False Hope?

False hope? Health System Reform May Not Really Help Anyone 

Texas Medicine Logo 

Cover Story– September 2012 

Tex Med. 2012;108(9):13-24. 

By Ken Ortolon 

The U.S. Supreme Court's decision to uphold the constitutionality of the Patient Protection and Affordable Care Act (PPACA) means that unless a future Republican-controlled Congress musters the votes to repeal it, PPACA will remain the law of the land. But certain parts of the health reform law may not become the law of Texas any time soon.

In July, Gov. Rick Perry followed the lead of Republican governors in Florida, Louisiana, Wisconsin, and elsewhere by announcing that Texas would not implement two key PPACA provisions – creating an online state health insurance exchange where people can shop for health coverage and compare prices and benefits of competing health plans, and expanding Medicaid to cover adults earning up to 133 percent of the federal poverty level.

"I stand proudly with the growing chorus of governors who reject the PPACA power grab," Governor Perry wrote in a July 9 letter to Health and Human Services Secretary Kathleen Sebelius. "Thank God and our nation's founders that we have the right to do so. Neither a 'state' exchange nor the expansion of Medicaid under the Orwellian-named PPACA would result in better 'patient protection' or in more 'affordable care.' What they would do is make Texas a mere appendage of the federal government when it comes to health care."

PPACA supporters immediately criticized Governor Perry's decision to forego the Medicaid expansion as "squandering an opportunity" to pump tens of billions of federal dollars into the Texas economy. The Austin-based Center for Public Policy Priorities (CPPP) says not expanding Medicaid could leave up to 2 million Texans without the health care coverage promised under the law.

But opponents of the law hailed the decision, calling PPACA a "bureaucratic scheme from Washington" that will not provide quality health care assistance for low-income Texans.

"Texas needs true health care reform, not thousands of pages of directives from Washington," said Peggy Venable, state director for Americans for Prosperity-Texas.

Texas Medical Association President Michael E. Speer, MD, said TMA is already developing an alternative approach to present to Governor Perry and the Texas Legislature.  

Even if the state expanded Medicaid, TMA officials and others question whether it would have enough physicians to treat those patients. A recent TMA survey showed that only 31 percent of Texas doctors accept new Medicaid patients.

"Medicaid expansion will give a false sense to some people that they now have insurance," said Fort Worth pediatrician Gary Floyd, MD, immediate past chair of TMA's Council on Legislation, noting that many of the new Medicaid patients would continue to rely on hospital emergency departments for their care because they would not be able to find a primary care physician to see them.

The Constitutional Question 

The 5-4 Supreme Court decision, written by Chief Justice John Roberts, surprised both opponents of the law and the Obama administration. Court watchers expected the decision to revolve around whether the Commerce Clause of the U.S. Constitution authorizes the law's individual mandate requiring all Americans to buy health care coverage.

The court ruled that the Commerce Clause does not give Congress the authority to compel Americans to buy health insurance, but it upheld the individual mandate on grounds that the $695 penalty on those who do not buy coverage is permissible under Congress' taxing authority.

Ironically, President Obama and other proponents of the mandate argued during debate on the bill and continue to argue that the penalty is not a tax.

The second surprise was the court's ruling that a section allowing the federal government to withhold current Medicaid funding from any state that failed to expand Medicaid is unconstitutional. That opened the door for states, such as Texas, to opt out of the Medicaid expansion.

What's more, some experts say the ruling also allows states to cut Medicaid for people already enrolled. That's because the justices let stand a provision of PPACA that says beginning in 2014 states are no longer barred from making it harder for adults to qualify for Medicaid.

Texas Attorney General Greg Abbott, one of 26 state attorneys general to challenge the law, bemoaned the decision.

"Although the individual mandate was found to exceed Congress' authority to regulate commerce, the court allowed Obamacare to stay intact by ruling that the mandate is a tax. We will continue our work to fight this unworkable and unpopular law," he said. "It is time for Congress to step in and end the Obamacare nightmare by repealing this unprecedented tax on all Americans."

President Obama, however, declared the law is here to stay and urged states to move forward with implementation. That, apparently, is not going to happen in Texas and several other states. 

New Numbers   

Then-Texas Health and Human Services Commissioner Tom Suehs told a state House of Representatives appropriations subcommittee on July 12 that implementing the new health care law in Texas would cost the state about $11 billion less over 10 years than previously estimated. He said the cost is now estimated to be between $15 billion and $16 billion over 10 years, compared with the original forecast of $26 billion to $27 billion if the law is fully implemented, including the Medicaid expansion.

