Include Medicaid and CHIP When Allocating Federal Stimulus Funding

Testimony of Louis Appel, MD

House Select Committee on Federal Economic Stabilization Funding
Thursday, March 12, 2009

Mr. 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 and medical students. My name is Louis Appel, MD. I am a practicing pediatrician, and the medical director and director of pediatrics at People's Community Clinic in Austin.

Our organizations understand the balancing act you and your Senate counterparts will face over the next couple months, that of deciding how best to use the new federal stimulus funding in the face of a slowing and uncertain economy. To make matters more complicated, the federal guidance about how the dollars can be used is still vague. However, we want to work with you to ensure that any dollars spent on health care provide the maximum benefit to needy Texans.

Of primary importance to our organizations is patients' access to effective, timely, and affordable health care.  As the Texas economy slows, we know that more families will turn to Medicaid, the Children's Health Insurance Program (CHIP), and other publicly-financed health care programs to obtain medical care. The federal economic stimulus will contribute an estimated $5.45 billion in increased Medicaid funding to Texas over the next two years. We support using these funds to offset Medicaid's inevitable impact on the state budget as a result of the slowing economy, while avoiding any cuts in Medicaid services or benefits.  However, just as important, it is imperative that at least a portion of the dollars be used to make long-needed programmatic improvements so that Medicaid and CHIP work better for families, physicians, and taxpayers.

As you consider how to use Medicaid stimulus dollars, we respectfully urge you to make the following four items high priorities.

• Reducing the number of uninsured children by extending 12 months' continuous coverage to children on Medicaid. Continuous coverage is not just good medicine but also good business. It is well known that uninterrupted health coverage improves the timely receipt of preventive health services - the hallmark of quality pediatric care. Plus, the longer a child is covered, the less it costs to treat the child per month. Twelve months' coverage would mitigate ongoing issues with the state's eligibility system by reducing half the volume of eligibility renewals state eligibility workers must process. Moreover, helping Medicaid children obtain timely preventive and primary care also would help Texas comply with the Frew vs. Hawkins agreement, a lawsuit stemming from Medicaid children not getting the care they need.
• 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. 
• Fixing the state's eligibility system by providing the Health and Human Services Commission sufficient resources to hire, train, and retain needed eligibility workers as well as make needed technological enhancements to the Texas Integrated Eligibility Redesign System (TIERS).
• Modernizing health information technology .   Lastly, the federal government allocated an additional $19 billion to help physicians and hospitals implement electronic medical records and e-prescribing. Funding is expected to begin in 2011. A portion of the funds is specifically directed towards helping high-volume Medicaid practices obtain this technology. The details are still not clear on how funding will be allocated. But our organizations are excited about the opportunity the new funding may provide and will work closely with the state and our members to help deploy health information technology.

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