Physician committee proposes division of $250-million Medicaid settlement

A panel of physicians and dentists held meetings to discuss methodology for allocating $253 million for pediatric Medicaid services with the goal of increasing access to care. Representing many different specialties, the physicians and dentists make up the Medicaid Physician Payment Advisory Committee and are charged with advising Health and Human Services on Medicaid reimbursement policies. They met on Friday, May 18, and Friday, June 1.

The money is available through a settlement in the federal class action lawsuit, Frew v. Hawkins, in which plaintiffs claimed the state did not provide children enrolled in Medicaid with adequate access to preventive services and evaluation and management services. PPAC must make a recommendation to HHSC soon for the department to meet the Sept. 1, 2007 deadline to increase reimbursement rates.

After reviewing projected Medicaid fee increases based on an actual fiscal impact, PPAC revised its May 18 recommendation to HHSC on how to spend the funds and still comply with the Frew agreement.

In addition to the 2.5 percent restoration of payments cut in 2004, the committee recommendation includes:

• 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.

HHSC projects $50 million will remain after the updates. With the remaining funds, 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. Health plans would be required to adopt a similar Medicaid fee methodology for increasing provider rates or, if using a different plan, delineate the increase for physicians to be in compliance with the Frew agreement.