Dear Friends,

Last week, SB 7 passed out of the first 82nd Special Legislative Session. Although the overall purpose is to achieve cost savings to the State in order to balance the budget, these derived cost savings could potentially harm our South Texas families. Texas has realized a growing healthcare crisis for a number of years, and SB 7 is intended to help remedy this problem by incorporating new methods of delivering healthcare to improve quality and efficiency. However, these reforms are certainly not guarantees to lower costs or better healthcare. Our goal should not simply be cutting costs, but, more importantly, to provide better healthcare to our Texas families and increase access to that care.

What is the harmful impact to our communities with the passage of SB 7? Most significantly, Medicaid Managed Care in the Rio Grande Valley is now a certainty. Currently, the Valley is protected by a moratorium that has prevented managed care from coming into the border region. We have been fighting it off for years, but, when SB 7 is signed by the Governor, the safe-harbor the moratorium provided will be eliminated.

Under managed care, the State will pay Health Maintenance Organizations (HMOs) a negotiated flat rate to serve as a middleman for administering health care. Healthcare providers will have to join HMO networks and be paid through the HMOs. This changes the current "pay-as-you-go" model where the State reimburses individual providers. Managed care is purported to create a more efficient healthcare system and to decrease overutilization of services, so expanding it statewide is claimed to generate a savings of close to $400 million. However, these savings are not a given. History has shown that implementation of managed care has not always realized the promised savings because of the large HMO administrative costs associated. These possible savings also say nothing for improving patient healthcare or increasing access to care.

The Rio Grande Valley would be the largest geographic service delivery area in the State for managed care - over 300 miles. This creates inherent obstacles specific to the South Texas border region because of its high population of Medicaid-dependent residents and even higher rates of limited English speakers. An outside organization may not be able to adequately understand and serve the Valley's particular needs. Providers could be spread out over large areas with patients having to travel long distances and with the possibility of providers not being available at all or not qualified to be part of the network. Decreased access to care will only lead to an increase in ER visits which are even more costly. The Valley delegation is fearful of a lack of access to care in our already medically underserved areas and for that reason, among others, the Valley delegation voted against this legislation.

However, knowing it was only a matter of time before managed care would eventually reach the Valley, Senator Juan "Chuy" Hinojosa and I amended SB 7 to address some of the Valley's concerns. We successfully passed amendments so that extra consideration is given to locally owned and operated managed care organizations when awarding service contracts. Other amendments would allow for children in a family to go to the same doctor rather than have several different primary care physicians and would allow doctors to submit invoices for payments through one portal as opposed to several. Another amendment requires that HMOs have a medical director and patient care coordinators located within the Valley service region and that special programs and materials be provided to recipients with limited English or low literacy skills.

I am committed to fighting for the best possible healthcare and access to that care as well as for lowering costs for our South Texas families. I welcome your feedback and ideas on this and any other issue.


Veronica Gonzales

State Representative, District 41