Another Report, … Another Excuse and Therapy Rates – What is Likely to Happen

On Monday the Governor’s highly anticipated and so-called task force report on HHSC was released. Here is a link to that report, Strike_Force_3_26_15. See also the various Austin American Statesman and Houston Chronicle articles today and,  for some of their interpretations. The report outlines a detailed history of the 21CT contracting process with HHSC via Jack Stick’s involvement. It is both scathing and critical, while at the same time, minimalist in its suggestions for improvement and for whom to blame. It points out that Commissioner Janek was essentially out of touch with the contract processes. It does not mention other contract troubles including the AT&T debacle and a state hospital collapse. In addition, it recommends that the consolidation of the various state health departments go slowly as the current state of HHSC is tumultuous and sensitive to disruption.

The timing of this report is questionable in many ways. First, the Senate Sunset Commission, led by Senator Jane Nelson, had already recommended that the consolidation plan go slowly. Was this report or its conclusions leaked to these legislators ahead of the general public because it seems that the Senate commission’s earlier released statements matched perfectly with the report’s conclusions about consolidation. Secondly, the report stops short of recommending Commissioner Janek’s termination. Many are suggesting that his close ties to the current political power structure in Austin is what is keeping him from being released now. His tenure expired in February, but no new commissioner has been appointed by Governor Abbott yet, even though the Governor had stated that he would make a decision about the Commissioner when the report was filed. Would a fresh commissioner start with a fresh approach to the problems of HHSC (contracting processes and the optimal consolidation) or does the Governor let Commissioner Janek complete the cleanup while at the same time being part of and originally docile to it?

The proposed reduction in the state biannual budget for Medicaid ($373M state and nearly $870M federal) proposed in the Senate Finance Committee’s amended SB 1 Article II Rider 51 “Cost Containment” language and the direct mention of therapy as a place to consider (but no direct mention of numbers), has many worried about possible rate cuts for therapy providers this time around. One thing to keep in mind is that the legislators cannot directly dictate therapy rates – that is the job of the HHSC. However, the legislators can mention (as it did) that therapy may be a place to consider partially for cost containment. If the $200M figure is correct as a “therapy target”, as stated before in this blog, it would represent an overall 14% reduction in biannual therapy services spending based on the last 2 years of therapy claims paid in the state and 16% of the “burden of cost containment” for Medicaid overall for 2016-2017.

This time around, HHSC has a flawed report on Acute Care Therapy Services to wave. In that report, if taken literally, it seems that all evaluations and very few treatment codes would be subject to reductions. A rate reduction, if implemented, may then be applied unevenly to all codes. Additionally, there is no direct mention of how the distribution of a rate cut would be applied to the therapy delivery models, (i.e., home health therapy, independents, and ORF/CORFs). This last point is an old and still very sensitive issue within the therapy services businesses in Texas. This would also be a way to turn a particular delivery model even more against another, as has been the case for the last few years with varying rate cuts applied to the different delivery models. This may therefore be the ultimate goal and weapon that the anti-therapy troops have in store in Austin.

HB 1 (and later HB 2), the House’s versions of the budget bills, is being debated on the House Floor today. After that, SB 2 will be debated on the Senate Floor. Yesterday, 3/30/2015, the House introduced an amendment to HB 1 that is in line with the Senate Finance Committee’s Rider 51 “Cost Containment” Amendment to SB 2 in that it explicitly mentions the HHSC/A&M report to bring therapy rates in line with “industry” standards. Again, if the report is taken literally by legislators, without regard to its authenticity, utilizing the exaggerated ratios of Texas therapy rates to the report’s other states’ rates (11-state Truven subset) – for some therapy codes (especially evaluations) that would mean an up to 44.64% rate reduction for the SLP evaluation 92523 alone and 38.46% and 41% reductions respectively for PT and OT evaluations (97001 and 97003). The treatment codes fair much better, possbily with no reductions. Again, these are based on flawed and selection biased statistics.

Since this bill is currently under debate, you need to contact your representatives staffs and legislators now. It should not be allowed to go for a vote since most legislators will not be privy to the inaccuracies of that study.