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Dewhurst and Nelson push Medicaid reform

I’m reserving judgment on this for now.

Sen. Jane Nelson

Lt. Gov David Dewhurst and Sen. Jane Nelson, R-Flower Mound, on Wednesday touted Senate proposals they say would bring down spending on Medicaid, the state’s health program for the poor, by instituting quality-based payment reforms for long-term care services and measures to catch Medicaid fraud and abuse.

“Our Medicaid costs have doubled, doubled since 2002-2003,” said Dewhurst, adding that Medicaid costs are crowding out room in the budget for “services people in Texas want to see,” such as public education, higher education and transportation.

Dewhurst said Senate Bills 7 and 8, filed by Nelson, the chairwman of the Senate Health and Human Services Committee, would bring down ballooning state Medicaid costs. “What we’re trying to do, Senator Nelson and myself, is improve the quality of health care for our Medicaid population” by providing incentives that lead to better patient outcomes.

The idea of payments based on medical outcomes rather than simply payment for services rendered is of course one of the cornerstone reforms of the Affordable Care Act. Given the Republican origins of many parts of the ACA, it’s hard to say if Dewhurst and Nelson are cribbing from it or if they’ve just gone old school. Either way, I’m quite certain that they would recoil from any attempt to compare their bills to the ACA, because of socialism or something like that.

SB 7 would redesign long-term and acute care services for the disabled and elderly — the most costly services in Medicaid — by instituting quality-based payment systems and expanding Medicaid managed care to cover services provided in nursing facilities.

SB 8 would ensure that providers found guilty of Medicaid fraud in Texas or other states would be barred from participating in the state’s program, strengthen prohibitions against marketing to Medicaid patients, add medical transportation services to managed care and enable the Health and Human Services Commission’s Office of Inspector General to establish a new data system to catch Medicaid fraud earlier.

Nelson highlighted that the OIG has identified more than $6 billion in fraud and waste between 2004-2011 in Medicaid, and she said a computerized claims monitoring program could be used “to identify outliers, anomalies and red flags in the Medicaid program so we can deal with those abuse trends on the front end.”

I want to hear from the professional wonks about this, but the Trib story doesn’t have any such quotes. Looking elsewhere, I do find some reactions. Here’s one in the Statesman:

Anne Dunkelberg, associate director of the Center for Public Policy Priorities, said Nelson’s goals of eliminating fraud and trying to create a Medicaid payment system that doesn’t provide incentives for too much or too little care “are goals everyone shares.”

Dunkelberg said her organization, which advocates on behalf of low-income Texans, will watch certain issues, particularly attempts to target fraud in the Medicaid transportation system, which many children, elderly Texans and disabled people rely on to make medical appointments.

Fairly nondescript, but not negative, which is good. Here’s the Chron:

It’s important for the state to take steps including making every effort to prevent providers from defrauding the state, said Bee Moorhead, executive director of the interfaith advocacy group Texas Impact. But Moorhead said the legislation touted Wednesday “is not the heart of the matter.”

“The biggest Medicaid problem Texas has is (that) so many people should be getting it, but aren’t,” she said.

Moorhead said more than 1 million children are eligible for health care but aren’t getting services. She also noted the opportunity for Texas to add 1.6 million people to Texas Medicaid over a decade through the expansion.

More of the same, so it would seem there isn’t anything particularly controversial. Going after fraud is relatively low-hanging fruit, and is unlikely to generate much opposition. Who doesn’t want to prevent fraud, and to punish those who do offend? I’d just note that any line item based on “money saved from fraud detection and prevention” is likely to be questionable, and anti-fraud measures have their own costs, since it takes people and other resources to investigate, prosecute, and collect repayments.

Expanding Medicaid is indeed the heart of the matter, but we know how that’s going to go.

Dewhurst also announced at Wednesday’s news conference that Texas would not expand Medicaid to cover impoverished adults, as outlined by the federal Affordable Care Act. “One size does not fit all in the health care arena,” he said, explaining he would rather apply for a block grant from the federal government to run the state’s Medicaid program independently.

Republican lawmakers have been under pressure to expand Medicaid to bring down the rate of uninsured and cut uncompensated care costs for hospitals and local government entities. Some Republicans in other states — such as Arizona Gov. Jan Brewer — have agreed to support the Medicaid expansion.

The Legislative Budget Board — headed by Dewhurst and House Speaker Joe Straus — issued a performance review on Wednesday morning recommending that the state empower counties to choose whether to expand Medicaid. Supporters of the Medicaid expansion say turning the decision power over to counties would relieve political pressure on Republican leadership.

