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Texas may cut Medicaid reimbursements to healthcare providers

11/20/2011 9:48 PM

11/21/2011 8:30 AM

Therapy and physician groups in Texas are alarmed about proposed cuts in government healthcare reimbursement rates that they say would hurt the sickest and poorest Texas patients, most of them children.

Therapists stand to lose millions of dollars as Medicaid reimbursement rates for their services are slashed.

The average reduction for home health providers, for example, would be 35 percent. All told, the state plan calls for cutting $150 million a year for therapists; that is 19 percent of the $792 million they received last year.

The state would save millions more with cuts in co-payments to physicians for people covered by both Medicaid and Medicare. But doctors say the proposed change will further push doctors from wanting to practice in less affluent parts of the state.

"It's another small step in the direction of making it harder to practice medicine in Texas," said Dr. Dee Dockery, a radiologist and councilor with the Texas Radiological Society.

Hearings in Austin

Today, the Texas Health and Human Services Commission will conduct two hearings in Austin on the change in payments to occupational therapists.

The agency periodically reviews its Medicaid rates to make sure they're in line with what Medicare and other states are paying, commission spokeswoman Stephanie Goodman said. Proposed reductions in Medicaid were based on Medicare rates.

"During our review of therapy codes, we found that Texas Medicaid paid much more than Medicare for some services," she said.

The commission said that for most other types of services, the Medicare rate exceeds the Medicaid rate. The agency deducted 2 percent for home health providers and 7 percent for other providers to fall in line with the rate reductions approved by the Legislature this past session, she said.

The reductions vary by service and provider type. The average reduction would be 54 percent for comprehensive outpatient rehabilitation facilities and outpatient physical therapy and speech pathology facilities, Goodman said.

"We understand that major rate changes can be difficult for our providers," she said. "It's our hope that we can work with the provider community to come up with options that keep our Medicaid rates in line with other payers and allow providers to continue to serve our Medicaid clients."

The Texas Occupational Therapy Association, among other groups, is urging people to attend the hearings today and contact legislators to protest the cuts.

"It is imperative that we speak up in order to address these proposed reductions," it said in a news release.

The association did not return a phone call seeking comment.

Therapy 2000, a Dallas-based provider of speech, occupational and physical therapy to disabled children statewide, said thousands of children will lose services if new rates are approved. Services the company provides include feeding and swallowing therapy to a baby who was born at 24 weeks and speech therapy to a 4-year-old boy.

Jennifer Riley, a Therapy 2000 official, said rate cuts could range anywhere from 30 to 71 percent.

"Our agency and most agencies like us in Texas are over 90 percent Medicaid population, so we rely heavily upon the Medicaid rate to sustain our business," she said.

Co-payments cut

Also set to be altered are co-payment rates for patients enrolled in both Medicare and Medicaid. Effective Jan. 1, the state would eliminate payment of Medicare Part B co-insurance if the payment resulted in Medicaid paying more than the allowable amount. If Medicaid pays more than Medicare, then the state would pay the co-insurance or up to the Medicaid allowable, whichever is less, according to the Texas Medical Association.

The proposed cuts will "come at the expense of the health and well-being of some of the state's most vulnerable citizens," Dr. C. Bruce Malone, president of the association, told the Health and Human Services Commission this month.

Malone called the changes misguided and said they will "penalize the physicians who care for the sickest and frailest Medicare patients."

Hit particularly hard will be practices in rural, inner city and border Texas communities, where a disproportionate number of dually eligible Medicare patients live, he said. "In addition to compromising the financial viability of these practices, we fear that the rules could result in fewer physicians willing to set up a practice in the communities that most need them," Malone said.

Medicaid costs have been rapidly rising and make up about one-third of the state budget, the commission reported in September. Total spending for the Texas Medicaid program is estimated to be about $24.7 billion this year. About $16.1 billion of that is federal money, while the state share is $8.6 billion. Medicaid serves about 3.4 million people in Texas, mostly low-income children, but also elderly, blind and disabled people.

Other proposed payment rate changes are related to co-payments for diagnostic radiology, musculoskeletal system surgery, portable X-rays, radiopharmaceuticals and sign language, screening services, and substance use disorders, among others. For example, rates for one type of chest X-ray would decrease to $63 from $136.

Dockery, the radiologist, said the state is cutting a small part of Medicaid to avoid the headlines of a 10 percent across-the-board cut.

He cited the situation in which Medicaid pays a Medicare co-payment. That loophole, he said, sometimes led to payments being higher than Medicaid rules would allow.

"By eliminating that loophole, apparently they're going to save some money," he said. Radiologists, though, "feel like a whole lot of physicians: that some insurance plans don't pay enough for procedures to be workable with our expenses. And Medicaid would be the biggest example because they pay less than any insurance company."

Darren Barbee,


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