TMA Supports Medicaid Rate Increase to Maintain Continuous Coverage for the Uninsured

House Appropriations Committee
Thursday, Feb. 26, 2009
Testimony of Todd Thames, MD



Sir Chair and members of the committee, it is a privilege for me to speak with you today on behalf of the Texas Medical Association, the Texas Academy of Family Physicians, and the Texas Pediatric Society which collectively represent nearly 47,000 physicians. My name is Todd Thames, MD. I am a family physician from San Antonio and director of the family practice residency program at Christus Santa Rosa. 

Our organizations understand the balancing act you and your Senate counterparts will face over the next few months trying to craft a budget that will meet the health, educational, and safety needs of a diverse and burgeoning state - especially while facing a slowing and uncertain economy. Of primary importance to our organizations is that patients have access to effective, timely, and affordable care. As the Texas economy slows, we know that more families will turn to Medicaid, the Children's Health Insurance Program, and other publicly-financed health care programs to receive medical care. The federal economic stimulus bill will result in $5.45 billion in increased Medicaid funding to Texas over the next two years. These new funds, while temporary, will defray the Medicaid budgetary impact that the slowing economy inevitably will cause while also providing the resources to pay for long-needed programmatic improvements to make Medicaid and CHIP work better for families, physicians, and taxpayers.

As you consider the Health and Human Services Commission budget, we respectfully urge you to make the following high priorities.

  • Reducing the number of uninsured children by extending 12-months' continuous coverage to children on Medicaid, boosting outreach initiatives to enroll all children who are eligible but not enrolled, and supporting private and public initiatives to make health insurance more available and affordable to working parents.
  • Improving the availability of physician services in Medicaid and CHIP by enacting payment parity with Medicare.  The rate increases enacted in 2007 have resulted in more physicians participating in Medicaid, but those gains are not as high as we would like and somewhat tenuous.  If we are to maintain the momentum, rates must be further enhanced in the next biennium.  We also ask that you reinstate state dollars for Medicaid graduate medical education.
  • Maintaining funding for current Frew vs. Hawkins strategic initiatives and providing funding for innovative new initiatives.
  • Fixing the state's eligibility system by providing HHSC sufficient resources to hire, retain, and train needed eligibility workers as well as make needed technological enhancements to the Texas Integrated Eligibility Redesign System (TIERS).

My written comments elaborate on these points.  I am happy to take questions.

Reduce the Number of Uninsured Children

  • Extend 12 months' continuous coverage to children's Medicaid. In 2007, Texas enacted 12-months' continuous coverage for most children in CHIP. This year, Texas should do the same for its poorest children, who must re-enroll every six months. Providing continuous coverage is simply good medicine and good business. Children with unstable health insurance are more likely to be hospitalized for preventable medical conditions or to rely on costly emergency rooms for routine care, even though treating a child for asthma in a doctor's office costs about $100 vs. $7,300 if the child is admitted to the hospital. Additionally, studies show that extending coverage from six to 12 months can decrease the monthly premium costs per child by 25 percent.

Twelve months' continuous coverage would help the state comply with the Frew vs. Hawkins agreement by helping achieve more timely medical and dental check-ups. It also would reduce by half the number of Medicaid renewals that state eligibility workers must process, thereby easing the workload in an already strained eligibility system. Texas has established a precedent for 12-months' coverage for newborns in Medicaid, (most) children in CHIP, the CHIP perinatal program, the Women's Health Care waiver program, and, if approved, any coverage under the proposed Health Opportunity Pool.

  • Enroll all eligible children by expanding outreach. More than half of Texas' uninsured children -some 800,000 - are estimated to be eligible for Medicaid or CHIP yet not enrolled. Many families still do not realize their children are eligible for these programs. Funding for outreach has improved modestly since 2003, but outreach organizations also are expected to do more. Our organizations support increasing outreach-related funds to sustain a robust, statewide educational campaign designed to enroll all eligible children.
  • Implement a mix of public and private sector strategies to expand health insurance for children. Twenty-one percent of Texas children are uninsured. CHIP and children's Medicaid are good buys for the state. Their generous federal matching funds - 72 percent and 60 percent respectively - help make health insurance affordable for working families and stretch limited state dollars. As such, our organizations support building on Medicaid and CHIP as a means to improve coverage. We support the HHSC exceptional item to implement a Medicaid buy-in program for children with disabilities.  Additionally, we support implementing a sliding-scale CHIP buy-in for families with uninsured children who earn too much to qualify for CHIP or Medicaid but not enough to purchase coverage on their own.

At the same time, it is equally important that the state strengthen the private insurance system. In addition to revisiting the regulatory barriers that make health insurance unaffordable for many small businesses, we also ask that you support funding for innovative new initiatives such the "Healthy Texas" premium stabilization program (see November 2008 legislative report from the Texas Department of Insurance) and tax credits or other incentives to employers who provide coverage for their employees and their dependents.

Improve Availability of Physician Services

  • Increase Medicaid/CHIP payments to Medicare parity. As a result of the 2007 physician rate increases, more physicians are participating in Medicaid. According to TMA's 2008 physician survey, 42 percent of physicians now accept all new Medicaid patients vs. 38 percent in 2006. (In 2000, 67 percent of physicians accepted all new Medicaid patients.) Most of the gains were among pediatricians and family physicians who care for children, which is not surprising given that funding to pay for children's services increased by 25 percent versus 10 percent for adults. The rate increases stemmed the tide of physicians leaving Medicaid, but more progress must be made. 

Medicaid and CHIP rates must become more competitive to attract more physicians to participate. Despite the 2007 payment increases, Medicaid rates still average only 73 percent of what Medicare pays for the same service. Medicaid payments do not cover physician practice costs, which the Center for Medicare & Medicaid Services estimates increase about 3 percent annually. 

We support increasing rates to at least Medicare parity, including raising adult rates to be equal to those paid for children's services, and instituting an annual inflation adjustment so that rates keep pace with the increasing costs of providing care.

  • Restore state funding for Medicaid graduate medical education (GME). Texas is a rapidly growing state with diverse health care needs. To ensure an adequate supply of physicians to care not only for Medicaid patients but also for all other Texans, the state must improve its ability to retain medical school graduates. Medicaid GME funding supports in-state training of physicians who otherwise may leave Texas for graduate-level training. Studies indicate that physicians are most likely to practice in a location within 100 miles of where they completed their residency training.  Additionally, residency programs have historically provided a significant amount of care to Medicaid and uninsured Texans and thus are vital to Texas' overall health care safety net.
  • Maintain funding for the Frew medical and dental strategic initiatives. As part of the Frew vs. Hawkins agreement, the state allocated $150 million (general revenue) to support development of innovative medical and dental strategic initiatives designed to improve the timeliness and availability of health care for children. Over the past year, with input from a Technical Advisory Committee composed of physicians, dentists, health researchers, and consumers, HHSC has approved implementation of more than a dozen initiatives designed to test new ways of delivering care to children enrolled in Medicaid as well as to expand the number of physicians and dentists available to care for them. Because of the time needed to research and implement initiatives, only a handful have been implemented, but more will kick off later this year, including the new loan repayment program. TMA, TPS, and TAFP support continued funding not only to maintain programs implemented this biennium but also to enable HHSC to develop and implement additional initiatives over the next biennium.

Last Updated On

January 06, 2020

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