He based his revised estimate on "new information and spending estimates," but said the Supreme Court ruling makes it difficult to know exactly how much the law would cost. The new information includes a reduction in the projected caseload growth from 2 percent to 1.2 percent and a medical cost increase forecast of 4 percent instead of the original 6 percent. He also told the subcommittee that the reduced caseload resulted in a lower cost of primary care provider rate increases.

Commissioner Suehs added that "expanding Medicaid without reforming it only multiplies the tremendous budget pressure the program puts on states."

Anne Dunkelberg, associate director for CPPP, says expanding Medicaid would have been a "great deal for Texas" because the federal government would have picked up 100 percent of the cost from 2014 to 2016, with the federal government's share gradually declining to 90 percent by 2020.

Even at 90 percent, that is substantially higher than the roughly 60 percent the federal government contributes to current state Medicaid programs.

"Expanding Medicaid will save Texas money in other ways, especially by reducing the money it spends providing health care in emergency rooms and health clinics to people without insurance," she added. "Texas could even end up saving more on these costs than it spends on the expansion, easing the strain on property taxes."

But several Texas lawmakers question the wisdom of expanding a program that already is in the red.

In 2011, lawmakers failed to fully fund Medicaid for 2012-13. State Rep. Susan King (R-Abilene) says the state faces a shortfall in the program of somewhere between $3.8 billion and $5.1 billion.

"We're going to have to have a supplemental appropriations bill to pay that tab when we walk in the door for the 83rd session," said Representative King, a member of the TMA Alliance.

In a letter posted on TMA's MeandMyDoctor blog, one senator and three House members who are physicians supported Governor Perry's decision not to expand the state Medicaid program or implement a federally controlled health insurance exchange.

Sen. Bob Deuell, MD (R-Greenville), and Reps. Charles Schwertner, MD (R-Georgetown), Mark Shelton, MD (R-Fort Worth), and John Zerwas, MD (R-Richmond), said they have "firsthand experience to the challenges facing our health care system, as well as a unique perspective on the profoundly detrimental effect Obamacare will have on the citizens of Texas."

In 1987, they wrote, Medicaid accounted for about 11 percent of the state budget but now totals more than 22 percent of the state budget, thus diverting funds the state could use for public safety, new roads, or education.

They added that state spending on Medicaid grew two-and-a-half times faster than the rest of the budget and would increase more rapidly under the Obama administration's proposed eligibility standards, placing one out of every five Texans on Medicaid by 2014. "Our present course is clearly unsustainable, and expanding Medicaid coverage to over a million new able-bodied adults does nothing to repair a broken system that's already groaning under the weight of those it serves," they wrote.

Even though the federal government "will claim to pick up the tab for this expansion," they said its share of funding "is designed to diminish progressively over time, creating an ever-greater burden on our own state budget. Eventually, this situation will create a substantial budgetary crisis for Texas, forcing us to choose between raising taxes and diverting increased resources from other areas of government just to keep Medicaid afloat. Funding an expanded Medicaid program under even the best of circumstances will mean higher taxes, increased federal debt, and reduced government services for the citizens of Texas."

The physicians said the best way to "ensure the long-term viability of our state's ailing Medicaid program is to seek a federal block grant which would allocate funding to the state directly, thereby providing Texas with the freedom to design its own Medicaid system without burdensome federal regulations and one-size-fits-all mandates. Such a grant would provide us with the independence and flexibility to devise the best and most cost-effective solutions to the specific health care needs of Texas, while preserving the critical doctor-patient relationship and ensuring continued access to care."

 State Sen. Jane Nelson (R-Flower Mound), chair of the Senate Health and Human Services Committee, is dubious about expanding a program that she says is "financially unsustainable."

"I have serious concerns about the long-term consequences of adding millions to an inefficient system that – despite our repeated efforts to gain flexibility – severely restricts our ability to contain costs, root out abuse, and encourage personal responsibility."

While state lawmakers worry about the price tag for PPACA, so do some hospitals because the law makes steep cuts in supplemental Medicaid payments to facilities that serve large numbers of poor and uninsured patients. The law was supposed to add some 16 million people to the Medicaid rolls nationwide, meaning hospitals would no longer need the supplemental payments to help cover uncompensated care. But hospitals in states that reject the Medicaid expansion will suffer the payment cuts and still see large numbers of uninsured patients walking through their doors, experts say.

Even if Texas implements the Medicaid expansion, some lawmakers question whether it would really improve patients' access to care.

