Appeals Court Upholds Central Health Authority to Invest in Dell Medical School

AUSTIN, Texas—On Friday, August 21, 2026, the Texas Third Court of Appeals dismissed the remaining claims in the Birch lawsuit, affirming what Central Health has maintained since the litigation began in 2017: Texas law gives Travis County’s hospital district authority to invest taxpayer dollars in the health care services and partnerships necessary to serve residents with low income.

In a memorandum opinion, the court reversed a lower court’s order and dismissed the remaining claims in the case for lack of jurisdiction. The court found that the hospital district framework in Texas law is broad enough to permit the use of public resources for direct care and for the additional services that make that care possible, and that Central Health has discretion to determine how best to provide medical and hospital care to Travis County residents.

Applying that authority, the court concluded that Central Health’s $35 million annual investment in Dell Medical School at The University of Texas at Austin—approved by Travis County voters in 2012—falls squarely within the district’s constitutional and statutory authority. The court also found that the plaintiffs lacked taxpayer standing to challenge certain other unspecified spending, because they produced no evidence that any of the spending they questioned actually occurred.

Voters approved Proposition 1 in November 2012 by a 10-point margin, directing tax revenue toward improved health care in Travis County, including support for a new medical school consistent with Central Health’s mission. Central Health, the Community Care Collaborative, and UT entered into the Affiliation Agreement in 2014.

Under that agreement, UT trains residents and medical students in community-based settings, provides clinical services to patients covered by Central Health’s Medical Access Program (MAP) and to uninsured patients, and helps develop clinical services at community clinics across Travis County.

Central Health presented data to the Travis County Commissioners Court in December 2025, showing that Dell Med-affiliated providers served nearly 25% of all Central Health patients and delivered more than 300,000 patient encounters from fiscal years 2023 through 2025. Patients in high-need ZIP codes, including 78744 in Southeast Austin and 78617 in Del Valle, were among the highest users of those services.

Central Health will continue to report to the Travis County Commissioners Court on how the Affiliation Agreement translates into care for patients with low income.

Read the opinion here.