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Monday, March 2, 2009

TMA Legislative Issue Brief: Medicaid Funding

Medicaid is the workhorse of Texas’ health care delivery system. It covers nearly 3 million poor and low-income Texans — most are children of working parents. Medicaid is the single largest source of federal funding, returning vital federal tax dollars to the state and local economies. A dollar spent by Medicaid returns $1.54 to the state; for the Children’s Health Insurance Program (CHIP), the return is $2.63.

Investing in primary and preventive care saves state dollars through reduced spending on acute illnesses and emergency room visits, and it results in a healthier population. Cost-effective health care hinges on patients’ continuous, ongoing relationship with a primary care physician or “patient-centered medical home.” For this reason, Texas needs a robust network of physicians who can take care of Medicaid patients.

The 2007 legislature made progress toward this goal by enacting the first meaningful Medicaid physician payment increase in 15 years. The payments increased 25 percent for physicians’ services for children and 10 percent for services for adults. According to TMA’s 2008 physician survey, the increase reversed a decade-long decline in physician Medicaid participation. Physicians who will accept all new Medicaid patients rose from 38 percent to 42 percent. However, Medicaid payments are still woefully inadequate and do not cover physicians’ cost to provide the care. The cost of running a practice increases about 3 percent a year. It is critical that the state continue to improve Medicaid payments so they are competitive with the rates of other payers.

Texas also must update Medicaid’s infrastructure to streamline and modernize the program’s administration and promote use of health information technology (HIT), including public health databases that can “talk” to each other easily.

Medicine’s 2009 Agenda
  • Promote a patient-centered medical home for all Medicaid and CHIP patients by supporting competitive physician reimbursement rates, including rewards for physicians who provide services like after-hours care and open-access scheduling.
  • Support 12-months’ continuous coverage in children’s Medicaid.
  • Support equivalent Medicaid payment rates for adults’ and children’s services.
  • Reduce the Medicaid “hassle factor” to entice more physicians to participate, modernize outdated information technology, and support expanded use of HIT, such as electronic medical records and e-prescribing.

Medicine's Message

  • Medicaid payments still lag far behind other payment rates even after the recent increases. The costs of physicians’ practices, like other small businesses, increase each year. Physicians want to participate in Medicaid, but they simply cannot sustain the loss.

Check out the Doctor’s Orders video to get a more complete view of TMA’s 2009 legislative agenda. You can see all of TMA’s 2009 legislative issue briefs on the TMA Web site.

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