Representative Shelton says physicians simply cannot afford to see Medicaid patients because the payment rates do not cover the cost of providing care.

"When you think about that, who is going to see these patients?" he asked. 

Creating an Exchange  

While state decisions to reject Medicaid expansion could significantly cut the number of newly insured people under PPACA, the decision to forego a state-run health insurance exchange likely will have less impact. That's because PPACA gives Secretary Sebelius authority to create a federally run exchange in those states that fail to create one.

According to the Kaiser Family Foundation, the exchanges will offer patients a choice of different health plans, certify those plans that participate, and provide information to help patients understand their options. Set to begin in 2014, the exchanges will target individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future.

There seems to be some disagreement, even among Republican lawmakers, about whether Texas should create its own exchange.

Representative Zerwas sponsored legislation in the 2011 session that would have authorized state agencies to move forward with an exchange, and he still thinks Texas should take the reins on one.

"I have a lot of discomfort in ceding this to the federal government, even if it's only on a temporary basis, because I think the federal government ultimately will remedy this with a one-size-fits-all solution and, perhaps, a single-payer model, which obviously is what this administration would love to do," he said.

But Representatives King and Shelton say it really doesn't matter who sets up the exchange because federal regulations will largely dictate how the exchange operates.

"The health care exchange, whether it's run by the state of Texas or whether it's run by the federal government, is going to be done under federal law, rules, and regulations, most of which are yet to be determined," Representative Shelton said. "So I don't think it matters about the exchange."

Representative King added, "While it does matter functionally whether Texas operates the exchange in terms of the day-to-day operations, ultimately the governor is correct that once again federal rules and regulations would ultimately dictate how Texas would have to administrator the exchange."

Even if Governor Perry did support a state-run exchange, several lawmakers and TMA officials question whether there is time to implement one before the federal government steps in. Under the law, states have until Jan. 1, 2013, to demonstrate to the federal government that they have an exchange in place and that it will be operational by Jan. 1 2014.

Representative Zerwas says it would be "a real stretch" to meet the Jan. 1, 2013, deadline but might be doable if the state acted quickly.

"There are some states that have already put together exchanges and worked out some of the kinks in them," he said. "There would be the possibility that those charged with putting together the exchange could look to other states, perhaps even look to the private market, and find examples of things that you could put together fairly quickly without having to spend a lot of time."

But that's assuming Texas could create an exchange without legislative authorization. The next session of the legislature does not convene until Jan. 8.

Darren Whitehurst, TMA vice president for advocacy, says the governor's office has indicated it has the authority to direct the Texas Department of Insurance or other agencies to implement an exchange by executive order.

But even if the governor could or would do so, Representative Zerwas questioned whether he would act before November's general election. If President Obama fails to wins another term, the question might be moot because presumptive Republican presidential nominee Mitt Romney vows to repeal PPACA, if elected.

Regardless of who runs the exchange, Texas Health and Human Services Commission (HHSC) officials say they must change their eligibility system to make sure it can interface with the exchange.

"The exchanges under the Affordable Care Act are designed to be a front door for not only the subsidies but other health coverage, too," said HHSC spokesperson Stephanie Goodman. "That means that the exchange will need to determine if someone might qualify for Medicaid and CHIP [the Children's Health Insurance Program] and send that information to the state."

For that to work, Ms. Goodman says, PPACA mandated that states move to a consistent method of calculating a family's income.

She says HHSC is waiting on additional guidance from the Centers for Medicare & Medicaid Services on exactly how that would work.

The Penalty Option 

PPACA is supposed to cover an estimated 32 million Americans, but without the Medicaid expansion in several states, that number is likely to be much lower.

Some TMA officials fear the law will have a negative impact on coverage in other areas.

"My concern would be that some companies that are feeling a financial or economic pinch right now will say 'I can't afford paying this premium, I'm going to pay the penalty tax,'" said Dr. Floyd, who served on the Council on Legislation throughout the PPACA debate. The law not only imposes a penalty on individuals who fail to purchase insurance but also on businesses with more than 50 employees that do not provide coverage for their workers.

"So employers are going to pay the penalty and look at the employee and say, 'Good luck, you're on your own,'" he added.

Dr. Floyd also predicts that healthy Texans in their 20s, 30s, and even some in their 40s will pay the penalty each year rather than shell out thousands of dollars annually for insurance coverage.

All told, he says, "I'm not sure we've helped the uninsured a bit."


