Opinions Are Mixed as Managed Health Care Makes Its Way to Valley

Managed health care services, which had been the subject of a recent moratorium in three Rio Grande Valley counties, will soon be available for Medicaid patients in those counties and the rest of the Valley.

On March 1, Medicaid patients living in what the Texas Health and Human Services Commission classifies as the Hidalgo Service Area will be eligible for the services, in which private organizations receive set monthly payments from the state to provide health services for patients. The Hidalgo Service Area includes Starr, Duval, Jim Hogg, McMullen, Webb, Willacy and Zapata counties, as well as Hidalgo, Cameron and Maverick counties, which had previously banned managed care. 

Advocates of managed health care say the program has proven to be cost-effective in parts of the state where it has been implemented. But others say that managed care will not meet the unique needs of the Valley. 

As Texas Monthly reported in December 2009, a group of South Texas legislators called for the moratorium in 2003, led by then-state Rep. Ismael “Kino” Flores, D-Palmview. The lawmakers said unique conditions made the Valley unsuitable for managed care, citing the region’s high rate of chronic, expensive-to-treat illnesses such as diabetes, and also said managed care would put economic pressure on the Valley’s already scarce physicians. 

Nearly 3.6 million Texans were on Medicaid as of June 2011. In 16 South Texas counties, more than 20 percent of the population is on Medicaid, with the highest percentage in Starr County, where about a third of the population is on Medicaid. 

In areas with managed health care services, Medicaid recipients go through a managed-care organization, usually one that includes their primary physician, and that organization contracts with doctors and hospitals to provide services within the patient’s chosen Medicaid plan. 

Spencer Harris, a health care policy analyst for the conservative Texas Public Policy Foundation, said the move is good for the Valley.

“The model of managed care gives the state a greater ability to predict costs and puts the burden of efficiency and savings on private, managed care organizations rather than the state,” he said. “We believe competition between private MCOs across the state has ultimately decreased costs, and we think that will be duplicated in South Texas.”

In a 2011 report to the Senate Finance Committee, the Health and Human Services Commission predicted that $290 million in general revenue savings would result from expanding managed care to South Texas. 

But state Rep. Veronica Gonzales, D-McAllen, said managed care could be detrimental for the region.

The Valley “has a high concentration of Medicaid patients with a lot of issues that may not be as prevalent in other parts of the state, such as language barriers and [lack of] public transportation,” Gonzales said. “Our providers are very nervous about it because they believe it will lead to delays in treatment and denial of certain care. Not one provider I’ve spoken to has said, ‘We think this is going to be good for the Valley.’”

The Medicaid patient population is so large, Gonzales said, that most of the region’s doctors include it as part of their medical practice, sometimes a significant part. 

Stephanie Goodman, a spokeswoman for the Health and Human Services Commission, said she does not expect the Valley to present unique challenges for the managed-care rollout. 

“We’ve done managed-care rollout in several other areas,” Goodman said. “We want to minimize transition issues as best we can. We look very closely to make sure we have enough primary doctors and specialists. So far everything looks good.” 

Sixteen out of 28 South Texas counties have a shortage of primary care health providers, according to a 2008 designation by the U.S. Department of Health and Human Services.

“That makes it harder to develop provider networks,” Harris said. “But the Valley already has a hard time attracting and maintaining primary care providers. ... There are unique considerations, but that’s not a reason not to expand managed health care to the Valley.” 

Managed care has existed in major Texas cities like Austin, Houston, San Antonio and Dallas since the 1990s. It is also available in El Paso, the Panhandle and parts of the Gulf Coast. 

“Houston has been a beneficiary of the managed care model since 1997,” said state Rep. Sarah Davis, R-Houston. “With the implementation of STAR and STAR+PLUS programs in Harris County, greater efficiency and cost savings have been found while increasing the number of individuals in Texas Medicaid managed care.” 

Managed-care plans operate under the Medicaid-managed STAR and STAR+PLUS programs. STAR generally provides care for low-income families and children, and STAR+PLUS is typically for elderly or disabled Medicaid patients. 

“From the client side, there’s a very high satisfaction with [managed care],” Goodman said. “It’s just easier to get services with a managed-care environment. There are no waiting lists. ... For providers, I think there’s an adjustment period. We found early on that sometimes health plans didn’t pay as fast as the state.” 

South Texas pharmacists have expressed concerns that managed care organizations’ lower reimbursement rates will drive small pharmacies out of business, according to the Brownsville Herald. Like Valley physicians, many of the pharmacists count on Medicaid patients as a significant share of their business. 

State Rep. Richard Peña Raymond, D-Laredo, who chairs the House Human Services Committee — which is responsible for overseeing the rollout — said it’s time to make the best of the situation.

“This is not a system we were for,” Raymond said. “But my interest now is in making sure it’s as good a system as possible, one that provides health care to people who qualify for it and need it. It’s an HMO system, and anyone familiar with health care knows HMOs have problems. My goal is to help give HMOs a good name instead of allowing the stereotypes to prevail.”