Qualifying for project funding has been difficult for hospitals because of the time-consuming task of recruiting partners and getting CMS approval. To get the go-ahead, programs had to show the initiatives would meet metrics of success such as training a certain amount of staff or increasing access to primary care.
About 1,200 such projects have been approved across the state. They include expanding access to primary and specialty care by hiring more physicians and building and expanding clinics. Projects also focus on improving care quality by creating patient-centered medical homes and offering chronic disease management programs.
“We're building this airplane as we're flying it,” said Stacy Wilson, associate general counsel for the Texas Hospital Association. “It's been especially hard for public hospitals serving as anchors because of the administrative burden and the resources that are needed to put the regional healthcare partnerships together.”
“It was people who were not used to sitting in a room with each other, people who had competitive relationships,” said David Salsberry, chief financial officer of JPS Health Network, a publicly funded county hospital system near Fort Worth. Eventually, they put aside the awkwardness and got to work, he said.
Because the first two years were consumed by planning, development and getting approvals to move forward, data showing the cost-effectiveness of the program is not yet available. “It is in the latter part of the waiver that we will see the greatest direct patient impact and also associated improvements to health outcomes,” said Stephanie Goodman, a spokeswoman for the Texas Health and Human Services Commission.
While a boon to their enrollment figures, the Medicaid managed-care expansion has proven problematic for the 19 managed-care organizations active in the state. Molina Healthcare, for instance, said in its 2012 annual report to the Securities and Exchange Commission that it faced higher medical costs and “substantial losses” because of miscalculating the price of services in Texas.
“Because there is limited historical information on which to develop rates, certain assumptions are required to be made which may subsequently prove to have been inaccurate,” according to the company. The company saw its enrollment in the state swell from 155,000 at the end of 2011 to 249,000 today through the waiver program.
Forced to expand their operations to serve dozens more counties, insurers had to quickly hire hundreds of new staffers and open new offices. Craig Bass, president of Molina Healthcare of Texas, said as it continues to improve members' quality of care, its financials are “going in the right direction.”
One group resisting the rise of Medicaid managed care is local pharmacies, which are unhappy with the pharmacy benefit managers (PBMs) used by the managed-care organizations. Each PBM uses its own formulas to set reimbursements.
“Payments to pharmacies are all over the map, even for the same drug for the same patient,” said Michael Wright, executive director of the Texas Pharmacy Business Council. The group lobbies for American Pharmacies, the Texas buying cooperative that serves almost 700 independent pharmacies.
The PBMs are offering independents non-negotiable, take-it-or-leave-it contracts with dispensing fees that are $5 to $6 less than in the old program, he said. Some have closed because they have a high percentage of Medicaid patients. “Many more independents are just hanging on, hoping that the state will do something to bring some fairness and consistency to payments,” Wright said.
However, others point to the continued growth of large chains such as CVS Caremark Corp. as the real cause of the disappearing independent pharmacy. “The prophecies of doom are incorrect,” said Billy Millwee, the former Texas Medicaid director who ran the program when the waiver was approved. “Beneficiaries still have access to pharmacy drugs.”
Community health center providers are cautiously enthusiastic about the program's prospects. “This waiver is seeking a transformation—and transformation doesn't happen overnight,” said Melissa Rowen, healthcare policy director for the Texas Council, which represents 39 community health centers across the state.
But consumer advocates are less than impressed by the initiative. They point to the larger failing of Texas' approach to helping the near poor: The state government's refusal to expand Medicaid under the national reform law to cover adults earning up to 133% of the poverty level. “Medicaid expansion would yield many, many, many billions more dollars per year than the waiver does,” said Anne Dunkelberg, associate director of the Center for Public Policy Priorities in Austin.
Follow Virgil Dickson on Twitter: @MHVDickson