Original TAMU Therapy Study Received by QDR

Yesterday HHSC released to QDR as a result of a Texas Open Records request: (1) the original TAMU Acute Care Therapy Study, (2) the contract between HHSC and TAMSPH (Texas A&M Health Science Center School of Public Health), and (3) the report given to legislators from HSSC proposing changes based on the TAMU study and the targeted $200M reductions in Medicaid therapy.  Our very preliminary analysis has revealed many conceptual and practical gaps in the TAMU study that HHSC relied on unscrutinized and that was selectively reported directly to legislators resulting in Rep. Bonnen’s HB 1 amendments to reduce therapy reimbursement rates to “industry standards” and its subsequent partisan passage in the State House. It is now poised to be passed in the State Senate and in the followup Senate/House conciliation committee. We will be releasing our extended study of true national published therapy rates, in conjunction with a critical analysis of the orginal TAMU study later this week.

In the meantime, a preliminary analysis of the TAMU Therapy study reveals:

  1. It was assumed that (re)evaluations do not need pre-authorizations in Texas (wrong). This fortunately did not change their overall opinions about the authorization process in Texas (it was favorable compared to other states), but it could have further shown that Texas’ authorization process for therapy services is stricter than other states’ authorization processes.
  2. Bundled claims were not unbundled for Texas therapy claims when pitted against other states’ claims, especially with respect to ST service bundles, (i.e., CPT 92507 was not unbundled from other ST codes in Texas Medicaid claims and was essentially treated as one whole ST CPT code cost, see item 3 below).
  3. Claims summary cost was not unbundled as claims line costs (per CPT code billed) and were compared to other states’ unbundled claims line costs giving the gravely mistaken impression that certain Texas therapy codes were paid more than other states corresponding codes.
  4. Gross margin analysis, (i.e., estimating the net profit made by a therapy business per CPT service billed) was done based on 2013 labor data (therapist wages, etc.) against older 2010 to 2012 claims data in some analysis – therapists were paid more in 2010, 2011, and 2012 than in 2013, 2014 and now in 2015! FYI, I published a paper (and talked about this in our 2012 conference) directly showing the mathematical effect on a therapy businesses’ gross profit margin (GPM)  from rate reductions, as a percentage, not as a net profit – the percentage is a better overall indicator of the profitability and health of a business.
  5. Their conclusions about what Texas HHSC regions bill more for certain CPT codes was antedoctal based on their assumptions about rural vs urban populations, with no information used on regional differences in cost-of-living, childhood epidemics of autism, diabetes, obesity, etc., (i.e., it is flawed based on an incomplete and possibly naive view of regional economic and health issues). Particular prejudice was applied to urban and border regions.
  6. Their own conclusions state that ORF/CORFs doing ST services will lose money to the tune of negative net gross revenues  if either a 1% or 5% rate reduction is executed. The same does not hold for PT/OT services and for independents doing HH or HHAs (they would still remain with positive net gross revenues). In fact, had TAMU used percentage gross margins (the better indicator of business health), all delivery models would suffer severe decreases in GPM, to the point of disfunctionality, with any modality type receiving rate reductions and hence a universal decrease in access to Medicaid therapy care.
  7. Overall, the TAMU study points to several results favorable to the Texas therapy industry that were not mentioned by the HHSC interpretive report on it, (i.e., the good news was not mixed in with the bad news in the HHSC report) and to that given to legislators who in turn, based their flawed legislation (budget bill amendments) on it.
  8. HHSC heads and anti-therapy legislators are not interested in debating the merits of either the TAMU study or of the HHSC interpretation report of it. They simply want to use the $200M budget reduction number as a means to an end in placating to rate reductions and corresponding decreases to access to Medicaid therapy care. Medicaid dollars are simply being shuffled between physician and therapist coffers in the real budget flow. This is the sad case of legislators trying to break up any alliance between Medicaid providers on behalf of the most vulnerable in the State – Medicaid and needy children and women.

Again, we will continue to analyze the results of the TAMU study with a more comprehensive and alternative approach to measuring therapy modalities, place of service effectiveness, delivery models, and utilization patterns, with an overall critique of the study. In the meantime, it is put up or sh** up time for your respective legislators. HHSC is in discussions with therapy advocates and they are targeting a rate reduction unless enough pressure is put on them and legislators to reconsider this pointless action and the effect on access to therapy care in Texas. As responsible therapy business owners and advocates for Medicaid children, it is vital that you contact your representatives and HHSC and speak out against these seemingly proposed cuts. Is is now or never and then 9/1/2015 (the usual rate reduction effective date for HHSC) will be here and it will be too late to talk to anyone, advocate or not.