Health Care
Conservatives have increased health care options for consumers, introduced cost-saving measures to Medicaid and the Children's Health Insurance Program, tackled Medicaid fraud, and advanced the use of electronic health care records.
House Bill 2292 (78R) Medicaid and Health and Human Services Reform
House Bill 2292 achieved the following reforms to the state’s Medicaid program:
- Limiting the period of continuous eligibility in Medicaid to a six-month period, rather than rolling to a 12 month continuous eligibility period as passed in the 77th Legislature;
- Allowing for more thorough procedures for verifying assets in determining eligibility for Medicaid, including access to consumer reporting agencies and other similar records;
- Setting a four-brand maximum and 34-day supply limit on prescription drugs under Medicaid;
- Eliminating requirements for the provision of certain services under Medicaid, such as podiatric, psychologist, and family and marriage therapy services;
- Requiring the implementation of the maximum cost-sharing allowable under federal regulations; and,
- Reducing Medicaid fraud by creating the HHSC Office of Inspector General and expanding the investigation and prosecution powers of the Office of the Attorney General.
In addition to these vital cost-saving Medicaid reforms, HB 2292 also reformed aspects of the state’s Temporary Assistance for Needy Families (TANF) program by establishing a marriage program for TANF recipients to provide incentives for clients that promote healthy and stable marriages. The bill also implemented a pay-for-performance system for TANF recipients, which requires participants to meet the obligations of the personal responsibility agreement every month in order to receive benefits.
The creation of the Office of Inspector General by HB 2292 and the additional authority and funding given to the Office of the Attorney General led to Texas being given the nation’s top fraud-fighting award in September 2005 by the U.S. Department of Health and Human Services. The Office of Inspector General (OIG) reported that in its first full year of operation it recovered $349.5 million and recorded ―cost avoidance‖ of $389.5 million. All of this was directed back into the Medicaid program to provide needed services to eligible low-income Texans. In fiscal year 2005 the OIG recovered $441.5 million as a result of fraud investigations. A further $362.5 million was saved through cost avoidance.
In all, more than $1.5 billion has been saved as a result of the anti-fraud measures enacted by HB 2292.
Key point: House Bill 2292 fundamentally reformed the state’s Medicaid program by addressing issues such as eligibility determination, the level of coverage provided, and cost-sharing. The bill also reorganized HHSC and increased fraud prevention efforts.
Senate Bill 541 (78R) Mandate-Free Health Insurance
Senate Bill 541 allowed insurers to offer mandate-free insurance policies to policyholders. The bill required the insurer to provide notice to policyholders of their option to choose a policy that does not cover the health benefits normally required in the state.
SB 541 was an important reform because health insurance mandates invariably drive up the cost of an insurance policy and therefore increase the number of uninsured. The evidence shows that increases in the cost of insurance force more people onto the rolls of the uninsured, and one of the main reasons that insurance costs increase is by way of mandates.
Statistics from the Texas Department of Insurance (TDI) show that take-up of consumer choice plans has been strong, and that many Texans who were previously uninsured have opted to purchase coverage through a consumer choice plan.
The first full year in which consumer choice plans were available in Texas, 5,347 plans were purchased; these plans covered 17,445 lives, 4,283 of which were previously uninsured.
By 2006, the total number of consumer choice plans purchased in Texas had grown to 38,839. These plans covered a total of 130,098 lives, 14,429 of which had been uninsured.
A three year summary of consumer choice plans follows:
Consumer Choice Plans in Texas 2004-06
| Year | Total lives covered | Growth in total lives covered | Lives covered by newly issued plans | Previously uninsured lives covered | Growth in previously uninsured lives covered |
|---|---|---|---|---|---|
| 2004 | 17,445 | - | 14,106 | 4,283 | - |
| 2005 | 87,675 | + 402.6% | 51,628 | 7,325 | + 71.0% |
| 2006 | 130,098 | + 48.4% | 75,311 | 14,429 | + 97.0% |
Source: Texas Association of Health Plans
Key point: Senate Bill 541 required the availability of mandate-free health insurance to health insurance consumers in Texas.
