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1. American Academy of Family
Physicians
2011 State Legislative Conference
Representative John Zerwas, M.D.
Texas House of Representatives
Chair-Appropriations Subcommittee on
Health and Human Services
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2. State General Revenue Spending By Article: FY 2000 and FY
2010
FY 2000 State GR Spending by Article, FY 2010 State GR Appropriation by Article,
Total Spending = $27.3 billion Total Appropriated = $42.4 billion
General
General
Government/Other
Government/Other Public Safety and $2.6 billion
$1.7 billion Criminal J ustice
Public Safety and $4.3 billion
6% 6%
Criminal J ustice
$3.3 billion 12% 10%
Health and Human 20% 62% 56% Education
28%
Services Health and Human $23.5 billion
Education
$5.6 billion Services
$16.8 billion
$12.0 billion
Source: Legislative Budget Board, Fiscal Size-Up, 2010-2011 Biennium; 2002-2003 Biennium
State General Revenue Amounts do not adjust for American Reinvestment and Recovery Act (ARRA) funds in FY 2010
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3. Historical State & Federal
Medicaid Spending
Total Federal and State Medicaid Client Services Spending (millions)
1981 1991 2001 2011
Federal Client Services
$688.6 $2,350.2 $6,234.1 $16,146.3
Payments ($Millions)
$20,000.0
State Client Services
$493.5 $1,333.6 $4,024.4 $8,550.1 $16.1
Payments ($Millions)
B
$16,000.0
Total Spending ($Millions) $1,182.0 $3,683.7 $10,258.5 $24,696.4
Federal
Spending
$12,000.0
(millions)
$8.6B
$8,000.0
State
Spending
$4,000.0
$0.0
1981 1991 2001 2011
3
5. Where Texas Spends
Medicaid Dollars – Services
*
T exas Medicaid Expenditures, SFY 2009
By Service Type — Total $22.9 billion
Long T erm Prescription
Services and Supports Drugs
$5.2 billion $2.0 billion
Delivery
Supplemental
24% 9% Payments
to H MOs
Medicare
$0.3 billion
Parts A, B & D
Dental $1.3 billion
$1 billion 4%
Disproportionate
Supplemental Share H ospital
24% Program
Payments
$1.7 billion
$5.4 billion
Physician 17% Upper
Payment
& Professional
Limit
$4 billion
$2.0 billion
9% 14%
*
Source: Medicaid Management Information System (MMIS).
H ospital &
H ospital Inpatient Prepared By: Office of Strategic Decision Support, Financial Services,
Clinic Outpatient Texas Health and Human Services Commission, J 2010.
une
$3.3 billion
$2.1 billion N ote: Due to rounding, totals may not add up exactly.
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7. SB 7 Initiatives
• Purpose of legislation – Improve the
administration, quality, and efficiency of Texas
health care benefits.
– Allows Medicaid managed care expansion into the Cameron, Hidalgo, and
Maverick counties.
– Carves prescription drugs into managed care organization plans, including the
use of vendor drug program formularies.
– Study physician incentives to reduce non-emergent use of emergency rooms
and implement recommendations if found cost effective.
– Cost sharing requirements to improve appropriate program utilization.
– Creates a Quality-Based Payment Advisory Committee.
– Establishes the Texas Institute of Health Care Quality and Efficiency.
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8. SB 7 Initiatives
– Requires development of quality-based outcome and
process measures.
– New quality-based payment systems for:
• Managed care
• Home health
• Hospitals
– Develop alternative health care delivery systems that
promote health care coordination and provider
collaboration.
• Establishes health care collaborative guidelines and support
• Texas Legislature encourages health care provider collaboration
to improve transparency, create greater accountability, and
promote innovation.
– The new procurement of the managed care contracts will specify these objectives.
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9. SB 7 Initiatives
– Encourages cost-savings by implementing and
identifying:
• Alternative payment systems
– Blended
– Episode-based bundled
– Global
• Potentially preventable
– Admissions
– Ancillary Service
– Complications
– Readmission
• Payment Incentives for
– High-quality, cost-effective healthcare
– Evidence-based best practices
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