TMA-Backed Law Prompts Medicaid Red-Tape Relief

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Legislative Affairs Feature — August 2014

Tex Med. 2014;110(8):33-36. 

By Amy Lynn Sorrel
Associate Editor

Apparently, the state got the message loud and clear: Physicians and patients are overly frustrated with the myriad administrative roadblocks that came along with the expansion of Medicaid managed care in Texas. Thanks to the Texas Medical Association's advocacy during the 2013 legislative session and the successful passage of Senate Bill 1150, relief from red tape may finally be in sight.

Longview obstetrician-gynecologist Yasser Zeid, MD, is hopeful legislation that relieves administrative hassles in Medicaid managed care will allow him to dedicate staff time to taking care of patients instead of spending excessive time on the phone to get preauthorization for services or verify enrollment. When each plan has its own rules, forms, and referral requirements, patients sometimes wind up in limbo if Dr. Zeid can't get timely approval for the test he needs or to refer a patient to a specialist. Other times, patients switch to different plans without notice, disrupting care.

"The administrative hassle is significant enough that it does interfere with patient care," Dr. Zeid said. 

For Harlingen pediatrician Stanley Fisch, MD, red-tape relief could mean a day when he no longer has to slog through five different credentialing processes with Texas Medicaid and the four managed care companies in the region. The labor-intensive process in some cases delayed the practice's ability to get a new physician up and running to see patients. 

SB 1150 calls on the Texas Health and Human Services Commission (HHSC) to develop a plan specifically to reduce such administrative burdens on physicians and other health professionals participating in Medicaid managed care, now the preferred state model for the program. Texas lawmakers are keen on using it to try to reduce costs and improve care delivery in a growing program that consumes a quarter of the state budget, and the 2013 legislature further expanded the model statewide. (See "Medicaid Roadblocks," October 2013 Texas Medicine, pages 14-21.)

Drs. Zeid and Fisch, members of TMA's Select Committee on Medicaid, CHIP, and the Uninsured, now serve on a multi-stakeholder state workgroup established by SB 1150, giving them the opportunity to share with HHSC their ideas on how to simplify and streamline many of the existing HMO requirements. 

"I'm hoping that at the end of day we will be able to come up with some sort of consensus on recommendations that will hold managed care companies accountable for the delivery of care as the No. 1 priority, as opposed to saving the state money. There's nothing wrong with saving money. But it should not affect patient care or the delivery of services," Dr. Zeid said.  

Dr. Fisch adds timing is critical as the state expands the program to include more vulnerable populations, especially when TMA surveys show only one-third of Texas doctors take all Medicaid patients. 

State officials "asked for input. They got it. And they are paying attention to it," he said. "These are not new issues. They've heard about this over and over again and finally wrapped their arms around the fact that there is a bundle of concerns we once and for all have to deal with. Stakeholders are telling us. The legislature is telling us. And I'm hopeful that all this is going to bring about some change." 

For their part, managed care companies say they, too, are willing partners in developing a solution. 

As the program shifts from fee-for-service to managed care, UnitedHealthcare's Donald Langer agrees the "timing is right" to look for efficiencies and improve upon many duplicative processes between the two models. The chief executive officer and plan president for the company's Medicaid division sits on the workgroup and oversees one of Texas' largest Medicaid HMOs.

"All parties are engaged. HHSC has invested a lot of resources in this [process]. And there's a great opportunity in front of us to take the time to look at the different components and make the program as simple as possible," he said. "Ultimately, it's going to improve the relationship between the providers, the state, as well as the MCOs [managed care organizations], so we can get past some of these process challenges or obstacles and work together to really figure out innovative ways to help members: One, through access, because it's a lot easier for [physicians] to participate. And, two, if we are not as distracted by some of these processes, we can focus on innovative programs for the members."

New Law, New Hope

The 2013 legislature responded to TMA's call for better protections in the Medicaid program. (See "Medicaid in the Legislature.") SB 1150, requires HHSC to put in its contracts with Medicaid HMOs a "provider protection plan" that provides for: 

  • Prompt and proper payment;
  • Prompt and accurate adjudication of claims through education on proper submission of clean claims and appeals, acceptance of uniform forms through an electronic portal, and establishment of standards for claims payments;  
  • Adequate and clearly defined physician and provider network standards that ensure patient choice; 
  • Prompt credentialing processes; 
  • Uniform efficiency standards and requirements for submitting and tracking preauthorization requests; and  
  • Measurement of HMOs' provider retention rates.    

