TMA Testifies on Health Care Collaboratives, CSSB 8

Testimony to Senate Health and Human Services Committee

Senate Bill 8 Committee Substitute   

Presented by: Asa Lockhart, MD
March 29, 2011

Good morning, Senator Nelson and members of the committee.  My name is Asa Lockhart, MD, and I am an anesthesiologist from Tyler. I am testifying before you today as the chair of the Texas Medical Association’s (TMA’s) Ad Hoc Committee on Accountable Care Organizations and on behalf of the more than 45,000 physician and medical student members of TMA.  I would like to thank the committee for the opportunity to testify in support of the committee substitute for Senate Bill 8. TMA appreciates being included in SB 8 discussions with staff from the offices of the lieutenant governor and the attorney general (AG), the Texas Department of Insurance, and Senator Nelson, as well as other stakeholders.  We would like to thank all of the above who have provided input and guidance on the SB 8 committee substitute before you today.

  • The substitute contains an avenue for the state to implement innovative ways for physicians and other health care providers to collaborate on issues of quality, and it allows new payment methodologies. 
  • Implemented thoughtfully, it will permit patients and employers to better predict their costs as they relate to health care.
  • The bill also introduces the concept of a licensed “health care collaborative.” The collaborative gives physicians and other providers the ability to work cooperatively across the continuum of care to reduce costs while improving quality — along with the introduction of new payment approaches. These approaches will be flexible and take into account various forms of agreed-upon payment structures for multiple services.
  • The collaborative is held accountable for performance through benchmarks and goals.  Presumably, if the goals are met, there is a financial reward for the collaborative and all those who participate in it. 
  • The following areas will remain paramount to TMA’s continued support and physician participation in any collaborative as the bill moves through the process:

1.   Attorney general approval/Texas Department of Insurance (TDI) certification and oversight,
2.   Equal and shared governance structure, 
3.   Compensation committee structure, and
4.   Due process protections.  

Attorney General Approval/TDI Certification and Oversight

TMA supports the committee substitute language that lays out the attorney general approval process, with the Texas Department of Insurance remaining in its oversight and regulatory capacity. As filed, TMA was concerned that without active AG approval and oversight, a collaborative MAY engage in activities that WOULD LIKELY violate  FEDERAL antitrust law. The committee substitute in its current form addresses that concern.  

  • This is important because what primarily has prevented collaboration among competing parties are the state and federal laws on antitrust. A collaborative brings together competing physicians, providers, and hospitals to achieve a common goal — to make health care affordable and provide quality patient outcomes.   
  • Without this important state oversight, no other exception provides physicians and other health care practitioners the peace of mind that their participation will not run afoul of antitrust laws.
  • The AG approval interjects a careful balance and serves those who are in the collaborative, as well as those who choose NOT to participate.
  • Without this balance, the lack of oversight could promote silos of health care and decrease access, thus defeating the purpose of community collaboratives to address community needs and health challenges. To achieve their purpose, collaboratives must be local, not statewide.  

Equal and Shared Governance — The Medical Model

  • If the future of health care delivery involves consolidation, then TMA believes a medical model is the best approach. The committee substitute in its current form provides a governance structure that will support the ultimate goal of keeping patient care and needs front and center.
  • The engine that will make a collaborative work is the professional component of any health care service. That is the heart of the medical model, and the success of any health care collaborative is dependent upon it. 
  • If collaboratives are successful, we should see a decline in in-patient admissions and readmissions. Patients will receive the right care at the right time, in the least expensive place of service. Where are those places of service? They are physician offices and other nonhospital based health care provider locations.
  • New payment methodologies will focus on episodes of care that involve more than just hospitalizations. Hospital care is only a limited component — albeit an expensive one — of the continuum of care that a patient receives.
  • Unlike health plans that focus on a calendar or plan year, or hospitals that focus on an acute episode of care, the medical model focus is all-encompassing. It isn’t limited to a plan year or any particular admission. The only constant over time in patients’ care is — and should remain — their interaction with their physicians, who are committed to long-term wellness.  
  • Getting the right care to patients at the right time requires physician leadership and participation.  The way to ensure that physicians are integral in patient-care decision-making is to provide them an equal voice within the collaborative’s governing structure on all important matters, including operations and payment. The committee substitute, as written, achieves that goal.

Compensation Committee Structure

  • In addition to the governance committee, the compensation committee will be integral in the design and operation of the new payment methodologies.
  • TMA supports use of a compensation committee to review and negotiate the payments that will flow through the collaborative to the various physicians and health care providers.
  • The committee substitute permits a compensation committee of unlimited size, which may be a drafting error. TMA recommends that for collaboratives with mixed provider type participation, the committee be limited to three:
  • The unanimously chosen committee member,
  • A member chosen by the nonphysicians on the collaborative board, and
  • A member chosen by the physicians on the board.
  • Nothing in the committee substitute would prevent the collaborative composed of mixed provider types from hiring experts to advise the compensation committee.  TMA supports that flexibility and approach.
  • This committee structure would not be essential for collaboratives composed of physicians only.

Due Process Protections

  • The opportunity to have a fair and interactive opportunity to address a complaint serves the fundamental purpose of ensuring physicians always have an unencumbered role in patient advocacy.  
  • A wrongful complaint should not be used as a method to silence a physician who delivered or advocated for appropriate, necessary care that perhaps that did not completely adhere to generalized collaborative protocols. 
  • Appropriate departure from general protocols may be necessary to treat the specific needs of a specific patient. 
  • The committee substitute language on due process provides the protections necessary for fairness when reviewing a physician’s approach to patient care.


The collaborative’s role should be to improve care, measure against certain quality benchmarks, report on the cost of care, and coordinate activities.  The committee substitute takes a step in that direction.

A long-term perspective on collaboratives is to encourage health and not just intervene in disease.  Embracing this concept is necessary to achieve success and any anticipated cost savings. Whether or not an organization embraces this concept — which is necessary for success — enables us to distinguish between those organizations that wish to bring about better-coordinated health care delivery vs. those that will leverage the collaborative model for short-term, anticompetitive gains.

Thank you again for the opportunity to provide our perspective and input. I am happy to answer any questions you may have.

82nd Texas Legislature Testimonies  

Last Updated On

March 29, 2011