It's Academic

February 2017 


Senate, House Lay Out Initial Budget Proposals

The 85th Texas Legislature is off to a busy start, including the unveiling of the Senate's and House of Representatives' initial 2018-19 budget proposals last month. Senate Bill 1 and House Bill 1, for the upcoming two-year cycle. The first-draft plans are about $8 billion apart from one another in all-funds revenue (state-federal dollars), or about $5 billion apart in state-only funds.  

The Senate’s proposed two-year base budget amounts to $213.4 billion, while the House’s two-year budget proposal totals $221.3 billion. Looking solely at state revenue, the Senate plan would spend $103.6 billion, while the House version would cost $108.9 billion. By comparison, Texas Comptroller Glenn Hegar said lawmakers will have $104.87 billion in state general revenue to spend. Overall, the House proposes to spend about $2 billion more on health and human services than does the Senate. 

Here’s a breakdown of the overall spending proposals as well as the budget bills’ suggested allocations to Medicaid and graduate medical education (GME): 

 February 2017 It's Academic Budget

Medicaid is jointly-funded by the state and federal governments. Roughly 58 percent of the state’s Medicaid budget comes from federal matching funds. Thus, state budget writers reference the two terms in the budget: Medicaid "all funds" (AF) — which is state and federal dollars combined — or general revenue (GR) — which represents state-only spending. 

The Senate budget (Senate Bill 1) includes $61.2 billion in Medicaid (AF) over the next two years; or $24.9 billion in general revenue (GR). SB1 cuts Medicaid spending by $800 million (AF), partly by not including caseload or utilization growth in its forecast. Client services are not cut. The House budget appropriates $65.1 billion to Medicaid (AF); or $26.8 billion in GR. The House budget is $900 million dollars more than the current budget. The House figures reflect caseload and medical inflation. 

At this point, neither the House nor Senate plan reduces physicians’ Medicaid payments. 

The Senate and House propose about the same total amount to spend on GME for allocation through four GME programs. The House comes out ahead, by $4 million, for a total of $194 million, and the Senate is close, with a total of $190 million. The House increase is 21 percent above current spending, while the Senate increases it by 19 percent. Legislators’ allotments vary, however. 

The expansion grant program would see more funding under Senate and House plans, but they differ in the amount they would allocate. The Senate trims some money from the state GME formula funding, while the House proposes spending $4 million more on GME formula funding as what’s in the current budget: $85.9 million. These funds are provided to medical schools to help offset the costs of training residents. The Senate proposal does not provide funding for residents at the two new University of Texas medical schools — Austin-Dell and Rio Grande Valley. Some of these resident positions are not new and had previously received GME formula funding.   

The Senate would give more to the GME Expansion Grant programs, allotting $97 million. The House would provide $82.8 million; both would be significantly above the current two-year budget for that item, $53 million. Additional monies are needed for the expansion program to provide continued support to residents in newly created positions, as they progress in their training. 

The Texas Higher Education Coordinating Board estimated an additional $18 million is needed beyond the Senate funding proposal to support sufficient growth in GME positions to achieve the state target of 1.1 first-year residency slots to every Texas medical school graduate. Neither the Senate nor House proposals provide sufficient funding to allow the Coordinating Board to give additional grants for the creation of new residency positions in 2018-19. 

Of note, this is the first time funding is available from the new state GME permanent fund, the first allotment being $21.8 million. These monies are included in both the Senate and House budget proposals. 

Both the Senate and House propose to keep the same budget allotments as the current budget for the other GME and medical education programs, including the Family Medicine Residency, Primary Care Preceptorship, Primary Care Innovation Grants, Emergency and Trauma Care Grants, Joint Admission Medical Program, and physician loan repayment programs. 

Senate Finance Committee Chair Sen. Jane Nelson (R-Flower Mound) appointed a five-person workgroup to study special item funding to higher education programs, including medical schools. The workgroup is charged with prioritizing special item funding, up to a maximum funding amount of $300 million. Currently, more than $1 billion is allocated through special items across all of higher education. Sen. Kel Seliger (R-Amarillo) chairs the workgroup, joined by Sen. Juan “Chuy” Hinojosa (D-McAllen), Sen. Lois Kolkhorst (R-Brenham), Sen. Larry Taylor (R-Friendswood), and Sen. Kirk Watson (D-Austin). Medical education, GME, and research programs are at risk as a result of cuts to special item funding. The House budget proposal keeps the special item funding at nearly the same level as the current budget. 

