A New Way to Provide Physician Services in Nursing Homes: Texas Physician-Centered Nursing Home Model Demonstration

Health Care Issue
Like most states, the Texas Medicaid program confronts numerous challenges in caring for nursing home patients, many of whom are dually eligible for Medicare and Medicaid.  One obstacle to better care is limited physician involvement in the care received by these patients, leading to shortfalls in the quality of care.  Most patients end up being forced into costly hospitalizations that could be avoided.  Because Medicare, not Medicaid, pays for the hospitalizations of these dual eligible patients, Medicaid currently has little incentive to help control those costs.  HPG and a leading edge provider of physician-centered nursing home care believe a better option exists to help Texas Medicaid address the complexities of caring for dual eligible patients in nursing homes.          

HPG Approach
HPG developed a demonstration project that could help Texas Medicaid evaluate the merit of a physician-centered model in nursing homes.  The model also defines an entirely new approach to financing services by these two critical public health care programs that in too many instances work at cross purposes.  Uniquely, this demonstration seeks to align the incentives between Medicare and Medicaid such that both programs realize better quality nursing home care and later share the cost savings produced by avoided hospitalizations.  To date, no other state has yet developed such an approach to addressing the complex issues of cost and quality without sacrificing access. 

HPG worked with key members of the Texas State Legislature and officials in the Health and Human Services Commission (HHSC) to establish a physician-centered nursing home model demonstration project in Texas Medicaid.  HPG achieved authorization of the demonstration project in the State’s Medicaid reform legislation, SB 10, which was signed into law in June 2007.  HPG also has interacted with HHSC to help develop the project’s design, and is briefing the U.S. Congress on ways to enhance the success of and broaden the Texas pilot program to other states.