TX HHSC Therapy Policy Changes – Some Further Interpretations and the Hearing

The proposed changes to Medicaid therapy policy changes released by TX HHSC last week and of which public hearings are being conducted for today in Austin include dramatic changes to the authorization process, periods, and requirements, home health limitations and personnel tracking. Many were not discussed with stakeholders prior to their release.

Previous blogs discussed these major changes. However here we go into some detail and interpretation.  The most prominent and affecting changes pertain to therapy home health. Home health therapy timed units are proposed supposedly to better equate work done between the delivery models. However, no equalization was mentioned for transportation involved in such delivery of therapy.  Also no at-risk component was given. Furthermore, equating therapy in such manners may violate certain statutes of home care given in prior injunctions and the TAC. Therefore timed units for home therapy will be problematic.

Additionally, home-bound medical necessity was, once more, vaguely outlined, solely put in terms of the medical necessity of such limitations, to be dictated by the referring physician.  The “inconvenience” of the family or beneficiary was exclusively eliminated as a legitimate reason for home therapy. Does “inconvenience” include all degrees of socio-economic disadvantage such as lack of funds, transportation or extenuating family circumstances involving multiple family members that would need other types of simultaneous supervision and/or care?

Assistant therapists are now required to use a special billing modifier (“UB”) when they render services. Obviously, the motive for this was to track their usage in the eventual hope of revealing any type of usage pattern in the state towards more economical healthcare, (i. e., reimbursing less for those services). Ironically, therapy businesses have needed to utilize assistants more because of rate cuts. This is a circular and insidious argument used by HHSC to track assistants usage. Instead, one could simply utilize the NPI of the supervising vs assistant therapists rendering those treatment services.

Co-treatment scenarios have been more clearly defined and tightened, and requirements for billing such services assigned. The modifier (“U3”) must be used in co-treatment scenarios.

The threshold for medical necessity for authorization under chronic cases for speech therapy in developmental delay now becomes a std dev. of 1.6 or below from a “norm” (using norm-referenced standardized tests) on at least one subtest of the assessment test rather than the more inclusive 1.2 std. dev. range. Is this requirement now based on the “therapy expertise” within HHSC, (i.e., practicing therapy within Texas without a therapy license on behalf of all of HHSC actuaries and analysts)? Even when the beneficiary is tested below this new threshold, the referring physician must review and approve it as a means to prove medical necessity.

Authorization periods were shortened so that the therapist is now relegated to obtain more frequent referral source signatures and checks for therapy service extensions. Without good referral source liaisons, this will burden the continuity of therapy care process in legitimate cases, further making it difficult to retain the beneficiary’s plan of care compliance.

HHSC’s public hearing on the therapy benefits changes proposal has come and gone with, once again, impassioned and deliberate testimonials. One can still submit your electronic testimony to HHSC by September 11, 2015. Although we are all aware of the lower weight that HHSC is now giving public hearing testimonials under their rigor of a budget cut ransom versus more direct methods such as legal and federal interventions, we highly encourage all to submit your thoughts and more importantly, your alternative solutions to HHSC by that deadline.


TX HHSC Drops Appeal to Therapy Rate Proposal TRO, but …

Yesterday, in less than 10 minutes in court, lawyers for the TX HHSC declined o continue their appeal to the plaintiffs TRO and injunction merit case. What this essentially means is that TX HHSC will restart their rate analysis in order to come up with a suitable rate reduction proposal for therapy services in Texas Medicaid – one that, mind you, must not result in an access to therapy care problem for Medicaid beneficiaries and must use a constitutionally appropriate methodology. In addition, according to a steadfast HHSC spokesperson yesterday, will meet legislatively mandated budget cut requirements in full. This will be a tall order since all those financial, numerical, and social policy constraints are inconsistent and counterintuitive.

In an immediate pushback from TX HHSC and some legislators, it was made clear that a subsequent new therapy rate cut proposal will include the use of other states’ Medicaid rates and historical trends. There is only one problem with this plan – these data were inconsistently collected and abused by the TAMU-SPH study and the follow up HHSC interpretive summary report – the same means that were challenged in court by the TRO.  In order to meet the LBB’s stringent and last minute budget constraint specifically targeting therapy, a corresponding rate cut would have to lead to access to care problems via a massively reduced therapy workforce in Texas – proved by none other than the TAMU-SPH study. This presents with a circular conundrum for HHSC. This time around, will a new and truly scientific study be done with the input of relevant therapy industry experts? This smacks of a reasonable logic and throwing a small amount of money towards finding a non-biased answer to the truth behind the worth of therapy for Texans, hence, no such announcement of such future action was made by the TX HHSC.

