Press Release
From the Office of State Senator Eddie Lucio, Jr., District 27

For Immediate Release
Tuesday, April 10, 2001
Contact: Doris Sanchez
(512) 463-0127

Sen. Lucio creates task force to evaluate Medicaid and CHIP reimbursement rates through legislation

AUSTIN, TX--On Monday, April 9, the Senate Committee on Health and Human Services passed Senate Bill 1299 by state Sen. Eddie Lucio, Jr., D-Brownsville, that creates a task force to evaluate rate-setting methodologies in the state for Medicaid and the Children's Health Insurance Program (CHIP).

"We know there are problems with reimbursement rates for these programs, but we don't have the solutions yet," said Sen. Lucio. "This is why I filed a bill that creates a task force composed of health care providers, as well as public health and academic professionals knowledgeable in Medicaid and CHIP."

The task force is also charged with developing recommendations for changes.

Currently health care providers who treat Medicaid and CHIP recipients are compensated below the cost of the services they provide. The bill defines health care providers as doctors, hospitals, dentists, nursing homes and emergency services, among others. To cover costs, providers are often forced to accept only a certain number of patients on these programs. Therefore, they must balance how many of these patients they treat with the number of private patients in their care. In areas with disproportionately high numbers of Medicaid and CHIP patients, like the Border, this practice is not even an option.

CHIP provides health insurance coverage for uninsured children younger than 19 and whose family income is at or below 200 percent of the federal poverty level ($35,300 for a family of four). As of April 9, 2001, the estimated number of children in Texas enrolled in CHIP was 314,360, and the actual number of children receiving services was 299,896. An estimated 14,464 enrollees are not receiving services yet.

To qualify for Medicaid, a family of three must be at the current federal poverty level of $13,650. The number of Texans receiving Medicaid is about 2.5 million and of those 59 percent are children. Total Medicaid payments made to Texas nursing homes for the past year amounted close to $1.3 billion and to hospitals that amount was $3.3 billion.

The task force will consider several issues brought to Sen. Lucio's attention during the interim, such as the availability of and need for services in various geographical areas of the state, and the impact this has on Medicaid utilization and reimbursement. Co-author of the bill, state Sen. Eliot Shapleigh, D-El Paso, added a mandate requiring the task force to examine Texas expenditures on Medicaid and Chip in comparison to national averages and to the top industrial states in the country.

"SB 1299 will give us the comprehensive evaluation we need in order to make the necessary improvements to Medicaid and CHIP," added Sen. Lucio.

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Note: Staff member handling this legislation is Ms. Bridget Sharphorn, legislative aide.

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