83(R) - 2013
Licensing & Administrative Procedures
Relating to level of care designations for hospitals that provide neonatal and maternal services.
No significant fiscal impact to the state is anticipated through the biennium ending August 31,2015. The fiscal impact is anticipated to be significant beginning in fiscal year 2016. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Summary: HB 15 requires the Executive Commissioner of Health and Human Services Commission (HHSC), in consultation with the Department of State Health Services (DSHS), to assign level of care designations for hospitals based on the neonatal and maternal care services they provide. HB 15 gives the “Perinatal Advisory Council,” authority to determine minimum standards for each level of care designation. Hospitals that fail to achieve minimum requirements cannot receive Medicaid funds for neonatal and maternal care, except in emergency situations where state or federal law requires them to provide care.
Background: HB 15 stems from a study conducted by the Neonatal Intensive Care Unit (NICU) Council that found Very Low Birth Weight (VLBW) infants have better health outcomes when born at Level III to Level IV (highest level) facilities than when they are born in lower level facilities and transferred. The study also notes that 55% of all births are paid by Medicaid and asserts that coordinating neonatal and maternal care more effectively, including facilitating transfer arrangements through regional coordination, will reduce costs by reducing pre-term births and NICU utilization.
Analysis: Because the majority of births are paid for with public (Medicaid) funds, the state has a compelling interest in ensuring that the services are performed at qualified facilities. Level of care designations can help hospitals coordinate neonatal and maternal care and provide consumers standardized, consistent information on which hospitals provide the care they need. Level of care designations can also ensure that neonatal and maternal care services are billed only from qualified facilities. This bill does not prevent individuals using private insurance from using lower level facilities if they so desire. Still, HB 15 expands government by providing HHSC, DSHS, and the Perinatal Advisory Council, the authority to develop and assign level of care designations. By limiting Medicaid reimbursement to only qualified service providers, Texas can incentivize lower quality providers to increase their standards, attain a higher level of care designation, and return to treating Medicaid patients. We encourage House members to support HB 15.