TMA Testifies: Stop Medicaid Cuts for Dual Eligibles

HHSC Hearing on Proposed Rules Eliminating Medicaid Payments of Co-Insurance/Deductibles for Dual-Eligible Patients

Texas Health and Human Services Commission
John H. Winters Building, Public Hearing Room, 125-E
701 West 51st Street, Austin, Texas
November 4, 2011 

2 pm 

  • Good afternoon. I am Bruce Malone, MD, a practicing orthopedic surgeon here in Austin and President of the Texas Medical Association, which represents more than 45,000 physicians and medical students. I am testifying today in strong opposition to the proposed rule.
  • TMA is aware that the Texas Legislature directed the Health and Human Services Commission to implement the proposed changes to reduce Medicaid expenditures. TMA opposed the proposal during the legislative session. Given the pressure on the legislature to identify some $2 billion in savings for Medicaid, we understand that perhaps some decisions were made without the time to fully consider the impact they would have on many low- income Texan’s ability to obtain necessary care.
  • We appreciate the serious budget constraints facing Texas. TMA has always been, and remains, a ready and willing partner with HHSC and the legislature to identify pragmatic solutions for reducing Medicaid costs. While these proposed rules will indeed achieve substantial Medicaid savings, it will come at the expense of the health and well-being of some of the state’s most vulnerable citizens.
  • TMA believes strongly that the proposed rules, once implemented, will have negative and profound consequences for the poorest and sickest Medicare patients. According to the Kaiser Family Foundation, more than half of dually eligible patients are very poor: 55 percent living on incomes of less $10,000 per year compared to just 6 percent of all other Medicare patients. They are more likely to need help with tasks of daily living. They are generally sicker than other Medicare patients. Half have multiple health conditions, such as diabetes and congestive heart failure, and 54 percent also have a mental illness.
  • Because these patients tend to have multiple and complex health conditions, they require not only more physician services, but also more physician time. For example, practices must work more closely with these patients to coordinate visits with multiple specialists, to arrange needed ancillary services, such as lab and x-rays, and to help patients find transportation.
  • According to a 2003 study sponsored by CMS, when states reduce or effectively eliminate Medicare Part B coinsurance and deductible payments for dual eligibles, these patients are less likely to obtain outpatient care. The results are most pronounced among psychiatrists and other mental health professionals.[1]The study also found that changes in payments led practices to restrict the number of dually eligible patients they were willing to treat.
  • Already, seniors across Texas struggle to find a physician willing to accept new Medicare patients. TMA’s 2011 physician survey on Medicare participation indicated that 25 percent of physicians limit the number of new Medicare patients they will accept; 8 percent accept no new Medicare patients. Among primary care physicians, the results are even more alarming: 37 percent limit new Medicare patients and 13 percent accept no new Medicare patients.
  • The reason: physician Medicare payments, while better than Medicaid’s, are insufficient to cover rising practice costs. The Medicare Payment Advisory Committee estimates that physician practice expenses increase about 3 percent annually. For the past decade, Medicare physician payments have been stagnant, if not declining. Indeed, without a fix by Congress before the end of the year, physician Medicare fees will, by law, automatically decline by 29.5 percent on Jan. 1, 2012.
  • These proposed rules will only hasten physicians’ exodus from Medicare. As proposed, they would result in a 20-percent payment cut for physicians who care for these patients, excluding changes in calculating deductible payments.
  • Further, TMA survey data also show that when Medicare payments are reduced, physicians respond, in part, by further reducing their Medicaid participation. I am providing you a slide depicting how physicians tell us they have or will respond if Congress fails to stop the impending 29.5 percent Medicare cut. Thirty-two percent of practices have already limited their Medicaid participation in response to impending Medicare cuts, 26 percent say they will impose new Medicaid limits, and another 27 percent say are considering them. While our survey question was not specific to the rules at hand, given how steep the proposed payment cut is, we believe the effect will be the same.
  • The proposed rules penalize the physicians who care for the sickest and frailest Medicare patients. They hit particularly hard practices in rural, inner city, and border Texas since those practices serve a disproportionate number of dually eligible Medicare patients. In addition to compromising the financial viability of these practices, we fear that the rules could result in fewer physicians willing to set up a practice in the communities that most need them.
  • Dually eligible patients are already more likely than regular Medicare patients to use the emergency room and inpatient care. If utilization of these very costly services increases among dually eligible patients because they are unable to find a physician to care for them as outpatients, then it will only further strain Texas’ health care delivery system, and increase costs, at a time when the safety-net is stretched thin.
  • Let me repeat, we appreciate the serious budget constraints facing Texas. We are willing to work with HHSC to find solutions for reducing Medicaid costs, just not at the expense of the health and well-being of some of the state’s most vulnerable citizens.
  • The proposal is misguided and we urge HHSC to work with TMA to identify other mechanisms to reduce Medicaid costs that will not jeopardize the ability of physicians to care for this population.
  • Lastly, if HHSC moves ahead with these rules, we urge you conduct a study in 2012 to evaluate the impact of the rules on dually-eligible patients’ access to care.


Proposed Rules (beginning on page 7057):  

[1] State Payment Limitations on Medicare Cost-Sharing: Impacts on Dually Eligible Beneficiaries and Their Providers, Final Report, Janet B. Mitchell, PhD and Susan G. Haber, ScD, RTI International, July 2003