Additionally, in a pounding-of-the-chest, bravado moment for HHSC, after the court adjournment, an overzealous announcement was made that the full force of the budget cut would be used for the next redo of a therapy rate cut proposal. This was clear politically motivated rhetoric – something that a supposedly politically neutral state agency should, at least, not be exposing so venomously (internal politics are human nature). As a state agency, it should directly serve the states’ constituency and not a handful of politicians and their staff. Alas, this is fantasy in our currently charged policy-biased environment.

What holds for the future of therapy in Texas after this initial tug-of-war? Will HHSC once more, test the will of the courts, the therapy industry, and it’s people against the force of a majority party backed and hastened LBB requirement? One must observe that the LBB is not a publically elected body and its credentials are not clearly shown to that public. The therapy cut budget was crafted in little less than one night under the pressure of a legislative deadline. A special session could have been called for in order to give sufficient time to display a more actuarially responsible budget proposal for the Medicaid therapy budget. Instead, it was hurried up to force the therapy industry and Medicaid beneficiaries to haul a large disproportional  brunt of the state’s budget deficit – the sins of years passed overspending in other nonessential areas and favors given to others.

Texas Therapy HHSC TRO/Injunction Hearing Postponed and the Real Reasons Behind the New Therapy Benefits Policies

The hearing in the Travis County TX District Courts to decide on the therapy TRO-to-temporary injunction status against TX HHSC has been postponed until Wednesday, 08/26/2015. This comes as no surprise as the courts have had a large caseload and the parties involved are holding large amounts of information in their dealings with each other – nearly 2,300 documents of which one was the alleged redo of the therapy rate reduction proposal from TX HHSC.

To the point of the new proposal from TX HHSC on therapy benefits policies, the real hit comes to home health therapy services because the bar to prove medical and home-bound healthcare necessity was raised, as well as billing in timed units. In terms of equating untimed to timed units codes and billing, home health therapists would now have to service a beneficiary for at least 53 minutes to recover a full untimed code reimbursement. Because of these added obstacles to home therapy care, there may be more legal wrangling to come with respect to these therapy benefits policies. The public hearing scheduled for these policy changes in Austin on 8/31/2015 can produce quite different takes on these issues and once more, present with a division within the therapy services industry in Texas and elsewhere. More directly, adding these restrictions to the benefits policy changes, more than therapy stakeholders had suggested earlier in their talks with TX HHSC, may add another schism in the industry between therapy delivery models – a divide and conquer strategy.

TX HHSC on different therapy cuts, sort of, comes back with double whammy for therapy

This week two interesting and curiously timed announcements emanated from TX HHSC – released therapy benefits policy changes and a disclosed internal memorandum submitted to the courts pertaining to a redo of a proposal for Medicaid therapy rates in relation to the current TRO in effect, first reported by Quorum Reports (http://quorumreport.com/quorum_report_daily_buzz_2015/updated_document_shows_new_proposed_medicaid_cuts__buzziid24195.html) and scheduled for a hearing on 08/24/2015 for a ruling to impose a temporary injunction against the release of the current proposed therapy rate cuts.

TX HHSC has scheduled therapy policy benefits changes that were crafted based on a mandate from the State Legislature (SB 2 Rider 50) to specifically reduce the therapy Medicaid budget by $25M per year for the next biennial. There were ten recommendations that were submitted by stakeholders including SynerImages, of which many managed Medicaid MCOs are already implementing. There were, however, a few surprises including no further reimbursements for re-evaluations and home health timed unit billing. Recommendations were made for both acute and chronic caseloads. One may download these new proposed therapy benefits changes at http://www.hhsc.state.tx.us/medicaid/MPR/index.shtm.

What actually transpired with the therapy benefits changes was that TX HHSC used the most stringent therapy benefits limitations imposed by all other states and combined them producing this new therapy benefits policy. Texas was already implementing one of the most stringent therapy benefits policies in the nation. These changes will essentially overshoot achieving the annual $25M annual savings. More specifically, this change alleviated much of the risk that TX HHSC was facing with assuming budget savings from these therapy benefits changes, shifting that risk to therapy providers instead, (i.e. therapy providers must now implement more stringent overhead processes for the continuation of authorizations and subsequent treatments).

