Legislative Alert: HHSC Poised to Eliminate Medicaid PCCM in Urban Areas

In the face of strong opposition from physicians and medical groups, the Texas Health and Human Services Commission is likely to go forward with a plan to repeal the Primary Care Case Management model for Medicaid in the state’s urban areas in favor of expanding the Star+Plus HMO model. Commissioner Albert Hawkins says the move will save the state almost $100 million in 2006-07, but critics of the plan say the savings are really a cost shift to local communities.

Hawkins spent several hours on Friday, Feb. 11 stating his case before the House Appropriations Subcommittee on Health and Human Services where several lawmakers questioned his assertions. Rep. Vicki Truitt, (R-Keller), was among those expressing concern with the plan, saying, “We must do a better job of managing care for these people, but I don’t want to do something that squeezes the balloon in such a way that it pushes the problem onto a different group.”

A Lewin Group study commissioned by HHSC concludes that the cost difference between the PCCM model and the Star+Plus HMO model can be measured in pennies. But while money spent in the PCCM model goes directly to patient care, 15 to 20 percent of the money spent in the HMO model covers administrative costs. Plus, money spent in the Medicaid HMO model is not eligible for a federal match, which means counties could lose out on millions of dollars.

According to TMA’s most recent survey, only 46 percent of Texas physicians currently accept new Medicaid patients, with the most severe drop in participation occurring in urban managed care counties. TMA estimates that if physicians are forced into an HMO-only model in those urban counties, the state can expect 15 to 20 percent more physicians will drop out of the program. Were that to happen, patient access to Medicaid would be greatly diminished.

Hawkins told the House Appropriations subcommittee that although he may soon announce tentative contracts awarded to managed care companies for the expansion, those awards would not be binding and that if the Legislature clearly indicated that they did not want the expansion to go forward, he would not push it through. However, the Legislative Budget Board has already calculated $100 million in savings from the Star+Plus expansion plan in their proposed budget, so changing course will not be easy.

TAFP strongly supports the Medicaid PCCM model and has urged HHSC not to go forward with its planned Medicaid HMO expansion. Contact your state senator and representative today and ask them to refuse to eliminate the PCCM model from any parts of the state.

If you need contact information or you do not know who your state legislative representatives are, you can use AAFP’s Speak Out Web site by logging on to http://capitol.aafp.org/.