The Associated Press June 3, 2011, 6:59PM ET

Committee approves revamping health care program

The Texas Senate unanimously passed legislation that would overhaul how Texas delivers health care to the poor disabled, while a House committee approved similar legislation.

The Senate and House measures cover similar territory and are cost-saving measures that Gov. Rick Perry wants passed in order to balance the state budget.

Sen. Jane Nelson, R-Flower Mound, passed a bill that combines three measures the Legislature failed to pass in the regular session. The proposed law would expand the privatization of health care services and discourage the use of emergency rooms for non-urgent care. It would also encourage state agencies and private health care providers to focus on improving patient outcomes and allow hospitals and doctors work together to control costs.

The measure now goes to the House for consideration.

"Our Medicaid costs are unsustainable and this legislation is critically needed to make our health and human services operate more efficiently on behalf of those who depend on state services and those whose tax dollars support the services," Nelson said.

Earlier Friday, the House Appropriations committee approved a plan that could possibly save the state $700 million in Medicaid costs.

While there is no guarantee federal authorities would approve the plan, the state's 2012-2013 budget counts on the cost saving. Rep. Lois Kolkhorst, R-Brenham, laid out a plan to ask federal authorities for a waiver to experiment with a new payment and incentive system for Medicaid patients. The measure passed on a 17-2 vote and now goes to the full House for consideration.

Medicaid provides health insurance to people with disabilities, the poor and the elderly who need long-term care. The federal government matches state spending, if the state follows federal guidelines.

Kolkorst's bill would require the state's Department of Health and Human Services to ask for a waiver in order to implement a new system that she says will be more efficient and will save the state money.

"It would enable us to do some different things in different parts of the state," Kolkhorst said. "What my goal was with House Bill 13 was to ask for flexibility."

That flexibility worried Democrats and some advocates for the poor, who said they worried flexibility was just another word for cutting services, or cutting the number of people currently eligible for the program.

"We would like to see legislation, that is proposing a reform like this, have a little more in the way of assurances that the intention is not to roll back (coverage)," Anne Dunkelberg, an associate director at the Center for Public Policy Priorities. She added that if the bill guaranteed the current level of services to the current population eligible for coverage, her group could support the proposal.

Rep. Sylvester Turner, D-Houston, said he was concerned the federal government would not approve the waiver, and the state would have to recover the expected $700 million in savings from another program.

The budget passed by the Republican-controlled Legislature shorted the Medicaid program by $4.8 billion in expected growth in demand and inflation of costs. Republicans have said they hope proposed reforms, like the one approved Friday, would reduce costs. They also expect the economy to improve, thereby reducing demand for Medicaid services.

Democrats worry that since the $4.8 billion in expected growth in Medicaid costs are not in the budget and required under federal law, the governor will cut other state programs while the Legislature is away.

Gov. Rick Perry called the Legislature into special session after a proposal to slash $4 billion from public schools failed to pass and threatened the budget. Perry ordered lawmakers to pass the school finance bill and an array of health care bills that could save the state money and balance the budget. The state is cutting at least $15 billion worth of current state services, primarily in health care and education.


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