or will the HMOs share one clearing- house?” asked Dr. Fisch, who says Med- icaid makes up 55 percent of his practice.
“And what about formularies? Will there still be one Medicaid formulary or will there be five formularies?” Ms. Kent Davis says his questions about formularies and clearinghouses have been resolved.
Waiving the UPL Also still to be answered is whether the federal government will grant a waiver to allow Texas to implement fully the Medicaid managed care expansion and other cost-cutting provisions of SB 7. HHSC spokesperson Stephanie Good- man says the U.S. Centers for Medicare & Medicaid Services (CMS) already ap- proved expanding Medicaid managed care to the Rio Grande Valley and rural counties, but still is negotiating a waiver to allow hospital services to be included in the program. At stake are some $2 bil- lion in Upper Payment Limit (UPL) dol- lars now going to Texas hospitals. The UPL funds are supplemental federal matching dollars that go to hospitals with heavy Medicaid patient loads. Without the federal waiver, Texas ei- ther would have to forego the UPL pay- ments or cut hospitals out of the HMO plans. That would mean HHSC would have to find other ways to make up for money expected to be saved by having hospitals in the HMOs. TMA officials say that likely would mean cuts in hospital payment rates.
Also still subject to federal approval
is the provision of SB 7 to move to qual- ity-based payments in Medicaid. That provision created a Medicaid and CHIP Quality-Based Payment Advisory Com- mittee to advise HHSC on quality-based reimbursement systems and policies; programs; standards and benchmarks; and outcome and process measures. In consultation with the advisory committee, HHSC is required to:
• Develop quality-based measures and payment systems.
• Convert Medicaid and CHIP hospital reimbursement systems to a diagno- sis-related groups methodology to more accurately classify specific pa-
Dozens of new cost-cutting measures in Senate Bill 7
While the Medicaid managed care expansion has the most imme- diate impact on physicians and patients, Senate Bill 7 and riders within the 2012-13 budget bill include dozens of other cost-contain- ment measures. Among other provisions, the bill requires:
• All Medicaid managed care organizations to provide outpatient pharmacy benefits using the Texas Health and Human Services Commission (HHSC) formulary, preferred drug list, and prior au- thorization requirements in fiscal years 2012 and 2013.
• HHSC to study physician incentive programs to reduce inappro- priate hospital emergency department use.
• HHSC to work with managed care plans to promote and provide payment incentives for patient-centered medical homes.
• Medicaid cost sharing to encourage personal accountability and appropriate utilization of health care services, including cost sharing for nonemergency services provided in emergency departments.
• HHSC to seek a federal waiver for more flexibility to determine Medicaid eligibility and benefits; allow the use of copayments, health savings accounts, and vouchers for consumer-directed ser- vices; consolidate federal funding streams and allow flexibility in the use of state funds; and more. The state assumes such a waiv- er could result in $700 million in savings. Those savings would be in addition to the more than $2 billion in savings achieved by SB 7 and the budget riders, but some political observers feel it is unlikely the waiver will be approved.
• HHSC to seek additional federal Medicaid funding for services required for undocumented immigrants.
• Ending the State Kid’s Insurance Program, a program for the children of state workers, and requiring HHSC to enroll eligible children in the Children’s Health Insurance Program (CHIP).
• Prohibiting the use of state funding from the Women’s Health Program for elective abortions.
The bill also authorizes the state to sign an interstate health care
compact with one or more other states to allow the states to re- ceive federal Medicaid funding as a block grant, allowing the states to design their own Medicaid programs. Congress must approve the compact.
October 2011 TEXAS MEDICINE 55
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