Take Action 
 TMA’s 2017 legislative agenda includes priorities to help advance patient care in Texas. Tops on the list are the state budget, insurance reform, scope of practice, telemedicine, the Texas Medical Board, and public health priorities. For more details, see “Building on Success” in the January issue of Texas Medicine magazine. TMA member-physicians, medical students, and TMA Alliance members play a significant role in advancing medicine’s priorities at the Capitol. Here are some ways you can help:  

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 Medicaid Strategic Planning Session Explores Legislative Options

TMA hosted a strategic planning meeting on the future of Medicaid leading into the legislative session. The Texas Association of Health Plans and Texas Association of Community Health Plans were invited to participate along with key physician leaders. The hefty agenda included Medicaid funding, vendor drug program reform, quality initiatives and value-based payments, improving physicians' Medicaid HMO experience, the 1115 waiver renewal/extension and how renewal fits into federal Medicaid financing reform proposals, and Medicaid block grants and per-capita caps.  

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 Texas Requests 21-Month Extension of Medicaid 1115 Demonstration Waiver

The Texas Health and Human Services Commission requested an additional 21 months of level funding for the Medicaid Uncompensated Care and the Delivery System Reform Incentive Payment pools, along with an extension of the managed care provisions of the Section 1115 Demonstration Waiver through Sept. 30, 2019. This request was made in a letter to the Centers for Medicare & Medical Services on Jan. 26. Texas’ Medicaid program is currently offering the following under the waiver:   

  • Delivery of Medicaid managed care services statewide;
  • 20 Regional Healthcare Partnerships to enhance access to care and to test innovative care through the Delivery System Reform Incentive Payment pools; and
  • Payments to hospitals and other providers to help offset uncompensated costs in serving Medicaid and uninsured populations.   

The commission requested level funding for uncompensated care and the Delivery System Reform Incentive Payment pools in 2018, or $3.1 billion (all funds) for each program, through Dec. 31, 2018, and a prorated amount for the last nine months. The initial waiver was approved for the five-year period from 2012–16 and is currently operating under at 15-month extension. 

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TMA Debuts Minutes That Matter Video

TMA's Minutes That Matter PR and advertising campaign got off to a rousing start last month. In conjunction with PR agency Edelman, TMA placed paid advertising on talk radio, across the internet, and on Twitter and Facebook. TMA is targeting ads to the Capitol community and their key influencers.  

As part of the campaign, TMA unveiled a moving 30-second video that captures Texas physicians' deep drive to care for patients. The video features four Austin physicians — Sara Austin, MD; Kimberly Avila Edwards, MD; David Fleeger, MD; and Pradeep Kumar, MD — who graciously agreed to be videotaped during the hectic week between Christmas and New Year's Day. Check out the video, let TMA know what you think, and then please “like,” repost, retweet, and otherwise share it. 

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Governor Abbott Names Six New TMB Members

Gov. Greg Abbott appointed Houston anesthesiologist Sherif Zaafran, MD, an active TMA and TEXPAC member, to TMB and named him president of the board. Dr. Zaafran is president of US Anesthesia Partners, Southwest Division. The governor appointed three additional TMA members to TMB: diagnostic radiologist Kandace Farmer, DO, of Highland Village; Livingston family physician Jeffrey Luna, MD; and internist Jayaram Naidu, MD, of Odessa. Governor Abbott also named two nonphysician members to the board: Michael Cokinos of Houston and LuAnn Morgan of Midland. Following confirmation by the Senate, the terms of all six new members will expire on April 13, 2021. 

