Righting the Ship

An Interview With HHSC's Newest Captain 

 Texas Medicine Logo 

Medical Economics Feature – January 2013 

By Amy Lynn Sorrel 
Associate Editor 

Last September, Kyle Janek, MD, took the helm at the Texas Health and Human Services Commission (HHSC) as its new executive commissioner. The anesthesiologist already has a lot on his plate.

He will start the new year by asking lawmakers for a $4.7 billion emergency appropriation to cover a Medicaid shortfall from last legislative session and to keep the program that comprises the largest share of his budget from running out of money as early as March. And the former state representative and senator acknowledged the hard work facing the agency. That includes improving physician participation in not just Medicaid, but also the Women's Health Program (WHP). That program has been plagued by court wrangling over the legislature's exclusion of "abortion affiliates," a potential withdrawal of federal funding, and a proposed "gag order" that, until its reversal in October, would have prohibited WHP doctors from discussing abortion with patients.

Nevertheless, Dr. Janek expressed optimism for innovative approaches that he hopes will help "turn the ship around."

Below are excerpts from Texas Medicine's November interview with Dr. Janek. Watch the full interview online

Texas Medicine: Your agency serves a broad audience. But could you take a moment to address physicians, who are interested to hear from you as a peer about how you plan to work with and work for doctors in carrying out your agency's goals? 

Dr. Janek: This agency covers a lot of territory. Everyone thinks it's just about Medicaid and CHIP [Children's Health Insurance Program]. But that's the funding mechanism. It is considerable, and it's a big piece of what Texas physicians do. Our job is to do the most we can with the dollars the legislature gives us. I worry that fewer doctors are now accepting new Medicaid patients. I applaud that they continue to take care of the Medicaid patients they've got. But they are leery of taking on new ones with threats of lower pay, more regulation, that sort of thing. I would love to see us create a system of excellence, and quality, and better reimbursement to providers of all stripes that encourages those providers to knock on the door and say, "Hey, I want in."  

Texas Medicine: Only one-third of doctors take new Medicaid patients, for a number of reasons. What do you plan to do to help get that number up? 

Dr. Janek: Turning it around is not going to be easy. The number has been drifting down, and it's been a long time coming. It's primarily related to rates, but there is a hassle factor involved. To turn that ship around is going to take some time and some money. Mostly it's going to take spending the money we have wisely. And that would include things like not spending money on things that end up being fraudulent further down the road. We're making an effort on all fronts. We look at rates to providers of all stripes constantly. Periodically, on a set schedule, we look at and revise those rates as we think is warranted. Again, I want to create a system where excellent providers, providers of quality, are able to come into the system, and that incentivizes other doctors to say, "Gosh, I want to be part of the system." 

Texas Medicine: There's no question there are abuses. But the physicians are concerned the new antifraud rules may make legitimate, unintentional errors a target for prosecution. (See "Guilty 'Til Proven Innocent," December 2012 Texas Medicine, pages 16-22.) Are doctors rightly concerned this may be a backwards approach, a "guilty-until-proven innocent-approach," and why not spell out the difference between an error, or what is not fraud and what is? 

Dr. Janek: One thing we can do is to look at and monitor payments as they go through the system. Using sophisticated software techniques, if you start to see an outlier, you call it to the doctor's attention early on. If [the physician] can show [auditors] that there's a legitimate, clinical reason [for the billing pattern] early on, no harm no foul. If [the physician] can't, it's better to catch that when it's a less expensive error to the taxpayers than to wait 18 months to two years. So we want to monitor payments as they go along, and it is possible now using sophisticated software techniques to pick up on the small error that over time can be a big error. Those same software programs can let you look at certain things that clearly identify overuse and outright fraud, and that's where you get into the real trouble. I want doctors to know that as we develop this, it is not about catching those small errors and prosecuting them. It's about correcting small errors before they become high-dollar amounts. But it's also about watching for outright fraud and abuse.  

