BY John Hawkins, President/CEO of Texas Hospital Association
Texas runs a lean Medicaid program and stays vigilant against fraud, waste and abuse, showing how to protect public dollars without compromising access to care.
As the 90th legislative session approaches, state and federal leaders are taking a hard look at fraud, waste and abuse in health programs. Texas enters that conversation with a strong record, and other states would do well to follow its lead.
Fraud, waste and abuse are serious concerns across the healthcare system, and hospitals take their obligation to comply with laws and regulations seriously. Texas’s Medicaid program stands out among peers as one of the most vigilant in the nation in combatting fraud, waste and abuse. In 2022, federal Medicaid funding to Texas equaled 113% of the total cost of mandatory benefits in Texas, the leanest ratio of any state, and about half the national average of 208%. Runaway
spending is not a feature of Texas’s bare-bones program.
Improper payments divert public dollars from the patients and communities that public programs exist to serve, which runs counter to the mission of hospitals. That is why hospitals accept extensive reporting, auditing and compliance requirements, and why they meet them. These obligations take real time and resources, but accountability and public trust are foundational to the care hospitals provide.
As scrutiny intensifies, though, an important distinction risks getting lost: Strong oversight does not require budget cuts.
Texas’ own system shows why precision matters. The state funds 10 supplemental and directed hospital payment programs almost entirely with local dollars, through intergovernmental transfers and local provider assessments. Those assessments have been in place since 2013 and are heavily regulated by the federal and state governments. Texas also publishes transparent provider-level payment and financing data, which the Medicaid and CHIP Payment Advisory Commission has said could be a model for other states. Every dollar that moves through the program is publicly reported. The state does not accept or pay funds that do not first meet rigorous standards.
Thanks to the foresight of the Texas Legislature in the early years of Medicaid supplemental payments, Texas has evolved a precise approach to program integrity. This ensures clear rules of the road for program participants and public accountability for every dollar. Effective oversight does not mean treating every complex payment arrangement as suspect because it is large or hard to explain. Unsupported allegations of impropriety undermine successful states’ programs, like Texas’, and harm the safety net hospitals that rely on those payments. When that happens, the burden falls hardest on hospitals doing the most with the least.
Texans expect accountability across the whole system, which means making sure people get what they pay for. Commercial insurer practices that drive costly denials, payment disputes and delays consume a substantial share of hospital spending. Every hour a hospital spends fighting for payment on care it has already delivered is an hour not spent on patients, and those costs ultimately show up in the price of care for everyone. If lawmakers are serious about ensuring every dollar is used well, reducing insurer friction belongs in the conversation. Again, hospitals’ mission is to provide care to patients, and health plans often inhibit hospitals’ success in doing so.
Texas can show the rest of the country how to get this balance right: targeted tools aimed at bad actors, transparency about how public dollars are spent and clear rules that don’t punish good actors. That approach protects taxpayers and patients at the same time.
The Texas Hospital Association is working closely with legislators to address rising healthcare costs and strengthen access to care for all Texans. Texans deserve confidence that their tax dollars are protecting patients. Texas hospitals will keep doing their part to earn it.