CAPITOL UPDATE: Physician loan repayment bill wins approval as session ends

The Texas House approved TAFP’s physician loan repayment bill, House Bill 2154 by Rep. Al Edwards,
D-Houston, by an overwhelming 122-21 margin late on the last Friday of the session, after the Senate had approved it 29-2 three days before. The bill was sponsored in the Senate by Sen. Juan “Chuy” Hinojosa, D-McAllen.

Throughout the session, the bill was opposed by a powerful group of tobacco lobbyists because funding for the new program will be generated by closing a loophole in the application of excise taxes on smokeless tobacco products. The change will raise an estimated $105 million over the next biennium. About $22 million of that will go to fund the new loan repayment program, which will provide up to $160,000 for primary care physicians who agree to practice for four years in health professional shortage areas.

“Physicians and health centers consider House Bill 2154 to be one of the most significant pieces of legislation to pass in decades because of its potential to bring basic medical care to millions of Texans in the inner cities and rural areas of our state,” said TAFP CEO Tom Banning in a May 29 press release. “Texans for years to come should know it was the dedication and tireless work of state Rep. Al Edwards, Sen. Hinojosa and our many legislative champions that have improved access to health care.”

The bill should bring as many as 225 physicians to health professional shortage areas each year, meaning in four years when the program is operating at full capacity, Texas will have 900 new physicians serving communities in need.

Much of the remaining revenue generated by the change in the excise tax on smokeless tobacco will be used to provide tax relief to small businesses. Currently, businesses earning revenue in excess of $300,000 a year must pay a state franchise tax, but H.B. 2154 raises that exemption to $1 million.

“In these tough economic times the significant tax cut funded through Rep. Edwards’ bill could well mean the difference between businesses staying open or closing their doors,” said Bill Hammond, president of the Texas Association of Business. “Small businesses are a huge economic engine for Texas, creating 70 percent of the new jobs in the last 10 years and employing almost half of the Texas workforce, and they are breathing a little easier today thanks to Rep. Edwards’ leadership.”

The bill is now on its way to the governor’s desk. He has until June 21 to sign or veto bills, and those he chooses to neither sign nor veto become law after that date.

Administration of the new program will be the responsibility of the Texas Higher Education Coordinating Board and as soon as rules and an application process are in place, TAFP will help distribute that information to medical students and educational institutions.

Governor signs TAFP’s instant verification of benefits bill

Gov. Rick Perry signed into law H.B. 1342 by Rep. José Menendez, D-San Antonio, and Sen. Chris Harris, R-Arlington on May 30. The new law requires health plans to provide information to physicians at the point of care about what services are covered, the amount of the patient’s co-pay and deductible and what the patient’s out-of-pocket costs will be for services provided.

To read more about the bill and the problems that drove TAFP to pursue this legislation, check out the cover story of the latest issue of TEXAS FAMILY PHYSICIAN.

House, Senate approve $182.3 billion budget

The state budget for the next two years made it over the last hurdles in the final days of the session. No major changes, either positive or negative, were included in this budget compared to the one passed last session. Physicians received no increases in payment for the CHIP and Medicaid programs, but increases implemented in 2007 were maintained.

Funding for family medicine residency programs increased by 21.5 percent, receiving an additional $3.75 million for the next two years. That funding will go to increase the number of residency positions in the state as well as the amount of money allotted for each family medicine resident.

The budget did not include funding to improve the Medicaid eligibility system or to implement 12-month continuous coverage for children enrolled in Medicaid.

Final hours hold fate of TDI sunset and CHIP expansion

UPDATE 06.02.09: The Legislature adjourned sine die without passing a so-called safety net bill that would have authorized a two-year continuation of the Texas Department of Insurance, the Texas Department of Transportation and three other state agencies. As of September 2009, those agencies will begin to close up shop unless the governor acts to solve the situation.

Early on June 1, rumors around the House suggested that some members would have liked to trade a two-thirds vote to bring up the safety net bill for a two-thirds vote to bring up a bill allowing families earning between 200 and 300 percent of the federal poverty level to buy into the state’s Children’s Health Insurance Program. The CHIP expansion bill had been on the ropes for days and the governor had indicated that he would consider vetoing such a measure, but several lawmakers hadn’t given up hope.

The deal never materialized and with less than 10 hours left in the session, House members tried another tactic to keep the agencies alive. They approved a technical correction to a bill dealing with federal stimulus dollars in such a way as to keep the agencies going, in effect postponing the sunset process until the 2011 legislative session.

The Senate didn’t buy it, so the agencies are scheduled to close.

Some pundits argue that since TDI and other agencies have been allowed to sunset, Gov. Perry almost certainly has to call a special session since the alternative in TDI’s case would be to let the state’s insurance market proceed without any regulatory agency for the next two years. That’s not certain, though. The closure of an agency doesn’t happen overnight, and for agencies like TDI and TxDOT, the process should take a year. That means the governor has until September 2010 to stall on a solution, well after the March gubernatorial primaries.

Perry has said he will not be calling lawmakers back for a special session immediately, though he didn’t rule out the option for the future. He did indicate that the agencies in question would continue to operate.

Stay tuned for a final Capitol Report video newscast and an expanded Legislative Update soon to further examine just what happened in the 81st Texas Legislature.

Thanks to the Physicians of the Day

Thank you to the physicians who volunteered as Physicians of the Day this week: Jake Margo, M.D., of Rio Grande City; Rodney Wiseman, D.O., of Whitehouse; John Egerton, M.D., and Judith Egerton, M.D., of Austin; David Pope, M.D., of Kerrville; Steve Carter, M.D., of Childress; Fred Merian, M.D., of Wimberly; Ron McMurry, M.D., of Jasper; and John Green, III, M.D., of San Antonio.