The LBB report recommends that lawmakers pass a statute allowing counties to use local revenue to fund the expansion. In that way, local money that is currently spent on uncompensated care for the uninsured could be used to pull down $2.5 billion in federal funds for the 2014-15 biennium and cover 1.3 million impoverished adults in the six most populous counties.

The Chron quotes Dewhurst as saying expansion is off the table “at the present time”, for whatever that’s worth. I can’t say I expected Dewhurst to say anything different about Medicaid expansion – it would have been a bombshell if he had – but there are other aspects of the ACA that will affect Texas whether Dewhurst et al like it or not. This may not have been the venue to address that, but it would be nice to hear what he and others think about that. Be that as it may, here’s what that performance review says about Medicaid expansion:

Of the 535 hospitals in Texas, 108 hospitals owned by city, county, or hospital districts accounted for 48 percent ($1.5 billion) of charity care spending reported in fiscal year 2011. Most of the charity care (94 percent) local public hospitals provided was attributable to six hospital districts—Bexar, Dallas, El Paso, Harris, Tarrant, and Travis. Local public hospitals that account for a significant amount of uncompensated care spending report that 90.8 percent of patients receiving some form of charity care were non-elderly adults. With certain exceptions, federal law allows states to use intergovernmental transfers to obtain funds for use as the non-federal share for Medicaid services. By using local funds as the non-federal share for expanding Medicaid to newly eligible population, Texas could generate an estimated additional $2.5 billion in Federal Funds for fiscal years 2014 and 2015.

I had previously noted an announcement by the Center for Medicare and Medicaid Services saying that there would be no option for a “partial or phased in Medicaid expansion”. My interpretation of that was that it meant the county option for Medicaid expansion had been mooted. Obviously, the LBB and I can’t both be right, and I’d assume they’re the ones that are correct. I haven’t heard much on this option, if it still is one, since September, so I have no idea if anyone in the Lege is currently pursuing this. Dewhurst said that neither he nor Sen. Nelson endorsed the idea, which isn’t the same as saying they opposed it but which does present an obstacle. The Chron story has reactions from the type of people who might want the Lege to provide this option:

Local officials said their first choice would be for Texas to expand the program statewide. That would provide a uniform program across Texas and ensure a funding source while relieving them of some of their costs of uncompensated care.

The Legislative Budget Board assumed the higher match would apply for newly eligible adults with a county-based expansion.

If counties were to do an expansion, local officials said it would be important for private hospitals to contribute, not just leave the cost to local taxpayers. They suggested a fee as one option.

David Lopez, president and chief executive officer of the Harris Health System, said, “If this becomes a local option, then … everybody needs to have skin in the game.”

Ron Cookston, executive director of Gateway to Care, a Harris County-based nonprofit collaborative focused on health care, said letting communities manage expansion could have a real benefit, but a state-level expansion would be preferable.

“If it is not done at the state level, there is going to be, community by community, variations in the services … ,” Cookson said. “That creates an infrastructure nightmare.”

That second paragraph makes it sound like the LBB isn’t fully certain that county-based expansion is an actual option. It would be nice to have some clarity on that. As I said before, one does have to be concerned that if some counties opt to expand Medicaid on their own, some others will try to leech off of that, which is unfair all around. The county folks clearly understand this. Full statewide expansion is the only way to deal with that, but that ain’t happening, at least for now.

One more thing, from Trail Blazers:

Dewhurst and Nelson repeated their opposition to expanding Texas’ Medicaid program to add non-disabled adults between 18 and 65 whose incomes are below 138 percent of the federal poverty level. The federal health care law provides full funding of adding the adults for three years and will pick up at least 90 percent of the cost after that. But Texas Republicans have said they fear federal deficit-reduction efforts will undo the federal government’s promise to pay most of the cost. Nelson said she’s “concerned about the cost three years from now.”

If that’s your concern, then tell your colleagues in Congress to tone down their deficit obsession, which as we all know only really manifests when there’s a Democrat in the White House. The White House has already come to the realization that including Medicaid in any deficit-reduction “grand bargains” would undermine their own efforts to expand Medicaid, so I’d largely consider Nelson and Dewhurst’s concern to be no big deal. Unless Republicans get their way at the national level and disembowel Medicaid via the Ryan budget or something similar, of course. As above, I don’t really expect them to embrace my line of thinking here. The Observer has more.

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