Texas Legislature Closes Door on Regular Session

Texas Legislature Closes Door on Regular Session

Prepares for Legislators’ Return

By Stephanie Limb

On Memorial Day, the 85th Texas Legislature came to an end, at least temporarily. With a special session scheduled to begin July 18, the reprieve from the politics of lawmaking is brief. Nonetheless, the 140 days that composed the regular legislative session yielded some significant outcomes for Texas hospitals.

Medicaid and the State Budget

The state budget for 2018-19 – how much the state will spend and on what – was one of the more challenging items of the legislative session. With thousands of proposed bills, it’s the only legislation lawmakers are required to pass. Despite Texas’ wide tax base and diversified economy, the recent drop in oil prices brought a loss of tax revenue and about $10 billion less for budget writers to appropriate for state operations and programs. Compounding the budget shortfall was the high-profile need to give the state’s beleaguered children’s protective services agency a significant funding boost.

In addition to how much to spend and on what, lawmakers had to decide on a source of funding. From the outset, budget writers in the House and Senate disagreed over whether to tap the state’s “Rainy Day Fund” or rely on accounting maneuvers instead. Ultimately, budget writers chose both approaches. (Click here to read more on the state’s use of the rainy day fund.)

In the final outcome, the financial pressures resulted in less funding for the Medicaid program for 2018-19, compared with 2016-17. Medicaid will get $62.4 billion in state and federal funds for 2018-19, a decrease of about $2 billion compared with the current biennium. As is typical, a supplemental appropriation will be needed during the next legislative session in 2019 to provide additional retroactive Medicaid funding to make up for the funding shortfall.

Despite this Medicaid underfunding, however, it is notable that Texas hospitals were not the subject of direct funding or payment cuts. In addition, the base budget bill included funding to preserve increased Medicaid reimbursement rates for trauma, safety-net and rural hospitals. This $307 million in state funding maintains current funding amounts.

Lawmakers also maintained funding to help Texas trauma hospitals offset some of their uncompensated trauma care costs. Using funds from “Account 5111,” the state will provide $29 million to designated trauma hospitals over thebiennium.

Behavioral Health Care

One of the biggest winners in the legislative session is behavioral health care. Following the 2015 legislative session and its investment to improve the state’s behavioral health care system, Speaker of the House Joe Straus (R-San Antonio) appointed a special committee to meet during the interim to study the scope of financing and delivery challenges and make recommendations to address them. Chaired by Rep. Four Price (R-Amarillo), the Select Committee on Mental Health issued a comprehensive report outlining numerous recommendations and the need for increased funding.

The 85th Legislature took these recommendations to heart. Lawmakers appropriated more than $7.5 billion for behavioral health, including $3.6 billion for Medicaid and CHIP behavioral health services. Of the $4 billion appropriated for non-Medicaid behavioral health services, $63 million will be used to address the current and projected waitlists for community mental health services for adults and children, and $366 million will be used for construction and repairs at state hospitals and other inpatient mental health facilities.

Although not part of the budget decisions, legislators also took steps to increase the number of providers available to treat Texans with substance use issues. Licensed chemical dependency counselors now will be eligible for educational loan repayment assistance as other behavioral health professionals currently are through the Loan Repayment Program for Mental Health Professionals. To be eligible for financial assistance, LCDCs must serve indigent and low-income populations.

Finally, the Texas Department of Insurance will have more authority to fully enforce the existing mental health parity law so that Texans with depression, for example, will be treated the same, in terms of benefits or provider access, as someone with a physical health condition such as diabetes or congestive heart failure.

Graduate Medical Education

The 85th Legislature also increased its investment in graduate medical education programs. Texas long has had too few physicians to meet the health care needs of its growing population. Statewide, there is a severe shortage of primary care physicians, as well as specialists in a number of disciplines, including pediatrics and geriatrics. The number of psychiatrists is insufficient to serve all Texans living with mental health or substance use issues. One of the most effective ways to increase the number of physicians in the state is to increase the number of physicians who train here.

In 2015, lawmakers appropriated funds to increase the number of graduate medical education training opportunities in Texas. Lawmakers in the 85th Legislature continued this tradition by appropriating $90 million for health-related institutions to continue the same level of state funding for current graduate medical education programs and added funding for new GME programs at The University of Texas Austin and The University of Texas Rio Grande Valley.

In addition, to expand GME training opportunities, the state budget provides $97 million in all funds – an increase of $44 million over the prior biennium. These funds may be used for:

  • GME planning and partnership grants to hospitals, medical schools and community-based ambulatory patient care centers;
  • New or existing GME programs to increase the number of first-year residency positions.
  • Unfilled first-year residency positions.
  • Grants to GME programs that received a similar grant in 2015.

Bills That Did Not Become Law

The legislative session is not just about bills that passed, however. Just as important are those that did not. For example, a bill that would have undermined Texas’ strong medical malpractice law by increasing the current limits on payments for non-economic damages ultimately stalled in committee. Another bill that failed would have inappropriately classified private hospitals, their health plans and subcontractors of public hospitals as governmental bodies and subjected them to the disclosure requirements of the Public Information Act. A third bill that failed would have reversed several provisions designed to increase enrollment in Medicaid of eligible individuals, including discontinuing the use of the modified adjusted gross income eligibility methodology and prohibiting use of asset tests.

More detailed information on the 85th legislative session and the outcomes for Texas hospitals is available at www.tha.org/2017legislativesession.

May/June 2017 issue of Texas Hospitals
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Upcoming Special Session

Lawmakers will come back to Austin July 18 for a special session, called by Gov. Greg Abbott (R). The one item they must address is the sunset date for the Texas Medical Board, the state agency that licenses physicians. Once that issue is handled, lawmakers may move on to 19 other issues. Among them:

  • Property tax reform, including a lower “rollback provision.”
  • Caps on state and local spending.
  • Increasing reporting requirements when complications arise from abortions.
  • Revising the practices and standards related to use of in-hospital do-not-resuscitate orders.
  • Extending the state’s maternal mortality task force to study and review cases of pregnancyrelated deaths and trends in severe maternal morbidity.

Special sessions can last up to 30 days. The governor has sole discretion to call a second, or third, or fourth special session. See more at www.tha.org/specialsession.