Doctor's Orders: TMA to Push Major Issues in 2009 Legislative Session

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Cover Story - January 2009  


Tex Med . 2009;105(1):14-21.  

By  Ken Ortolon
Senior Editor  

A tight budget, narrow partisan margins in the Texas House and Senate, and an anticipated all-out assault on scope of practice from some allied health professions promise to make the 2009 session of the Texas Legislature a particularly challenging one for organized medicine.

The Texas Medical Association plans to pursue an ambitious agenda when the 81st Texas Legislature opens Jan. 13, but TMA leaders say the political climate definitely will impact the association's ability to push through some of medicine's top priorities, including items such as Medicaid physician fee increases and desperately needed increases in graduate medical education (GME) funding.

"The economy is probably going to be the biggest challenge and probably the biggest thing looming on the legislators' minds," said Austin obstetrician-gynecologist Albert Gros, MD, chair of TMA's Council on Legislation. The sagging economy, damage from Hurricane Ike, and lagging tax collections will make it "very difficult for us to get traction" on any funding issue, he says.

In addition to seeking more funds for GME and attempting to move Medicaid and Children's Health Insurance Program (CHIP) payment rates closer to parity with Medicare and commercial payers, TMA will seek to force health plans to be more transparent and provide more information about how they do business so employers and individuals can make better health insurance purchasing decisions.

TMA will take on a number of public health issues, such as increased measures to combat obesity and smoking, and will strive to protect exemptions physicians currently receive under the state's new business tax for charity care and care provided through public programs, such as Medicaid, Medicare, and others. The association also will defend the 2003 tort reforms from any attacks from the trial lawyers.

And, election gains by the Democrats in both the House and Senate could make for a very contentious legislative session. Republicans now hold a razor-thin 76-74 margin in the House. Harvey Kronberg, publisher of the Austin-based online political newsletter Quorum Report , says the outcome of the race for speaker of the House likely will determine if the climate in that body is "harsh" and "fractious" or whether it will be more civil.

House Speaker Tom Craddick (R-Midland) came under fire from members of both parties over what they felt were heavy-handed tactics. Some political observers, including Mr. Kronberg, think he is likely to be defeated in this year's speaker's race, although it seems clear Republicans will hold onto that leadership position.

And, Mr. Kronberg says the pickup of at least one Senate seat gives Democrats the ability to block bills from moving to the floor for a vote. That, he says, means any "flashpoint, high-polarization" issue likely is dead in the Senate. 

Changing Conduct  

Dr. Gros says TMA has divided its legislative priorities into five broad issues areas - health insurance, budget issues, patient safety, health care access, and public health.

"Obviously, medicine has a fairly consistent series of legislative priorities," Dr. Gros said. He says a cluster of health insurance issues, including how health plans calculate usual and customary charges, adequacy of plan networks, and use of tiered networks and economic credentialing all "are high on our members' radar screens."

TMA's health insurance agenda for 2009 centers largely around a health plan code of conduct that physicians hope will provide both employers and individuals purchasing insurance with needed information for making smart coverage decisions. (See " Pulling Back the Oz Curtain ," December 2008 Texas Medicine , pages 25-27.)

"Most of our agenda is going to focus on how we get better information into the hands of the patient and how we make sure that the plans are treating patients fairly," said Darren Whitehurst, TMA vice president of advocacy. "We believe there is a lot of bait-and-switch stuff going on out in the marketplace. Oftentimes the plans are pushing off an unreasonable amount of the costs onto the patient. They promise one level of coverage and they're actually providing a totally different level of coverage."

Lewis Foxhall, MD, chair of TMA's Ad Hoc Committee on Insurance and Managed Care, says employers and other purchasers of health insurance "just want to be sure they're getting a fair deal and that the money they're investing is going to provide care" and is not being wasted on administrative overhead or excessive health plan profits.

While the Health Insurance Code of Conduct Act of 2009 would not mandate spending a certain percentage of premium dollars on direct patient care, it would crack open the window on how health plans calculate premiums, medical loss ratios, out-of-network costs, and other issues.

