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.