Texas lawmakers concluded the state’s business on Wednesday, June 29^th after 170 days in the state Capitol. This includes 140 days for the regular session and an additional 30 days for the special session. The special session was called by the Governor to specifically address unfinished business including balancing the state’s budget, reforming Texas Windstorm Insurance, drawing congressional redistricting maps and addressing rising health care costs.

The 82^nd Texas legislature convened in January with the hefty task of closing the state’s $27 billion budget gap and writing a state budget for 2012-2103 without raising new taxes. In the end, the lawmakers passed a state budget that spends $15 billion less than current spending with much of the reductions achieved via cuts in education and health and human services. The Medicaid budget is projected to be underfunded by almost $4.8 billion. In addition, there are several cost containment and Medicaid reform initiatives as directed by the budget bill and the omnibus Medicaid bill, SB 7, 82^nd (1) that potentially impacts the overall Medicaid program.

Some key highlights of interest as a result of the 82^nd legislature:

• Despite the severe budget deficit, no draconian reductions to physician rates in Medicaid and CHIP are implemented.
• Medicaid hospital service rates are reduced by 8% except for TEFRA reimbursed facilities.
• Durable Medicaid Equipment and Lab services are reduced by 10.5%.
• Authorization is granted to expand Medicaid managed care into South Texas.
• Carve-in of prescription drug benefits into managed care.
• Directs HHSC to seek federal waiver to preserve UPL supplemental funds to hospitals with managed care expansion.
• HHSC to implement quality-based reforms in Medicaid and CHIP including adoption of outcome measures, quality-based payment systems, payment incentive to reduce preventable readmissions and complications, and bundled payments.
• SB 7, 82^nd(1) establishes the Texas Institute of Health Care Quality and Efficiency for the purpose of making recommendations to the Legislature on how to improve the quality and efficiency of health care.
• SB 7, 82^nd(1) creates and establishes parameters for the formation and governance of a Health Care Collaborative. Health Care Collaborative (HCC) are entities that undertake to arrange health care services for insurers, HMOs and other payors. The HCC must be certified by TDI to lawfully accept and distribute payments to providers and may consist of physicians, physicians and other providers, physicians and insurers, or physicians, other providers, and insurers.

Attached are links to HB 1, 82^nd State Budget bill and SB 7, 82^nd (1^st) Omnibus Medicaid bill.

http://www.lbb.state.tx.us/Bill_82/4_Conference/prtHB1_Conference_2011_SIG_Engross.pdf

http://www.capitol.state.tx.us/tlodocs/821/billtext/pdf/SB00007F.pdf#navpanes=0