The U.S. Supreme Court ruled that states cannot be coerced to expand Medicaid, the federal and state government-funded healthcare program for the poor, pregnant women and children. Yet, the Affordable Care Act prohibits states from making changes to the program to control costs, leaving state leaders with three options: cut provider rates paid to doctors and hospitals; take further steps to control waste, fraud and abuse; or expand managed care.
Provider rate cuts, especially those aimed at primary-care physicians, undermine the program by limiting the number of doctors who choose to accept Medicaid patients. Taking rate cuts off the table leaves policymakers with essentially two tools: fighting fraud and expanding managed care. The two are directly linked.In 2011, Texas legislators expanded Medicaid managed care statewide. This is a good move for state taxpayers and for those who depend on the Medicaid program to access needed healthcare.Healthcare fraud robs taxpayers and citizens who foot the bill for Medicaid, Medicare and private insurance coverage. A review of recent news stories includes a North Texas doctor accused of defrauding Medicare and Medicaid of nearly $375 million; a Houston-area hospital administrator indicted in a $116 million Medicare billing scheme involving psychiatric claims; and a South Texas physician indicted for healthcare fraud and accused in Oregon of illegally funneling more than $1.8 million to Iran.Medicaid dental fraud is so pervasive that the Texas Attorney General and Inspector General launched a joint task force targeting it.The statewide rollout of Medicaid managed care is the direct result of its success in combatting fraud and delivering cost savings. Unlike other Medicaid delivery models, managed care plans assume all of the cost "risk" for the beneficiaries they cover. Because the state contracts with managed care providers on a flat monthly fee-per-client, there is no scope for the state to be fraudulently billed for health services.Through managed care, the state can achieve Medicaid budget certainty and save tax dollars. The Health and Human Services Commission estimated more than $1.1 billion in savings in the 2012-2013 budget cycle directly attributable to managed care.These plans also provide a level of coordinated care that was severely lacking in traditional Medicaid. Managed-care providers have incentives to coordinate care and services that reduce the costs of inpatient care, overuse of prescription drugs and other expensive categories of healthcare services.This is critical in Texas given rising costs associated with "unmanaged" and uncoordinated Medicaid offerings. Even now, Medicaid consumes a growing share of the state budget, threatening funding for Texas schools and law enforcement in the future.As part of the expansion of Medicaid managed care, pharmacy benefits were included in Medicaid plans statewide. As a result, participating health plans will bring all pharmacy dispensing fees in line with what is being paid in the private sector. Pharmacies, independent and chain alike in every part of the state, will receive lower taxpayer-funded fees on any prescription paid for with Medicaid dollars. Despite this change, more than 39 pharmacies have been added to the program, Texas Tribune reported.Texans deserve greater accountability of taxpayer-funded healthcare services. Managed care, and the oversight and management it brings to preserve the integrity of the Medicaid program, along with increased enforcement by the Attorney General and Inspector General, will provide better health outcomes, reduce fraud and protect taxpayer dollars.John Colyandro is executive director of the Texas Conservative Coalition Research Institute (TCCRI). Tom Aldred is the director of policy and research for TCCRI. www.tccri.orgHave more to add? News tip? Tell us