House Bill 727 (78R) Disease Management in the Medicaid Program
Disease management is an important way in which health care services can be delivered cost-effectively to segments of the Medicaid population with chronic diseases such as diabetes. House Bill 727 allowed HHSC to request proposals for disease management contract, determine other aspects of the disease management program, and develop appropriate contracts. Significantly, the bill provided that the Commission could only enter into a contract with a provider of disease management programs with a guarantee of savings to the state.
HB 727 encapsulated the core conservative principle of limited government and defined an appropriate role of government by allowing competitive bidding for services and for a non-government entity to manage part of the Medicaid program.
The Texas Conservative Coalition supported disease management efforts and the Texas Conservative Coalition Research Institute (TCCRI) recommended implementation of a disease management program in its 2003 State Finance Task Force Report "A Roadmap to Responsible Reform." The report specifically recommended that the state implement a "disease management program to target populations with preventable and manageable chronic illnesses such as diabetes, heart problems, hypertension, and asthma."
Key point: House Bill 727 required HHSC to contract for disease management services for Medicaid recipients with chronic health conditions who do not qualify for Medicaid managed care.
House Bill 1735 (78R) Disease Management State Funded Managed Care
Specifically, the bill required the managed care plans that are offered by public entities such as the Health and Human Services Commission and the Employee Retirement System to provide disease management services or coverage no later than January 1, 2004.
House Bill 1735 was a responsible reform enacted by the Legislature to contain costs in the health care coverage programs offered by state entities outside of the Medicaid program.
Key point: House Bill 1735 required managed care programs offered by certain state agencies and entities to provide disease management services.
House Bill 1743 (78R) - Senate Bill 1694 (80R) Prevention and Detection of Medicaid Fraud
HB 1743 allowed the Health and Human Services Commission (HHSC) to perform a pre-payment review of a claim for reimbursement under the Medicaid program to determine whether the claim involves fraud or abuse, and to withhold payment for up to five working days in order to complete the review.
The bill also authorized the HHSC Office of Investigation and Enforcement (OIE) to obtain information relevant to its duties in the same way as law enforcement agencies. The bill gave the Office the authority to issue a subpoena to compel the attendance and testimony of a witness or the production of records. In addition, the (OIE) was given authority to seize assets if there is a likelihood that the owner engaged in fraud or abuse of the Medicaid program.
Senate Bill 1694 built on these reforms by providing that if an agency involved in the Medicaid program discovers information that could indicate fraud, they may provide that information to another agency. The bill facilitated better communication between agencies during the investigation of Medicaid fraud, and allowed the Attorney General to more effectively prosecute those who defraud the Texas Medicaid program.
Key point: House Bill 1743 established stronger processes through which HHSC can determine whether claims for Medicaid payments are fraudulent; Senate Bill 1694 improved the ability of state agencies to investigate and prosecute fraud in the Medicaid program.
Senate Bill 10 (78R)
Small Employer Group Health Benefit Plans
Group health cooperatives formed with other small and large employers allow small employers to obtain less costly health coverage for employees. Allowing small employers to pool with larger ones in order to obtain affordable health insurance is an important part of the process of reducing the number of uninsured in the state. A range of reports published by the Texas Department of Insurance demonstrate that many uninsured Texans work for a small business; addressing this issue was therefore necessary and was achieved by SB 10.
Key point: Senate Bill 10 allowed for the establishment of group health cooperatives to tackle the problems small businesses can face as a result of the cost of health coverage for their employees.
House Bill 3126 (78R) Increasing the Number of Registered Nurses
House Bill 3126 was an appropriate response from the Legislature to the state’s shortage of qualified nurses. The bill addressed the shortage by requiring that all money appropriated to fund enrollment growth in nursing programs is spent for that purpose.
