Medicaid Managed Care Needs Better Oversight, Networks, Care Coordination, and Physician Payment

Interim Written Testimony by Douglas W. Curran, MD, TMA President

Joint Meeting of House Committees on General Investigating and Ethics 

and Appropriations, Subcommittee on Art. II

June 27, 2018


The committees will meet in a joint hearing to consider Appropriations Interim Charge 18/General Investigating and Ethics Interim Charge 10: 

-Monitor the agencies and programs under the Committees’ jurisdiction and oversee the implementation of relevant legislation passed by the 85th Legislature. 

-Oversight of the Texas Health and Human Services Commission’s management of Medicaid managed care contracts 

Chair Davis and members of the joint committee, I am Dr. Douglas Curran, a family physician from Athens, Texas, testifying today on behalf of the Texas Medical Association, which represents more than 51,000 physicians and medical students. I am also a family physician who for more than 30 years has cared for thousands of Medicaid patients — young and old, healthy and sick — so I greatly appreciate the opportunity to speak to you on the significant deficiencies in the Texas Medicaid managed care program and how Texas can expeditiously correct them.  

TMA shares your utmost goal to make sure Medicaid patients get the right care at the right time. Medicaid is vital to ensuring the health of all Texans. One in seven Texans is enrolled in the program, amounting to nearly 4.5 million individuals, many of whom are my patients and all of whom, collectively, are neighbors. Medicaid also is critical to addressing the state’s most pressing health care challenges, such as improving maternal health, better treating substance use disorders, and expediting care to abused and neglected children taken into state custody. In this context, the recently published Dallas Morning News (DMN) series, “Pain & Profit,” was especially painful to read. It highlighted serious flaws in Medicaid’s ability to ensure children and people with disabilities get the care they need to lead full and healthy lives to the extent of their abilities.

Sadly, what I read reflects not only my own experiences dealing with Medicaid managed care organizations (MCOs) but also that of many of my colleagues — struggling to find specialists accepting new patients, wading through convoluted prior authorization and appeals processes, and spending hours on the phone attempting to find and arrange care coordination for medically complex patients. Stories like those in the DMN indicate that the plans in question — as well as the Texas Health and Human Services Commission (HHSC) itself — are too often failing to uphold the fundamental oath of medicine — do no harm.  

Texas’ Medicaid managed care system faces grave but surmountable challenges that must be addressed with all due haste, beginning with enhanced scrutiny not only of the health plans but also of how the state’s own actions, including deep funding cuts and insufficient agency staff, jeopardize Medicaid’s ability to care for the neediest among us. 

At the same time, we must recognize not all Medicaid MCOs are created equal. Some are quite clearly poor performers while others go above and beyond what the state asks of them to ensure their enrollees receive the care they need, including expanding availability of specialty services and improving maternal health outcomes. Texas must learn from and replicate the best practices of the highest- performing plans rather than just punishing the bad apples. 

TMA is dedicated to working with lawmakers, state agency staff, and MCOs to reform the system to ensure it does no harm. To that end, we make the following recommendations to address the issues detailed in the “Pain & Profit” series.

Enhance accountability and oversight of managed care organizations 

The Texas Health and Human Services Commission is charged with the oversight of Medicaid MCOs. But it is not clear if the agency has sufficient, qualified staff to routinely and systematically scrutinize MCOs’ network adequacy, medical policy development and revisions, appeals compliance, and so forth. It is important for Texas to candidly assess whether the agency itself requires more resources to do the job entrusted to it by the legislature. While we are pleased HHSC recently received approval to hire more contract oversight staff, more may be needed. Furthermore, we urge support for hiring a senior chief medical officer to provide important and timely insight and oversight of issues relating to medical and clinical policy, including network adequacy and expansion of value-based payment initiatives.   

Undoubtedly, it goes without saying that HHSC must quickly and meaningfully penalize poorly performing plans and implement timely, appropriate corrective measures. At the same time, Texas must not focus exclusively on removing or punishing bad MCOs. Plans that perform well, as well as the physicians who participate in their networks, should be recognized and rewarded.  For Texas Medicaid managed care to constructively evolve, the state must determine how to quickly replicate and expand the highest-performing plans’ best practices so that Medicaid managed care works better for all.   

Strengthen care coordination 

Care coordination remains inordinately confusing and time-consuming, well short of its intended goals. The intent of care coordination is to ensure patients, particularly those with the most significant needs, get the right care at the right time, as well as to help physicians successfully transition patients from one level of care to another, such as from an inpatient stay to the community, where follow-up care may be needed. But these connections are not happening routinely.

