The first question many doctors ask when new patients call for appointments is how they intend to pay. If the answer is Medicaid, the doctor can expect to lose money.
The Texas Legislature has been balancing the state's budget by intentionally paying doctors 40 to 75 percent less for Medicaid patients than what private insurers pay for the same treatment. Doctors generally plan to do some charity work, but more and more physicians are reaching their limit, potentially leaving Texas' most vulnerable in a bind.
"When you are a physician and you see a Medicaid patient for a sick visit ... it basically costs more money to see them than what I get paid for," said Dr. Jason Terk, a pediatrician at Cook Children's Hospital in Fort Worth. "I accept Medicaid patients, but they can only be a certain percentage of my practice for me to do what I do. For me, it's anywhere between 10 percent and 15 percent of my practice."
The Medicaid reimbursement rate is at the center of the debate over whether to expand Medicaid to include more adults who can't afford health insurance. When Republican and Democratic politicians talk about how Medicaid is a "broken program," reimbursement rates are the biggest problem.
More than 3.6 million Texans rely on Medicaid, and of those 2.6 million are children and 538,000 are disabled, according to state figures. About 245,000 are elderly poor people, 128,000 are pregnant poor women and 125,000 are destitute. But while children comprise the vast majority of Medicaid patients, the disabled and elderly take up 58 percent of the budget.
The chairman of the House Appropriations sub-committee on health issues, Republican Rep. John Zerwas of Richmond, also happens to be a doctor and anesthesiologist. He admits those two hats put him in a dilemma because he helps craft the state budget that only pays him 25 percent of the commercial rate when he treats a child on Medicaid.
Zerwas said medical costs are growing faster than state revenues, which means every year it becomes more difficult to pay for Medicaid. The program is financed with roughly two federal dollars for every $1 the state spends, but those matching funds come with mandates for who gets treated for what and limits where the Legislature can trim the budget.
"You have to rein in your costs on the back of your service providers, that's your doctors, hospitals and nursing homes," Zerwas said. "We've whittled down the hospitals, we've whittled down the nursing homes, we've whittled down the physicians and ... we're at a point where we could see a significant dissolution of the network of providers that are going to participate."
The Texas Medical Association has sounded a similar warning. It polled its members and found that only 31 percent of Texas doctors are accepting any new Medicaid patients, while 26 percent will accept only some new patients. The group warns that with an ever-growing population and not enough doctors to keep up, Medicaid patients could find it tough to find doctors if more doctors stop taking Medicaid patients.
"My colleagues and I want to care for low-income Texans, but we also run small businesses that have to pay our staff and overhead," Doug Curran, an Athens physician and TMA board member, told Zerwas' committee this month. "Plain and simple, pitifully poor Medicaid payments are driving physicians out of Medicaid."
Nursing homes are also finding it difficult, according to the Texas Health Care Association.
"We care for 60,000 elderly and disabled Texas seniors dependent upon Medicaid, and our facilities simply cannot continue to operate at current staffing levels if Medicaid funding remains well below the actual cost of caring for our elderly," said Julie Sulik, chair of the group's nursing council. The Legislature would need to boost reimbursement rates more than 16 percent to cover the actual cost of caring for the elderly poor, the group said.
President Barack Obama's Affordable Care Act will boost reimbursement rates for eligible primary-care doctors this year at no cost to the state, and pending state legislation would boost payments to obstetricians and gynecologists because they serve as primary care providers for many women. Doctors in other specialties would see no change.
Democrats have said the only problem with Medicaid is the Legislature's decision not to fund it. They recommend closing tax loop holes or raising taxes.
"People will swallow increasing taxes for certain things; they are not going to swallow raising taxes for the indigent health care program," Zerwas said.
He has submitted legislation that would request federal waivers to allow Texas to find savings from places other than provider rates. Part of that solution is subsidizing private insurance for working adults who don't get it through their employer and cannot afford it. The ACA calls for those adults to join Medicaid, but conservatives oppose any expansion of Medicaid and even Zerwas' private sector alternative faces an uphill battle.
Gov. Rick Perry is pushing for a block grant, where the federal government gives Texas all of the funding without any regulations attached. The last time Texas made that request, the Bush administration turned it down.
"I'm a believer in a block grant, but I'm enough of a realist to understand that probably is not going to happen," Zerwas said.