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Get ready for another Medicaid lawsuit

That’s the very likely outcome if proposed cuts to Medicaid reimbursement rates go through.

“You cut rates an additional 10 percent, I’m not sure I can comply with the access provision,” Thomas Suehs, commissioner of the state Health and Human Services Commission, told the House Appropriations Committee on Thursday.

He warned that short-term savings from cutting reimbursement rates could be outweighed by a long court fight over whether the state was providing sufficient access to health care for children who are Medicaid recipients.


In 2007, the state ended a nearly 15-year dispute over whether Texas provided sufficient medical coverage to children enrolled in Medicaid. As part of the settlement, the Legislature increased funding for the program by more than $1.8 billion, using state and federal funds.

While the settlement specified only the amount of money the state had to spend on Medicaid for the 2008-09 budgeting period, Texas also agreed to maintain standards of accessibility of health care services for citizens on Medicaid.

Hospital and child advocacy groups say that the proposed reduction of reimbursement rates would result in fewer doctors seeing patients using Medicaid for insurance. That would increase the likelihood that the state violates the accessibility standards it agreed to, potentially setting the stage for another legal battle, they said.

“You’re talking about a payment rate currently, that’s before the cuts, that’s about 50 percent of commercial rates,” said John Holcombe, chairman of the Medicaid committee at the Texas Medical Association. “Now, we’re looking at a situation where we’re going to cut rates again. And if we believe what’s happened in the past will happen again, we’ll see a reduction again in the number of physicians that are willing to see Medicaid patients.”

And in the meantime, all those folks who would have had access to Medicaid will start showing up at the emergency room instead, so even the short-term savings of these cuts is largely illusory as cities and counties get stuck with the tab. People don’t stop needing medical services. It’s just a matter of how to pay for them, and whose budget it comes out of. And I’ll say again, Texas and its handling of Medicaid is a strong argument for federalizing the program and providing a single standard for reimbursements. It’s a shame that wasn’t part of the Affordable Care Act.

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