Specifically, the proposal would make health plans subject to the same "file and use" requirements on rates that govern other lines of insurance. Health insurance companies would not need prior approval to adopt new rates, but employers or individual purchasers could challenge what they believe to be unwarranted increases. The commissioner of the Texas Department of Insurance (TDI) could then investigate the proposed rates and require the insurance company to provide employers and enrollees information to substantiate the premium increase.

The bill also would:

  • Require health plans to disclose information about their medical loss ratio so employers and individual purchasers of coverage can see how much a plan spends on actual health care versus profit or expenses such as marketing, administration, and recruitment.
  • Require that an independent review organization examine any attempt by a health plan to cancel a policy after a beneficiary has already incurred high medical bills.
  • Regulate how a physician's contractual agreements are sold, leased, or shared among health plans and other companies, and prohibit any business or insurance company from improperly using a physician's contracts.
  • Require health plans to disclose to physicians the scientifically valid, peer-reviewed criteria they use to evaluate physician performance. Physicians could review their data and ranking before it is made public and could appeal to correct any misleading or incorrect information.
  • Codify a number of provisions dealing with claims processing included in settlements of state medical society lawsuits against health plans under federal racketeering laws. Such practices include refusing to process claims for vaccine administration, formulating clinical policies on criteria not supported by medical science, and unilaterally changing billing codes and amounts.

TMA's health insurance agenda also will include legislation requiring insurers to give consumers a standardized product label similar to nutrition labels on food. Such a label would enable employers and patients to easily compare health plans based on standardized measures of value. The label could identify premiums and copayments, medical loss ratio, average annual amount paid by the health plan versus out-of-pocket expenses paid by the patient, and out-of-network benefits.

TMA also will pursue legislation to eliminate a loophole plans are using to cut payments for out-of-network services. The plans base the patient's out-of-pocket costs for out-of-network services on what they call the "total covered amount" or "maximum allowable." There is no standard for how that amount is calculated nor is it readily available to the patient.

Insurers say the total covered amount is the usual and customary amount they pay - an amount that is arbitrarily determined by the plans themselves. TMA will seek to make that determination more transparent and perhaps set a standard minimum payment.

Finally, TMA likely will seek to require health plans to approve preauthorization requests electronically and to provide real-time claims adjudication electronically. 

Staring Down the Budget  

Dr. Gros says expanding Medicaid coverage to more low-income Texans, boosting physician fees, and increasing GME funding also rank high on the priority list.

But he says these issues are going to "run up against the economic concerns facing the state."

While Texas has some $12 billion in its so-called "rainy day" fund, most of that money will be eaten up before lawmakers even convene. "Very likely we're going to come into the session with close to a zero surplus, if we have any surplus at all," Dr. Gros said.

Michelle Romero, associate director of TMA's Legislative Affairs Department, says the state's financial woes stem from a number of sources. The state's new business tax has not raised as much money as expected, and sales tax collections are off because of the economic downturn.

Also, the state faces hundreds of millions, if not billions, in damages from Hurricane Ike, and the Texas Department of Transportation is looking at a $1 billion deficit because of an accounting mistake. Finally, Medicaid is facing a $2 billion shortfall for the current budget cycle because lawmakers did not appropriate enough funds to cover increasing costs and caseloads.

"All of these different appropriations scenarios really mean we're going into the session without a surplus," said Ms. Romero, who will handle budget issues for TMA during the session. "That's going to be the challenge."

Still, Dr. Gros says TMA will not back down from pushing for funding increases where the association believes they are essential. One of those obviously is physician payment rates in both Medicaid and CHIP.

As a result of the settlement in the Frew v. Hawkins lawsuit in 2007, lawmakers boosted physician fees in children's Medicaid and CHIP by an average of 25 percent and increased fees for adult Medicaid by an average of 10 percent.

But Medicaid and CHIP still pay only about 73 percent of Medicare, and TMA believes it is critical to bring those fees up to attract more physicians into the programs.

In 2007, TMA launched what it hoped would be a five-year plan to bring Medicaid rates up to levels comparable to Medicare and commercial payers. The increases tied to the Frew settlement were the first installment. Despite those increases, TMA estimates lawmakers would have to spend an additional $700 million in state funds to bring Medicaid rates into parity with Medicare and an additional $60 million in state funds to bring adult Medicaid into parity with children's Medicaid. Those totals do not include federal matching funds that would come to Texas if lawmakers were to increase state funding.