Reforming Medicaid care coordination is a high priority for our members. The role of care coordinators should be revised to help practices facilitate specialty and long-term care services. In addition, physicians with patients requiring care coordination must have a mechanism to directly request such services and to easily and quickly contact a patient’s care coordinator. The state also needs to develop distinct definitions for “care coordination,” “service coordination,” or similar terms within each Medicaid managed care product to better differentiate what each patient population is eligible to receive. 

Simplify appeals process

The current appeals process for Medicaid MCOs is overly complicated and burdensome for patients and physicians. HHSC should streamline process and ensure physicians and patients have access to an ombudsman or state staff person who is available to facilitate the appeals when necessary. Any reforms to the system must ensure the process is responsive, quick, and flexible to allow both patients and physicians/providers to appeal for medical, surgical and behavioral health procedures, treatments, and medications.

Ensure adequate networks

The DMN articles clearly highlighted a significant barrier to obtaining timely medical treatment through MCOs: Texas’ extremely inadequate network of physicians and providers. While the problem predated MCO expansion, over time the seemingly endless red tape and bureaucracy imposed by some MCOs, combined with low payments, has resulted in more physicians limiting Medicaid participation or leaving altogether. In 2000, 67 percent of physicians accepted all new Medicaid patients. Today, that number is 42 percent.  

In 2013, the legislature enacted Senate Bill 760 by Chairman Charles Schwertner, MD, giving HHSC authority and tools to increase MCO accountability regarding the adequacy of their networks. In 2017, HHSC amended its MCO contract to implement stiffer standards. However, HHSC has yet to share detailed information about the plans’ compliance with the new standards, leaving physicians, patients, and lawmakers unsure of where we stand. HHSC must expedite its reporting on SB760 compliance as well as its recommendations for addressing systemic and plan-level deficiencies. 

Increase physician payments

Despite physicians’ broad support for Medicaid as a vital piece of Texas’ health care safety net, physician Medicaid participation will continue to wither unless Texas implements competitive Medicaid payments. As the saying goes, you cannot squeeze blood from a turnip. Even among well-run, well-regarded Medicaid MCOs, finding and keeping subspecialty physicians and even some primary care physicians is a growing challenge. This is because Texas Medicaid physician fee-for-service payment rates — which are what most Medicaid MCOs pay physicians, too — have not received a meaningful, enduring increase in nearly two decades. Physician payments also are not indexed to inflation, meaning that each year Texas fails to increase payments, the farther Medicaid payments fall behind commercial payers and Medicare. 

However, TMA survey data clearly show that when Medicaid payments increase, likewise so does physician participation.

Streamline administrative procedures

For Texas Medicaid managed care to work effectively and efficiently, Texas must eliminate redundant, silly, and onerous red tape that benefits no one but results in physicians spending less time with their patients. In TMA’s survey, 55 percent of respondents stated that simplifying Medicaid paperwork would result in them seeing more patients. 

To that end, over the past year, TMA has collaborated with the MCOs to create a centralized organization through which physicians can obtain credentials to participate in any of the 19 Medicaid plans operating in the state. 

Furthermore, TMA and the Texas Association of Health Plans will co-host a summit later this summer for our respective leadership to identify five to 10 administrative hassles our organizations can address in relatively short order. This includes cutting unnecessary prior authorization requirements, standardizing prior authorization forms, strengthening Medicaid care coordination, improving specialty referral processes, and deploying smart telemedicine initiatives to help physicians better integrate and coordinate care. 

Expand use of value-based payment initiatives

Another strategy to increase the number of physicians who see Medicaid patients is to better reward those who partner with MCOs to improve patient health care outcomes and well-being.  HHSC contractually obligates MCOs to implement value-based payment initiatives that promote improve health care quality and access. These new value-based partnerships between physicians and managed care organizations have resulted in some physician practices, mostly primary care, receiving better payments, including incentives for providing evening and weekend office hours, increasing the number of children who receive well-child care visits, or boosting the number of women getting early prenatal care.

Yet such bonus payments cannot overcome the fact that payment per service is below physicians’ practice costs.  Furthermore, legislatively mandated funding cuts to Medicaid MCOs potentially imperil the ability of plans to expand or maintain value-based payment initiatives. Without investment of new state dollars targeted to Medicaid physician services, the ability to maintain innovative MCO-physician collaborations will teeter on the edge. 

Texas physicians look forward to continued dialogue with lawmakers, HHSC staff, and MCO leadership about improving the Medicaid program for our most vulnerable Texans. If TMA can provide any more information on a particular issue I covered today, please reach out to us. 

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Last Updated On

June 28, 2018