Texas abandons Medicaid change costly to hospitals

Texas lawmakers dropped an idea to expand a state Medicaid HMO program known as StarPlus because the move was projected to cost hospitals far more in federal matching funds than it would save. Instead, hospitals agreed to come up with the hoped-for savings of $109.5 million themselves, said Joe DaSilva, senior vice president and advocate for public policy at the Texas Hospital Association. The state was seeking to save $109.5 million over two years by expanding StarPlus, but officials figured out that the change would result in public, urban hospitals losing $150 million in federal matching funds over two years, said Jennifer Cutrer, executive director of government relations at Parkland Health and Hospital System Dallas. Parkland's losses would have been $50 million, Cutrer said. Instead, state officials agreed to use four alternatives to StarPlus. The agreement is expected to be passed as part of the state's budget bill. -- by Paul Barr