Physicians Prescribe Three Remedies to Improve Medicaid

Interim Testimony by Ryan Van Ramshorst, MD 

House Human Services Committee

Submitted on behalf of:
Texas Medical Association, Texas Pediatric Society, Texas Academy of Family Physicians, Texas Association of Obstetricians and Gynecologists, the American Congress of Obstetricians and Gynecologists-Texas Chapter, and Federation of Texas Psychiatry

Tuesday, March 8, 2015

Chairman Raymond and committee members, thank you for the opportunity to testify. I am Ryan Van Ramshorst, MD, a practicing pediatrician from San Antonio, speaking on behalf of the Texas Medical Association, Texas Pediatric Society, and the medical societies listed above. 

Increasing physician participation in Medicaid is of the highest priority for our organizations. Medicaid is critically important to 4 million low-income Texans, who rely on it to obtain preventive, primary, specialty, and behavioral health care. As a pediatrician, I see every day how Medicaid improves the health and well-being of my patients, allowing me to provide everything from immunizations and developmental screenings to treatment for asthma and diabetes. But my colleagues’ and my ability to provide care to Medicaid patients has become increasingly difficult over the past several years. 

In 2000, 67 percent of physicians accepted all new Medicaid patients. Today, 34 percent do.   Physicians’ exodus from Medicaid is not difficult to diagnose: Medicaid’s burdensome and costly paperwork combined with stagnant payment rates have made it economically untenable for a growing number of practices to continue.  

Reversing the Medicaid physician exodus will require a three-pronged approach:   

  • Decreasing administrative costs,
  • Improving network adequacy, and
  • Paying competitive rates. 

Administrative Simplification

As regards the first recommendation, Texas is making progress. During the 2015 sunset review of the Health and Human Service Commission (HHSC), lawmakers directed the agency to standardize and centralize the Medicaid HMO credentialing process, which has long been a major source of physician frustration. HHSC and the health plans will elaborate on the forthcoming changes, but once implemented, the reforms will eliminate paperwork redundancy and expense when physicians seek HMO credentials. Further, under the leadership of Commissioners Chris Traylor and Gary Jessee, HHSC formed a stakeholder workgroup to identify and eliminate duplicative or unnecessary administrative requirements whenever possible. Attached to my testimony are the recommendations submitted by organized medicine. Reforms underway include simplifying the Medicaid enrollment process and better communicating HMO care coordination benefits to physicians and patients. HHSC and the HMOs also conveyed interest in our recommendation to establish a “gold star” program to eliminate or reduce prior authorization requirements for practices that demonstrate appropriate utilization management. 

But much more administrative relieve can and should be done. Since the vendor drug program is a particular focus of this hearing, let me say that it is indeed the bane of physicians. It is unnecessarily complicated and confusing. Physicians do not understand it. Patients do not understand it. Let me give you one example of what I deal with on a daily basis. Texas Medicaid organizes most prescription drugs into what is called a Preferred Drug List or PDL. Drugs categorized as “preferred” do not require prior approval before being prescribed; drugs classified as “nonpreferred” do. But in addition to this categorization, some drug classes also are subject to what are known as clinical edits. These edits are developed by a committee of physicians and pharmacists for valid clinical reasons, such as avoiding potentially dangerous drug interactions. But nowhere on the actual PDL is a physician given information about these additional edits. So a physician who prescribes a preferred drug may have it denied because of a clinical edit, thus triggering the need for prior authorization.  

This may just sound like business as usual for Medicaid prescription drug benefits, but no other payer operates such a confounding process. Further, while all the Medicaid HMOs must abide by the statewide PDL, they are not required to adopt all the clinical edits, which undermines the concept of a statewide PDL as required by the legislature. I will note that HHSC has agreed to meet to discuss our concerns, and we appreciate its willingness to work with us. But these are not new issues. We have raised concerns about the administration of the Vendor Drug Program for many years. 

As to the study released today by the Texas Association of Health Plans urging the state to cede the Medicaid pharmacy benefit management system entirely to the Medicaid HMOs, our organizations have not yet taken a stance. But we will be vetting this recommendation over the next few months. If nothing else, HHSC must take steps to make the PDL and clinical edit process more transparent and easier to navigate for all users.

