In 2014, that could change, when the Patient Protection and Affordable Care Act will allow states to expand Medicaid to cover all low-income adults up to 133 percent of poverty, or $14,856 for an individual. If Texas decides to expand Medicaid, the program will grow by an estimated 1.2 to 2 million enrollees.90
$23 billion on Medicaid,91
In fiscal year 2010, Texas spent of which Texas’ share
was $7 billion; the federal government footed the bill for the remaining $16 billion. While most enrollees (75 percent) are pregnant women and children, they account for only about 40 percent of the program’s costs. Seniors and patients with disabilities make up the other 25 percent but account for 59 percent of the costs.92
In 2011, the
Texas Legislature enacted numerous reforms to reduce Medicaid expenditures by nearly $3 billion, including authorizing the expansion of Medicaid HMOs, decreasing physician and provider payments, and reducing benefits and services.
The Children’s Health Insurance Program (CHIP) provides health insurance to low-income children who do not qualify for Medicaid. Like Medicaid, the costs are shared between the state and federal government: The federal government pays 72 percent of Texas’ CHIP costs. As of March 2012, some 570,000 children were enrolled. To qualify, a family of four may not earn more than $46,100 (in 2012).
For physicians, Medicaid and CHIP are typically the lowest payers and often do not even cover the basic cost of providing the service. On average, Medicaid pays 73 percent of Medicare and about 50 percent of commercial insurance payments.93 In 2010 and 2011, the state cut already-meager payment rates another 2 percent. If lawmakers cut physicians’ rates further or fail to invest in a robust physician network, millions of Medicaid recipients will have an enrollment card but fewer physicians to care for them, driving them to more costly emergency departments (EDs).
Repeal the dual-eligible payment cut
In early 2012, legislators made a funding cut without knowing its true impact, creating a
Medical Group Management Association; Centers for Medicare & Medicaid Services; Texas Health and Human Services Commission
January 2013 TEXAS MEDICINE 59
medical emergency for thousands of dual-eligible Texans and the physicians who care for them.
“Dual-eligible” patients are low-income seniors and people with disabilities who qualify for both Medicare and Medicaid. In Texas, there are almost 465,000 dual-eligible patients,94
sickest and most vulnerable people in our state.
When a physician provides treatment to a dual- eligible patient, Medicare pays the physician 80 percent and Medicaid the remaining 20 percent. Medicare also requires patients to pay an annual deductible — $140 in 2012 — which Medicaid pays because the patients are so poor. However, beginning on Jan. 1, 2012, Texas Medicaid implemented a new policy, limiting what it pays physicians (and other providers) to the maximum of what Medicaid pays for the same service. In most instances, the patient’s physician faces a cut of 20 percent, and potentially even more. Consider these examples:95
• Example 1: Established dual-eligible patient has not met any of the Medicare deductible and is seen during a routine office visit. Physician bills Medicare CPT code 99213. Maximum Medicare allowable is $66.90. Medicare pays $0 because deductible has not been met. Medicaid will pay
who are among the
Physician Cost/Revenue Comparison Multispecialty
Practice Revenues
Multispecialty Practice Cost Medicare
Medicaid $59 $60 $37 $29 Dollars per Unit of Service (RVU)
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