Houston Chronicle: Was it the Texas Legislature that broke Medicaid?
By Patricia Kilday Hart
April 28, 2013
At a recent House committee hearing, a health care analyst for the conservative Texas Public Policy Foundation argued against a plan to extend Medicaid benefits to low-income adults, even though the federal government has promised to pay most of the cost.
Already, a declining number of doctors are willing to see Medicaid patients, reasoned the foundation’s John Davidson. He said it would be “reckless and irresponsible” to add more patients to a program that is, essentially, broken.
Under questioning by lawmakers, Davidson acknowledged that doctors opt out of Medicaid because it pays so little. Who determines how much doctors are paid?, Davidson was asked.
“The Legislature of the state of the Texas,” he replied.
Rep. Garnet Coleman jumped at the opportunity: “If you claim it is broken, do you think we broke it?” the Houston Democrat asked. If doctors are being driven out of Medicaid by poor pay, he argued, “the only responsibility for that is us.”
The exchange reduced the legislative session’s most incendiary debate to its core. To Gov. Rick Perry and other conservatives, the state should reject Medicaid expansion, even though the federal government has offered to pay $100 billion over the next decade for a $15 billion match, because the program is “broken.”
So, who broke it, and how?
Coleman’s observation provides part of the answer: Just last session, the Legislature trimmed $486 million in state money paid to Medicaid providers, and ended a student loan-forgiveness program for new doctors exclusively serving Medicaid patients.
The federal government, which has established some rules that restrict the state’s ability to rein in costs, also bears some responsibility.
For example, the federal government will not allow states to charge even small co-pays, which could discourage overuse of services.
In 2009, the Texas Medicaid program paid $467 million for almost 2.5 million emergency room visits – but half of those visits were not emergencies, according to Stephanie Goodman, communications director for the Health and Human Services Commission.
“Private insurance plans typically charge a higher co-pay for an emergency room visit than for going to a doctor’s office because they want to create an incentive to choose the right level of care for the situation,” she said. “Medicaid should do the same.”
Not much downside
Supporters of taking the federal money – from the usual liberal suspects to Republican county officials and big city chambers of commerce – see little downside to extending health care coverage to an estimated 1.5 million working poor Texans.
Senate Finance chair Tommy Williams, however, says Medicaid’s costs are crowding out other core government responsibilities, like education and infrastructure.
“In Texas, Medicaid currently costs as much as education when you look at all the funding sourced,” said Williams, R-The Woodlands, in a recent editorial. “That’s never happened before.”
At the same time, Medicaid has kept its costs down better than other sectors of the health care system. On a per-beneficiary basis, the program’s costs grew only 4.6 percent between 2000 and 2009, compared with a 5.1 percent increase in Medicare and a 7.2 percent increase in costs for patients covered by private insurance, according to the national Center for Budget and Policy Priorities, which focuses on policies affecting low-income families.
“Medicaid is the victim of Swift-boating,” said Anne Dunkelberg, analyst for the Austin-based Center for Public Policy Priorities, referring to the political ad campaign that torpedoed Sen. John Kerry’s 2004 presidential bid. “It is the power of the talking point that is repeated so often that people believe it.”
Medicaid is spending less per recipient today than in 2001, Dunkelberg says. The program’s bigger footprint can be traced to demographics, not overuse, she argued. Texas accounts for half the increase in children in the U.S., says the census, and most of them are poor.
Still, the program cannot work if fewer doctors accept Medicaid patients, and low provider rates are only one part of the reason why many do not.
For example, Medicaid patients, low-income folks who rely heavily on public transportation, have significantly higher no-show rates than other patients.
Though it is an uncomfortable topic, physician advocates say it is impossible to run a viable Medicaid practice when an estimated 50 percent of the patients fail to show up for appointments.
Not any no-show fees
Yet, the state is forbidden by federal rules to charge no-show fees, reasoning that elderly, disabled and poor children simply do not have the money. That is why conservatives would like the state to obtain federal dollars through a block grant and design its own program.
“A block grant would give us the flexibility to design a system that includes co-pays and no-show fees that would make Medicaid more attractive to doctors,” said Chris Traylor, chief deputy Health and Human Services Commissioner. “We have to try something new.”
Block grants, however, carry significant risk for high-growth states because they are not adjusted for population growth. Texas obtained a block grant for its Temporary Assistance for Needy Families program, and now receives less than 26 percent of the average level of federal spending per child in poverty. In 2012, Texas received $294 per child in poverty compared with the $2,782 New York received.
In the last decade, the state has taken important steps to increase efficiency in the Medicaid system by requiring all providers to participate in managed care networks. It also has taken aim at fraud and abuse by tracking billing to identify outliers.
The Texas Senate recently passed a measure sponsored by Sen. Jane Nelson, R-Flower Mound, that would target overuse of ambulance services by requiring they participate in managed care plans.
Perry always opposed
Last week, a House committee approved a proposal by Rep. John Zerwas, R-Richmond, to seek a block grant for Medicaid. The bill also would provide subsidies for low-income adults to buy private insurance policies, rather than simply expand Medicaid. The idea mirrors a plan adopted by Arkansas lawmakers.
A spokeswoman for Perry said the governor opposed that plan, since it would use federal money to expand health care.
Dunkelberg said Perry’s position proves that the criticisms leveled at Medicaid are a red herring.
“Even when given an opportunity to do what Arkansas proposed – put this group not in the traditional Medicaid program and not with traditional co-pays – he’s saying he’s going to turn it down,” Dunkelberg said. “He’d rather let 1.5 million Texans of the poorest uninsured go without coverage.”
Paradoxically, people on both sides of the debate acknowledge that the state’s health care network would be strengthened if more Texans had health care coverage – be it government-paid or private.
“You are in a lot better position to build your provider supply,” Dunkelberg said, “if you have patients who can pay than if you have patients with no insurance.”