Authorization periods were shortened from 180 days to 120 days (total) and 90 days to 60 days (initial). More stringent definitions of acute and chronic cases and medical necessity, were also given. Re-evaluations will no longer be reimbursed. Home health billing will be based on timed units. Further requirements involve limiting high frequency and duration criteria for cases, use of assistants, and new co-treatment description requirements. In general, for the average therapy case, authorizations will be tighter and their periods shrunk.

Notwithstanding TX HHSC’s denial of a new rate proposal emanating from a disclosed internal document submitted to the courts this week, the alleged memo points to a new methodology to be used based on the TAMU-SPH study’s median of the Truven 11-state Medicaid paid rates (T11-SM). Firstly, the TAMU-SPH study does not mention median rates, only mean rates for comparisons. Secondly, the alleged interim memo is inconsistent with the TAMU study and HHSC’s own first interpretive report of it, citing different payment comparative ratios between the current Medicaid rates and the T11-SM rates.

In the alleged interim proposal, speech code 92507 would be reduced by 10.48% and 8.48% respectively for ORF/CORF/ind(office) and home health/ind(home).  All other codes would be reduced by 15% if the resultant amount would be above the T11-SM rate. Otherwise, the code rate would be reduced by 3.75%. The main difference between the 9/1/2015 effective proposal and the alleged interim one is that all codes will now be reduced. We will follow up with a more detailed analysis between the two proposals and if anything has been gained or lost from the hearing testimony, and political and legal pressure.

The TRO hearing on whether to implement a temporary injunction against HHSC is still scheduled for 08/24/2015. All these issues and more will be presented to the preceding judge to interpret and rule on.

The Beginning, …. chess moves to the middle of the board and a TRO for Texas Therapists

On August 11, 2015, plaintiffs consisting of four therapy providers and numerous Medicaid beneficiaries filed a temporary restraining order (TRO) against Executive Commissioner Chris Traylor (aka the TX HHSC) in order to halt the implementation of therapy rate cuts effective 9/1/2015. In point of fact, legal representation for the TX HHSC at the Travis County court in which the order was filed, stated that  the TX HHSC had “no intention” of stopping the implementation of these rate cuts. Hence, the final rates would have been released this week as is. See the beginnings of the media frenzy here http://www.texastribune.org/2015/08/11/families-disabled-children-sue-texas-over-medicaid/, the plaintiffs’ press release here HearingSet.PR, and a copy of the filed TRO here tro-petition-texas-therapy-2015.

The TRO is actually far reaching in that it does not simply ask for the restraint of implementing those rate cuts across all delivery models, but points to the possible negligence of the state in utilizing an unconstitutional (Texas) Medicaid fee schedule rate methodology and of not utilizing objective means in commissioning a study for the use of appropriate assigning of rates for therapy. Instead, the Tx HHSC commissioned a study (from TAMU-SPH) using limited agenda and scope and incomplete and possibly faulty data, assumptions, and subsequent conclusions that were not part of the study. Further to this, HHSC released a secret communique to legislators during the last legislative session, stating their proposals to meet biennial budget constraints. The affecting Rider 50 language in SB 2 had not been written yet. None of those suggestions were precisely implemented in their final rate proposal.

We now have at least, two smoking guns to ponder in this opera. First, some data that was given to TAMU-SPH researchers, legislators, and therapy stakeholders from 2009 to 2014 may have been faulty or incorrect. Discrepancies exist between the supposed spike from Medicaid therapy utilization increases between 2011 and 2012 and natural Medicaid population dynamics. The numbers cannot be explained from using only natural population and/or provider increases. Extrapolating this increase while holding the number of beneficiaries to their natural increases during that time would have had to have resulted in a tremendous increase in servicing and billing therapists in the thousands in Texas (utilizing then current authorization policies). This means that up to around 10,000 new therapists would have had to have been employed and billing regularly during that year. Contrast this with the total number of employed therapists (OTRs, PTs, and SLPs) during 2014, around 30,720 (11,670 SLPs). That number would have been appreciably less during the period 2011 to 2012. This stretches the possibilities beyond any reasonable scenario or subsequent epiphenomenon.

Second, the TAMU-SPH study was doomed from the start because researchers were told not to collaborate with stakeholder providers about protocols used, nor were they possibly given correct data to begin with. Couple these situations with the fact that the billing protocols from other states were not cleared up in order to do head-to-head comparisons, the study never had a chance of coming close to being objective. In addition, the TX HHSC used the incomplete study (the efficacy and efficient part of the study was never finished) to create their own agenda-based report that TAMU-SPH has distanced themselves from – a not-so-scientific paper to others, including legislators and certain stakeholders.

