Part One: What the Heck is a Full-Risk Broker?

The full-risk broker concept slithered from the primordial ooze in 2005 as part of President George W. Bush’s Deficit Reduction Act of 2005 (DRA). DRA was primarily aimed at reducing the growth of entitlement programs such as Medicaid, Medicare, and Temporary Assistance for Needy Families (TANF).

The Senate's version passed after a tie-breaking vote was cast by Vice President Dick Cheney. The bill passed the chamber with no Democrats and five Republicans voting against the bill. The House version passed by a vote of 217-215, with all Democrats, fourteen Republicans, and one Independent voting against. And they say votes don’t count.

Dick Cheney’s vote unleashed full-risk brokers into the nonemergency medical transportation gene pool. But what are full-risk brokers exactly?

Full-risk brokers are private transportation companies that agree to do the following:

• Handle the call center duties (currently HHSC handles the call centers);

• Operate under a captitated system (so whether they coordinate 20 or 20,000 rides they are reimbursed by Medicaid the same;

• Contract with providers (public or private) for the actual trips (by law they cannot own and operate their own vehicles.)

So what’s so wrong with that?

First, the federal law was fundamentally and irrevocably flawed. The enabling legislative language was clearly written by health policy wonks. The prohibition on brokers from owning and operating vehicles was taken out of what is known as the Stark Law. Named after Con. Pete Stark, (D-California), that 80s law prohibited physicians from referring Medicare and Medicaid patients to their own clinics or hospitals. The broker law is based on Stark.

Problem? At the risk of sounding absurdly self-evident: nonemergency medical transportation is not a healthcare program. It is a transportation program. It is the fundament that policymakers have missed since since day one (and continue to miss today).

The transportation provider does not check Medicaid eligibility. It has no HIPAA ramifications. No treatment. No diagnosis. The drivers are not EMTs. They are not allied healthcare professionals of any kind.

The transportation provider is told by HHSC who to pick up and where to go. They drive the patient to the doctor, hospital, clinic or pharmacy. And then they take the Medicaid patient back home. It’s not rocket science. Heck, it’s not even science.

Having health policy experts devise a transportation program is like asking a physician to run a bus company. The full-risk broker model was flawed from the get-go. Like all things built on a weak foundation it dramatically misses the mark. The problems mount, however, as the model destroys the systems it touches. More on that later….