TMA Advantage 
Brochure Answers Health System Reform Questions  

Are your patients asking you questions about the Patient Protection and Affordable Care Act and how it affects them?

To help you answer their questions, TMA created a brochure for patients, "Because Your Doctor Cares: What You Need to Know About Health Care Reform."

TMA members may order free copies of this brochure to hand out or place in waiting rooms. Call the TMA Knowledge Center at (800) 880-7955 or email knowledge@texemd.org with the number of brochures you need and your mailing address.


Texas Needs More Realistic Solutions 

Austin orthopedic surgeon C. Bruce Malone, MD, immediate past president of TMA, testified Aug. 1 at a special joint hearing of the Texas Senate Committee on Health and Human Services and State Affairs Committee. The committees are examining the potential impact of the Patient Protection and Affordable Care Act on insurance regulations, Medicaid and the Children's Health Insurance Program, health care outcomes, health care workforce, overall health of all Texans, and the state budget.

Dr. Malone made these remarks: 

All of us want to do the right thing for our patients and Texas taxpayers. We all want to find cost-effective ways to ensure people who live in our communities can get the care they need when they need it.

As TMA president, I had the opportunity to travel the state and visit with my colleagues from El Paso to Tyler, from Wichita Falls to the Valley.

I can tell you firsthand, physicians' practices are struggling to surmount the growing regulatory burdens of the new federal law. Physicians had to invest in expensive health information technology, upgrade our coding and billing systems, implement e-prescribing programs, and endure the frozen fee schedule and continuous pay uncertainty from Medicare. The financial stress is hurting small practices in rural Texas, midsize practices in the suburbs, and large practices in every urban center.

Government regulatory burdens, red tape, payment hassles, and low pay have been eroding the physician foundation of Medicaid and Medicare for more than a decade.

TMA's new 2012 physician survey shows the fallout. More and more physicians are forced to reduce the number of patients they see who depend on government health care.

Texas physicians available to treat new Medicaid patients have plummeted from 42 percent in 2010 to 31 percent – an all-time low. I am not surprised by these numbers. It makes no sense to create health insurance programs that no doctor can afford to take.

 I'm one of the 31 percent of Texas doctors who say they take new Medicaid patients. I do that because I believe it is my moral and ethical duty to take call in hospital emergency departments. I need a Medicaid and Medicare number so I can work in the ER.

When HHSC [Texas Health and Human Services Commission] says "there are plenty of physicians available to take Medicaid patients," what they really mean is that they have a long list of physicians with a "Medicaid number." It doesn't mean these physicians are available to care of patients or that they are taking new Medicaid patients.

HHSC is running a system based on a false sense of access.

A huge majority of Texas physicians agree that Texas Medicaid is broken.

And, almost all of them believe we need to devise a system of providing care to low-income Texans with realistic payment rates and less stifling bureaucracy.

Look, for instance, at the 20-percent payment cut for the care we provide to our most sick and vulnerable patients – dual-eligible patients. Because of their age they qualify for Medicare and because of their income they receive Medicaid benefits.

The cut hit particularly hard practices in rural and inner-city Texas, along the Mexico border, and many of those serving nursing homes. Those practices serve a disproportionate number of dual-eligible patients. HHSC recognized the cuts would truly harm patients on dialysis, and it reduced the cut for renal dialysis centers. We must take additional steps to reduce the dual-eligible cuts for other physicians who are struggling to care for these patients.

What's lost in the health care debate is the simple fact that patients need a doctor when they get sick. And, physicians want to take care of our patients. That is why we went to medical school. That is why I'm still studying continuing medical education when I am in my 60s, so I can provide the very best care to my patients.

However, without an adequate network of physicians, no health care system can work, let alone be effective. The state simply cannot continue to run its Medicaid program on the backs of physicians.

Instead, Texas needs to invest in a robust physician network so we can better treat chronic illnesses and keep patients out of expensive hospital and emergency rooms.

Texas has a shortage of both primary care and other specialists at a time when we need physicians more than ever. We rank behind all other large states in the number of physicians per capita. We can change these statistics by providing stable funding to our medical education system. We can change these statistics by providing opportunities for our Texas medical school graduates to obtain residency training without leaving the state.

As we train the new workforce, we need to recognize that the way we deliver health care is evolving. The future for some physicians, especially primary care physicians, will be to lead teams of health care professionals. Physicians' primary role will be to "manage care" – to direct and coordinate care for a large group of patients using a team approach. The care, however, will still be provided based on the needs of each patient.

