80th Lege ends in tumult, just like it began

Memorial Day marked the close of the 80th Texas Legislature, and a raucous end it was. Just as the session began with a hotly contested Speaker’s race, so it ended with Speaker Tom Craddick, R-Midland, struggling to maintain his leadership position. The rebellion in the House disrupted business for the last four days of the session, culminating in a quorum-breaking walkout on the night before the final adjournment. Here’s a quick rundown on how several of the issues we tracked ended up.

Budget

The final budget spends a record $153 billion over the next two years. Funding to expand CHIP and strengthen Medicaid made it into the bill. Physician Medicaid reimbursement will be increased for the first time in several years because of a settlement in the class action lawsuit, Frew v. Hawkins. The amount allocated to increasing physician reimbursement—$253 million—goes directly to improving pediatric Medicaid services with the goal of increasing access to care. A separate measure approved by the Legislature will provide a 10-percent increase for adult Medicaid services. The Medicaid Physician Payment Advisory Committee brought together a cross-section of physicians and dentists to make the following recommendations for pediatric Medicaid services. In addition to the 2.5-percent restoration of payments cut in 2004, PPAC recommended:

• Updating all Texas Health Steps screening services to parity with Medicare by using the 2007 Medicare RVUs, or relative value units, and the Medicare Conversion Factor to 100 percent for new patients and 92 percent for established patients;
• Increasing all remaining Evaluation and Management services by 27.5 percent above existing fees;
• Assuring the RVU update does not result in a decrease for existing RVUs or access-based codes by giving a five-percent increase to any that would have seen a decrease; and
• Updating the anesthesia procedure codes using the 2007 Medicare base units and increasing Medicaid conversion factors for anesthesia.

With remaining funds, projected at $50 million, PPAC members advised ensuring an increase in pathology services for independent laboratories, giving immunization codes up to a 20-percent increase and giving further increases to codes that received a five-percent increase in the original adjustment. Dentists would see a separate update of 50 percent for their Current Dental Terminology codes. Rate increases will go into effect Sept. 1, 2007.

Medicaid Reform

HHSC will have lots of new projects to try out in Medicaid as a result of the passage of Senate Bill 10, Sen. Jane Nelson’s, R-Flower Mound, omnibus reform package. Provisions in the bill include:

• An incentive program to encourage Medicaid patients to stop smoking, control their weight and implement other preventive health measures;
• An effort to pool state Medicaid dollars with employer and beneficiary contributions to pay for private insurance premiums in a “three-share” or “multi-share” program, and the creation of customized Medicaid benefit packages;
• The establishment of the Texas Health Opportunity Pool, which will provide subsidies to help low-income adults purchase policies through their employers;
• The creation of customized Medicaid benefit packages;
• A study of the feasibility of introducing health savings accounts as an option for adult Medicaid clients; and
• A study on how to give financial incentives so more employers would offer insurance that covers nursing home stays.

CHIP Enhancement

HB 109 by Speaker Pro Tem Sylvester Turner, D-Houston, pulls down many of the enrollment barriers erected in 2003 that caused approximately 200,000 children to be dropped from the CHIP program. Estimates are that the provisions of HB 109 could bring more than 120,000 children into the program. The final bill would:

• Change the enrollment period from six months back to 12 months for families up to 185 percent of the federal poverty level;
• Institute an electronic income verification mechanism that will be required every six months for families above 185 percent of the federal poverty level;
• Eliminate the 90-day waiting period for uninsured kids; and
• Institute a more reasonable asset test.

Managed Care

HB 522 by Rep. Beverly Woolley, R-Houston, is a solid first step toward giving physicians accurate, up-to-date information about their patients’ benefit coverage and out-of-pocket responsibility at the point of service. See an in-depth discussion of how the bill will affect your practice on page 28.

• The bill establishes a technical advisory committee to make recommendations to the Texas Department of Insurance on what information health plans should be required to provide physicians including, but not limited to, covered services, benefit limitations, patient deductibles, copays, prior authorization requirements, patient liability for proposed services and health plan coverage amounts for proposed services.
• The advisory committee will also make recommendations on what kind of technology health plans should use to provide the information. These could include smart cards, Web portals and biometric technologies.
• HB 522 directs the TDI commissioner to designate a county or set of counties for a pilot program to test these ideas. Health plans in those counties would be required to participate in the plan.

HB 1594 by Rep. John Zerwas, M.D., R-Fulshear, is designed to expedite the health plan credentialing process for physicians joining a group practice in the plan’s network. It requires plans to recognize those physicians as in-network as soon as they begin seeing patients. This legislation should help keep patients from being hit with expensive and unexpected out-of-pocket costs.

SB 1731 by Sen. Robert Duncan, R-Lubbock, contains provisions designed to make health care more transparent, giving employers, employees and Texas patients access to health care information about medical service costs and patient out-of-pocket expenses. Under the bill:

• Health plans and health care facilities will have to provide information on health costs and out-of-pocket costs to patients;
• The Department of State Health Services will host a Web site where the public can access health information and general information on health care facilities; and
• Physicians will have to publish a set of billing policies that patients can access upon request.

Technical corrections to the business activity tax

Remember the business activity tax the Legislature passed last time around? If not, you’re in for a surprise in 2008. That’s the year businesses making more than $300,000 a year begin paying the state’s new business tax. During this session, legislators made some “technical corrections” to the tax that will give a break to many physician offices. HB 3829 by Rep. Jim Keffer, R-Eastland, puts a sliding scale of tax discounts in place for businesses earning between $300,000 and $900,000 a year. For example, a business with revenue ranging between $300,000 and $400,000 would get an 80-percent discount while a business with revenue between $400,000 and $500,000 would get 60 percent.

Public Health

The most notable public health bill to make it through was the physical education bill, SB 530 by Sen. Jane Nelson. That bill requires increased physical education in grades K-8 and an annual fitness test for grades K-12.