Texas Medicaid managed care expansion approved

But HHS denied a family planning program renewal plan because it would have excluded organizations that provide abortions.

By — Posted Jan. 2, 2012

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Federal health officials approved Texas' statewide expansion of Medicaid managed care, but they also denied a separate state request to continue a family planning program in a way that would have excluded organizations associated with abortion services.

The Centers for Medicare & Medicaid Services on Dec. 12, 2011, signed off on Texas' request to expand its existing risk-based Medicaid managed care program to 174 counties in the rural parts of the state. The five-year agreement allows Texas hospitals to retain billions in federal funding to help pay for care for the uninsured and poor people in exchange for improving care for these patients.

Texas Medicaid covers more than 3 million people, 1.9 million of whom already are in risk-based managed care. The expansion would shift nearly all of the remaining 1.1 million enrollees into this model beginning in March 2012, according to the Texas Health and Human Services Commission. All Medicaid enrollees transitioning to a managed care organization will have 15 days to make a choice, or the enrollee automatically will be assigned to one. The automatic assignment will consider the enrollee's previous visits with primary care health professionals, according to the agreement.

The Texas Medical Assn. did not support expanding Medicaid managed care into the Rio Grande Valley at the southern tip of the state, said TMA President Bruce Malone, MD. "It's very difficult to do an HMO in a really rural, really poor area like that." However, Dr. Malone said state lawmakers were set on completing the statewide expansion, so the TMA has been working with the state to ensure that managed care organizations have adequate physician panels and provide sufficient access to care, among other goals.

Texas Gov. Rick Perry applauded the CMS approval of the agreement. Regional health care partnerships outlined in the agreement will provide Medicaid care that's more customized to the needs of individual communities, he said. Each partnership will be anchored by a public hospital and will attempt to improve care coordination and quality. The partnerships will face financial penalties for missing quality improvement milestones and will operate with capitated budgets.

"Many of the operational details still are being worked out, and how the current funding streams transition to the waiver structure are critical issues for hospitals," said Dan Stultz, MD, president and CEO of the Texas Hospital Assn. The state must develop a proposal for the regional health care partnerships by March 31. CMS must sign off on the proposal and other specifics as they are developed.

However, the agreement does allow hospitals to claim as uncompensated care the fees hospitals pay to physicians for caring for uninsured or indigent patients, said Ann Ward, spokeswoman for the Texas Hospital Assn. Previously, hospitals did not receive such federal support.

The agreement includes other significant obligations for the state and the managed care organizations. These include ensuring that Medicaid enrollees with special health care needs have direct access to appropriate specialists and that such plans have adequate panels of physicians and other health professionals.

Many of the quality goals were in place already, but the agreement would increase public reporting of managed care performance on these standards, said Anne Dunkelberg, MPA, associate director at the Center for Public Policy Priorities, an Austin-based organization that tracks conditions for low- and moderate-income Texans. "This would definitely raise the bar in terms of specific commitments."

The agreement did not include an initial proposal by Texas officials to limit Medicaid enrollees to three prescriptions per month, Dunkelberg said. Instead enrollees will face no explicit drug limits. "That's actually something that all of the stakeholders fought for here," she said.

Texas flexibility limited

CMS on Dec. 12, 2011, also denied Texas' request to effectively exclude Planned Parenthood and other organizations that provide abortions from the Medicaid Women's Health Program.

The women's health program provides birth control, Pap smears and family planning counseling based on natural methods to more than 180,000 lower-income women. Single women who earn as much as $20,148 a year are eligible for the program.

Perry said Texas law prohibits the state from funding organizations that provide abortions. The state, in its women's health program renewal application, sought to exclude organizations that provide abortions even if they do it outside the women's health program. CMS denied the request.

"Once again, Washington takes one step forward for state flexibility and two steps back," Perry said.

But federal law prohibits states from excluding health entities from the program for reasons not related to their qualifications to provide services, according to a Dec. 12, 2011, letter from CMS Deputy Administrator Cindy Mann to Texas' Medicaid agency.

CMS extended the family planning program through March 31 to give CMS and state leaders more time to negotiate a longer-term agreement to extend the program.

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