Draft budgets reduce prison healthcare reimbursements to match Medicaid rates

In the wake of a recent audit alleging that the University of Texas Medical Branch overcharged for prison health services, I was interested to note that both the House and Senate budgets would university medical providers to get written permission from LBB to charge TDCJ more for services than would be allowable under Medicaid.

Rider 58 in the proposed Senate budget (large pdf, p. 599) declares that TDCJ "shall not pay rates to health care providers for hospital services provided to offenders in its custody that exceed the rates that would be paid for same services according to the Medicaid reimbursement methodology adopted by the Health and Human Services Commission in Texas Administrative Code, Chapter 355."

Presently, said the state auditor, "the UTMB-CMC Division's reimbursement amount for physician billing services is, on average, 135 percent of the Medicare reimbursement amount. Additionally, UTMB-CMC Division reimbursement amounts exceeded standard Medicare reimbursement amounts for each type of hospital service, including inpatient and outpatient services." Medicaid rates are even lower than Medicare, so if they were charging 135% of Medicare rates, UTMB billings are about to take a serious haircut.

Further, the bill creates a rather elaborate process for exceptions in order to charge more than Medicaid would pay:

In order to pay a rate that exceeds the rate that would be paid for same services according to the Medicaid reimbursement methodology ... the Department of Criminal Justice must receive prior written approval from the Legislative Budget Board. To request authorization to increase a rate, the Executive Director of the Department of Criminal Justice shall submit a written request to the Health and Human Services Commission and the Legislative Budget Board. The Health and Human Services Commission shall determine if the requested rate is reasonable and shall notify the Legislative Budget Board in writing of its finding. The Legislative Budget Board may consider the Health and Human Services Commission's finding in determining whether to approve the requested rate. The request shall include, but is not limited to, the previous rate; the requested rate; the reason for the request to exceed the previous rate; and the estimated fiscal impact of the increased rate. The request shall not be submitted for approval if such approval would cause expenditures to exceed appropriations.

Given that, it's almost certain that exceptions for higher rates would be few and far between, and even if individual rates are increased, the total aggregate amount providers can receive is capped at appropriated levels.

UTMB has complained for years that the state pays them too little for the healthcare they provide at Texas prisons, even threatening (read: bluffing) to cancel their contract if the state didn't fork over more money. But given the audit and draft budgets released recently, clearly the tables have now turned. Not only won't they get more money, prison healthcare now faces a whopping 24% aggregate budget cut, and there's nothing in this budget (nor that I've heard from anyone else) that makes me think anyone at the Lege plans to let UTMB out of this shotgun marriage anytime soon.