The state of Texas canceled Medi-caid HMO enrollment meetings scheduled for this month in Fort Worth as it tried to work out a settlement with the city's public hospital.
The state is attempting to move its $9 billion Medicaid system into managed care amid fears by public hospitals that they'll be left out of the process.
Under the threat of a lawsuit, the state attorney general last week was negotiating with Fort Worth's JPS Health System and University Medical Center, a public hospital in Lubbock, to avert legal action.
Medicaid HMOs were scheduled to start enrollment meetings this month, but that has been delayed until July 1 in hopes a settlement can be reached.
JPS has accused state health officials of cramming a managed-care Medicaid system down the throats of providers without federal or state legislative approval. It threatened to legally block implementation (May 6, p. 2).
Because the Medicaid program receives matching federal dollars, states must receive waivers from HCFA to implement major changes. An 1115(a) federal waiver allows statewide changes. A 1915(b) federal waiver allows a state to implement pilot projects in which Medicaid beneficiaries receive care through a select group of providers.
Texas health officials had intended to operate pilot projects in most of the state's urban cities by expanding 1915 waivers that it had in three locations. Although Texas state officials said they intend to file 1915 waivers for the Fort Worth and Lubbock areas, they had not yet been completed as of last week, said Charles Stuart, associate commissioner for the Texas Health and Human Services Commission.
However, in letters between the state attorney general and JPS' attorney, the two tentatively agreed to allow the public hospitals to participate in the pilots by offering hospital-based prepaid health plans to Medicaid beneficiaries. That option would be offered in addition to four HMOs with which the state already has contracted to provide Medicaid services in the Fort Worth area.
Meanwhile, the state has been holding hearings throughout Texas on how to structure its 1115 waiver application. The state submitted an 1115 waiver last year. HCFA sent it back with concerns and it was never resubmitted.
But Stuart said there also were local problems with the waiver application. To go forward with the waiver, the state's public hospital districts needed to sign funding agreements in which they would put up the necessary matching funds for Medicaid. Of the urban hospital districts, only Fort Worth's public hospital signed the agreement, Stuart said.
In 1995, the state's 10 public hospitals contributed $288.4 million for matching purposes. In turn, they received $492 million in Medicaid disproportionate money.