Ms. Romero says that the different fee schedules for children and adults cause administrative headaches for physicians who see both. Plus, the adult Medicaid population tends to be costly, often with patients who have multiple, complex diseases.

"But if you can get them preventive care and manage their diseases, if you invest in adult Medicaid, you will definitely see a return on that investment," she said.

Another major budget issue for TMA is GME funding. In 2007, lawmakers approved roughly $5,600 in formula funding per residency slot to cover faculty expenses in existing GME programs. Medical educators, however, had asked for $16,000 to fully fund those costs. At current formula levels, the state is spending about $34.4 million per biennium. TMA will ask for some $63.3 million in additional funds to bring total formula spending up to $97.7 million and achieve the $16,000 per slot needed to fully fund faculty costs.

Ms. Romero says TMA also will advocate that lawmakers restore some $40 million in GME funding cut from the Medicaid program in 2003. With federal matching funds, that would provide roughly $120 million to help teaching hospitals cover their clinical costs. 

Tackling Student Debt  

TMA will seek about $19 million for the next two years to greatly enhance the state's physician loan repayment program that helps medical graduates who agree to practice in underserved areas pay off their medical school debt.

The current program provides $9,000 per year for up to five years, totaling a maximum of $45,000 in loan repayment assistance. Hurst pulmonologist Woody V. Kageler, MD, says new medical graduates have lost interest in the program because those amounts have not kept pace with growing medical school debt. According to the American Association of Medical Colleges (AAMC), the median debt of a medical graduate in 1984 was $22,000 for those who attended a public medical school and $27,000 for those graduating from a private medical school. In 2007, average medical school debt totaled more than $139,000, AAMC says.

"The current loan program, which hasn't changed since the mid '80s, has trailed off in terms of physician interest," said Dr. Kageler, who chaired a special TMA workgroup on physician education loan repayment. "There haven't been enough doctors to even take the money that was available. We believe it's because the loan repayment amount is so low it doesn't meet the need for the students to repay their student loans."

Dr. Kageler's workgroup has proposed an enhanced program that would provide a maximum of $150,000 in loan repayment funds for up to four years of service in an underserved area. Loan repayments would start at $30,000 the first year and increase by $5,000 each of the next three years.

Dr. Kageler says a survey conducted by his workgroup indicates an interest among young physicians to practice in rural and underserved areas if an adequate loan repayment program were in place.

"We've got a measure of interest from the survey; we've got a measure of the need from the demographics that we know. So we think if we boost the repayment amount, we can generate interest and, therefore, generate doctors going into underserved areas," he said. 

Protecting Patient Safety  

TMA expects patient safety to be challenged on a number of fronts in 2009. Front and center among those will be efforts to rollback some of the 2003 tort reforms, attempts by nonphysician providers to expand their scope of practice, and efforts by hospitals to repeal, either wholesale or piecemeal, the ban on the corporate practice of medicine.

Beaumont orthopedic surgeon David Teuscher, MD, chair of the PatientsFirst Coalition, expects a tough fight with advanced practice nurses (APNs) over independent practice. A six-year moratorium on nurse scope expansion expired in 2007, and the nurse practitioners have indicated they will make a run at independent prescribing.

In a letter posted on the Texas Nurse Practitioners (TNP) Web site, TNP President Alison Mitchell, RN, questioned why nurse practitioners' prescribing authority should be limited to medically underserved populations, physician primary and alternate practice sites, or facility-based practices.

"Does your competency to prescribe depend on where you perform this?" Ms. Mitchell asked.

Dr. Teuscher says TMA has reached out to the ANPs but has been unable to come to any compromise on the issue. And Dan Finch, director of TMA's Legislative Affairs Department, says the ANPs are telling lawmakers TMA backed out of an agreement on independent practice.

"Our position is we're happy to talk, but we do not agree with independent practice," said Mr. Finch. "We believe prescriptive authority is a delegated medical act that should be supervised by a physician who should be ultimately accountable for that practitioner's prescribing authority."

Dr. Teuscher says he does not believe independent practice by APNs is a "patient safety model" for practice. "I believe that the practice of an advance nurse practitioner is not up to the same standard as a residency-trained, board-certified family physician," he said.

