Strike Two … Judge Upholds Temporary Injunction on HHSC’s Therapy Rate Cuts

On Monday, the State, for the HHSC, filed an appeal to the state court in Travis County to both dismiss the TRO and to have the judge rule that he could not preside over the case because of jurisdictional purposes. The judge, Tim Sulak, refused both appeals. Then on Tuesday, in the continuation, the judge ruled on upholding the temporary restraining order as a temporary injunction, further damaging HHSC’s case for going forward with the therapy rate cuts. The State will almost surely appeal, but this process, because of the evidence and clarifying data needed and of possible restrategizing, will be a long haul, anywhere from 3 to 9 months. The burden of persuasiveness to the court is now fully on the side of the State on behalf of the HHSC in its defense against a permanent injunction, which the plaintiffs are requesting.

At least two things were made clear in this round of judgment, (1) the State did not bother to display any real quantitative evidence of access to care impact problems as a result of implementing the cuts – throwing that back to the plaintiffs to prove and (2) the State threw back the blame for this lack of evidence to the TAMU-SPH study. As reported by others, TAMU fought back and said it was not told to do that in the study parameters provided by HHSC. In addition the rate analysis methodology was still questioned by the judge – there was no clear display of how the cuts were calculated using any of the appropriate and allowed means in the Texas Administrative Code (TAC). As pointed out here in an earlier article, rate methodology can be access-based or resource-based. The HHSC implemented neither of these two approaches when first using state commercial median rates and then a random (and unknown) 11-state Medicaid median rate panel.

The most ostensible part the State’s defense of HHSC’s tactics was their insistence that therapists should be the ones to show access to care impact and not their own analytics teams. This means that the therapy industry, not given timely access to all raw data by HHSC for the last few years, had to have figured out if the numbers pointed to economic instability in the industry and therefore access to therapy care shortfalls in the state without adequate state data being made available to them – essentially shooting in the dark with the HHSC not bothering to give a mere flashlight to look for the data. This is not what prior injunctions have told the HHSC to do – they themselves must show that no access to care problems would persist under certain rate conditions – as the past court-upheld series of Frew injunctions directed.

This brings to the front now, the issue of the second cost-cutting proposal that the HHSC has put forth – the so-called therapy benefits policy changes slated to be implemented in January 2016. HHSC has established a second stakeholders meeting to look at four specific items in that proposal, including the medical necessity bar of a std dev. of 1.2 in standardized testing in order to qualify for some therapy regiments (ST). None of the home health changes were mentioned and hence the timed unit conversion is still “on the books” to be implemented. This will likely trigger another TRO on behalf of the home health therapy industry.

In the meantime, the State has various options to go forward with their rate cut proposal. They could appeal to the court based on some other issue that may challenge the court’s jurisdiction in fiscal matters (not likely since that one was struck down) or they could do another retreat and proposal another rate reduction package using a legal methodology, but with large cuts. The later will be hard to do without an access to care impact study and these types of studies take a lot of time as they are dependent on long-term causes and changes within the communities affected.

In the midst of all our analysis of the situation, it stubbornly and simply comes down to our humanity, to what was pointed out to me yesterday by a client (and has been pointed out in this blog before), a “tragedy of the commons” economic problem and to the mistaken notion by many politicians and analysts that it is a zero-sum game. No one wins when many that are less advantaged than us go the way of the forgotten. It haunts both our internal appeals to goodness and fiscal responsibility. The cost of noncompliance, of neglect, in this case, the well being and maintenance of less advantaged children, is magnitudes of orders larger than the cost of implementing their care, especially put in the light of our plentitude in our state coffers. Those not wanting to know that cost by their apathetic view that it will either not or should not affect them, do not know the dynamics of the complex economics of our society and how it intrinsically ties back to their existence on the streets and in their places of occupation. By letting others fork the “bill” for such things leads to their own demise in the form of a less passionate and functioning society within the realms of commerce.

