The Week in Review & IN(hind)SIGHT: Feb. 13-19, 2017

21st Feb 2017

THE WEEK IN REVIEW: FEB. 13-19, 2017

The House Appropriations Committee began hearings on agencies with a general overview hearing.

The overview laid out issues for Article two at a very high level. The Bill:

 Increases funding by $1.5 billion over what is estimated to be required to fund current law entitlement, contingent upon enactment of legislation to reform the school finance system and maintains the increase in state funds from the 2016-17 biennium associated with the homestead exemption and franchise tax reduction tax relief provisions enacted by the 84th Legislature

 Provides for caseload increases in Medicaid (the Senate Bill does not) but does not provide for cost growth

 Maintains critical needs funding provided to Child Protective Services in the 2017 fiscal year

 Provides $3.5 billion in All Funds, including $2.8 billion in GR and GR-D, for non-Medicaid/CHIP behavioral health services at 18 agencies across six articles, providing a system approach to funding behavioral health for the first time ever.

 Provides $663.2 million in All Funds across various agencies with $595.8 million is provided in border funding at the Department of Public Safety. Federal involvement in Border Security is not included in the Bill.

 Provides an estimated $5.0 billion from Proposition 7, 2015 and $2.2billion from Proposition 1, 2014 for the Department of Transportation

 Does not address the short fall at TRS.

This hearing was followed up with a hearing on selected subject areas including Medicaid, Behavioral Health, Child Protective Services and other substantive areas. The hearing identified the following:

 The defensiveness of DPS in defending their use of overtime will not serve them well. Their response to this issue was a good lesson in how not to address legislative concerns. “This call may be recorded for training purposes.” This was a training moment

 The House will have to address cost increases and will have a battle with the Senate over caseload growth which is addressed in the House but not the Senate in the Medicaid program.

 Caseload assumptions in the House Bill (and more so in the Senate) may have to be re-evaluated as case load figures appear to be rising.

 Issues related to the funding of CPS caseworkers still need clarifying

 Managed care in Medicaid covers about 92% of the covered population.

 Pharmacy costs as budget drivers are a significant concern for this Legislature

 Major concerns exist related to overtime and the impact on existing positions across agencies.

 There is not a clear understanding that managed care rates must be actuarily sound

 Child Protective Services having only hired 50% of the staff requested in the critical funding, might have to clarify their message regarding the need for critical funding

 Kinship Care in CPS is a considerable concern for this Legislature

 The impact of the new administration in Washington is an issue that the Legislature would like clarification on before investing more state dollars.

At the agency level, The Medical Care Advisory Council met and several issues emerged. The Chair expressed the concern of many committee members that more and more items are coming before the committee only as informational items, denying them the ability to have meaningful input. Other issues included:

 There clearly was growing concern that there does not appear to be a plan in the event that CMS does not approve the 1115 waiver. The odds of denial may be slim, but in the absence of an approved waiver, communities are left in limbo, unable to plan in a meaningful way.

 Given the federal delays in approval of a number of the items before this committee the budget neutrality calculation is becoming problematic. Not only are projects delayed but their impact on budget neutrality cannot be clearly understood.

 Quality Incentive Payment Program (QIPP) for Nursing Facilities is finally moving forward with a rule implementation date of April but actual implementation several months later.

IN(hind)SIGHT: FEB. 13-19, 2017

Be Careful What You Ask For… Considerations for State Policymakers Regarding Medicaid Block Grants

13 Feb 2017. Texas lawmakers have called on the federal government to transform federal Medicaid funding into a block grant. Although there are aspects of shifting federal Medicaid funding to state block grants that could be very attractive to state policymakers, there are also significant potential negative ramifications depending on the details of the funding structure.

The Mechanics and Implications of High Risk Pools as a Potential Element of National Health Care Reform

16 Feb 2017. Health insurance high-risk pools have been proposed as a potential element of ACA replacement plans, but they are not a new idea. Past experience with high-risk pools suggests they can help address issues of affordability, stability, and fairness in the individual health insurance market. To do so, they must be adequately publicly subsidized and have benefit designs and cost-sharing structures that are comparable to health insurance products available on the open market.

The 85th Texas Legislature Takes Up The Medicaid Vendor Drug Program

18 Feb 2017. State law compelling Medicaid managed care organizations to adopt the Vendor Drug Program formulary is set to expire after August 31, 2018. After this lapse, existing state law allows HHSC to retain the authority to negotiate supplemental rebates for drugs on the VDP formulary indefinitely. At issue now is whether Texas lawmakers should step in and preserve HHSC’s expiring authority over the managed care formulary or surrender it to managed care plans. As the 85th Texas Legislature takes up the issue, it has several cost and quality factors to consider before voting to retain control of a rebate-based formulary.

HEARINGS AND MEETINGS

House Appropriations Committee: Budget Overview for HB1 Legislative Budget Board

13 Feb 2017. The House Appropriations Committee heard testimony providing an overview of HB1, the House introduced budget for 2018-19, which allocates substantially less revenue than the 2016-17 budget.

House Appropriations Committee Selected Topic Areas: HB1, General Appropriations Bill

15 Feb 2017. The House Appropriations Committee heard invited testimony on the House Budget Recommendations related to: Public Education Funding; Medicaid; Mental Health; Child Protective Services; Border Security Funding; Transportation.

Medical Care Advisory Committee Met To Receive Information And Vote On Rules

16 Feb 2017. The Medical Care Advisory Committee met to review and make recommendations to the Texas Medicaid director on proposed rules that involve Medicaid policy or affect Medicaid-funded programs.