While there also could be scope expansion activity on other fronts, such as podiatrists, optometrists, and chiropractors, TMA has been working collaboratively with genetic counselors, acupuncturists, and dietitians to attempt to reach compromises on licensure bills for those groups.

Mr. Finch says TMA wants to see those professions organized under the Texas Medical Board so that the board could have oversight over any rulemaking that might dangerously expand their scope of practice.

TMA also expects the Texas Hospital Association (THA) and the Texas Organization for Rural Community Hospitals (TORCH) to attempt to repeal the corporate practice ban, which prohibits hospitals from directly employing physicians. TORCH likely will seek to lift the ban only for hospitals in small counties but THA could seek a general lifting of the ban.

TMA will fight any efforts to remove the ban to ensure that physicians' loyalties remain with their patients and not the hospital's bottom line. 

Battling Obesity  

TMA has a number of initiatives it will push on the public health front. At the top of that list are obesity, immunization, and tobacco.

Greg Herzog, associate director of TMA's Legislative Affairs Department, says TMA will work with a strong coalition - including the American Cancer Society, American Heart Association, American Lung Association, and others - to support a bill mandating smoke-free workplaces statewide. Similar legislation cleared the House in 2007 but died in the Senate on the last day of the session.

TMA Council on Public Health Chair Jeffrey Levin, MD, MSPH, says TMA will work with the Texas Public Health Coalition on measures to target nutrition and physical activity for schoolchildren. Those measures likely will include funding to improve education on the importance of proper nutrition and physical activity and legislation and funding to implement a coordinated school health program for all grades. (See " The Obesity Threat ."]

"Obesity-related diseases are going to be a huge cost driver for the state and for the nation in the future so we're trying to curb that now," added Mr. Herzog.

On immunizations, TMA will seek to increase the amount the state pays for administering childhood vaccines and will support legislation to allow voluntary reporting of adult immunizations to the ImmTrac registry.

The state currently pays $5 for vaccine administration while the national average is roughly $12. "The cost that pediatricians bear is making it increasingly difficult for them to be able to provide vaccines for the entire population," Dr. Levin said.

Also on TMA's public health agenda will be making sure that part of the $3 billion cancer research fund approved under Proposition 15 finds its way to local physicians for primary cancer prevention and detection services. Under Proposition 15, 10 percent of those funds are to be used for those services. 

Buying Into Retail Health  

TMA also has been collaborating with owners of retail health clinics over issues concerning physician oversight of those facilities. The retail health clinics want to expand from three to six the number of nurse practitioners and physician assistants (PAs) that one physician can supervise. They also want to cut the amount of onsite supervision required from 20 percent to 5 percent.

Mr. Finch says the discussions with the retail clinics have been "civil, productive, and they've been almost entirely focused on good patient care." While no agreements had been reached, he says it is likely the two groups can come to some compromise on at least some of the issues under discussion.

For example, while the retail clinics are required to have a physician on site 20 percent of the time, rural health clinics staffed by ANPs and PAs are only required to have physicians on site once every 10 business days, which is essentially a 10-percent requirement.

"What we'd like to do is bring about some conformity so that it's a single standard of care applied to everybody regardless of the situation and reinforce the medical board's authority to waive certain requirements where they make good sense," Mr. Finch said.

One such area would be the proximity requirement. Physicians currently cannot supervise a clinic that is more than 75 miles from their primary practice location. That may not work well in West Texas where some entire counties lack a physician, Mr. Finch says.

TMA also will remain vigilant to stop any attempts to water down the 2003 tort reforms or to attack the $250,000 cap on noneconomic damages. Although the potential ouster of Speaker Craddick would be a blow to tort reform advocates, most observers say there likely will be no serious challenge to the cap this session. What they do expect is another run at softening the standard-of-proof language regarding emergency care.

The 2003 reforms require that plaintiffs prove "willful and wanton negligence" in cases involving emergency room physicians or other emergency care situations. In both 2005 and 2007, Sen. Rodney Ellis (D-Houston) unsuccessfully pushed legislation to lessen that standard. He is expected to do so again this year.

