Enact Competitive Medicaid/CHIP Physician Payments

TMA Testimony by Martin Garza, MD

Senate Finance Committee
Article II, Health and Human Services Commission

Feb. 19, 2015

Submitted on behalf of the Texas Medical Association, Texas Pediatric Society, Texas Academy of Family Physicians, and Federation of Texas Psychiatry.

Good morning Chairwoman Nelson and committee members. I am Dr. Martin Garza, a practicing pediatrician from Edinburg testifying today on behalf of the Texas Medical Association, Texas Pediatric Society, Texas Academy of Family Physicians, and Federation of Texas Psychiatry to urge you to take bold action to improve Medicaid and the Children’s Health Insurance Program patients’ access to needed services by enacting competitive physician payments in these programs

Medicaid and CHIP together serve more than 4 million Texans, people we all know or encounter every day, including hard working, low-income parents and their children as well as people with disabilities and seniors. Without the programs, the vast majority of Medicaid and CHIP patients would be uninsured, thereby depriving them of access to affordable preventive, primary and specialty care. 

But a Medicaid card does not make access. Inadequate physician payment rates have forced many physician practices to limit their Medicaid and CHIP participation or cease it altogether. Medicaid payments are the least competitive among all insurers, ranging from 48 percent to 87 percent of Medicare and 41 percent to 73 percent of commercial insurance payments. These rates are hardly enticing, particularly when many practices can barely keep up with demand for their services from better paying privately insured patients. 

According to TMA’s biennial physician survey, in 2000 67 percent of Texas physicians accepted all new Medicaid patients. Today, that number is 34 percent. The good news is that increasing physician Medicaid payments actually reverses the decline in participation. From 2012 to 2014, physician participation in Medicaid rose 5 points, a jump attributable to the temporary two-year primary care physician rate increase paid for with federal funds. Similarly, in 2008, physician’ participation also increased after Texas lawmakers invested new monies to improve the physician Medicaid network.

Unfortunately, the recent federal funding to increase primary care physician payments expired Dec. 31, 2014. Without the higher payments, our organizations fear that physician Medicaid participation will again enter free fall. Physicians support Medicaid and want to participate. Yet, as owners of small businesses, facing ever more costly and demanding federal and state regulatory burdens, many cannot afford to stay in a program that pays less than half their costs

Over the past 18 months, there has been considerable attention paid to Texas’ “broken” Medicaid system, with particular interest in the plummeting physician Medicaid participation rate and the impact that exodus is having on patients’ ability to obtain timely, medically necessary care. We agree that Medicaid needs a facelift. We want to work with you to continue to identify common sense changes that will benefit patients, physicians, and the provider network while also improving patient outcomes and lowering costs. But while the federal government contributes to challenges facing Texas Medicaid, it is the Texas Legislature, not Congress, that determines how much Medicaid and CHIP pay physicians.

As you write the 2016-17 budget, we urge you to invest the necessary resources to ensure Medicaid and CHIP patients can access timely the physician services they need to be healthy and productive. Specifically, we urge you to support the following:

  • Reinstate the Medicaid to Medicare parity payments for primary care physicians (PCPs).  For the past two years, PCPs received the higher payments as a result of federal funding. But the payments expired Dec. 31, 2014. At least 15 other states, including Alabama, have voted to fully or partially sustain the higher payments to ensure an adequate physician network for their Medicaid beneficiaries.
  • Extend the parity payments for primary care to services provided to CHIP.
  • Establish competitive Medicaid and CHIP payment rates for physician specialties not included in the Medicaid to Medicare parity increase. 
  • Reverse the eight percent payment reduction for Physician Assistants (PAs) and Advanced Practice Registered Nurses (APRNs) practicing under physician supervision. The cut, which took effect earlier this month, will undermine Texas’ efforts to promote team-based models of care, an essential element of reforming the Medicaid delivery system. 

We know our request will entail significant new costs. But fixing a Medicaid system widely acknowledged in need of repair must begin with bold action by Texas leaders. 


Last Updated On

February 19, 2015

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