LEGISLATIVE AFFAIRS
Managing Medicaid New law expands Medicaid HMOs statewide BY KEN ORTOLON Medicaid beneficiaries in the Lower Rio
Grande Valley and rural Texas who have little or no experience with HMOs soon will become closely acquainted with them. Under Senate Bill 7, which passed in this summer’s special
session, the Texas Legislature mandated statewide Medicaid managed care, which previously was limited to large urban areas. The move is one of dozens of cost-cutting initiatives included in SB 7.
While the state expects to see sav- ings of more than $2 billion during the 2012–13 biennium from the shift to managed care, implementation of Medicaid cost-containment initia- tives, and the other provisions of SB 7, Texas Medical Association officials say the move will not be without some pain and confusion for Medic- aid patients and their physicians. “Change is always difficult, and it’s going to be hard to convert a physi- cian population, and even a patient population, that’s used to being in a private, choose-your-own-physician, fee-for-service arrangement into a new way of getting care,” said San Antonio pulmonologist John R. Hol- comb, MD, chair of TMA’s Select Committee on Medicaid, the Chil- dren’s Health Insurance Program (CHIP), and the Uninsured. “Ulti- mately, we may all be better off for this, but there will be lots of aches and pains in the short term.” Other provisions of SB 7 likely will impact physicians, hos- pitals, and other health care professionals across the state. Foremost among those is a provision that requires the Texas Health and Human Services Commission (HHSC) to begin moving toward quality-based payments in Medicaid. (See “Dozens of Cost-Cutting Measures in Senate Bill 7,” page 55.) TMA officials say it is not clear exactly what that will entail.
“Ultimately,
we may all be better off for this, but there will be lots of aches and pains in the short term.”
The HMO expansion The Medicaid managed care expansion under SB 7 repeals the Medicaid HMO prohibition for Cameron, Hidalgo, and Mav- erick counties in the Rio Grande Valley and also authorizes expansion of the HMO model to 202 rural counties across the state. All of those counties formerly were under the Medic- aid Primary Care Case Management model. The managed care rollout began in September in rural counties adjacent to existing urban Medicaid managed care service areas. Managed care will expand to the remaining rural coun- ties and the Rio Grande Valley in March 2012.
The change affects patients in both
the STAR and STAR+PLUS programs. STAR covers acute care, primarily for children and pregnant women, while STAR+PLUS covers the elderly and people with disabilities.
State officials estimate the shift to the HMO model will save rough- ly $385 million through efficien- cies they hope the health plans can achieve, such as reducing hospital in- patient services and keeping patients out of emergency departments. Plus, the state expects to gain an addition- al $240 million in health insurance premium taxes by shifting Medicaid
beneficiaries into private health plans. Another $805 million in savings is expected to be garnered
from provider rate cuts, most of which will impact hospitals. Plus, an additional $843 million in savings would come from provisions of Rider 61 in the budget bill and other benefit changes, including reductions in optional services and discon- tinuing paying coinsurance for patients dually eligible for Med- icaid and Medicare if paying the coinsurance would result in Texas paying above the Medicaid rate. In August, HHSC awarded contracts to five health plans
October 2011 TEXAS MEDICINE 53
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