and the Hits Keep On Coming …. the Status of Texas HHSC and the OIG

As if the current investigations of the contract procurement programs at the Texas HHSC are not enough to occupy HHSC’s future plans, the Feds (FBI) have now been involved since January 15. Now it seems, the Feds were lied to by that procurement team or others involved in the 21CT contract procurement process. Jack Stick’s legacy and the OIG culture continue to be unwound. See and Mr Stick, it has been found, also had HHSC purchase executive office chairs (2) worth $2,800 each and badges (nearly 300) for his officers that cost nearly $300 each, badge holsters worth $16 each, and leather ID card holders worth $18 each. The chairs were nearly sent to Mr. Stick with his other office belongings, after his resignation. This opens up yet another chapter in the investigations under way in Texas, fully involving the Feds now. It may be that they (the contract investigations) are now out of the hands of Texas since self-investigation (Abbott’s strike force and Janek’s internal investigations?) is an obvious conflict of interest in HHSC. Furthermore, by having Stick, Wilson, and their respective wives and aide, stick around (excuse the pun) the office for another few weeks after their resignations, the internal HHSC electronic-paper trail may be in question. The so-called State fraud-detectors may have become the actual fraudsters in all of this. All of these investigations have enlightened calls for all of the State’s agencies to be scrutinized for their current contracting and spending processes. In the end, the 2013 Texas Legislature with Perry’s appointments may have created the unleashed and uncontrolled monster they earlier had called heroes in collecting from and finding so-called Medicaid fraudsters. Aside from the scandal here, the OIG software program may in reality have been in the red after real actuarial analysis.

The current relevant question from providers in Texas about HHSC is if these scandals are playing enough havoc with the operations in HHSC that everyday tasks are being delayed such as OIG open investigations of providers, payment hold cases, and even Medicaid (re)enrollment application processing. We have noticed delays in these application turnaround times by up to 2 months, making the current application process last more than 4 months. The OIG plays an active role in this process since they perform the appropriate physical visits of facility applicants and other background checks. Some of these application processes are skipping physical visits altogether in cases of provider clean record histories, even though they (HHSC-OIG visits) are required for (re)enrollment. This may now be at their subjective discretion.

HHSC has many current and important transitions to manage, including the transition from traditional Medicaid to 100% managed Medicaid by September 2016. Providers must then contract with all relevant regional MCOs for their client portfolio needs. The MCOs will then apply their own algorithms to populate their regional provider networks. This may include the pruning of their respective provider networks. Once this happens, a provider must show how their respective practices differentiate them from others in the area in order to keep or obtain new MCO contracts. Moreover, this process may take months. Hence, being prudent about signing up with your regional MCOs is as important as ever and well before the start of 2016, since last minute applications will surely be delayed shortly before the September 2016 deadline.

Texas A&M’s Requisitioned Study on Texas Therapy-based Medicaid Reimbursements

HHSC had earlier last year (6/2014) requisitioned a study from a Texas A&M study group to review and make recommendations on how therapy codes are reimbursed under the Medicaid program from other states in the nation. See,, slide 16. We are trying to obtain that study (when completed) under the Texas Open Records Act.

The bottom line with this request was to find if Texas was reimbursing Medicaid therapy-based codes at a disproportionate rate compared to other states’ Medicaid fee schedules. SynerImages had invited OPIRA to present findings of their independent study on Medicaid fee reimbursement schedules used in the other larger states, such as California, New York, and Florida at our 10th Annual Rehab Facility Conference in San Marcos last year. In that small, non-scientific survey it was found that indirect reimbursements were being made through states’ education budgets and not through their Medicaid budgets, (i.e., school-based therapy for Medicaid-aged children). Moreover, the cost of professional therapists was more expensive in these other states than in Texas. Hence, a direct comparison between these states’ Medicaid fee schedules cannot be done without first compensating for education and other alternate budget layouts and the respective economies of the states.

SynerImages, in conjunction with Quantum Decision Research, LLC, is gathering all of the states’ direct Medicaid fee schedules, along with all their respective delivery model options for Medicaid therapy services (including education-based budget reimbursements and other alternative Medicaid plans) so that one may harmonize all therapy reimbursement schedules into one comparison algorithm.