Health reformers keep talking about providing care to "patient populations." But I don't treat populations. I take care of one patient at a time, devoting my time and skills to giving you the best care possible. Doctors hear from policymakers that "practice guidelines" will solve our health care problems. Well, I should and do know those guidelines, but do not forget that your outcome depends on my skill and the skill of the hospital and professionals working there. Really good medical care will never be cheap, but prevention can be.

If Texas wants to create a new system to serve the more than 6 million citizens who have no health insurance, we need realistic solutions that are going to require sacrifice and work from all segments of our society, not just the doctors and hospitals.


State Medicaid, Medicare Crisis Worsens 

The share of Texas physicians who will take new Medicare or Medicaid patients has dropped to an all-time low, according to a TMA physician survey. Low-income Texans who rely on Medicaid for their care are the hardest hit.

Texas physicians available to treat new Medicaid patients plummeted from 42 percent in 2010 to 31 percent, less than half the 67 percent who reported they would take all new Medicaid patients in 2000. The number of Texas physicians accepting all new Medicare patients dropped from 66 percent in 2010 to 58 percent in 2012. That's part of a steady decline from 78 percent in 2000.

"All the bureaucratic red tape and administrative burdens only serve to increase the cost of running a practice, while diverting a physician's attention away from patient care," said TMA President Michael S. Speer, MD. "Every business has a breaking point; physicians' practices are no different."

The survey also found that if health care reform were to increase the number of patients covered by private insurers and Medicaid, one in five doctors (and one in 10 primary care physicians) cannot serve any more patients than they do today. More than half of physicians (51 percent) report their practice could take more privately insured patients, but not more Medicaid patients.


There Has to Be a Better Way 

By Michael E. Speer, MD, TMA President 

Medicaid in Texas is broken.

I am sure some of you will agree with that statement more strongly than others. Medicaid plays a vital role for millions of low-income Texans. But I doubt I can find many Texas physicians who would argue that our Medicaid system does a good job of providing health care for Texas' poorest citizens.

That's one of the reasons why I wasn't terribly surprised when Gov. Rick Perry announced that Texas will not participate in the expansion of Medicaid to single adults. Setting the politics aside, just for a moment, let's look at the facts in front of us.

First, there's no question about the need. One in four Texans younger than 65 today have no health insurance coverage. Hospitals and physicians are required to treat patients in emergency situations under EMTALA. Insured patients, state and local taxpayers, and the hospitals and physicians who provide the care share the cost.

Our recent survey results, released the same day Governor Perry rejected the Medicaid expansion, further document the problem. The share of Texas physicians who say they accept all new Medicaid patients has fallen from 42 percent in 2010 to 31 percent today; that's less than half the 67 percent who reported they would take all new Medicaid patients in 2000.

If health system reform were to increase the number of patients covered by private insurers and Medicaid, one in five doctors (and one in 10 primary care physicians) say they cannot serve any more patients than they do today. More than half of physicians report their practice could take more privately insured patients, but not more Medicaid patients.

Physicians increasingly are forced out of the Medicaid program because the payment does not cover the cost of providing the care.

As Texas physicians, we are deeply concerned about our most vulnerable patients. We don't want a faulty system to force us to close our doors to them. But that's what is happening. If doctors can't participate because of the system, then Medicaid is broken. You cannot fix a broken system simply by making it bigger. We have to make it different.

Let's look at the political realities for a moment. Whether you agree with his decision or his rationale, the governor was extremely clear and pointed in his announcement. His anti-Washington, states-rights rhetoric was consistent with the message he has delivered for years. I don't see him budging on his opposition to expanding Medicaid.

What about the November elections? We can say with a fair degree of certainty that the voters will elect a Texas Legislature that's even more conservative than the one we had in 2011. I don't see us ending up with a House or Senate that would push back on the governor on this issue.

Meanwhile, if President Obama wins reelection, the Republican majority in Texas will likely continue to rally around the governor's push to protect constitutional sovereignty for Texas. If Mitt Romney wins, we can expect a full-scale attack on the Patient Protection and Affordable Care Act.

But we still have patients to care for. They're still showing up in the emergency departments sicker than they would otherwise be. We need to build a system that will work so poor Texans, often with multiple health problems, can see their doctors when they need care.

Texas needs to fund the system so that Texas physicians can take care of those patients.

I do not know what that system looks like … yet. But I do know we need to fix it so doctors come back. We need to win realistic payment rates, we need to reduce the stifling state bureaucracy, and we need to eliminate the fraud-and-abuse witch hunts.

