From the Office of State Senator Royce West - District 23

For Immediate Release
CONTACT: David Quin
(512) 463-0123
Tuesday, February 22, 2005

Senator West, legislators say state's health plan will harm more than help

AUSTIN -- State Senator Royce West and a group of state lawmakers have united in an effort to slow changes proposed by the Texas Health and Human Services Commission. They say current plans will negatively impact public hospitals and others that provide indigent care. The plan, part of a massive healthcare reorganization passed in 2003, will move an estimated 2.6 million Medicaid recipients into a managed care system. Senator West says the move may cause more harm than good.

"We have met with healthcare and county officials from all over Texas and they are in agreement that the proposed changes could have a drastic negative impact that reaches far beyond the next biennium," said Senator West. "While the Commission has been charged with implementing the most cost-effective solution to indigent care, the harm caused to public hospitals may far outweigh any short term state savings. Dallas County alone thinks it could lose anywhere from $25 million to hundreds of millions in federal aid."

Under the state's plan, urban areas will be moved to a managed care plan the Commission says will result in savings estimated at nearly $70 million for 2006-2007. Rural Medicaid recipients will be part of a referral system that relies on care specialists. The drawback is that hospitals who are part of health maintenance organization systems are not eligible to receive federal dollars to supplement treatment costs.

"My Harris County colleagues are part of a managed care system that has already cost them millions in federal assistance," said Senator West. "Our information is that hospitals in Austin, Fort Worth, El Paso, San Antonio, all the urban centers could be similarly impacted. If this is Texas' only choice, we understand. But we are asking Health and Human Services to delay its implementation plan until it can be thoroughly examined. We want what is best for everyone involved."

County officials are seeking other solutions to combat rising costs associated with indigent and uncompensated treatment. Cuts in the Children's Health Insurance Program have resulted in the loss of preventative care. Many children are treated at hospital emergency rooms, where costs are higher. Patients also travel from cities that do not have indigent care plans or public hospitals to cities that do. Those hospitals are largely not able to recover uncompensated care costs. Lawmakers and healthcare officials think the Commission's plan to have indigent care provided by managed care would worsen existing financial woes.

For more information, please call David Quin or Kelvin Bass at 512-463-0123.

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