So, while we have now heard both shoes drop (one from the TX HHSC rate proposal and the other from the stakeholder/advocacy TRO against it), this saga continues to plague the TX HHSC. A TRO will turn into a temporary injunction should the TX HHSC not or ineffectively appeal to the judge on 08/24/2015. If this should happen, then hearings will be scheduled for follow-up appeals and replies from both sides towards a permanent injunction. Consider that the Frew injunctions lasted over 12 years in and out of courts. This TRO can only be filed in the state as SCOTUS ruled last March that an individual cannot sue a state over Medicaid reimbursements in federal court. SCOTUS however, left open the ability to sue (file an injunction) in state courts and to CMS to equalize (interject on behalf of individuals) a state in order to remedy such  disputes based on the conditions of Medicaid amendments to the Social Security Act of 1965.

The TRO contends that the TX HHSC used an unconstitutional methodology to set the current rate proposals, (i.e., it is based on a 2012-2013 Texas median commercial rate fee schedule – 145% on average of them, instead of based on governmental rates such as percentages of Medicare, Medicaid, or combinations thereof, etc.). Additionally, it states that the TAMU-SPH study was at a minimum, based on flawed data and assumptions. In order for these issues to be resolved, the study would need to be deconstructed (once more) and the data re-wrangled by data experts and verified. Also, the TAC (Texas administrative code) pointing to the Texas Medicaid Rate Methodology (TMRM) must be examined to determine the appropriate “formula” to use.

There are two TAC Medicaid fee schedule rate methodologies, one based on non-geographic relative value units or resource-based reimbursement fees (RBRF), similar to CMS’s RVU-based formulary, and the other on access-based reimbursement fees (ABRF) or the ability of a service to be historically rendered in a proper setting based on availability of providers and equipment in the state. See TAC388.8085_rule and also our prior discussion of the state constitutional methodologies that are not being used back on 3/2015, prior discussion on methodology (see the second paragraph after point no. 12)

On the surface, neither one appears to resemble anything TX HHSC utilized to come up with their 145%-Texas-median-commerical-based rates. HHSC used this particular metric because the TAMU-SPH study researchers were asked to calculate such rates (median thereof of all various Texas commercially paid rates for therapy) as a means of comparison with the current Texas Medicaid rates. One would then guess that HHSC used 145% because the ratio 1.45 was an average ratio of  a therapy Medicaid rate to the corresponding median commercial therapy rate or at the least, was a ratio that made sense based on a weighted average ratio using weights that were relative utilization frequencies (based on most used codes) and would achieve the additional $50M savings per year. If this was indeed the approximate methodology used then it would behoove HHSC to publish it. HHSC’s motive might have been that the 1.45 ratio would better serve providers than a ratio based on Medicare rates or the TAMU-SPH study’s Truven 11-state median paid rates. Of course, any small enough ratio of any fee schedule would be damaging and so, what were the alternatives to HHSC using other states’ Medicaid fee schedules (or central tendency estimates of them thereof) or CMS’s Medicare fee schedule (which are used in calculating floors for commercial rates as percentages of the Medicare RBRVS) as baselines (or combinations thereof) for their rate proposals? Also, commercially paid therapy is simply administered differently than government subsidized paid therapy. There is more overhead in administering Medicaid claims than commercial claims (think pre-authorizations and more stringent medical necessity requirements in a 100% managed Medicaid scenario by next year). Therefore, the cost of servicing Medicaid therapy patients may be more expensive than servicing commercial or private therapy patients.

One other question should be asked of these calculations – was all commercial payer data used to calculate these median commercial rates and if so, how was the data wrangled in order to make sense of the gaps and discrepancies in certain data items in commercial claims? The study does explain some of these “data wrangling methodologies”, but it is inconclusive on the uniformity of it, (i.e., some things were sweep under the rug as anomalies that could be statistically smeared out). The plot thickens and the saga continues, but there may be more than just injunctions impressed on the TX HHSC – there may need to be subpoenas issued in order that the data be properly vetted and verified. At this point in its recent history, can the TX HHSC avail itself to objectively vet its own analysis and data collection? These are issues (among many others, including the precarious condition of Medicaid beneficiaries in the state) that the preceding judge will have to ponder over in future interim and final rulings.