Doctors Restricting Texas Medicaid Patients Due to Cuts

by Denise Reynolds RD on 2010-07-12


A 1% cut to Medicaid reimbursement that is scheduled to take effect September 1, 2010 has doctors in Texas considering dropping Medicaid patients or severely limiting those they serve, according to a report by The Dallas Morning News. The cuts are the first in a series expected to take place over the next two years to help cover an expected $18 billion revenue shortfall.

About 3.3 million poor and disabled Texans depend on Medicaid for health care.

According to Texas Health and Human Services Commission, less than a third of the state’s 48,700 practicing physicians are currently accepting Medicaid patients. A survey by the Texas Medical Association found that 45% of its members would limit how many patients they could treat if Medicaid fees were cut by 1 or 2%, while another 24% said they would stop accepting patients altogether.

Medicaid reimburses physicians only 70% of what Medicare pays for the same service.

In testimony before the Health and Human Services Commission (HHSC), Tom Plowman, Director of Rate and Financial Analysis for the Texas Health Care Association, warned that the 1% decrease in Medicaid rates will also undermine senior care in the state of Texas. About 80-85% of Texas nursing home residents depend upon a combination of Medicare and Medicaid for funding.

“As proposed, the FY 2011 rates represent a one percent reduction in a reimbursement rate that already holds the unenviable rank of 49th lowest in the country,” Plowman testified. “For more than ten years now, the Texas nursing facility Medicaid reimbursement rates have been set at levels that have not even covered the operating costs of well more than half of Medicaid contracted nursing operators.”

Plowman also testified that reductions in Medicaid reimbursement will not actually save the state money. "For every dollar that the state attempts to save through reductions in Medicaid reimbursement rates, the state's general revenue fund only saves less than 40 cents -- even less if the enhanced Federal Matching Assistance Percentage is extended as is currently being considered by Congress. Medicaid providers have to absorb the full $1.00 hit for the state to save that 40 cents."

Does Straus think Texas should end Medicaid?

4:59 PM Thu, Jun 03, 2010
by Robert T. Garrett/Reporter

Speaker Joe Straus added a line this week to his close-the-budget-gap-without-taxes pep talk: Take a look-see at all those federally financed programs that Texas administers. Someone. Please.

OK, the actual words Straus used in an op-ed piece in the Austin American-Statesman on Tuesday were a tad less blunt but certainly intriguing. After urging colleagues to consider a partial freeze on state hiring and salaries, he said:

"Other ideas that should be analyzed include re-evaluating the state's responsibility for administering various programs, including federally-sponsored programs ..."

Does he mean Medicaid, which Republican leaders have complained for years is devouring the state budget? Even though the Texas Medicaid program, at least until this bleak recession, had a rate of spending growth that was below the rate of medical inflation generally? And notwithstanding that it's a major financial prop under the state health care industry?

"It wasn't necessarily intended to be a signal of a specific way to go, or anything other than just looking at all the options," Straus spokeswoman Tracy Young said today. "It's just a continuation of what he asked the Appropriations Committee to do," she said, referring to Straus' unusual appearance before the House's budget writing panel last month.

If you look at the remarks he made then, you won't see mention of, hey, maybe Texas should pull out of some federal programs. Then again, Straus dropped from his op-ed his earlier call for perhaps improving state collection of unpaid fines and fees. So perhaps we parseth the speaker's utterances too much. On the other hand ...

Conservatives such as former Rep. Arlene Wohlgemuth, R-Burleson, now at the Texas Public Policy Foundation, have bitterly complained of strings attached to the huge federal dollars flowing under Medicaid but have stopped well short of urging that Texas dismantle its program.

Some 64 percent of Texas Medicaid's current, two year budget of $45 billion comes from the feds. It's the state's single biggest source of federal moolah.

And liberals such as former state District Judge F. Scott McCown, of the Center for Public Policy Priorities, stress that Medicaid doesn't just pay for the delivery of half of Texas' babies each year, it covers the nursing home tab for a huge percentage of people getting those services -- including former members of the middle class, who've "spent down" their assets and qualify for government-paid care.

