Fears of funding problems have eased after federal officials struck a Medicaid waiver deal with Texas last month, and JPS officials said Wednesday that the upcoming overhaul of the state's healthcare safety net will more fairly compensate hospital systems like the JPS Health Network for their treatment of poor patients.
In fact, JPS' funding ultimately could increase under the terms of the five-year deal, officials said.
"It's not like we slid down the rainbow and got our pot of gold," said Robert Earley, JPS CEO and president. "But this gives us a clear path in which we are more fairly compensated and a fairly clear road map for some of the things we need to be accomplishing."
The state's new plan essentially transforms the Medicaid payment structure and, health officials say, ensures that hospitals serving the most uninsured patients with the best services get the most funding.
It will also help Texas prepare for an expected influx of new Medicaid patients in 2014, when millions become covered under President Barack Obama's healthcare reform.
"What is important is that it's not status quo; it's not a rubber stamp saying we're going to fund exactly the way we have, even for mediocrity," Earley said. "This basically says, 'Do what you need to do and should do on behalf of the patients and you will get reimbursed.'"
The change comes as the state expands managed care, a model intended to save on costs. However, Texas would have lost billions of dollars in federal funding because, under federal law, those payments cannot exist in a managed-care structure.
The five-year waiver allows the state to keep receiving that funding.
JPS receives about $85 million of that money (known as upper payment limit dollars) a year, said David Salsberry, JPS chief financial officer. For the first year of the plan, JPS will likely receive about the same amount, but after that, additional money could become available.
Public hospitals naturally provide the most uncompensated care, but private hospitals will also see benefits for their care of indigent patients, Earley said.
The waiver plan includes incentives to reduce the number of people entering emergency rooms, lower hospital readmission rates and get more patients preventive care, Earley said.
It encourages efficiencies and creates funding pools that promote collaboration among regional medical facilities.
State health officials called the new strategy a meaningful replacement for an "archaic Medicaid funding system."
Anne Dunkelberg, associate director of the Center for Public Policy Priorities in Austin, said she is "hopeful" that the new system will mean improvements in access, quality of care and patient safety. Its effectiveness will depend on the development of benchmarks that hospitals must meet to draw the funds, she said.
Texas is one of the states challenging the constitutionality of the new healthcare law, a matter the Supreme Court could decide this year.
That the state and federal health officials were able to reach the agreement speaks to "the Obama administration's willingness to bend over backwards to work with the states," she said.
The waiver does not reduce the number of people uninsured in Texas, about a quarter of the population.
As a public hospital district, JPS is designated an "anchor hospital" in the plan, meaning the network is responsible for leading a collaboration of regional providers in identifying service gaps and critical health issues, as well as managing development of the plan.
The plan, which must be presented to state and federal officials by Oct. 31, will include performance measures.
"We are going to ask, 'Where are we going to put our priorities,'" Salsberry said. "Our role at JPS is to help bring this effort together."
Alex Branch, 817-390-7689