BY Ted Shaw, President/CEO, Texas Hospital Association
Every Memorial Day during odd-numbered years, the Texas Legislature adjourns from its 140-day legislative session. But, this Memorial Day was unlike those in the recent past. It was calm, cool and collected. By sine die, the 86th Legislature already had passed the leadership’s priority items—the 2020-2021 budget and property tax reform and school finance bills. Unlike the 140th day of the 2017 legislative session, discussions of a special session were decidedly absent.
The 86th Texas Legislature had worked remarkably well together. The body that recently has been described as the “kumbaya legislature” passed several bills of particular importance to Texas hospitals and managed to avoid a number of poor policy choices.
Texas hospitals successfully dodged one of the holdover issues from the 2017 legislative session—the governor’s and legislative leadership’s priority to limit local governments’ ability to raise property taxes.
The legislation proposed in the very early days of the session sought to reduce the amount by which local governments, including hospital districts, could increase property taxes from 8 to 2.5 percent.
Such a reduction would have posed a significant threat to Texas hospitals’ ability to generate revenue to provide the state share of hospitals’ supplemental payments and support indigent health care programs. But, lawmakers came to understand the devastating consequences the legislation could have on Texas hospitals’ ability to support the health care safety net and exempted county hospitals and hospital districts from the new, lower caps.
More positive news came when the state’s comptroller identified nearly $10 billion in additional dollars for state lawmakers to spend on public programs for the next two years. With an allowed 16 percent spending increase over the 2018-2019 biennium, state lawmakers passed a $250.7 billion two-year budget to cover existing expenditures and funded new items for 2020-2021.
Health and human services spending totals $84.4 billion in state and federal funds—up just 1 percent from the last two-year budget cycle. Since Texas secured a higher federal match rate, the state can put up fewer state dollars to draw down more federal funds. Changes in the federal match rate this session allowed budget writers to invest $1.9 billion less in state general revenue for Texas Medicaid.
Overall, Texas hospitals secured funding for most of the industry’s key budget needs. In addition to maintaining $720 million in state and federal funds for Medicaid rate enhancements for trauma, safety net and rural hospitals, lawmakers also appropriated new funding to support Medicaid rate enhancements for particularly vulnerable hospitals:
- Rural hospitals’ inpatient services ($35 million in state funds).
- Rural hospitals’ labor and delivery services ($6.2 million in state funds).
- Children’s hospitals ($50 million in state funds).
Lawmakers even dipped into the state’s savings account, the Economic Stabilization Fund, better known as the “Rainy Day Fund,” to provide $15 million in grant funding to support infrastructure improvements for designated trauma hospitals.
Behavioral and maternal health also saw legislative commitment in the form of new funding. Lawmakers invested nearly half a billion dollars to improve access to inpatient and outpatient behavioral health care. They also provided $7 million in state dollars for statewide initiatives to reduce maternal mortality and morbidity and $20 million in state funds to help reduce the nursing workforce shortage.
One of the biggest winners of the 2019 session is access to trauma care.
Houston-area lawmakers, Rep. John Zerwas and Sen. Joan Huffman, passed landmark legislation that repeals the Driver Responsibility Program—the primary source of revenue for the state’s trauma fund (Account 5111)—while maintaining funding for the state’s more than 280 designated trauma hospitals.
Repealing the DRP and replacing its lost revenue for trauma hospital funding is an issue Texas hospitals, lawmakers and other stakeholders have worked to address for more than six years.
Revenue in the state trauma fund, when combined with federal funds, provides $176.4 million to offset just over half of Texas trauma hospitals’ more than $320 million in unreimbursed trauma care costs.
Eliminating surprise medical billing of Texas patients was another issue state lawmakers were determined to solve.
Texas hospitals supported those efforts early in the session and helped pass legislation to protect patients from surprise medical bills for emergency or unplanned out-of-network health care services, while maintaining mediation for hospitals and health plans to negotiate a fair payment amount, free from government-set rate parameters.
As the issue of surprise billing gains increasing attention in the U.S. Congress, Texas’ new surprise billing law can serve as a model for the nation.
The legislative session is over, but the work doesn’t stop. Texas hospitals must monitor the state agencies’ activities to implement and enforce the legislature’s laws, particularly through rulemaking, and prepare for the March 2020 primary election.