I also know we have plenty of very smart men and women who are TMA members, who serve on the boards and committees of the Texas Medical Association and our state specialty societies. We have plenty of bright and capable staff members who understand the politics and the economics. Let's be creative about this.

We have just about four months until the Texas Legislature convenes in January 2013. We must have a workable plan … something that will work for our patients and our practices and something that will fit the political exigencies of the time … ready to present by then.

By the time you read this, TMA will have convened a Physicians' Medicaid Congress to devise that plan. There has to be a better way, and I'm determined to find it.


TMA's Post-PPACA Agenda 

By Louis J. Goodman, PhD, TMA Executive Vice President and Chief Executive Officer 

Government-run health care dates back to the Roosevelt administration and has increased in every decade since then, culminating in the 2010 passage of the Patient Protection and Affordable Care Act (PPACA) and a favorable Supreme Court constitutional decision in 2012.

Much has been written about PPACA, and we are certain to read and see much more as thousands of pages of regulations are promulgated and the health care landscape is remolded in PPACA's image. Most recently, the far-reaching tax implications of the law were more widely disseminated and better understood by the American people.

Immediately before passage of the law, TMA's polling of Texas physicians found 18 percent in favor of the legislation and 69 percent opposed. A recent report by The Physicians Foundation found that the large majority of physicians surveyed (86 percent) believe the legislation did not adequately address the "viewpoint of physicians." TMA did not support the onerous Senate version of the legislation. But, when the House concurred with the Senate version and passage seemed all but imminent, we lobbied to send both versions to a conference committee.

Unfortunately, that did not occur, and physicians, along with the rest of the population, face the good, the bad, and the ugly provisions of the unfiltered legislation.

Accordingly, TMA carefully evaluated the new legislation from the patient-physician perspective and developed our current policy: "Find What's Missing, Keep What Works, and Fix What's Broken." This policy prescription guides our federal agenda, in cooperation with a consortium of state medical societies, and with the American Medical Association on some issues such as repealing the flawed Medicare Sustainable Growth Rate (SGR) formula.

Let's start with "Find What's Missing": 

  • Repeal the broken Medicare SGR funding formula and enact a fair and rational physician payment system.
  • Enact Texas-style medical liability reforms that do not modify or change reforms now in Texas law.
  • Pass the Medicare Patient Empowerment Act that allows physicians to privately contract for Medicare services.

 We also need to "Keep What Works": 

  • Maintain the prohibition on insurance companies from excluding coverage to patients with preexisting conditions.
  • Maintain the requirement that insurance companies use a consistent and transparent reporting formula for the "medical loss ratio."
  • Maintain the requirement that insurance companies label their policies in plain English, so patients can better understand their coverage.

 Finally, we need to "Fix What's Broken": 

  • Repeal the Independent Payment Advisory Board and keep Congress accountable for the Medicare system.
  • Increase graduate medical education funding and make adjustments for future Medicare support based on population growth.
  • Remove abusive and unfair provisions relating to the health care fraud criminal statute that punishes physicians for honest mistakes and inadvertent billing errors.
  • Remove the arduous paperwork requirement for imaging, so physicians can spend more time taking care of patients instead of pushing paper.
  • Ensure that all nonphysician practitioners only act within their state scope-of-practice laws.
  • Repeal legislation that limits physician ownership of hospitals.
  • Expand the Health Insurance Portability and Accountability Act to provide adequate funding for physicians to adopt electronic health record technology.

Of course, there are many more provisions in PPACA that will require support or opposition, but the items listed above are the most imminent and important to Texas medicine at this time. Clearly, the impact of PPACA will be profound. Thirty million more Americans will have health insurance, but will there be enough physicians to care for them? We can expect the retirement of as many as 100,000 senior physicians in the next five years, concomitant with the impending influx of 36 million baby boomers into the Medicare program.1 

Our data show that the future prospects for Medicaid are substantially worse than for Medicare. The number of Texas physicians available to treat new Medicaid patients has dropped from 42 percent in 2010 to 31 percent this year. The same survey (TMA's 2012 Biennial Survey) found that the number of Texas physicians accepting new Medicare patients has dropped from 66 percent in 2010 to an all-time low of 58 percent in 2012. This is part of a declining trend in the physicians' ability to see new Medicare or Medicaid patients.

The reasons why physician participation in government- funded health programs is dropping precipitously are clear: 

  • Flat or declining payments for medical and surgical services,
  • Growing and irrational regulatory and paperwork burden,
  • Health insurance technology requirements that punish rather than reward innovation, and
  • The uncertain effects of PPACA on the quality and delivery of services.