"We are talking about complex needs that need to be addressed and [that require] access to specialists and providers. So if a provider tells us that because of the administrative requirements he or she is no longer willing to do business with Medicaid, we are going to have an issue in terms of access, and we take that seriously," said Gary Jessee, deputy director for HHSC's Medicaid and Children's Health Insurance Program (CHIP) division. 

To prepare for the workgroup's first meeting in May, HHSC surveyed physicians and other Medicaid professionals, HMOs, consumers, and advocates, including TMA, on policy and regulatory recommendations for how to achieve the law's administrative simplification goals. 

The state survey elicited more than 200 suggestions. They center on four areas that are ripe for improvement and that align with TMA's priorities:  

  1. Claims processing,
  2. Credentialing, 
  3. Standardization of forms, and 
  4. Prior authorization processes.  

A fifth category of "other," but no less important, issues raised includes concerns over HMO network adequacy and the state drug program, also among TMA's concerns. 

At press time, the workgroup was in the process of forming subcommittees to tackle the various categories and develop solutions over the next several months. HHSC must report back to the legislature on its progress by Sept. 1. 

Bill author and sponsor Sen. Juan "Chuy" Hinojosa (D-McAllen) says he and the legislature are looking forward to that report after what he agrees were a number of "bumps in the road" getting the Medicaid managed care expansions off the ground. 

"One of the key requests we made was to get doctors involved [in improving the system] because they are the ones on the front lines," he said. "Through this legislation, we have a formal structure in place to get this workgroup together to discuss the issues on how to make the program run smoothly so we can focus on providing care to the people who need it." 

Making Progress

Though the workgroup remains in its early stages, Dr. Fisch highlights some emerging solutions that peaked common interest. 

One idea gaining traction is the potential for a centralized credentialing clearinghouse. Instead of physicians filing the same information over and over again and Texas Medicaid and health plans processing duplicative paperwork, all parties seem to align over the potential for a one-stop data repository for credentialing purposes.

Dr. Fisch says physicians, HMOs, and Medicaid also seemed to agree with the need to streamline the state's preferred drug list (PDL) and updates to it. Even though HMOs administer the drug benefits, HHSC determines the drug list and edits made to it, often creating a disconnect between the state and the health plans.

For doctors, "there are a lot of abrupt and arbitrary changes we don't learn about until the patient goes to the pharmacy and finds out that drug is no longer covered or we have to get prior authorization for something that used to be routine," Dr. Fisch said. Not only does it disrupt care, "it's annoying. It's a hassle. And the call is for a much more systematic way to make changes in PDL and announce those changes," for example, through the Epocrates web-based application.

Dr. Zeid says physicians and other professionals also galvanized around the idea of a single, standardized prior authorization form and shifting those forms and processes online. 

Two other TMA-backed laws, Senate bills 1216 and 644, direct the Texas Department of Insurance (TDI) to adopt standardized medical and prescription drug prior authorization forms for use by all health plans, including Medicaid HMOs. HHSC participates in the TDI workgroups developing the forms and once completed, it plans to implement them across Medicaid managed care, Mr. Jessee says. 

On the other hand, he says, although physicians and others may prefer to see all HMOs have the same prior authorization practices, managed care rules give plans "flexibility around utilization management and review practices, so we probably won't get to a place where they all have the exact same process. But if providers knew what those processes were, and they are clearly defined and easily accessible, even if they varied, that is something we could work through." 

When it comes to claims, TMA and others took issue with HMO payment clawbacks for services physicians provided to patients enrolled in an HMO at the time of service but later determined ineligible. HHSC officials indicated they are open to identifying the most common eligibility errors that result in recoupments to see if system changes could prevent the problem.

TMA also expressed concern over outdated state network adequacy standards for Medicaid HMOs, which Dr. Fisch says continue to result in shortages in specialty care for Medicaid patients. 

