Texas has a problem. As lawmakers try to stretch an ever-shrinking budget, providers face reimbursement cuts and other setbacks. In addition to the 10 percent Medicaid reimbursement cut, hospitals face additional setbacks.
If the budget riders passed by the Senate Finance Committee last week become law, for instance, hospitals would be reimbursed for Medicaid patients according to the average rate in the state, as opposed to their current unique rate system. Additionally, federal matching funds could be used only for patient care and not for investments like capital improvements. An excerpt from the Texas Tribune:
There’s also one other complicated series of riders. Texas intends to expand Medicaid managed care into hospitals to save money — a move that could jeopardize some federal hospital funds. If the federal government doesn’t give Texas an exception to current rules, the state will either keep hospitals out of managed care or halt the expansion of managed care all together. If hospitals were excluded from managed care, the state would cut their Medicaid rates or state contracts in order to save $39 million over the next two years. If the state decides not to expand managed care, it would cut hospital Medicaid rates, contracts and other funding to save $243 million over the biennium.
These proposals and more are on top of a proposed 10 percent Medicaid rate cut for hospitals other than children’s hospitals and rural hospitals, a move designed to save roughly $500 million over the biennium.