TMA Legislative News Hotline: Thursday, March 23, 2017



Senate Budget: On Wednesday, the Senate Finance Committee unanimously passed its proposed budget for the 2018-19 budget cycle. The bill allocates a total of $217.7 billion for the next two years, of which $106.3 billion is from state general revenue. The measure relies on delaying a $2.5 billion payment for transportation funding to the next budget cycle to remove it from this cycle’s balance sheet. Without the accounting change, the budget would not be within Texas Comptroller Glenn Hegar’s biennial revenue estimate of $104.9 billion — which is all lawmakers can allocate for the next budget cycle. 

Here are some key points included in the Committee Substitute to Senate Bill 1, the Senate’s budget bill (all numbers represent general revenue), as summarized by the committee’s chair, Senator Jane Nelson (R-Flower Mound):  

  • Funds Medicaid caseload at fiscal year 2018 levels; 
  • Allocates $244 million for mental health, including $63 million to reduce mental health waiting lists, and adds money for state hospitals;
  • Appropriates $264 million for women’s health preventive services;
  • Funds $30 million more for graduate medical education (GME) to work towards to goal of having sufficient residency slots for all graduating Texas medical school students. 

In the coming days, TMA staff will analyze CSSB1 for additional details. The full Senate is scheduled to vote on the bill early next week.

Some more details, in the meantime:  

Health Care Cost Containment: 

  • Adoption of a rider reducing Medicaid funding by $410 million (general revenue) from an already tight budget for Medicaid (TMA is working with lawmakers to ensure these cuts do not impact physician payment rates or patient care);
  • Retention of proposed cuts in staff and services — including infectious disease prevention and public health preparedness and capacity — at the Texas Department of State Health Services;
  • Requirement that medical schools that contract to care for state employees accept payment rates equal to Medicare; and
  • Increased out-of-pocket expenses to discourage state employees from using free-standing emergency departments.

Education: The Senate Committee’s 2018-19 budget adds $393 million for medical education-related programs. These budget proposals would cut some medical school and Texas GME programs, while retaining funding for others. 

The revised budget bill provides a surprising addition of 16.6 percent in funding for Medical Student Formula Funding (per-student funding) compared to what the Senate’s initial draft bill proposed. This would raise the annual per-student amount from the $45,301 that was in the base bill, to $52,815. This is a 13-percent increase over the current two-year budget. The Senate is proposing a process to put an end to most special-item funding for higher-education programs. Instead, the budget adds $375 million in one-time funding for the health-related institutions. The special-items funding supports a broad array of medical education-related programs, including medical schools, GME, and research. The Senate added money to this budget to provide formula funding for medical students and residents at The University of Texas Rio Grande Valley School of Medicine, but not for The University of Texas at Austin Dell Medical School. This slightly increased the state GME formula funding from the base budget, raising it to $73.5 million. 

Proposed budget cuts include:

  • Six-percent reduction to the Family Medicine Residency Program, dropping $1 million from the current budget of $16.78 million. This program helps sustain family medicine training programs that typically do not receive the same level of support from the Medicare GME funding provided to teaching hospitals. 
  • A whopping 25-percent slice from the Physician Education Loan Repayment Program, taking $8.45 million from the current budget of $33.8 million, leaving $25.35 million. This program is among the state’s most effective in recruiting and retaining primary care physicians in physician shortage areas. Texas rural areas depend on this program to maintain or improve access to care. 
  • An 11-percent cut from the EMS and Trauma Care Training Program. The program’s current budget is $4.5 million, and the proposed budget is $4 million.
  • Eliminating the Primary Care Innovations Program, with a proposed cut of the entire $2.1 million in current funding. The program provides incentives to medical schools to create innovative ways of preparing more primary care physicians. An example of such a program is the Family Medicine Accelerated Track at the Texas Tech University Health Sciences Center in Lubbock, which trains family medicine physicians in six rather than seven years.

Many funding proposals for medical education-related programs remain as SB 1 initially proposed:

  • GME Formula Funding, at $86.1 million; 
  • GME Expansion Grants, at $97 million; 
  • Mental Health Loan Repayment Program, at $2.125 million; 
  • Primary Care Preceptorship Program, at $3 million; and 
  • Joint Admission Medical Program (JAMP, which helps place economically disadvantaged students into medical school), at $10.2 million.

The House Appropriations Committee expects to vote on its budget on Friday. With 68 days remaining in the 140-day legislative session, some observers question whether lawmakers from both chambers will find compromise in a spending plan in the time remaining, or a special session will be required to do so.   


Less than two weeks remain until TMA’s third First Tuesdays at the Capitol event, Tuesday, April 4. Plan now to join other TMA physicians, medical students, and TMA Alliance members in Austin to make your voice heard about important health care issues like the budget, scope of practice issues, balance-bill mediation, and more.

TMA’s “2017 Prescription to Keep Texas Healthy” legislative agenda describes TMA’s top-priority issues this session in concise bulleted form to help you dialogue with lawmakers.


The physician of the day at the Capitol is Swati Jadhav, MD, of Austin. Dr. Jadhav graduated from the University of Bombay in India. She is a member of TMA and the Travis County Medical Society.



TMA Letters and Testimonies

TMA's Texas Legislature main page