Testimony Senate Bill 7: Medicaid Cost-Containment
House Public Health Committee
John Hellerstedt, MD
May 11, 2011
Good morning, Chairwoman Kolkhorst and committee members. Thank you for the opportunity to testify.
I am John Hellerstedt, MD, a pediatrician and vice president for medical affairs at Dell Children’s Medical Center in Austin. I also am chair of the Texas Health and Human Service Commission’s (HHSC’s) Quality-Based Payment Advisory Committee. HHSC created this committee last summer to solicit pragmatic but innovative strategies for improving quality and lowering costs in Medicaid and the Children’s Health Insurance Program (CHIP). I am testifying in favor of Senate Bill 7 on behalf of the Texas Medical Association.
SB 7 will formally establish a Quality-Based Payment Advisory Committee. The new committee, to be composed of physicians, consumers, and other stakeholders, will continue the state’s efforts to devise innovative payment and delivery systems that promote better quality care at a lower cost. SB 7 directs HHSC and the committee to (1) devise strategies for reducing potentially preventable hospitalizations and readmissions, both of which are significant cost-drivers in Medicaid; (2) develop evidence-based outcome measures to promote the delivery of more efficient and effective health care; (3) develop new payment methodologies that reward health care provider collaboration and coordination of patient care, particularly for patients with chronic conditions; and (4) tie a portion of Medicaid HMO premium payments to the plans’ ability to improve health outcomes for their enrollees.
The bill also directs HHSC to evaluate cost-effective incentives to reward physicians for curbing their patients’ nonemergent use of hospital emergency departments and to implement nominal cost-sharing for patients who choose to obtain care in a hospital emergency department for a nonemergency condition.
Speaking from experience as the chair of the current quality-based payment advisory committee, I can say that Texas physicians, hospitals, health plans, and other health care providers already are implementing novel yet pragmatic approaches to improving care for Medicaid and CHIP enrollees. Several proposals the committee considered led to legislative initiatives this session, including House Bill 1983 by Chairwoman Kolkhorst to reduce the incidence of elective inductions prior to the 39th week of pregnancy. By harnessing the knowledge and expertise of providers and consumers across the state, Texas Medicaid and CHIP can find ways to improve care that maintain access to services while also achieving our shared goals of better care at a lower price.
As you consider SB 7, our organizations respectfully ask that you consider adopting several amendments to further refine provisions in the bill. We are concerned that several definitions within the bill incorporate the phrase “in accordance with accepted standards of care.” However, the bill does not define what that phrase means. We ask that either a definition be inserted or this phrase be struck.
We also recommend that the legislation be amended to ensure that the majority of quality-based outcome and process measures developed by HHSC in collaboration with the committee be based on nationally-accepted and validated clinical measures. National measures for the child and adult Medicaid populations either already have been developed or are underway. Replicating that effort in Texas would be costly and redundant and mean that physicians and other providers in Texas may be measuring health outcomes differently from their peers in other parts of the country, making comparisons difficult. We do, however, see the value of developing measures that reflect unique geographic or environmental variations found in Texas, and support the development of a limited set of measures designed to assess distinctive health characteristics or concerns of the local population.
Lastly, we are concerned about language in Section 536.052 that would allow HHSC to grant Medicaid or CHIP managed care organizations flexibility with respect to network requirements and financial arrangements. The intent of this language is vague. The Texas Department of Insurance establishes network requirements for all health plans, including the maximum distance and time a patient must travel to obtain primary care and specialty services. We ask that this language be struck.
It is our understanding that the above recommendations are acceptable to the bill’s author.
Thank you for the opportunity to testify. We look forward to working with you to perfect and pass this important legislation.
82nd Texas Legislature Testimonies