TMA and TMA Border Health Caucus Testimony on Medicaid

Testimony: Medicaid by Carlos Cardenas, MD

Vice Chair, Texas Medical Association Board of Trustees
Legislative Chair, Texas Medical Association Border Health Caucus

Before the Texas House Committee on Human Services 

Sept. 17, 2012  

Good morning, Chairman Raymond and distinguished members of the committee. It is my sincere pleasure to join you this morning. I am Dr. Carlos Cardenas, a practicing gastroenterologist in South Texas and Board of Trustees vice chair for the Texas Medical Association, which represents nearly 46,000 physicians and medical students. I would like to express my sincere appreciation to the committee for allowing me to participate in today’s hearing.

I would also like to thank the chair on behalf of the Texas Medical Association for his tireless efforts to eliminate health care disparities in our great state. In addition, I would like to express appreciation to the staff of the Texas Health and Human Services Commission (HHSC), especially Joe Vesowate, who throughout the rollout of Medicaid managed care in South Texas have worked tirelessly to resolve challenges and provide solutions. 

I mention the issue of health disparities because it is impossible to evaluate the impact of Medicaid managed care in South Texas without understanding the unique socioeconomic conditions that exist along the Texas border region. Residents along the border region tend to have a higher rate of chronic conditions and literacy challenges, and suffer from a lack of health insurance coverage.

This confluence of factors affects not only the patient but also the providers who serve them. Throughout my medical training, I was instructed that the fundamental principle of health care is to render the right care, at the right time, and in the right manner.

I firmly believe that it is through the lens of this principle that we can evaluate expansion of Medicaid managed care in South Texas. In the end, the only determinate for its success should be whether its overall impact is allowing or preventing the right care, at the right time, and in the right manner.

1. Financial Impact
Over the past 12 months, South Texas physicians and providers have experienced one of the most challenging periods of change in modern time: The Texas Medicaid program expanded Medicaid managed care for women, children, and seniors into South Texas. Simultaneously, the state reduced payments for Medicaid-eligible, low-income seniors through revisions to its dual-eligible payment policy, while changes by the federal government to the Health Professional Shortage Area (HPSA) program came into effect and led to the loss of additional payments for most urban counties in South Texas.

Medicaid managed care has always translated into some form of reduced payment for providers. But no other community in Texas has had to endure this new payment methodology while also suffering major payment losses in two other major programs — and this in a community where Medicaid can amount to more than 80 percent of a provider’s payer mix. In one year, after all reductions are factored in, some providers’ effective payment rate was cut more than 40 percent. Without immediate action by the state legislature and the Texas Health and Human Services Commission, the continuation of this level of payment will erode our state’s safety net of care; providers already have begun exiting the South Texas community.

2. Impact to the Delivery of Care
The implementation of Medicaid managed care in South Texas has led to some significant changes in the delivery of care in my community. Some are positive. One of the key benefits has been the increase in education and prevention programs Medicaid managed care operators have offered. These programs have provided covered individuals with hypoallergenic linens and products to reduce asthma incidents; weight management training; diabetes awareness classes; and community intervention specialists to reduce the incidence of traumatic life events and/or administer chronic disease management assistance. Some managed care operators, such as United Healthcare, have even reached out to the provider community to find new ways to offer patients medical homes, avoid hospital readmissions, and prevent avoidable visits to the emergency department. This type of collaboration is the definition of managed care that all providers welcome. 

However, not all change has led to a positive experience. Since the expansion of managed care into South Texas, providers have become inundated with a barrage of paperwork, most of which is unnecessary. Due to the regulatory requirements of managed care, physicians have been forced to see fewer patients so they can meet the administrative requirements of multiple plans. This situation is made worse when one considers that reduced payment rates have forced physicians to lay off staff. So physicians must now cope with greater processing requirements, but with fewer staff. 

I feel it is important to note that some plans have done a better job than others to streamline the care process and reduce unnecessary paperwork or unsubstantiated denials. A select group of managed care providers understands that an overly bureaucratic system impedes the proper delivery of care and is working to improve this situation. 

