House Tentatively OKs Medicaid Fiscal Reform Bill

The state House tentatively passed a health care bill intended to increase efficiency and cost savings in Texas' expensive Medicaid programs today — but not before adding a far-ranging variety of amendments. Medicaid fraud, abortion and immigration issues all entered the debate, drawing jeers and cheers among members. 

One amendment that sent applause through the House would crack down on pharmacy benefit managers convicted of Medicaid fraud by increasing the fine to $500,000 and prohibiting those convicted of fraud from re-entering the Medicaid program. Rep. Fred Brown, R-Bryan, author of the amendment, said PBMs “have raped and pillaged our country and our state for years.” Although Brown told lawmakers Texas spends $30 billion a year to provide prescription drugs for Medicaid recipients, and the attorney general has recouped more than $828 million from "bad actors" convicted of Medicaid fraud since 2001, a spokeswoman from the Health and Human Services Commission says Texas only spent $27 billion total for Medicaid in 2010. Zerwas raised concerns the amendment had “the potential to limit access to pharmacy services,” but the amendment passed the House almost unanimously (three representatives voted no).

Rep. Jim Landtroop, R-Plainview, successfully added a provision to cut off all state funding for any health care provider that has ever performed “abortion-related services."

Many Democrats raised concerns about the language of the amendment, saying it would have far-reaching effects beyond his intention to "save unborn children." At first their concerns caused Landtroop to withdraw the amendment and tighten the language to exclude medical emergencies. They said the wording of the amendment could potentially cut off state funding for any hospital that has given a woman a sonogram, prescribed the morning-after pill or helped a woman after a botched "back alley" abortion, which could technically be abortion-related services, they said. "You may not intend it that way, but when you read your amendment, [it] includes those types of services," said veteran Democrat and lawyer Sylvester Turner. 

Controversial immigration-related legislation by Rep. Van Taylor, R-Plano, was also amended to the bill. The provision would hold citizenship sponsors accountable for the health care costs incurred by the state for legally residing aliens. If a legal immigrant applies for state services, the sponsor would be notified they could be required to reimburse the state for the cost of the immigrant's health care. 

The largest cost-saving measure in the bill would save $290 million by expanding managed care coverage — i.e., pay state-selected insurance providers to manage the health care of Medicaid clients — to the Rio Grande Valley. Many urban areas in Texas, including Houston, Dallas, San Antonio and Austin, already use managed care plans. 

Rep. John Zerwas, R-Simonton, House sponsor of the bill, said expanding managed care to the Rio Grande Valley is one of many efficiencies in the bill that should be implemented to reduce the cost of the expensive Medicaid program. “The inflation in healthcare is going to continue to go up whether it's in a managed care organization or not,” said Zerwas, but the intent of the bill is to slow down inflation by implementing managed care and other “best practices.”

Representatives from South Texas, such as Rep. Veronica Gonzales, D-McAllen, told lawmakers the expansion of managed care into the Rio Grande Valley “could be a recipe for disaster.” The Valley is a large geographical area with a shortage of Medicaid providers, no medical school and particular health concerns like a high rate of diabetes, they said. Current budget proposals will reduce how much physicians and other providers are reimbursed for health care and if “insurance companies are going to come in and take a cut off the top,” it could severely limit the ability of Medicaid patients to find a health care provider, Gonzales said. “When we start limiting access to care it’s going to cost us at the back end.”

Zerwas said the amendments offered by Gonzales — which would have required the Health and Human Services Commission to consider the unique factors in South Texas that affect the delivery of health care services and favor locally owned and operated HMO providers — called for “special treatment” for the Valley. But Gonzales told the House floor, “We don’t consider this special treatment to all of a sudden have managed care rolled out in full force in an area that is this large.” Zerwas successfully tabled her amendments.

An overview of the saving reforms in the original bill can be found here. 

Ed. note: This story has been corrected. Rep. Fred Brown's amendment was aimed at pharmacy benefit managers, not pharmaceutical companies.