Potential for Increased Texas Medicaid Payments Part of the proposed settlement of the Frew lawsuit against the state of Texas is an increase in Medicaid payments to providers. The final settlement will be determined by Health and Human Services Commission and must be approved by the trial judge. HHSC will be using the recommendations of the Medicaid Physician Payment Advisory Committee (PPAC) as a basis for their final determination. Dr. Robert Kottman, MedaPhase’s Medical Director serves on the PPAC and has provided us the following information on the proposed agreement:

The Medicaid Physician Payment Advisory Committee (PPAC) held its initial meeting on Friday, May 18. The PPAC met all day to vet potential options for increasing payment rates for Medicaid services for patients under age 21 (rate increases for adults were not discussed at this meeting but will be reviewed later). 

After extensive discussion and debate, the committee recommended the following approach pending further analysis by HHSC as to the fiscal impact (e.g. does this spend more money than has been allocated or is it right on target?) and consultation with the plaintiff attorneys as to whether this approach fulfills the agreement.  HHSC will be meeting with the plaintiff attorneys this week to lay out the proposal.

• Update the RVUs to the 2007 level.  Most Medicaid RVUs have not been updated since 1992.
• Assure that the RVU update results in no fee decreases for either RVU or access-based codes, meaning that any fee that would go down as a result of the update (and there are some) would be held harmless to ensure that no fee is cut
• Increase Texas Health Steps (EPSDT) preventive health codes by 30 percent (or more)
• Increase E & M codes by 22.5 percent (or more)
• After accounting for the above, if any dollars remain, for those codes that do not go up as a result of the RVU update, increase them by 5 percent.
• Dentists are considered in the targeted specialty dollars so HHSC will set aside some of the monies to increase rates to pediatric periodontists and other dental subspecialties

Medicaid managed care plans will be required to pass through the new funds (available as a result of the state’s settlement of the Frew case) directly to  providers. Health plans that follow the existing Medicaid fee methodology will be required to adopt the above; if the plan uses a different approach, the plan will have to specify the plan it will use and attest to the new dollars available being used exclusively to increase reimbursements to providers, rather than to pay for any plan administrative fees.

The result of these recommendations is that most evaluation and management (E&M) codes will increase in reimbursement by at least 22.5%.  The committee will meet again June 1 to review HHSC's findings and fine tune the methodology to be used to increase provider reimbursement.   

The PPAC serves in a strictly advisory capacity and the Texas Health and Human Services Commission will make the final determination on how the increased money available as a result of the state’s settlement of the Frew lawsuit will be dispersed.