The convergence of all these factors and the generally pessimistic opinion of young physicians2 about the future of the U.S. health care system portend an alarming impending shortage of physicians.

Unless the positive and proactive steps outlined in TMA's federal agenda are implemented, health insurance coverage may be available, but like the Canadian health care system today, there will be a desperate shortage of physicians to provide needed medical care services.

Texas tort reforms passed in 2003 doubled the number of new medical licenses issued by the Texas Medical Board. Yet, Texas still ranks 42nd in the number of physicians per 100,000 populations.3 Thus, the convergence of an inadequate supply and an overabundant demand for services would, under normal economic conditions, result in increased payments and more utilization of only appropriate and necessary services. But, in a government-controlled system, market forces are all but irrelevant. Payments will continue to decline, paperwork will continue to sap time away from patient care, and demand for services will continue to increase at an alarming rate.

New untested organizational and payment models, like accountable care organizations and bundled payments, will be offered as the "new and best" solutions. But, the answers and solutions rest with American and Texas physicians. Only through a unified and mission-driven effort can health care focus on what matters most: the best possible outcome for each patient, seen one at a time and not as a population!

TMA's state and federal agenda is devoted to maintaining and creating an environment where physicians can be physicians and not assets of some mega-corporate system. Led by the TMA Board of Trustees, chaired by Tomas Garcia, MD, and on behalf of our 46,000 members, TMA will actively and successfully pursue this federal agenda for our members to improve the health of all Texans. 


  1. Goldsmith J. The Future of Medical Practice: Creating Options for Practicing Physicians to Control Their Professional Destiny. The Physicians Foundation; June 2012.
  2. Practice Arrangements Among Young Physicians, and Their Views Regarding the Future of the U.S. Healthcare System. The Physicians Foundation; March 2012.
  3. 2011 State Physician Workforce Data Release. Association of American Medical Colleges; March 2011. 


PPACA Adds New Rules Physicians Must Follow  

By Crystal Conde, Associate Editor 

 Now that the Supreme Court has upheld the Patient Protection and Affordable Care Act (PPACA), physicians have many new rules and regulations to follow. As business owners and employers, physicians need to understand the new law and adapt to meet its specifications and to foster economic sustainability.

PPACA contains human resources implications and provisions that could affect physicians' insurance contracts with managed care plans, says Donna Kinney, director of research and analysis for TMA.

"With the expansion of insurance coverage for preventive care services and the increase in insured patients, physicians may have more market power, ensuring they can continue to practice in an economically viable environment," she said.

TMA President Michael E. Speer, MD, said in a statement that Congress and the Obama administration must find a way to reduce the new law's overbearing bureaucracy. He said TMA "has said since day one that we need to find what's missing, keep what works, and fix what's broken in the new law. We absolutely must reduce the law's red tape and bureaucracy that interfere with patient care. Today's health care system is riddled with hundreds of regulations imposed by federal health law that do little to improve patient care, but instead divert our time and energy away from our patients."  

In the meantime, physicians need to educate themselves on the new law to ensure their practices survive and thrive. In addition, physicians can direct their uninsured patients to visit www.healthcare.gov. The website contains the temporary high-risk pool application, a link to the state high-risk pool and Medicaid applications, and lists of insurers by ZIP code.

To access TMA health system reform resources, visit the TMA website. For answers to questions about health system reform, contact the TMA Knowledge Center by calling (800) 880-7955 or emailing knowledge@texmed.org.

Human Resources Implications 

Some PPACA provisions require practices to update their policy and procedure guides. TMA offers a tool to aid in effective communication with employees and patients and in implementation of human resources policies and procedures.

Under the law, employers must provide a private place – not a bathroom – in the workplace where nursing employees can express breast milk, as well as reasonable break times for nursing mothers. The law doesn't require employers to pay their employees during these nursing breaks. Employers with fewer than 50 employees who can demonstrate significant difficulty or expense in complying with the requirement can request an exemption.

Last year, the federal government began requiring people with health savings accounts and flexible spending accounts who wish to use funds from the accounts to pay for over-the-counter medicines to obtain written prescriptions from their physicians. Ms. Kinney advises physicians to develop a practice policy for addressing prescription requests for these medicines and for accommodating nursing employees.

Insurance Contract Implications 

Physicians may witness an influx in patients who have new insurance coverage for preventive health services. PPACA requires new individual and group health plans to cover in-network preventive health services without any copayment or deductible, including immunizations, preventive care for women and children, and other preventive services rated A or B by the U.S. Preventive Services Task Force (USPSTF).