It is my honest hope that in the weeks ahead, managed care operators, providers, and representatives of the Health and Human Services Commission can come together to improve and streamline managed care process in South Texas. The Texas Medical Association and I offer the following suggestions:

  • Require Medicaid HMOs to pay clean claims within 15 days (Medicaid HMO data show they can pay clean claims within 15 days now). 
  • Establish a standardized prior authorization form for each HMO and fee-for-service (FFS) operator to reduce administrative hassles. 
  • Preserve the single statewide preferred drug list (PDL) and formulary in HMO and FFS health plans; the provision requiring the HMOs to use the statewide PDL and formulary will sunset next August. Without this requirement, each HMO will be free to establish its own drug formulary and prior authorization requirements, only adding to the complexity of the HMO model. 
  • Standardize the credentialing process to the extent possible.
  • Work with HHSC to improve the readiness review process so HMOs have an adequate physician and provider network. After the March 1 expansion, TMA received calls from rural physicians complaining about inadequate hospital coverage with certain health plans in their service area, which resulted in delays in scheduling patients for elective procedures.

In light of these challenges, I must say that at this time we cannot determine if Medicaid managed, care allows for right care, at the right time, and in the right manner. However, I am optimistic that if the state, plan operators, and providers come together, this goal may be achieved.

3. Dual Eligible Cuts and Star Plus
Assessing the full impact of Medicaid managed care must include evaluating changes to other integrated programs. The eventual success or failure of the state’s Medicaid managed care Star Plus Program is inextricability linked to its dual-eligible payment policy. I would like to dedicate the remainder of my testimony to recent HHSC policy changes I believe have the potential to erode any progress achieved in realizing border health care parity. If left, these policies will lead to a great exodus of physicians from the Texas border community.

Beginning Jan. 1 of this year, Texas Medicaid implemented a new policy, limiting what it pays physicians who treat dual-eligible patients. As a result, physicians across the state who care for these patients face a cut of 20 percent and in some cases even more. “Dual-eligible” patients are low-income seniors and people with disabilities who qualify for both Medicare and Medicaid. In Texas, there are almost 465,000 dual-eligible patients, who are among the sickest and most vulnerable people in our state. Many reside in nursing homes.  

I can tell you firsthand that these cuts have created a medical emergency for thousands of dual-eligible Texans and the physicians who care for them. No physician practice can absorb a 20-percent cut, especially now when Medicare threatens to cut our payments almost 30-percent Jan. 1, 2013. The policy change basically penalizes physicians who care for the sickest and frailest Medicare patients in the state.

One of my colleagues, Javier Saenz, MD, from La Joya is struggling to keep his practice open to patients. In addition to the 20-percent budget cut, his and other doctors’ payments were delayed because the state and federal government experienced computer glitches the first three months of the year. Dr. Saenz had to borrow money twice this year to keep his office open. And, he’s not alone. TMA has heard similar stories from physicians from Lubbock to Nacogdoches, El Paso to Brownsville, and Houston.

These cuts also hurt our ability to recruit physicians. Take for example Dr. Saenz, who runs his own practice in La Joya — and has for more than 20 years. His son who is getting his medical degree in San Antonio wants to join the practice. However, will there be a practice for him to return to?

TMA’s current physician’ access study shows 58 percent of Texas’ doctors accept all NEW Medicare patients compared with 40 percent for dual-eligible patients. This the first time TMA asked questions in its survey related to dual-eligible patients so we don’t have historical data to compare them against.

However, the survey did illustrate that physicians who have changed their practice policy towards dual-eligible patients are less likely to see all new Medicare patients. In fact, 47 percent said they accept none. These patients need us. These patients have serious, complicated illnesses. They need access to their doctor.

The message I most want leave you with today is that Texas physicians want to take care of our patients. We want to see all Medicaid and Medicare patients and those who are covered by both payers, but … we cannot do it without your help.  

We need your help and action to mitigate the cut so physicians can continue to care for Texas’ elderly — and often sickest — patients. Relief for these physicians and patients cannot happen too soon.

Physicians along the Texas border region cannot remain in operation without immediate action on this issue. Without physicians in communities across this region providing the right care, at the right time, and in the right manner, border health disparities and long-term health cost will rise by an exponential factor.

Last Updated On

January 06, 2020

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