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House Gives Early OK to Medicaid Expansion Ban

In a surprise turn of events in the House on Monday evening, a Medicaid reform bill meant to address long-term and acute care services became a weapon in the GOP’s fight against Medicaid expansion.

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In a surprise turn in the House on Monday evening, a bill to reform Medicaid long-term and acute care services became a vehicle for the GOP’s platform against Medicaid expansion.

“Many of us are very weary of Medicaid expansion,” said state Rep. Jeff Leach, R-Plano, who offered an amendment to Senate Bill 7 that would ban Texas from expanding Medicaid eligibility without the approval of the Legislature. While House lawmakers recognize that Texas' large number of uninsured residents is a problem, Leach said, “We don’t believe that Obamacare is the answer to that.”

Leach’s amendment — which was adopted with a vote of 87 to 57 — would prohibit the Health and Human Services Commission from providing “medical assistance to any person who would not have been eligible for that assistance and for whom federal matching funds were not available” under the state’s existing criteria for medical assistance.

State Rep. John Zerwas, R-Richmond, expressed concern that the “broad stroke” of Leach’s amendment would handicap the state’s ability to stretch federal matching dollars in other programs, such as the 1115 Medicaid waiver program.

“I’m the first to tell you that the Medicaid system is very fragile,” said Zerwas, who has pushed this session for the Legislature to weigh in on the Medicaid expansion debate by approving “a Texas alternative” based on private-market reforms. "But this particular provision, in terms of restricting any ability to utilize matching funds for the provision of health care, is not the right amendment for this bill,” he said.

But under current law, Leach said, the state health commissioner or governor could expand Medicaid coverage without legislative approval. The expansion of Medicaid eligibility is “too big of a decision for the future of this state to be made by one person, and I believe the Legislature ought to be involved,” he said.

The House sponsor of SB 7, state Rep. Richard Peña Raymond, D-Laredo, said the amendment would not directly affect SB 7. "Obviously this amendment is a bigger debate,” he said and attempted to table the measure.

State Rep. Mark Strama, D-Austin, read off a list of taxes Texas would pay to finance Medicaid expansion and other provisions in the Affordable Care Act — regardless of the state's decision to expand Medicaid.

“If we choose not to, we will become far and away the biggest donor state to the federal government,” he said. “We will still pay the taxes required of us under the Affordable Care Act. The difference is we will pay it to provide health insurance to other states' low-income” populations.

The House tentatively approved SB 7 after adopting 26 amendments — 16 of which are "basically technical corrections that we hadn’t caught," Raymond saidGiven the substantial changes made to the bill in the House, representatives from the upper and lower chambers must conference and agree on the final language in the bill before it will be sent to Gov. Rick Perry.

The original legislation, SB 7 was a “thoughtful and cautious plan of moving other individuals into managed care that were not previously included,” said Raymond. He said the bill would improve efficiency, coordination and quality of care “for some of our most vulnerable citizens.”

SB 7 would redesign Medicaid services for individuals who require long-term or acute care services, establish pilot programs to test “managed care” models for providing those services at specific premiums, and set up an advisory committee made up of stakeholders from the disability community to advise the Health and Human Services Commission on ways to efficiently redesign Medicaid acute care services. It would also call on the HHSC to evaluate — and implement if feasible — a process that would automatically enroll people with disabilities in a Medicaid managed care plan.

"This legislation will ensure the state is getting the most out of our Medicaid dollars and greatly improve efficiency and quality in our long-term care system," Sen. Jane Nelson, R-Flower Mound, the author of the bill, said in a statement. "It will help to ensure we can continue providing quality services to seniors and Texans with disabilities, who are living longer, more productive lives than ever before."

Even before the amendments were adopted, the House version of the bill made substantial changes to the version approved by the Senate in March. For starters, the House version would ensure that public and private medical providers and patients with disabilities are represented in an advisory committee set up to oversee the changes. It would also extend the timeframe for the pilot programs by a year so that they would run from 2017 to 2019. And rather than require individuals with disabilities to enroll in a managed care plan, the House bill would create a two-phase plan for the state to slowly transition those patients' services to managed care. In the first stage, the health department would shift acute care services patients with intellectual disabilities to managed care, and in the second stage, they would transition long-term services.

During committee hearings on the bill, disability rights stakeholders expressed concern that the transition to Medicaid managed care could harm patients with disabilities by disrupting their access to trusted medical providers and community living centers.

“I’m concerned about the implementation, particularly for the nursing home and the intellectual disability community,” said state Rep. Stephanie Klick, R-Fort Worth. She offered a couple of amendments adopted by the House, including a measure calling for an interim study to examine implementation of the changes. 

The House version would also establish a variety of new parameters to help individuals with disabilities transition to managed care plans. For example, it would require managed care organizations to provide each individual with disabilities an “acute care services coordinator” to oversee the transition and to ensure the patient receives an appropriate health plan. It also would require state contracts with managed care organizations to guarantee individuals with disabilities will have a choice of providers and continuity of care by allowing single-case agreements with out-of-network primary care providers.

The House version is expected to save the state $6.1 million in 2014-15, whereas the Senate version was expected to save nearly $12.6 million.

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