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With Medicare and Medicaid providing more than half of most hospitals’ patient revenue, any changes to these government-sponsored programs have a significant impact on hospitals. Federal health care reform will change these programs significantly over the next decade, as well as make dramatic modifications to private insurance practices. The Texas Legislature sets the Medicaid program budget for each biennium, and also oversees the regulation of the state’s insurance industry through the Texas Department of Insurance. THA works with the Texas Legislature on legislation that affects health care financing. Through involvement with specific Medicaid advisory committees, the Texas Health and Human Services Commission and the Texas Department of State Health Services, THA helps shape the regulatory environment.

Federal

As part of the comprehensive federal health care reform legislation, hospitals are experiencing reductions in Medicare and Medicaid disproportionate share hospital payments. Other changes include payment reductions to promote reductions in preventable readmissions and hospital-acquired conditions as well value-based purchasing incentives.

State

The Texas Legislature increased Medicaid reimbursement rates for the state’s safety net hospitals. Despite efforts by Texas hospitals and the Texas Hospital Association, however, legislators rejected a Medicaid expansion alternative.

Additional Information