Texas Medicine: Physicians worry that when an investigation starts, payments stop while everything is sorted out behind the scenes, and yet business must carry on. Could this scenario be avoided in the process you just described?  

Dr. Janek: The process would be this: If [the OIG finds] a credible allegation of fraud, we have the ability to put a provider payment on hold. That means they would continue to accumulate. You investigate that allegation. And then if we found there's nothing, we'll release the money. The important thing for doctors is this should not drag out for two months, or three months, while they are waiting for payment. They've got cash flow needs to meet to keep their office going. We're asking for more attorneys in the OIG. I can almost hear the gasps among your readers that [these attorneys] will have to have something to do and find allegations of fraud and the like. The purpose of these extra employees is to cut that time down. From the time an allegation is made, and a hold is in place, [the OIG's goal] is that we get this all resolved in a four-week period of time.

I want there to be a good, strong dialogue with TMA and other physicians as we go forward. Help us develop that system that works without forcing you to either quit taking new Medicaid patients or shut down your practice.  

Texas Medicine: Your agency recently proposed a 1-percent across-the-board cut in Medicaid and CHIP payments in its 2014-15 budget request. How do you justify that proposal given the low participation rates we just discussed? 

Dr. Janek: Because we've now gone to a system of managed care throughout the state, it means that what's left is on the direct fee-for-service [side]. Estimates around this building are that between 10 and 25 percent of the caseload is in fee-for-service, [where] we may have to institute some rate cuts. I hope we don't get there. I think we can do without it. And again, that's the wrong direction if we get to that point. I want to go back and create the model for Medicaid, even in managed care, that encourages doctors to get into the system. One of the models we hope to discover, create, stumble upon – I don't care how we get there – is [one] where providers are at the table saying, "We'll share in some of the risk, but we want some of the reward. Pay more when the quality is good. We can do more with less in certain areas. But we also need to be able to do more with more in other areas." Whether that's an ACO [accountable care organization], or an IPA [independent practice association], or some new alphabet soup that hasn't been invented yet, we've got to get doctors back in the game to at least share in the risk, while participating in the rewards. 

Texas Medicine: Patient responsibility is a factor that impacts costs and outcomes but is often out of doctors' control. What is HHSC doing to get patients in the game, too? 

Dr. Janek: Most of the time, it comes down to financial incentives. The federal government gives very little latitude to do that. Even when it lets you [use] copays, premiums shares, and the like, it still is very clear and known by the patients themselves that even if they don't pay, [doctors] still have to take care of them. There's the rub. It could be that the incentive out there is not so much financial. Maybe the incentive out there is to do more for yourself, participate in wellness programs, stop smoking, lose weight, and we'll make sure that you get better latitude in clinic hours, easier access to clinics, rather than longer waits in emergency rooms. I'm not saying that's the [answer], but we have to find some sort of incentive, financial or otherwise, to get patients back in the game. Just like the doctors want to be available for the rewards if they take the risk, we have to get patients back in the game to take more control of their well-being. 

Texas Medicine: The dual-eligible payment cuts last session were another hit to doctors and access to care, particularly in certain regions of the state. Will you advocate to restore those cuts? 

Dr. Janek: We're working hard on that. In an attempt to restore some of that, you have to figure out how much money you can get to do that and where it is going to come from in other parts of the budget. To say we can do it for some doctors and not others is very problematic. We are not about to go look at the books of every practitioner in the state who is a Medicaid provider. Right now, our best hope is that we can restore some of those cuts on the deductible side. We think that is the best place to look right now, and that's what we are exploring. I don't know that we are going to get this done. It requires the cooperation of the legislature because it is money that would otherwise be available for other things.

Many of these doctors are also primary care providers, and because of the [Patient Protection and Affordable Care Act], one of the bright spots was a provision for straight 100-percent federal dollars [to raise Medicaid payment rates] for primary care doctors. We are working to determine what that number is going to be, what the conditions of it are. But certain primary care doctors should see an increase in their Medicaid reimbursement paid for with federal dollars. That's supposed to be available Jan. 1. I see nothing right now that tells me it won't. But we are working hard with [the federal government] to make sure those dollars are available.  

