Moving Forward on Medicaid

The Senate's unanimous passage of SB 7 gives a small hint of what a Texas approach to Medicaid might look like.
Tue March 26, 2013 9:30 am
Sen. Jane Nelson leads a meeting of the Committee on Health and Human Services on Tuesday, March 26.
Bob Daemmrich

A central conceptual problem with Texas's ongoing resistance to the federal government's effort to expand Medicaid is that while Texas's Republican leadership have a point—it would be better to spend money on an efficient entitlement program than a bloated and dysfunctional one—they haven't fully specified what a Texas approach to Medicaid would entail.

Some clues are, however, coming out of the current legislative session. On Tuesday, by a unanimous vote, the Senate passed SB 7—one of two Medicaid-related bills authored by Jane Nelson, a Republican from Flower Mound and chair of the Senate's Health and Human Services committee. This one, SB 7 , focuses on streamlining the state's service provision to Texans with physical and intellectual disabilities who are eligible for long-term or acute care. The other, SB 8 , is meant to crack down on waste and fraud in the system  and has been recommended for the local and consent calendar.

Both bills have been welcomed by Republicans , with Democrats being more wary . The reasoning behind SB 7 is as follows. As Nelson has explained it, Texas's current system provides a lot of services to a relatively small number of people, many of whom don't need all or even most of the services available to them. The overarching goal of the bill, then, is to extend Medicaid coverage for acute or long-term care to some 12,000 additional Texans with physical or intellectual disabilities—without spending more money.

To that end, the bill includes a number of provisions meant to improve efficiency, such as the creation and implementation of a new assessment tool that would better specify each patient's needs, so that they can have access to those services, but that the superfluous resources can be made available for others. According to the Legislative Budget Board's fiscal note , the state could actually save money: $30 million over the course of the 2014-2015 biennium, although as the LBB noted, the net fiscal impact of the proposed reforms (positive or negative) can't be fully determined at this point.

When Nelson filed the bill, its emphasis on efficiency was alarming to some legislators, who were concerned, logically enough, that one way to save money on Medicaid would be to cut the services that the state provides. The bill does include some language that would lessen the state's obligations. A new provision in Section 5, for example, would say that "to the extent permitted" under federal law , the state's commissioner of Health and Human Services should implement premiums to be paid by the parents of children who are eligible for long-term services.

As the bill's supporters say, though, all the current services will still be provided. And Republicans and Democrats would agree that the existing Medicaid system has known inefficiencies. The issue at hand was that Texans with disabilities are currently served by a patchwork of local, state, and federally funded programs, in both institutional and home- or community-based settings. The result, as described in a January report (also from the LBB) on government effectiveness (PDF), is a system which "maximizes budget certainty for the state but does not control the over- and under-provisioning of services."

There are many such pockets of inefficiency in Texas's Medicaid program, and while they may not be the most important aspect of the subject, they are an area where bipartisan cooperation is possible. As Lieutenant Governor David Dewhurst observed just before the vote on Tuesday, SB 7 builds on the Medicaid bill Nelson authored last session. That was also filed as SB7 and which also aimed to improve efficiency, in that case by discouraging non-emergency use of the emergency room by making alternative provisions for urgent care. The 2011 SB 7 ultimately passed with bipartisan support, and was supported (with some qualifications) by experts such as the analysts at the Center for Public Policy Priorities , a nonpartisan think tank based in Austin that advocates for low- and middle-income Texans. 

As in 2011, concerns from the Democrats and various advocates were mostly mediated in the committee rooms , or behind closed doors. By the time the committee substitute for the original bill made it to the Senate floor, it included two amendments written in response to testimony, and had attracted letters of support from several groups that advocate for the disabled. And SB 7 passed, as mentioned, unanimously. The state's next moves on Medicaid, whatever they are, will be lucky to elicit such widespread support. 

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