This provision took effect in September 2010, but health plans update their coverage requirements as USPSTF recommendations change. For example, Ms. Kinney says, the task force approved recommendations for women's preventive care just last year, meaning plans will include changes to their coverage requirements for those services with this year's renewals.

To access a list of preventive services with an A or B rating that are relevant for implementing PPACA, click here.

The preventive services coverage requirement also applies to non-grandfathered renewed health plans. The federal government considers plans existing before March 23, 2010, (the date PPACA took effect) "grandfathered" and exempt from this provision. If a currently grandfathered plan makes material changes in benefit design or patient cost-sharing at renewal, however, it will lose its grandfathered protection.

These changes will trigger a loss of grandfathered status: 

  • Increase in coinsurance percentages;
  • Increase in deductibles or out-of pocket maximums more than 15 percent, plus an inflation adjustment;
  • Increase in copays more than inflation, plus $5 or 15 percent;
  • Elimination of benefits for a specific condition;
  • Decrease in the employer contribution by more than 5 percent below the rate on March 23, 2010; and
  • New annual limits on benefits or reduction in existing ones. 

As long as a plan retains its grandfathered status, it may impose patient cost-sharing for preventive health services.

Additionally, the Centers for Medicare & Medicaid Services (CMS) removed cost sharing for some preventive services and provides for an annual personalized preventive care plan for Medicare patients. For more information, consult the CMS Preventive Services Quick Reference Chart online.

From a practice management perspective, Ms. Kinney recommends physicians examine how the insurance plans they contract with and plans they're considering contracting with address and pay for the new preventive care benefits. She says plans may not have to provide the coverage or may apply patient cost sharing for preventive services delivered in a setting or by a physician that the plan considers out-of-network for particular services. She says physicians should find out whether the plans they contract with consider them to be in network for some or all of the preventive care services.

"It would be a good idea for physicians to start contract negotiations with health plans two to three months before the plan renewal date," she said.

"Is That Health Plan Contract Good for Your Practice?" is an on-demand webinar presented by Ms. Kinney. The webinar helps practices assess a plan contract's effect on their bottom line and the impact of their contracting choices. It also features information about contract negotiation and potential problems in managed care contracts.

Ms. Kinney explains the importance of examining contract profitability and payer mix as part of informed contract decision making in a medical practice.

Additionally, the American Medical Association launched an online community to help physicians improve their contracting strategies. The Cutting-edge Contracting Group allows physicians, practice staff, and contract experts to connect and share tips, know-how, and resources about contracting with managed care organizations.

Ms. Kinney encourages TMA members to take advantage of the association's contract evaluation service. For $150, attorney and accountant Michael Z. Stern will review a new or existing managed care contract for legal pitfalls and provisions that may alter or affect a medical practice. Physicians will receive a written evaluation.

For more information, contact Mr. Stern at (512) 469-9006 or m_stern@sbcglobal.net, or the TMA Knowledge Center at (800) 880-7955 or knowledge@texmed.org.

"Out-of-network physicians would be wise to ask the plans how they're going to pay for preventive services," Mr. Stern said. "When a physician is out of network, there's generally no contractual agreement regarding fees or copays and deductibles. Managed care companies could strong-arm physicians, and they could potentially be providing services under a plan for which they don't know how they will be paid."

He cautions that with changes to the law under PPACA, physicians shouldn't assume their managed care contracts will be the same when they come up for renewal.

"Insurance companies may start implementing a lot of changes in their contracts with physicians. It's probably a good idea for physicians to have their contracts reviewed by an attorney when they renew," Mr. Stern said.


 TMA Policies, Procedures Guide 

To help medical practices implement and enforce their own policies and procedures, TMA offers Policies & Procedures: A Guide for Medical Practices. A hard copy of the guide with customizable CD is $295 for members and $395 for nonmembers. The customizable CD alone is $255 for members and $355 for nonmembers. To order the guide, call the TMA Knowledge Center at (800) 880-7955 or e-mail knowledge@texmed.org.

Regina Williams, an Austin human resources attorney who consulted with TMA in developing the human resources portion of the guide, says a practice's office manager or other human resources professional should obtain written proof that new employees received the guide and were told to read it, and conduct an orientation session.

The same training and notification procedures should be required when the manual is updated, she says. Keep a written record of attendance and written proof employees received the revised policies. 

September 2012 Texas Medicine Contents
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