (Id. Nos. 128832 & 55228) appraised at $8,372,020 (building at $7,992,300; land at $379,720).

CoreGro 1 and LGRH later executed an Assignment of Rents and Leases (V2194/ P986, eff. 10-17-25) to 1 Saint Marks Place Lenders, LLC, another Florida corporation. The Assignment references a lease dated July 24, 2025 between CoreGro 1 (as “Landlord”) and Progressive Health of Fayette (as “Tenant”).

The result is that what was the Saint Mark’s building and land is now owned by Florida and Delaware companies and operated by Progressive Health Group of Mississippi. A Linkedin.com post says Progressive Health of Fayette has a “20-year absolute NNN Lease” with CoreGro. An “absolute NNN lease” places all financial responsibility on the tenant for operating expenses: property taxes, insurance, common area and building maintenance, and capital expenditures. ( westwoodnetlease. com) These operating expenses are obviously a huge financial challenge in the current rural hospital / health care environment and economy. Progressive Health is a private, for-profit company. It would be a challenge for any rural hospital (privately owned, non-profit or hospital district) to consistently cover these expenses and also the costs for payroll, supplies and equipment and still generate a profit. St. Mark’s, a 501(c)(3) non-profit, only had to break even to keep going. Progressive Health can’t just do that.

REHs

Progressive Health of La Grange will operate as a Rural Emergency Hospital (REH). This is a Medicare provider designation that Congress established in 2021. REH designation allows a facility to provide emergency services, out-patient care (admission cannot exceed 24 hours) and diagnostic (radiology/lab) and pharmacy services. REHs: (1) can provide skilled nursing in a separate unit (another source of revenue), (2) cannot provide obstetric care, (3) receive reimbursement at the Medicare out-patient rate plus 5% and (4) receive monthly facility payments of $285,000 from the federal government. ( cms.gov) There are now 43 REHs in 18 states. Texas has four REHs. ( beckershospitalreview. com) A fifth, Mid Coast Medical Center in Trinity County, closed nine months after it started operating as an REH. According to the Center for Healthcare Quality and Payment Reform, as of February 2025, Texas had 159 rural hospitals, 67% had a negative operating margin and 13% were at “immediate” risk of closing.

Healthcare Insurance Sources

Rural hospitals need patients with insurance to consistently get paid for their services. “Uncompensated care” causes hospitals and clinics to lose money. Many small businesses, farmers and ranchers are not able to offer group health insurance to employees.

Texas employers with less than 50 full-time employees are not required to provide health insurance plans to employees. ( texasinsurance. org) Basically, there are four sources of health care insurance: (1) employer-provided, (2) government plans (Medicaid & CHIP (insurance for children) and Medicare (eligibility starts at age 65), (3) individual plans (purchased directly from insurance companies) and (4) the Affordable Care Act (ACA) that has had part of the premium paid by the federal government. ( mymcso.com) People who can’t get Medicaid or Medicare or insurance from their employer often relied on ACA insurance – small business owners, hourly and parttime workers, farmers and ranchers. Congress passed the Affordable Care Act in 2010.

Congress enacted ACA premium subsidies during COVID but let those expire on December 31, 2025. Unless Congress restores the subsidies, ACA insurance will cost much more. People will drop coverage and rural hospitals will provide more “uncompensated” healthcare. The Bush School of Government and Public Service at Texas A&M reported in September 2025 that about 800,000 of the 4 million or so Texas residents with ACA insurance would drop coverage due to the subsidies ending. ( bush.tamu.edu)

Medicaid in Texas

Medicaid is the federal government health care program for people who have incomes less than what the government defines as the “federal poverty level” (FPL). The amount is different for individuals and families and changes from year to year. In 2025, the FPL started at $15,650 for one person, increasing by $5,500 for each additional household member (e.g., $21,150 for two, $26,650 for three, $32,150 for four). In May, 2025, Texas had a population of about 31 million with about 4,420,000 people (14%) on Medicaid. Of those on Medicaid then, 13% lived in rural areas; 61% were children; 22% were over 65 or had a disability; 68% of adults worked (45% full-time; 23% part-time). ( kff.org) Under the Affordable Care Act, Congress allowed the states, beginning in 2014, to “expand” Medicaid healthcare coverage to also cover individuals and families who had yearly incomes of up to 138% of the FPL. If a state agrees to put money into the Medicaid program, for every extra dollar the state spends for “expanded” Medicaid, the federal government covers 90 cents of the state’s cost.

Texas and eight other states have not opted into “Medicaid expansion.” Texas state officials say Medicaid is too bureaucratic and inefficient and that people instead should have to work and get health insurance through an employer. The Bush School of Government estimates that, at current funding rates, “Medicaid expansion” in Texas could bring in $5.4 billion of federal money to the state each year and provide health coverage to nearly 1 million Texans, with little cost to the state. ( bush.tamu. edu)

Medicaid Cuts

The 2025 Budget Reconciliation Act (the “One Big Beautiful Bill Act”) passed by Congress last July will, according to the Center on Budget and Policy Priorities ( cbpp.org), result in up to 15 million more people in the U. S. without health insurance by 2034 and includes over $1 trillion in spending cuts to healthcare through 2034. The Johns Hopkins Bloomberg School of Public Health ( publichealth.jhu.edu) says the majority of the cuts impact federal support for Medicaid and changes who is eligible to receive Medicaid and Medicare benefits and who can access Affordable Care Act plans.

Because some U. S. Senators from farm states (not Sens. Cruz and Cornyn) insisted on adding a provision for rural healthcare because of the cuts, Congress included a “$50 billion rural health fund” in the OBBB to get it passed. That fund was entitled the “Rural Health Transformation Fund” (RHTF).

Over the next five years, the $50 billion of the RHTF will be distributed among the 50 states.

The National Rural Health Association estimates that RHTP funding will only amount to 37% of the OBBBA’s $137 billion permanent cuts to rural federal Medicaid funding over a 10-year period ( ruralhealth.us 10-125). NRHA also said Texas will lose about $1.2 billion in Medicaid funding due to the new law but gain $1.6 billion from the RHTF. ( texastribune. org 7-24-25) The OBBB specifically says RHTP funds cannot be used as an offset for Medicaid cuts. ( northcarolinahealthnews. org 1011-25) The “bottom line” is that Medicaid cuts and ending ACA premium subsidies will negatively impact rural hospitals and healthcare. If people want some type of hospital, an REH seems like a good bet, but private companies like Progressive Health of Fayette are going to need help – from State government and local people. There are many La Grange area folks with the experience and knowledge to address this and get things done. We don’t hear much about it, but let’s hope they are looking for ways to help.

Russell Friemel Fort Worth & Ellinger