Poor Payouts Endangering Medicaid, Doctors Say

Physicians' groups told Texas budget writers on Thursday that the state’s health insurance program for the poor pays doctors so little that it is endangering the health of the program.

“With Medicaid payments, they’re the least competitive of all the insurances that we have,” Martin Garza, an Edinburg pediatrician, said at a Senate Finance Committee meeting. “We have to take a good hard look at the rates because we don’t want to limit the access by decreasing the physician workforce.”

Texas Medicaid pays physicians about 65 percent of what Medicare, the federal health insurance program for the elderly, does, according to the Kaiser Family Foundation. That puts Texas’ Medicaid reimbursements among the bottom quintile of all states, at a time when Medicaid enrollment in the state is rapidly growing.

But in fiscally conservative Texas, many lawmakers are reluctant to spend more public money on Medicaid, which already constitutes about 25 percent of state expenditures. Several Republican leaders, including Gov. Greg Abbott, have said the program is broken and in need of an overhaul, not expansion. In the belt-tightening 2011 session, lawmakers cut reimbursement rates for most providers by 10 to 20 percent.

“Do you know how much money, and what amount, would be needed to fix the problem?” Sen. Juan “Chuy” Hinojosa, D-McAllen, asked at Thursday’s hearing.

The physicians at the hearing did not provide a dollar amount.

The fight to raise payments to doctors is one waged every two years by doctors’ groups, who say the program’s reimbursements are so measly that they cover less than half of physicians’ costs. But this year the terms of the battle are different, thanks to federal health reform.

In 2013 and 2014, federal funds made available under the Affordable Care Act boosted Medicaid reimbursements to Medicare levels. The result, according to the Texas Medical Association, was a 5 percent jump in Medicaid participation.

That money dried up at the beginning of this year, and doctors’ groups say another drop in physician participation is imminent. In 2000, 67 percent of Texas physicians accepted all new Medicaid patients, whereas today’s number is closer to 34 percent, according to the medical association.

Meanwhile, the number of Texans receiving Medicaid coverage continues to grow, largely driven by a wave of sign-ups in the wake of the Affordable Care Act. The state’s health agency predicts that Medicaid enrollment will rise from 4.1 million to 4.3 million over the next two years.

“You do what you have to do to take care of your patients, and I think it’s in our blood to do that,” said Doug Curran, a family physician from Athens. “But at the same token, my family needs attending to as well.”

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Disclosure: The Texas Medical Association is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.