This was an appropriate response to the shortage of qualified nurses and was particularly commendable because the bill had no fiscal impact; it simply ensured that existing appropriations were spent as intended.
According to the Department of State Health Services and the American Association of Colleges of Nursing, there was an immediate increase in enrollment in the 2005-06 school year:
In Texas, enrollment in entry-level baccalaureate nursing programs increased by 9.3 percent and entry level and associated degree and diploma nursing programs increased by 4 percent from 2004-05. Texas produced a total of 6,300 new graduates of initial nursing entry programs in its 84 nursing programs in 2005.‖3
Key point: House Bill 3126 required that all money appropriated by the Legislature specifically to fund enrollment growth in a professional nursing program is expended for that purpose.
Senate Bill 45 (79R) Health Care Technology Advisory Committee
The Health Care Technology Advisory Committee established by Senate Bill 45 issued recommendations in September 2006, many of which were realized through bills filed during the 80th Legislature. Most notably, the Committee’s primary recommendation was that a statewide coordinating body be established to oversee the adoption of electronic health care records ―across Texas that meet patients’ expectations for privacy and control of access to their records.
This recommendation was manifest in the 80th Legislature through House Bill 1066 (see below), which created the Texas Health Service Authority (THSA) to facilitate the voluntary and secure electronic exchange of health information. The THSA is expected to improve the delivery of health care services by significantly improving Texas’ health care infrastructure and allowing medical information to be shared effectively and accurately, which will result in a reduction in medical and clerical errors. Senate Bill 45 in the 79th Legislature was the first step in this process.
Key point: Senate Bill 45 established the Health Care Technology Advisory Committee, which paved the way for many of the health care technology reforms initiated by the 80th Legislature.
House Bill 1066 (80R) Electronic Health Care Records
Electronic storage and sharing of health information, particularly medical records, is an important reform that will improve the delivery of health care services to all Texans. According to the Institute of Medicine, a research academy based in Washington D.C., ―preventable medical errors—from unplanned drug interactions, say—kill between 44,000 and 98,000 people each year in America alone.
HB 1066 is the first step toward a comprehensive electronic health care information exchange that would significantly improve Texas’ health care infrastructure and allow medical information to be shared effectively and accurately, while protecting patients’ privacy.
Key point: HB 1066 established the Texas Health Service Authority to facilitate the voluntary and secure electronic exchange of health information to improve the delivery of health care services by cutting down on errors.
Senate Bill 10 (80R) Medicaid Reform
Senate Bill 10 required HHSC to initiate a pilot program to encourage Medicaid recipients to engage in health-conscious behaviors, such as participating in weight-loss or anti-smoking programs. Increasing personal responsibility in Medicaid is an important way to lower costs, reduce reliance on expensive emergency care, and to ensure efficient use of Medicaid funds in Texas.
SB 10 also required HHSC to study the feasibility of increasing the use of technology to detect and deter fraud in the Medicaid program, including using technology to verify a person’s citizenship and eligibility. This was important because the total cost of Medicaid fraud is considerable. In September 2005, the office of inspector general at HHSC announced that in fiscal year 2005 it recovered $441,551,341 as a result of fraud investigations.
SB 10 addressed the issue of uncompensated care given by hospitals by directing HHSC to determine a standardized definition of ―uncompensated care,‖ and to establish a methodology by which hospitals must calculate the cost of the uncompensated care that the institutions provide. HHSC estimated that hospitals over-reported uncompensated care in Texas in 2005. While $9.2 billion was reported, HHSC calculated that actual uncompensated costs were between $443 million and $2.3 billion. It is clear from these figures that a standardized and the approved methodology recommended by SB 10 was required.
Key point: Senate Bill 10 made important Medicaid reforms to encourage personal responsibility among participants and allowed the state to deliver services more cost-effectively.