This is being done in advance of the receipt of the Texas A&M study to be delivered to HHSC and to Texas legislators during this very important legislative session. The potential from the study is for new directives to be given to adjust therapy reimbursements this year. While there are some direct conflicts of interest involved in this study (political associations between the former and current governors and other majority party leaders in the Legislation and the school), the need for an independent and comprehensive alternative study is apparent. We will be posting the results of our study in the next few months, while the current legislative session progresses and how, if anything, the Texas A&M study is utilized in discussions.

84th Texas Lege Under Way – Bills to Look Out For

There have been a number of bills introduced in the  initial filings of the 84th Texas Legislative Session during January 2015. Of special interest to the Texas therapy services industry is:

SB219 (Schwertner, Hinojosa, Nelson), see, consists of nearly 2,300 pages, with many struck-through or corrected statements. This bill has to do with (1) enhancing benefits for mental/behaviorial health, (2) clarifying the powers of the HHSC commissioner, especially with respect to handling contracts with HHSC, (3) identifying how the HHSC-OIG is to report accountability for fraud detection and its results, (4) clarifying statutory provisions of the state healthcare rules, (5) imposition of fees, and (6) licensing of provider types (direct mention of therapists was not present). Of particular interest in this bill is how it may potentially change the way that the OIG goes about its business of reporting fraud detection and the enforcement of the state’s anti-fraud laws. Additionally, the bill interjects new or clarified procedures that the HHSC commissioner must follow, especially in the area of contract procurement. New definitions of mentally disabled patients or condition is given, as “intellectual disabilities” and of various eligibility criteria for them and with respect to state juvenile custody laws. Imposition of fees for providers applying for state programs is spelled out more clearly, as well as the licensing to be required of certain provider types, such as massage therapists. If a therapy-based organization employs massage therapists as part of their regimen of services, these individuals will have to be licensed appropriately, even if such services may not be reimbursable through Medicaid, according to the bill.

HB550 (F. Price) (House version of SB219), see

HB956 (C. Turner), see, clarifies and makes more detailed the definitions of a claimant (patient or representative thereof) and claim in the case of a possible provider negligence lawsuit in Texas. In the particular context of a Texas therapist or therapy-based organization, a plaintiff can now be a representative acting on behalf of the patient that was allegedly harmed as claimed in a lawsuit.

SB353 (Nelson), see, a Senate bill, and HB649 (McClendon), see; a House bill, both introduced to reign in no-bid  contracting  in  HHSC; something that led to the resignations of Stick and Wilson and the continuing investigations into Stick’s activities with his wife, Wilson’s wife and a mutual political aide  with  Janek. We have chronicled these activities earlier in this portal. Among other things, the bill would  require that a contractor reveal everything about their technologies and methodologies, including any proprietary information,  to  HHSC, and to additionally have a gatekeeper that is independent of the people in the agency that would be assessing the technology of the contractor as well as adequate ethics training for state agency personnel in the contracting bid process.

If the now infamous fraud-detection software of the contractor 21CT that Jack Stick had embraced, had had to reveal such technology, they would have had to clearly demonstrate how the algorithms work under the guise of “graph pattern analysis”, what their proprietary algorithms do, how that would have helped alleviate fraud-detection difficulties, including hastening the process and demonstrate the accuracy of such results to agency technologists and reviewers apriori. The existing patents on those algorithms are already available to the public via federal rules of patenting. One would have, upon closer scrutiny and with some mathematical expertise, surmised that those algorithms are based on others’ work from the past 10 years of industry research, a clearly free resource to the public. In other words, these algorithms could have been coded by contract programmers for the state agencies for a fraction of the $110 million dollar contract. Quantum Decision Research will be publishing to the general public, an analysis of graph pattern analytics (GPA), its current state-of-the-art in academia, and how such algorithms could be used to more quickly surmise patterns of association between business and government entities in transaction histories. One such type of history would be the claims history of a provider with Medicaid. Nonetheless, GPA is not infallible, it could easily lead to false associations, (i.e., guilt by association).

SB89 (Ellis), (see and Trey Martinez-Fisher (House version) to have HHSC follow the expanded Medicaid clause of the ACA and adapt it to HHSC’s Medicaid programs.

There will be other bills introduced pertaining to Medicaid providers and therapists in particular in the coming days. Stay tuned. All bills are being reviewed. As of now they consist of thousands of pages. They will invariably change during the course of the session.