Texas Medicine: What is the status of WHP? Do you have enough physicians participating, and in gauging that, are you considering the difference between the one- and two-doctor practices that can take a handful of patients, compared with clinics no longer allowed in the program that were taking hundreds of patients? 

Dr. Janek: The state has always had an eye on continuing WHP as a Medicaid program with the exclusion of abortion providers and their affiliates. At the end of the day, my job is to make sure we've got a system – whether it's a Texas WHP or a Medicaid WHP – that provides basic primary and preventive care, including family planning, to the 115,000 to 130,000 women who need it. I will do this as long as we can do it as a Medicaid program. If that's not allowed by [federal] law – and we'll let the courts and CMS [Centers for Medicare & Medicaid Services] figure that out – then I will do it as a state-funded only program. Either way, I can do it. But we won't know the answer to that until all of these court cases are resolved.

We started making phone calls to existing providers, and last spring we certified a lot of them. We want this to be easy for the doctors. We want this to be seamless for the patients as they transition from the old Medicaid program to the new Texas WHP if that becomes necessary by court ruling, or if they transition from being Medicaid eligible. We don't want them to be caught in the middle of the conflict.

We're confident we have enough doctors. We've found 3,000 doctors. There was another big provider who [under state law] is no longer allowed – Planned Parenthood. We've got most of that business [covered]. Now that there's an opportunity to take care of those patients, [doctors are saying], "I'll do it." We're now in the process of gauging the capacity issue: If there are four doctors in a group practice, how many patients can they take? But we know our geography is good. We've got a good spread of doctors all over the place. And we are going to make sure our capacity is good and well. We got a bit of a bum rap. Some of it was self-inflicted because we had a provider list – not an official database – that had not been well filtered. So you might have one doctor [on the list] but three different office locations. And yet if you went through and saw those three different locations, you would think we had gone through and counted that three times. Our number of 3,000 is predicated on a [single] provider, not three different locations.

 Texas Medicine: Recent census numbers show a quarter of Texas' population remains uninsured. At the same time, there appear to be divisions in the state about whether to participate in the Medicaid expansion under health system reform. What is your view on the expansion? Could waiver flexibility make it more feasible? 

Dr. Janek: First and foremost this is a decision for the policymakers. I agree with the governor. It seems enticing to take federal money, but are you going to have to spend money later once you've entered into that system, and what's that cost going to be? I think everyone would agree that the Medicaid system is broken, and to go further down on that limb for the short-term effect of 100-percent federal dollars can put the state in big dire straits later on. My job is to find how we can do more with the resources we are given. Rather than provide all services to all people in Medicaid, I'd like to see a system that gives us more flexibility, not necessarily by waiver, but maybe by some change in federal law. I think we can design a system that fits Texas. [That includes] utilizing our medical schools. They are [located] where the Medicaid population centers are, and to the extent we can leverage better Medicaid funding for the medical schools and ask them to take care of that Medicaid population, now you've taken that dollar of straight [state] medical school funding with no match and turned it into $2.47, let's say.  

Texas Medicine: Now that the state has gone ahead with the expansion of Medicaid managed care, what is HHSC doing to hold these health plans accountable?  

Dr. Janek: We are constantly revisiting those contracts. We get more sophisticated all the time in how we build those contracts. We look at not whether it takes 90 or 120 seconds for the phone to be answered, but how the service is provided, how quickly providers are paid. We have tools called liquidated damages in our contracts with managed care organizations so we can go back to those plans and say, "You didn't meet the contract requirements. You didn't negotiate in good faith – whatever it was – and we are going to recoup some money from you." So there is a financial penalty under liquidated damages to get some money back if [plans] didn't meet the terms of the contract.  

Amy Lynn Sorrel can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email. 


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