There have been discussions about changing the law to require plaintiffs to prove "willful or wanton negligence," but Mr. Finch says the intent of the original bill's author was to create a gross negligence standard, and TMA will work to ensure that is maintained. 

Improving Access  

On the access front, TMA will pursue measures to improve access to a patient-centered medical home for Medicaid and other vulnerable populations. Those measures might include incentive payments for physicians who offer after-hours clinics, participate in disease registries, or participate in case management.

TMA also will seek incentives for implementing health information technology, including electronic medical records and e-prescribing.

The association also will seek further Medicaid simplification to reduce hassle factors, strengthen due process for physicians accused of fraud or abuse, support 12-month continuous coverage for children on Medicaid, and improve the timeliness and accuracy of the state's eligibility system.

And, TMA will seek more improvements in the workers' compensation system, including efforts to eliminate the inappropriate discounting of physician fees for non-network services (so-called silent PPOs), remove burdensome preauthorization requirements, and eliminate peer review gaming by carriers.

Austin physical medicine and rehabilitation specialist Charlotte Smith, MD, says much has improved in workers' compensation since sweeping reforms were enacted in 2005, largely due to the efforts of former Workers' Compensation Commissioner Albert Betts, current Commissioner Rod Bordelon, and Medical Director Howard Smith, MD.

She says the new physician fee schedule for out-of-network services is "reasonable," and top officials are working to reduce the hassles in the system. But she adds that continued existence of silent PPOs in the worker's compensation system has been "a disaster."

She says physicians caught in a silent PPO are virtually "indentured servants" to networks they never agreed to participate in. Also, because every network has its own treatment guidelines, it's impossible to know if you're following those treatment guidelines if you don't know you're in the plan, she adds.

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email at  Ken Ortolon.   



Meet Your TMA Public Affairs Team

The Texas Medical Association has an experienced team of lobbyists who work closely with the Council on Legislation to advance medicine's issues in the Texas Legislature.

This year, TMA has broken its legislative priorities into five categories and assigned a member of the lobby team to be the point person on each issue. If you want to find out the status of a bill, express a concern about an issue, or get involved in TMA's advocacy on an issue, contact these people:           

Darren Whitehurst
Darren Whitehurst is the TMA vice president of advocacy. Mr. Whitehurst received his master's of public affairs degree from the Lyndon B. Johnson School of Public Affairs at The University of Texas at Austin and his master's of science in health care administration from Trinity University. Mr. Whitehurst came to TMA from the Texas Hospital Association, where he served as vice president of government relations. While working at the state Capitol, Mr. Whitehurst worked directly with leaders such as Lt. Gov. Bob Bullock, Sen. Chris Harris (R-Arlington), and Rep. Steve Wolens (D-Dallas) and on issues including health care, tax, public education, transportation, and business development. Mr. Whitehurst may be contacted at (800) 880-1300, ext. 1350, or (512) 370-1350, or via e-mail at  Darren Whitehurst .

Dan Finch
Dan Finch joined the TMA staff as director of legislative affairs in August 2006. He previously served as associate director and director of public affairs for the Harris County Medical Society in Houston for 24 years. Mr. Finch is a 1975 graduate of the University of North Carolina and holds a degree in journalism. He oversees issues involving medical liability, scope of practice, and the corporate practice of medicine. Mr. Finch may be contacted at (800) 880-1300, ext. 1355, or (512) 370-1355, or via e-mail at  Dan Finch .

Greg Herzog
Greg Herzog has served as an associate director of legislative affairs for TMA since 2004. Before joining TMA, he worked as staff director of the Texas House Committee on Public Health. He also has served as associate director of legislative affairs for the Texas Academy of Family Physicians (TAFP) and associate director of the TAFP Political Action Committee. Mr. Herzog started his career as a legislative clerk for TMA. He holds a bachelor of arts degree in history from UT Austin. He is responsible for public health, workers' compensation, and tax issues. Mr. Herzog may be contacted at (800) 880-1330, ext. 1360, or (512) 370-1360, or via e-mail at  Greg Herzog.

