Texas Medicaid Reform Will Include Physician Incentives to Utilize Health IT

Texas Gov. Rick Perry was joined today by U.S. Department of Health and Human Services Secretary Michael Leavitt to sign SB 10 into law, reforming the state's Medicaid program which serves more than 2.7 million vulnerable, disabled and elderly Texans. The bill -- which takes effect Sept. 1 -- also creates a health opportunity pool, which will fund a premium assistance program to help uninsured working Texans who are not eligible for Medicaid by private insurance.

"By optimizing available funding for health services, expanding consumer choices, encouraging personal responsibility for Medicaid recipients, and providing new sources of financing for private insurance, we are taking a historic step toward a better, more accessible healthcare system," said Perry.

Today, Texas' Medicaid program costs $39.5 billion, accounting for 26 percent of the state's biennial budget. By instituting a more flexible, innovative methodology to provide health care to underprivileged Texans, the state will be able to serve individuals better and more cost effectively, according to a release from the Governor's Office.

Medicaid reform is designed to increase the percentage of Texans with health care coverage, focus on prevention, and emphasize consumer choice in health services. Reform efforts will transform the state's health care infrastructure, optimize health investments and provide health coverage to an estimated 200,000 uninsured Texans.

Additionally, Medicaid reform will do the following:

• Provide assistance for enrollment in private insurance and employer-sponsored plans

• Create tailored benefit packages for children with special health care needs

• Promote consumer choice through health savings accounts and consumer directed services

• Reward healthy lifestyle behaviors with health care incentives

• Set a cost-sharing base for non-emergency use of emergency rooms 
  

In addition to Medicaid reform, SB 10 also requires the Health and Human Services Commission (HHSC) to develop a pilot project, which will provide incentives to primary care physicians serving Medicaid recipients who utilize health information technology, including electronic health records. Electronic medical records will help to ensure recipients receive appropriate medical care.

"It is not the end-all, be-all in a state with unique healthcare challenges, including more than 5 million uninsured, many of whom have immigrated here from poor conditions. But this plan is a good start at solving the problem [of] working Texans who make too much to qualify for Medicaid, but not enough to affordably purchase health insurance coverage," said Perry.

HHSC will immediately begin work to prepare and submit a Medicaid waiver request by this fall to the U.S. Department of Health and Human Services.