The 77th Texas legislative session got off to a relatively late start and was immediately faced with a looming budget crisis and a brewing scandal at the Medicaid program, not to mention the unenviable task of redrawing legislative boundaries, also known as redistricting.

Ready, set, . . . hold up a minute

With the “Great Florida chad debate” finally resolved, former Governor George W. Bush assumed the title of President. That move sent Texas legislators into a game of musical chairs. Lieutenant Governor Rick Perry ascended to Governor. Sen. Bill Ratliff, former chair of the Senate Finance Committee claimed the position of presiding officer of the Texas Senate, which provoked a shuffling of committee chairs, personnel, and staff in the Senate. Then there was the weeklong victory lap in Washington, which only reaffirmed the national media’s stereotypes about Texans. Added together, it wasn’t until around mid-February that committees got organized, except for the Senate Finance and House Appropriations Committees, which had been laboring to contain the fallout from the Medicaid program. 

The great Medicaid budget surprise

During this time, state budget leaders were tackling soaring Medicaid cost-overrun estimates, driven mostly by higher prescription drug cost, increased patient caseload, and simply more people signing up for health insurance. The state must pay about $600 million more than expected on Medicaid in the current budget and might have to pay another $600 million in the next biennium to fund current services for the Medicaid program. The state may have between $300 million to more than $1 billion in discretionary funding for the 2002-03 budget, however, Medicaid could eat up most–if not all–of that money.   

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Tom Banning, Director of Legislative Affairs

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Legislative Aide

Medicaid contractor under investigation

Just when you think it couldn’t get any worse. District Attorney Ronnie Earle launched a criminal investigation into whether National Heritage Insurance Co. deliberately overcharged the state $10 million for administrative costs associated with paying doctors and other Medicaid providers and overseeing parts of the state’s Medicaid program. The allegations could cast a larger shadow on an already troubled Medicaid program and derail legislative initiatives to streamline and simplify Medicaid enrollment, increase provider reimbursement rates, and reform Medicaid managed care.

Redistricting: will blood spill?

It gets worse. Redistricting is the once-every-10-years process by which lawmakers reapportion state House and Senate districts, as well as Texas congressional districts. It is a process in which lawmakers cannibalize each other’s districts as they wrangle for political survival. It is a bitterly partisan process through which the party in power tries to draw safe districts for its incumbents, while the minority party attempts to carve out some new seats that it can win. Regardless of how well intentioned, hard working, and well prepared Texas’ lawmakers are, they will be hog tied and preoccupied by this exercise.

Are you ready for some good news?

Despite the challenges the 77th Texas Legislature faces, they are well positioned to address a multitude of health policy issues. There is a solid consensus among key budget writers, agency and legislative leaders, and health care groups on what is broken and what needs fixing. The bad news is, well you’ve got a pretty good idea already. The following is an overview of issues the TAFP has been working on. This is by no means the whole of our efforts, but a quick run-down of some big-picture issues.

 Medicaid simplification

An estimated 600,000 Texas children are considered Medicaid eligible but not enrolled in the program. Recent surveys of low income Texas families show that the primary reason parents do not enroll their children is the hassle.

In response to those hassles, several bills have been filed to eliminate the resource test for children’s Medicaid, adopt Medicaid application and documentation requirements similar to CHIP, allow mail- and phone-in applications rather than face-to-face interviews, and provide children 12-month continuous enrollment in Medicaid.

Medicaid provider fee increase

In 1999, the Legislature provided a nominal Medicaid fee increase for health care professionals and outpatient hospital services. The fee increase of 2.7 percent, was the first in seven years. An already sparse Medicaid provider base is shrinking further due in part to the unsustainably low reimbursement rates.  Surveys of physicians reveal a substantial decline in the number of physicians accepting new Medicaid patients. Therefore, TAFP is strongly advocating a substantial statewide increase in Medicaid professional and outpatient hospital reimbursement rates, as well as CHIP reimbursement rates.

Medicaid managed care reform

In 1997 and 1999, the Legislature enacted numerous reforms designed to improve the Medicaid managed care program. The 2001 Legislature will revisit the issue yet again. Setting the stage for the reform debate is the Health and Human Services evaluation of managed care’s impact on access to care, quality of care, utilization of services, Medicaid costs, and the administrative complexity for providers, patients, and health plans. The following are a few of the proposals that will be debated:

• Maintaining the moratorium on new Medicaid managed care service areas

• Elimination of preauthorization requirements for routine services

• Developing common credentialing and referral forms for all participating Medicaid plans

• Subjecting Medicaid managed care plans to the prompt pay and utilization review statutes, including the Independent Review Organization process for appeal of denied medical services. 

Managed care reform

When you look at Texas’ managed care statutes they are the envy of other state medical associations, but in term of new ideas its like the third day of a garage sale—all the big stuff has been taken. Almost all managed care reforms this session will be to refine and tighten existing statutes and close loopholes, such as prompt payment and clean claim legislation. Representative Craig Eiland (D—Galveston) and Senator Leticia Van de Putte (R—San Antonio) will pursue tougher legislation to ensure health plans aren’t allowed to contract their way out of or simply ignore the prompt pay statute.

Other managed care reform initiatives include standardized credentialing, prohibiting the mandatory use of hospitalists, prohibiting tied or all-products clauses, refining the 1999 physician negotiation law to make it more user friendly, and re-enacting the law prohibiting health plans from dumping financial risk and other tasks on physician networks.

Telemedicine

Following three interim studies on ways to expand telemedicine services, more than 12 different bills have been filed in the House and Senate. Telemedicine, as we expected, has turned into a politically hot topic.

TAFP staff has been working with Senator Mike Moncrief (D—Fort Worth) and Representative Glen Maxey (D—Austin) to draft a comprehensive, omnibus telemedicine bill that would expand reimbursement for telemedicine services, while ensuring it is done in an appropriate way. We have tried to ensure telemedicine is 1) a physician directed tool, 2) there are provisions in place to protect existing health care systems and medical relationships, and 3) quality of care and supervision rules are in place.

Scope of practice

After intense debate on a range of proposals, an agreement was reached with the nurses and physician assistants on a bill to amend the Medical Practices Act and the Physician Assistant Practices Act to designate the PA as an agent of the supervising physician when performing delegated medical acts. The agreement would also allow physician-based collaborative model for prescriptive authority. This would allow the delegating physician the option of placing an APN/PA with delegated prescriptive authority in one alternate site separate from the delegating physicians’ primary practice site. Certain conditions would apply to the physician-based collaborative model.

Lawsuit abuse

After a sustained hiatus and rate rollbacks, medical liability claim frequency and in some instances award severity has again escalated, prompting some dramatic and perhaps in some cases indefensible premium increases and discriminatory underwriting policies. Seeking to address those ills, House Judicial Affairs chairman, Juan Hinojosa (D—McAllen) has filed legislation to reinstate a bad faith cause of action, which would enable physicians who are the target of frivolous lawsuits to countersue those who initiated the legal action. A separate, but important issue is a request by the Legislature to investigate the business practices of certain malpractice insurers, specifically in areas where there appears to be an attempt to “redline” or set premiums in an unrealistic way designed to dump risk.

This overview focuses on only a few of the issues your academy has been working on. Other issues include protecting patients’ medical privacy, public and rural health initiatives, workers comp, and graduate medical education. Over 4,000 bills have already been filed and more than 400 are directly related to health care. The outlook is guardedly optimistic, but one thing is for sure—-the TAFP will spend the rest of the session making certain the voice of family practice is heard and the patients of Texas are protected and served.