Medicaid cutbacks may be revised by state

Facing significant pressure from providers and parents of disabled children, Texas Medicaid officials appear poised to revise the timing and distribution of their proposed cuts in Medicaid reimbursement rates for therapy.

The total amount of the reduction, however, apparently would not change under a new proposal.

In July, the Texas Health and Human Services Commission proposed slashing state spending for speech, physical and occupational therapy services by $150 million per year over the next two years, forfeiting an additional $200 million in federal Medicaid matching funds.

But in depositions for a lawsuit seeking to stop the cuts, the agency described a revised payment methodology that would limit the combined cuts to $62.5 million for fiscal year 2016. Most of those savings — some $42 million — would come from speech therapy services.

A health agency spokesman declined to comment on the new rate proposal, citing the ongoing litigation.

“If the goal remains to cut therapy by $150 million, the end result will eliminate access to care for the most vulnerable Texans. Rearranging the chairs on a sinking ship may hide the harm, but it does not eliminate it.” Rachel Hammon, executive director of the Texas Association of Home Care & Hospice

First year cuts eased

Provider groups that have reviewed the memo and the accompanying rates say the overall twoyear amount of the cuts is unchanged. The memo was first obtained and reported by Quorum Report, an Austin-based news organization.

“They are reducing the size of the cuts in the first year, but still appear to pursue the same goal to slash spending on Medicaid acute care therapy for kids and seniors by a total of $150 million in state spending over the next two years,” said Rachel Hammon, executive director of the Texas Association of Home Care & Hospice.

“If the goal remains to cut therapy by $150 million, the end result will eliminate access to care for the most vulnerable Texans. Rearranging the chairs on a sinking ship may hide the harm, but it does not eliminate it.”

According to the memo, the revised cuts also appear to be more evenly distributed, with a smaller across-the-board cuts to the many types of services provided under the three basic therapy modes, rather than deeper cuts to targeted services.

The agency would no longer try to peg payment rates to commercial rates, but would bring rates in line with Medicaid programs from 11 other states. That would reduce the state’s general revenue outlays by $26.8 million in the first year, with a corresponding reduction in federal funding of $35.7 million.

Abuses suspected

Therapy services are used by adults recovering from injuries, managing new conditions such as stroke or amputation, or coping with progressive diseases such as Alzheimer’s or Parkinson’s. But most Medicaid-funded therapy is provided to children with physical or developmental disabilities, who often require ongoing care for much of their pre-adult life.

State officials have sought to rein in a sharp rise in Medicaid spending that many believe was caused by therapy providers taking advantage of their virtually unfettered ability to provide services and by generous payment rates. The cost of pediatric acute care therapy in the state rose from $412 million in 2009 to $699 million in 2014, while the number of patients jumped from 94,039 to 148,293.

The state health agency held a public hearing on the original rate cut proposal on July 20, hearing from scores of parents of disabled children that the cuts would deny them needed services. Provider groups testified that the reductions were so deep, many would have to limit the number of Medicaid patients they saw or close their doors.

The $150 million in cuts were mandated by the Legislature in a rider to the appropriations bill passed in the last session. But after the legislative session ended, dozens of Democratic lawmakers wrote to health Commissioner Chris Traylor in an attempt to stave off the cuts. By mid-August, they were joined by seven Republican colleagues as well.

On Aug. 11, a group of parents of disabled children and home health providers filed suit to block the rates, and state officials will be asked to justify the cuts at a hearing Monday before state District Judge Suzanne Covington.

Most children with disabilities in Texas who qualify for Medicaid remain in the fee-for-service program. But starting in September 2016, they will be required to join managed care plans, which also are subject to the cuts and will see their per-member payments reduced a commensurate amount. But several managed care executives said they did not believe the cuts would have a significant effect on their ability to provide therapy services to disabled children.