Network Adequacy

Last session, the legislature, with your leadership, also enacted Senate Bill 760 by Sen. Charles Schwertner, MD, and Rep. Four Price directing HHSC to implement new measures to increase oversight and accountability for Medicaid HMO network adequacy. Contractually, the Medicaid HMOs must ensure they provide an adequate network of physicians and providers. Yet, one of the most frequent complaints we receive is about the inadequacy of HMO provider networks. TMA received a particularly glaring case in January from a gynecologist who had spent four months trying to identify an in-network gynecologist-oncologist for two patients diagnosed with cancer in need of urgent procedures. Every time the physician called the plan, the plan referred the patient back to him, even though he did not perform the surgical procedure. TMA worked with HHSC to resolve the issue quickly, but nonetheless the delay in care could very well jeopardize the patients’ health. 

In my own practice, when I need to refer a patient to specialty care, my office often spends hours calling other physicians trying to find one who is in-network and accepting new patients. When I do find a physician, patients often must suffer a prolonged wait before being seen while my patients with commercial insurance usually get in quickly. Thankfully, SB 760 makes explicit that it is the HMOs’ responsibility to find a participating physician or arrange for an out-of-network referral. This will relieve my office of the time and expense of tracking down participating offices. To fulfill the language of SB 760, our organizations recommended that HHSC require the HMOs to prominently and clearly list on each page of their provider directories and on their websites the phone number to call for help finding a physician or provider. Moreover, HHSC should specify HMOs must fulfill such requests within three business days with a mechanism to escalate to the HMO medical director if the plan is not responsive.  

Now that 87 percent of Texas Medicaid patients are enrolled in managed care, it also will be important for HHSC to establish a transparent, accountable process for establishing new managed care policy and contractual changes. Currently, when HHSC amends the uniform managed care contract, changes are not shared with other stakeholders prior to the changes taking effect. Contractual changes also are not reviewed by any advisory committee, such as the Medical Care Advisory Committee, which reviews proposed Medicaid rules. To ensure broad input into HMO contract amendments, we recommend that HHSC distribute any proposed revisions for public comment.  This would not necessarily be a lengthy process, like rule changes, but could be done by posting proposed changes on the HHSC website and giving interested parties an email to which to send comments. A similar process is now in place for proposed changes in Medicaid and/or CHIP clinical policy. 

Competitive Payments

As important as administrative reforms are, they can only go so far towards enticing physicians to return to Medicaid. To make real progress, Texas must establish competitive payment rates. Over the past decade, physician practice costs have increased an average of 3 percent per year, or 30 percent over a decade. Yet during the same period, Medicaid rates have been mostly flat or declining with the exception of a 2007 rate increase for primary care services and another temporary, two-year federally funded rate increase in 2013 and 2014 that increased payments for some primary care physician (PCP) services to Medicare parity.  

We know from the TMA physician survey that increasing physician Medicaid payments actually reverses the decline in participation. From 2012 to 2014, physician participation in Medicaid rose five points. But among primary care physicians, 9 percent more participated. The jump is attributable to the temporary PCP rate increase. Similarly, in 2008, physician participation increased after Texas lawmakers invested new monies to improve the physician Medicaid network (see attached chart).

Last session, the House, galvanized by Chairman Price, strongly supported maintaining the higher primary care rates. We are grateful for your support.

In 2017, we urge you to make increasing all Medicaid payments to Medicare parity a top priority.

Medicaid plays a huge role in providing health coverage for thousands of low-income children and adults, including a large number with special health care needs or mental health conditions. The time to increase Medicaid physician payments to competitive levels is now. With investment from the Texas Legislature, combined with state agency, health plan, and physician and provider efforts already underway to decrease the administrative burden for those already enrolled in the Medicaid program, Texas will be able to make a concerted push to increase the number of Medicaid-participating doctors so that Texans have access to health care they need to be healthy.

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Last Updated On

March 08, 2017

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