House Bill 1977 (80R) The Texas Health Insurance Risk Pool
The Texas Health Insurance Risk Pool plays an essential role providing health care coverage to medically uninsurable individuals and is therefore one of the few areas of government intervention in health care which is a wholly appropriate role for the state to play. The Risk Pool acts as an authentic safety net for those who cannot find health insurance as a result of a pre-existing medical condition.
The reforms enacted by HB 1977 addressed Risk Pool funding inequities by allowing certain health benefit plan issuers’ contributions to be based on their gross premiums received rather than total lives covered. This will help guarantee the continued fiscal solvency of the Risk Pool while ensuring that health benefit plan issuers that offer low-premium, high-deductible policies are not penalized by the Pool’s funding mechanism, which has grown to an annual tax of $95.1 million.
Key point: House Bill 1977 reformed aspects of the funding mechanism of the Texas Health Insurance Risk Pool to ensure equitable treatment for all health benefit plan issuers.
House Bill 522 (80R) Health Plan Identification Cards
House Bill 522 established a health plan identification pilot program that required health plans operating within the pilot area to issue enrollees a card containing ―accurate and current information regarding the holder’s health benefit plan, and limited information about the policy and type of coverage that the plan offers.
Under the pilot program, health plan identification cards are required to include magnetic strip technology, smart card technology, biometric technology, or any other technology determined appropriate by the Department of Insurance to safely hold the required information in an electronic format.
Using technology to store information on health plan identification cards was an important reform because it will reduce errors and improve communication between the different health care providers, plan issuers, and consumers. According to the National Center for Policy Analysis (NCPA), only one in five physicians currently stores medical records electronically despite research demonstrating that electronic medical records reduce costs and improve the quality of health care. Using the technology suggested by HB 522 will reduce errors and improve the flexibility and control that individuals can exercise over the health care they receive.
Key point: House Bill 522 created a health benefit plan identification card pilot program that will improve the availability of health care information.
House Bill 2256 (81R) Improving Health Care Transparency
House Bill 2256 addresses the issue of out-of-network billing in the health care system.
HB 2256 promotes transparency by requiring prior notification by the physician to the enrollee of the estimated cost of their out-of-network charges. Additionally the bill requires hospitals to indicate the specific facility-based physicians who have exclusive privileges in that hospital, and requires the hospitals to inform the enrollee of the possibility of receiving a bill with out-of- network charges.
Specifically, HB 2256 attempts to address situations in which individuals can unknowingly receive costly out-of-network charges after they receive emergency care in a hospital. This situation can commonly arise when, although the hospital is in the enrollee's health benefit plan network, a doctor practicing in the in-network hospital, may not have a contract with the enrollee's health benefit plan.
As a result, a patient can receive a bill far in excess of what they were expecting to pay at an in- network hospital.
Three main factors can contribute to these situations:
- The enrollee was unaware of the fact that doctors within his in-network hospital were not covered by his insurance.
- Even if the enrollee had a choice on who his physician would have been, that physician has an exclusive contract with that hospital.
- The enrollee has no idea what his physicians actual charges are, or the rate that his insurance company will reimburse the physician.
Key point: HB 2256 addresses a fundamental lack of price transparency in the health care system.
House Bill 1966 (81R) Electronic Prescribing in Medicaid
E-prescribing is an electronic method of prescribing pharmaceuticals using current communications, data management, and web-based technology. By utilizing technology to write prescriptions, a medical professional can ensure that the drug being prescribed will not interfere with other medications the patient is taking and thus prevent costly and dangerous medical errors.
According to the Legislative Budget Board Texas State Government Effectiveness and Efficiency report, cost-savings from using electronic prescriptions range from $4 to $25 per prescription. The report also notes that at least 21 other states maintain some level of E-prescribing system or pilot program.
Key point: H.B. 1966 requires the Health and Human Services Commission to develop an e-prescribing implementation plan under the Medicaid and the children's health insurance programs.
