Patient Care Protected: Medicaid Payment Increase
By Sean Price Texas Medicine August 2023

Related content: 
2023 Legislative Wrap-Up: TMA Secured Big Wins With a New Strategy

TMA Priority: Help physicians grow their Medicaid panels and access to care with healthier payment rates.

Physician-Led Results: Texas physicians have not seen a Medicaid payment increase in more than a decade, except for a brief, temporary one that took place in 2013-14 under the Affordable Care Act. So, one of the Texas Medical Association’s top priorities for the 2023 legislative session was to achieve a targeted rate increase.

For physicians who take care of young people and women giving birth, the wait is over.

Lawmakers approved a 6% boost to Medicaid payment rates to “improve access by children to physician and clinical services, especially well child visits,” according to House Bill 1, the vehicle for Texas’ 2024-25 budget. This increase affects physicians treating children and young people aged 0 to 20. The budget also adds a 6% increase in Medicaid payment rates for labor and delivery, including cesarean sections and any other surgeries performed in the course of a delivery.

“That’s a huge win,” said Gary Floyd, MD, a Corpus Christi pediatrician and immediate past president of TMA, who presided during the 2023 legislative session. “We’re seeing a lot of physicians who took Medicaid [patients] stating that they were going to have to stop if something didn’t change,” he said. “A small group practice can really only absorb about 15% to 18% of Medicaid patients at Medicaid pay rates before they start really losing [their] overall [ability] to be able to meet their light bill, their lease, [and] their employees’ salaries,” he said. “Whether [this rate increase] is enough to attract physicians to take new Medicaid patients, I don’t know. But it will help those who are seeing Medicaid [patients] hang in there.”

Texas physicians went into this year’s legislative session knowing that across-the-board Medicaid rate increases were unlikely, no matter how badly needed. Instead, TMA and other physician groups like the Texas Pediatric Society worked to achieve a focused increase designed to preserve health care services for women and children.

“[Lawmakers] were looking for specific ways to address the gap in maternal care,” said TMA lobbyist Caitlin Flanders. They also recognized the U.S. Supreme Court decision in Dobbs v. Jackson Women’s Health Organization, which triggered additional abortion restrictions under Texas law, will lead to an increase in pregnancies and young children over time.

The 6% increase for children will be targeted, says Helen Kent Davis, TMA’s associate vice president of governmental affairs. The budget rider that provides the funding gives a 6% increase for evaluation and management codes for services provided to children, singling out well-child visits.

The budget also calls for the Texas Health and Human Services Commission (HHSC) to evaluate any differences in access to care between patients aged 0 to 4 and those aged 5 to 20. HHSC will submit a report on those differences to Gov. Greg Abbott’s office and the Legislative Budget Board by Sept. 1, 2024.

“If physicians see that [the rate increase] happened as a result of advocacy work, then, hopefully, we can continue to see that move in a positive direction,” said Houston obstetrician-gynecologist Carla Ortique, MD, a member of TMA’s Council on Science and Public Health and a consultant for the Committee for Reproductive, Women’s, and Perinatal Health.

Lawmakers also made several investments through HB 1 to reverse the trend of “maternity deserts” in rural areas, where local hospitals have either closed maternity services or shut down completely. (See “Maternity Deserts,” June 2022 Texas Medicine, pages 40-43.)

For rural hospitals, the legislature tripled the labor and delivery Medicaid “add on” payment to $1,500 per delivery, from $500, and approved a $50 million grant program designed to sustain rural hospitals and invest in rural maternal health.

Last Updated On

August 04, 2023

Originally Published On

August 02, 2023

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Leadership | Medicaid | Texas legislation