Patricia Kolodzey, RN, BSN
Patricia Kolodzey has more than 30 years of health care and insurance experience.  She joined TMA lobby team as associate director of legislative affairs in September 2007, where her primary focus is insurance and managed care issues. Before joining TMA, Ms. Kolodzey was a lobbyist for the Texas Hospital Association (THA) for 10 years in the policy areas of the uninsured, Medicaid, insurance, and managed care. She also represented THA in the regulatory arena as a member of the Texas Department of Insurance Technical Advisory Committee on Claims. Ms. Kolodzey began her career as a registered nurse. In 1987 she became a prepayment specialist for the Medicaid program. She also has worked in the commercial insurance market for Travelers, PCA Health Plans, and FirstCare. She received her bachelor of science in nursing from the UT Health Science Center at Houston in 1978 and practiced clinical nursing at UT M.D. Anderson Cancer Center. Ms. Kolodzey may be contacted at (800) 880-1300, ext. 1370, or (512) 370-1370, or via e-mail at  Patricia Kolodzey .

Michelle Romero
Michelle Romero has served as an associate director of legislative affairs since August 2006 and specializes in state budget issues, including Medicaid, the Children's Health Insurance Program, the uninsured, mental health, graduate medical education, and scientific affairs issues. Ms. Romero also directs the legislative affairs of the Texas Academy of Internal Medicine Services. Before joining TMA, she served as the legislative director for state Sen. Mario Gallegos (D-Houston) and as chief of staff to state Rep. Jim Solis (D-Harlingen). Ms. Romero began her legislative career in 1991 as a legislative assistant to state Rep. Roberto Gutierrez (D-McAllen). Ms. Romero has a bachelor's degree in history from UT Austin and a master's degree in public administration from Texas State University in San Marcos. Ms. Romero may be contacted at (800) 880-1300, ext. 1367, or (512) 370-1367, or via e-mail at  Michelle Romero .

David Reynolds
David Reynolds has served as director of political education and treasurer of the Texas Medical Association Political Action Committee (TEXPAC) since 2004. Before working at TEXPAC, Mr. Reynolds served a two-year stint as the senior manager for state governmental relations for the American Academy of Family Physicians in Washington, DC. He also has worked in a number of capacities on behalf of state Sen. Jane Nelson (R-Lewisville), including as health policy aide and director for both the Senate Health and Nominations Committees. Mr. Reynolds has also lobbied on behalf of the American Heart Association, Texas Affiliate, and the Texas Academy of Family Physicians. He is a graduate of Texas Tech University. This session he will be the TMA lobby team's utility man, prepared to take on any assignment on any given day, as well as  travel to your county medical society meeting throughout the session to brief local physicians on the status of TMA's legislative agenda. Mr. Reynolds may be contacted at (800) 880-1300, ext. 1365, or (512) 370-1365, or via e-mail at David Reynolds.

All members of the public affairs staff may be contacted by fax at (512) 370-1693. 


First Tuesdays Program Begins Feb. 3

The "white coat invasion" played a key role in organized medicine's victories during the past three sessions of the Texas Legislature. With the 2009 session approaching, TMA urges physicians, medical students, and TMA Alliance members to make their presence felt in Austin again by participating in  First Tuesdays at the Capitol.

Sponsored by TMA, the TMA Alliance, and the Texas Medical Association Political Action Committee, the First Tuesdays events provide a chance for physicians, medical students, and alliance members to become lobbyists for a day each month during the session. Participants will don their white coats and show up en masse at the capitol to lobby for key issues affecting patients and their physicians.

The initial First Tuesdays event will be held Feb. 3, with three others to follow on March 3, April 7, and May 5. The April 7 event will be dedicated to medical students and residents.

Each event will begin at the TMA building with a "Burning Issues" briefing, followed by a crash course on how to be a lobbyist for a day. That will be followed by visits with individual representatives and senators, as well as attendance at legislative committee hearings and House and Senate floor sessions.

Housing for First Tuesdays participants is available at the Doubletree Guest Suites, located across the street from the TMA building. Those interested in participating in First Tuesdays at the Capitol should register now for one or more of the events, make hotel reservations at the Doubletree no later than two weeks before the event, make appointments with legislators before the event, or contact TMA or your county society staff for help in making appointments.

To register or for more information about First Tuesdays at the Capitol, call TMA at (800) 880-1300, ext. 1361, or (512) 370-1361.



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