"These programs are essential and widely popular," McCown said. "People don't connect all the dots but if you took all the programs away, they'd connect the dots pretty fast."

The Healthcare Refugee

By Patrick Boardman
J and R Medical

When we hear the word “refugee,” most of us envision a far away, war-torn land. We visualize a city of tents where desperate people have lost everything and have become devoid of hope.

What most people do not realize is that there are refugees in every city and every town in America. These people are "healthcare refugees."

Here in the Houston market, our company has experienced first hand this rising population of people. These are wheelchair users who in good faith purchased a new manual or power wheelchair from a local supplier. That supplier then went out of business and now the patient has nowhere to go for repairs. They lost have their mobility and independence.

Over the last 2 years approximately 20% of the complex rehab providers in Houston have closed their doors. Some got out because their business failed. Others closed because their business model was no longer profitable with complex rehab as one of its divisions.

As a result, thousands of patients suddenly had lost the lifeline of service for their equipment. We were made painfully aware of this situation in late 2007 and early 2008. We noticed a tremendous influx of patients needing service and repairs. The vast majority of the clients had purchased their equipment from a supplier who was no longer in the rehab business. Most of them were distraught and afraid that they would not be able to be independent again.

The Simon Study that came out in 2007 reported that 45% of rehab companies made 5% or less in net profits for the year. It is no wonder that these companies had to draw a line in the sand and say “no.” I do not fault them for making a business decision that kept their doors open.

There are some large national companies in our industry who hope to capitalize on competitive bidding and other continued cuts. They know that their buying power will create an un-level playing field and that their market share could increase. This is classic complex–rehab-out-of-a-box thinking.

Healthcare refugees will only increase under continued cuts and competitive bidding. If someone is lucky enough to win a bid under competitive bidding, they will likely be seeing cuts as deep as 18% or more. If this happens, many companies will simply stop doing Medicare.

This will create an even greater population of health care refugees who will have no one willing to come help them. They will be trapped as prisoners in their beds because their only mobility will be broken with no one to come fix it.

Recently, Texas Medicaid attempted to invoke the same 9.5 % cut that Medicare had done a short time ago. TXRPC, our state complex rehab association, testified at the Medicaid rate hearing to articulate why this was a very bad choice. Such a cut would create a plethora of access-to-care issues for TMHP beneficiaries.

We recently heard from TMHP that the rate cut was not invoked. So for the time being we staved off creating a new population of healthcare refugees. It must be noted that TMHP is one of the few agencies that I have ever encountered that seems to truly take steps to make sincerely good decisions for their beneficiaries. Hats off to Texas Medicaid for listening and doing the right thing for their beneficiaries in Texas.

When the first "Health Care Refugees" started knocking on our door, we made the decision that someone had to help these people. Often we heard the same story: "I have called 4 places, and they all say that if the chair isn't purchased from us then we can't service it."

We decided to do something about the problem. We created a new job within J and R Medical called Service Coordinator. This person schedules technicians and handles all of the paperwork for all clients that have equipment in need of repair. To date we are able to continue to service all clients that have service issues and that are in our geographical service area. It must be noted that we have had to shrink our service area size.

It is imperative that rehab providers, referrals, and patients work together to create a louder voice for our industry. A few days ago President Obama announced that he was going to cut 500 billion from Medicare through eliminating fraud and abuse.

I think everyone will agree that eliminating fraud and abuse is a good thing. The alarming part is that, if this happens, there could be further cuts that create more healthcare refugees.

No one knows what the road ahead holds for these patients and the rehab suppliers. It is imperative that suppliers make an effort to inform their own staff about the challenges we are facing in our industry. Your sales people and ATP’s should be well-versed in the big picture so they can inform patients and referral sources about the challenges we all face. Have your staff hammer your elected officials prior to big votes that affect our industry. Without a coalition and unity, there will be more refugees.

Patrick Boardman

J and R Medical Supply and Rehab
Houston Texas Market