Mr. Jessee says HHSC has what he describes as "comprehensive" standards in line with TDI rules that include regular reporting by HMO networks. But he acknowledges network adequacy is under "major discussion" in the statewide managed care advisory committee. HHSC also formed its own internal workgroup to develop recommendations for improvements that might include, for example, applying broader Medicare managed care requirements to Medicaid.

Part of the administrative improvement process also involves "making sure providers understand protections they already have in place," as well as the limitations of SB 1150 and other state rules and regulations, Mr. Jessee adds.

Some recommendations, for example, centered on penalizing HMOs for not paying clean claims on time, but state prompt pay laws already include such safeguards. (Additional information is available on TDI's Prompt Pay FAQs webpage. Or use the TMA Payment Advocacy Department's Hassle Factor Log for help with claims-related issues, including prompt pay.)

Other problems, like Medicaid fraud, fall within the purview of other state agencies, in this case, the Office of Inspector General. Still other suggestions, like requiring Medicaid patients to stay with a specific primary care physician instead of switching plans, would require legislative approval.

Mr. Jessee also clarifies "SB 1150 was not designed to, and we've taken no action to, design processes around payment." The managed care model allows HMOs to negotiate and set payment rates with physicians and others, "and we are not typically involved." 

HMOs on Board

The law does, however, mandate Medicaid HMOs establish electronic processes for smoother payments and other functions. Those systems must include portals so physicians and others can electronically submit claims, appeals and related attachments, and prior authorization requests. HHSC is in the process of evaluating health plans' progress.

Mr. Langer says United plans to roll out some enhancements to its portal this year, adding the Centers for Medicare & Medicaid Services (CMS) has similar requirements that Medicaid HMOs must comply with by 2015. The automations will save physicians and health plans time and probably some costs, too, by eliminating paper processes and potentially lost mail and claims and by allowing plans to more easily and quickly capture, track, and respond to requests and reviews. 

As for other areas, "I don't see anywhere we can't come to some sort of a win-win situation," he said. 

The only challenge he foresees "is there's going to be a lot of education for all of us around all of the different rules and regulations that the state, HHSC, and managed care companies have to abide by: There are CMS rules, TDI rules, and HHSC rules. There are laws that have been passed in addition to SB 1150 that create some parameters we all have to operate in. But once we have a collective, cross-functional team and an opportunity to understand those rules, I don't see why we can't come to a win-win agreement for everybody."

Dr. Zeid says he's also optimistic the committee's work will make a difference.

"Frankly, if I didn't think this would make a difference, I would not be wasting my time in Austin for the next several months. It's not a one-sided issue. Managed care companies also acknowledge the fact that if they can streamline [Medicaid], they would save money and improve access, which is a win-win situation. And that's where we want to be."

Amy Lynn Sorrel can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email.


Medicaid in the Legislature

While there's more work ahead, the 2013 Texas Legislature responded to TMA's call for better protections in the Medicaid program. TMA will work to build on those gains in 2015. Among them:    

  • Senate Bill 1150 by Sen. Juan "Chuy" Hinojosa (D-McAllen) and Rep. Bobby Guerra (D-Mission) requires the Health and Human Services Commission to incorporate a "provider protection plan" in its contracts with Medicaid managed care organizations.
  • Senate Bill 1803 by Sen. Joan Huffman (R-Houston) and Rep. Lois Kolkhorst (R-Brenham) improves transparency during Medicaid fraud investigations by defining a "credible allegation of fraud" and providing timelines and procedures for payment holds and appeals. (See "Fighting for Fairness," August 2013 Texas Medicine, pages 35-38.) 
  • Senate Bill 644 by Senator Huffman and Rep. John Zerwas, MD (R-Simonton), requires the Texas Department of Insurance (TDI) to appoint a stakeholder workgroup to design a standard prescription drug preauthorization form applicable across all payers, including Medicaid and the Children's Health Insurance Program. 
  • Senate Bill 1216 by Sen. Kevin Eltife (R-Tyler) and Rep. Sarah Davis (R-Houston) requires TDI to appoint a stakeholder workgroup to design a standard preauthorization form for health care services, also applicable to Medicaid and all other payers.  

Last Updated On

June 02, 2016