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No PQRS, VM Penalties for Physicians Affected by ICD-10 Update 

We have some good news to report on the 2016 fourth-quarter ICD-10 code updates, which had the potential to negatively affect some physicians who participate in quality reporting for the Centers for Medicare & Medicaid Services (CMS) Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier (VM) programs. It turns out CMS will not apply payment penalties to physicians and groups who fail to meet reporting requirements solely as a result of those code updates.

Because the code updates, which occurred on Oct. 1, 2016, included a large number of new codes added or removed from the ICD-10 code set and because of its impact on quality measures, CMS has determined that it will not have the ability to process data reported on certain quality measures for the fourth quarter of 2016. That means physicians and groups will not incur payment penalties or "negative payment adjustments" to Medicare Part B payments in 2018, and for a few in 2017, under the PQRS and VM programs. 

CMS still expects physicians and groups to report quality data for the 2016 PQRS program year, even if they believe they were affected by the ICD-10 code changes. For an in-depth description of the issue, refer to the ICD-10 Section on the CMS PQRS website, and read the ICD-10-CM FAQ.

Remember: You have from January to March 2017 to report quality measure data for the 2016 PQRS program year. The specific deadline is dependent upon the submission method you use to report data to CMS. For specific dates, visit TMA's Deadlines for Doctors

For guidance on quality reporting, visit the TMA PQRS and VM Resource Center. For ICD-10 help, visit the TMA ICD-10 Resource Center. For questions, contact the CMS QualityNet Help Desk, Monday through Friday, 7 am to 7 pm CT, by phone, (866) 288-8912, or by email

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MACRA: Review Your Options for Medicare's New Quality Payment Program

The first performance period for the new Merit-Based Incentive Payment System (MIPS) and alternative payment models (APMs) under the new Medicare Quality Payment Program began on Jan. 1. Review your participation options to avoid payment penalties and to potentially earn bonus payments in 2019.

For the first year of the new program, the Centers for Medicare & Medicaid Services (CMS) created a "transition year" and offers a pick-your-pace approach to participation along with many flexibilities to allow you to build capabilities to report and gain experience with the new program. For details on participation options for the 2017 performance period and where to find help, read the TMA Five-Step Checklist for MACRA Readiness. Also, read "MACRA: Easing the Pain?" in the January issue of Texas Medicine.  

CMS has recently revised its search tools for each MIPS category and has added several resources to help you better understand the new payment paths. TMA encourages you to visit the new website to explore the MIPS measures and review key information, such as MIPS benchmarks and measure specifications on the education and tools webpage

Measure specifications provide critical details (numerator, denominator, documentation requirements, etc.) for each quality and advancing care information measure, and measure benchmarks determine how many points you may earn for each quality measure. TMA recommends you review this information to help you select the best measures for your practice and patient populations, ensure accurate reporting, optimize performance, and improve your overall MIPS score. 

Additionally, CMS is conducting a study to examine the burdens associated with quality performance data collection and submission processes. Physicians who take part in the study may receive full credit for the MIPS improvement activities category. To learn more about this option, refer to this CMS announcement, and submit your application to by Jan. 31. 

For information on how to transition from the 2016 CMS quality programs to the new 2017 MIPS program, register for the Medicare Quality Programs: Transitioning from PQRS to MIPS call, scheduled for Tuesday, Jan. 24 from 1–2:30 pm CT. Visit the TMA MACRA Resource Center to stay up to date on all things MACRA and the new Medicare Quality Payment Program.    

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This Month in Texas Medicine

The February issue of Texas Medicine is a symposium on infectious diseases. The special edition of the magazine features clinical articles that cover ethical challenges related to infectious diseases, emerging infectious diseases, future epidemics, the infectious disease outbreak investigation process, health care-associated infection prevention, antimicrobial resistance, the hygiene hypothesis, and infectious disease physician workforce needs.  

You can subscribe to RSS feeds for TMA Practice E-Tips, TMA news releases, Blogged Arteries, and Texas Medicine. More

It's Academic is for physicians in academic settings. For more information about TMA’s efforts on behalf of medical education and academic physicians, visit the TMA Council on Medical Education’s Subcommittee for Academic Physicians page and Advocacy page on the TMA website.

Please share with your colleagues who are not TMA members and ask them to join.

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