The Truth With Therapy Rates, Legislative Updates Affecting Therapy, the HHSC Metamorphosis, and a Sticky Place for Stick

After consideration of the HHSC-Strategic Decision Support subgroup report on the Texas A&M School of Public Health’s data study on Medicaid acute therapy rates, one wonders if conclusion and selection biases were present given the agenda that the study was predicated on. What was at stake was a result that would support and make a decision to implement rate and/or authorization process adjustments easier to execute. The HHSC report concludes with an already produced suggestion for bringing Texas rates closer to their limited median 11-state rates (the A&M Truven Health Analytics 11-state medians for published and paid rates) given the study data and the current supposed Texas Medicaid shortfall for the biannual projections.

In this vein, two questions surface – (1) how is the Medicaid shortfall calculated and what are the savings that have been produced so far from the prior therapy rate cuts, therapy authorization process adjustments, and increased Managed Medicaid therapy population, and (2) what if the A&M study utilized a complete states’ dataset for all therapy rates that are applicable in each state of the nation, further using utilization rankings of each code, (i.e., what therapy codes are being paid most frequently in Texas and elsewhere) and the manner in which Medicaid therapy is paid in each state, (i.e., the effect of multiple programs that cover eligible Medicaid therapy populations in each state)?

QDR has finalized their collection of all other states’ applicable published Medicaid therapy rates (40-states/territories). This collection is the complete dataset of all states’ published rates and requires no statistical estimation as did the Truven dataset. Our conclusions paint a very different picture even without considering how Medicaid therapy is paid in each state and through which subprograms of Medicaid in those states and their rate utilization profile (ranking the utilization and frequency of payment of therapy codes). The claims-paid datasets for all applicable states (states that pay for subsets of all Medicaid therapy services) will still need to be obtained from Truven Healthcare Analytics as a paid-for service to compare paid-rates ratios. QDR has submitted a Texas Open Records Act request to obtain the A&M study and data collected from Truven, as well as the contract between HHSC and A&M, and the HHSC report to the legislators pertaining to their suggestions based on the 2/25/2015 HHSC therapy rates report. A copy of this request letter can be provided upon request.

The QDR 40-states/territories dataset reflects a more comparable Texas rate schedule. For example, for ST treatment codes, Texas significantly underpays therapy providers compared to the national average or median (Texas rate/national ave rate < .68). In the A&M data study, ST evaluations were compared using the old 92506 ST eval code, instead of the unraveled four ST evaluation code set of 92521, 92522, 92523, and 92524. Equating 92506 with 92523 (as Texas did), Texas ST evaluation rate ratios (Texas rate/national ave rate) are within 50%, i.e. (1.4). PT/OT evaluation rate ratios are approximately at 2.0. PT/OT treatment rate ratios are under 2.3. These ratio averages/medians do not take into account utilization profiles for Texas, (i.e., what codes are overwhelmingly paid more frequently and their respective ranks among all paid codes). If these utilization rates are used as well as harmonized with the multiple ways states pay for therapy services, the modified average/median ratios would be significantly lower and approach 1.0, (i.e., Texas pays the effective national average/median rates for therapy considering true utilization ranking). The completed QDR analysis will be completed by April 10, 2015 and will reflect those modified ratios. If you would like a copy of the current draft of the QDR analysis, email me with a request at

Parallel to this therapy study report is the now revealed text of the two major budget bills that are being considered in committees in the state legislature, HB 2 and SB 2. In these bills, adjusted Medicaid appropriations juggle resources within Medicaid categories. For example, money is being transported from mental and women’s health to the major acute services Medicaid coffers to the tune of around $280M. Does this mean that therapy is now out of the radar? Not necessarily as the legislation cannot directly dictate rate adjustments. That task is under the purview of HHSC. HHSC may then, regardless of the legislation passed, announce rate and/or authorization policy adjustments this summer, in time for a mandatory public hearing late in August with an effective date of 9/1/2015.

In a separate but important issue, the 84th Texas Legislature is considering bills suggested by the 2014 Sunset Committee (HB 2510, SB202) that may effectively lessen the ability of the SLP state board to control licensing and policy for Texas SLP therapists. Those tasks would be transferred to the TDLR (Texas Department of Licensing and Regulation) with non-SLP board members, relegating them to the licensing control status of Texas electricians and plumbers. This has numerous ramifications for the professional certified SLP in Texas, including possibly having non-SLPs or even non-clinicians, practice speech therapy by dictating speech therapy clinical policy and deciding what an SLP’s and assistant SLP’s ethical and clinical responsibilities should be. A causal effect of this possible legislation would be to extend these changes to the PT/OT board at a later date. The SLP board changes, if implemented, would not take place until after 2017 and  closer to 2019.

We are again hearing the continuing ruminations of the former HHSC lead counsel and OIG Deputy Enforcement Director Jack Stick saga. His former law partner, James Frinzi, gave a sworn deposition to state and federal investigations (FBI) stating that Stick had intentions of advancing financially by promoting the analytics software contractor, 21CT to other states and that he was in constant contact with their executives during this campaign. Of course, Mr. Stick denies such a modus operandi. See In another development, Stick has again obtained a delay in his DWI trial, this time to April 30, 2015. See .  Two and a half years have now past since he was first arrested.

The efforts of Stick’s department to collect from Medicaid fraud cases during his tenure and recently has had a dismal record – a return on investment (ROI) on just the 21CT software (not counting the extravagant badges, chairs, staff time, logistics costs, etc) of -72.5%, that’s a negative 72.5% ROI, and targeted recovery rate of just .55%, that’s point five five percent!  If you or I were running a business based on these numbers, that would equate to a profit margin of -263.6%, that is a 263% marginal loss on just that software! See

Lastly, Texas legislators are apparently backing off on an accelerated schedule for consolidating HHSC and the other Texas healthcare agencies into one mega-organization. Instead, Jane Nelson and others are patching the current version of HHSC with internal groups that are tasked with coming up with better organizational ideas and combining HHSC, DADS, and DARS by next year, with graduated consolidation with the other groups in the next few years. See How will these (gradual) changes affect your everyday interaction with HHSC? Will the department and people-shuffling result in slower correspondence times, application turnaround times, OIG interactions, etc?