While visiting a client in Austin yesterday and as we awaited word of the TRO trial, just minutes away in a state courthouse, as I approached my car, I was greeted with a scenario in which a very determined mother of two disabled children was struggling to prepare them to be wheeled into the rehab. Without a thought (as any of you would have done), I ran to offer my help, in any small way she would accept. Her proudness had forced her to say she was fine (as she certainly was – as she had done these tasks countless times and was a regular part of her life struggles). At that point, we both made a silent determination that I was merely a very small and temporary extension of her and my help was as much for me as it was for her and her two children. She accepted my offer and we both wheeled those two extraordinary young people up the ramps and into the rehab. Among the many things that impressed me was her preparedness – she had all the children’s notes, props, and tools on the wheelchairs, ready to take out and use during their therapy regimens. She then thanked me, but the thanks had to go to her and her children instead for their continued fight to be part of all our lives, wherever we are and whom we are. They are the opposite of burdens – they are essential to our own saneness and self-worth. They are necessary for us to go forward in our own lives, facing our own very small challenges. This is the essence of the fight to keep therapy care going for them and really, a vital mental and psychological therapy for us to conquer our bumps in life. We are all evidently syneristic in our internal struggles. Therapy is a large part of our future investment for our own survival.

Letters to Write to Both the Texas LBB and the Federal CMS About Proposed Rate Cuts

With the recent activity of the rate cuts, it is as important now as anything else to write to those who can influence outcomes, regardless of the final rates that will be released, negotiated, or settled in court. Have your patients (parents of Medicaid beneficiaries and/or friend/advocates of them) and your working therapists write letters to CMS (email below) and the Texas Legislative Budget Board (LBB) (website below) with testimony about how a rate cut will endanger access to care for them on a personal level or to their patients.

Members of the LBB were the individuals, that with the approval and guidance of the legislative compromise committee members handling the final budget bill passed (SB 2), crafted behind closed doors, the language of SB 2 Rider 50, which in turn, gave the TX HHSC guidance on how much to cut from the Medicaid therapy services budget for the 2016-2017 biennial.

CMS contact:

Bill Brooks

CMS – Region 6

Associate Administrator for Medicaid and Children’s Health Operations
1301 Young Street, Suite 1124
Dallas, TX 75202

Letters to LBB:

Also, if you are not going to attend the public hearing on the latest rate proposal from the TX HHSC, you can instead submit electronic testimony (just as effective as in-person testimony) to:

We do, though, encourage all to attend and testify to HHSC about these this latest rate cut proposal:

TX HHSC Swings Back, .. Releases New Therapy Rate Reduction Proposal Redux – Same Data, … Same Story

As was expected, today TX HHSC released their redone Medicaid therapy rate reimbursement reduction proposal to be effective October 1, 2015 with a public hearing scheduled on September 18, 2015 in Austin. Each code reimbursement was reduced based on an over-under 150% of the Truven 11-state median Medicaid therapy rates (T11-SM) methodology as published in the TAMU-SPH study.

Preliminary analysis shows that if a current code reimbursement rate was over that threshold (1.5*T11-SM), it was reduced by anywhere between 25% and 28%. Otherwise, the rate was reduced by approximately 3.44% (ORF/CORFs), 4.68% (HH), and 3.46%  (Inds) respectively. There were a few exceptions for seldom used codes. All therapy disciplines were affected. All evaluations were reduced by 25% across all delivery models and disciplines.

The ave (weighted ave) rate cuts across all disciplines were ORF/CORFs 13.19% (17.49), HH 12.16% (15.18), Inds – home 12% (9.96), and Inds – office 11.36% (5.91) respectively.  The weighted average cuts were calculated based on code utilization in Texas (percentage of total Medicaid therapy budget spent on a code service during the last fully collected fiscal year’s data). On the surface, this reduction appears to affect the ORF/CORF delivery model sector disproportionately. Again, CPT 92507 was cut the most based on a relatively high utilization pattern – 27.93% (ORF/CORFs), 25.75% (HH), 11.12% (Inds – home), and 9.83% (Inds – office) respectively.

If one calculates across disciplines (again for each delivery model), one gets the following ave (weighted ave) cuts: For ST services – ORF/CORF 18.19% (27.93%), HH 17.9% (25.75%), Ind (HH) 16.73% (15.15%), and Ind (office) 15.96% (8.25%). For OT/PT services combined – ORF/CORF 11.96% (6.83%), HH 10.68% (3.5%), Ind (HH) 10.81% (4.68%), and Ind (office) 10.21% (3.51%).

Without regards to delivery models one obtains the following ave (weighted ave) cuts: ST 17.18% (19.27%), and OT/PT 10.91% (4.88%). Finally, across all disciplines and delivery models one obtains the ave (weighted ave) cuts: 12.18% (12.12%). The average median cut across all delivery models and disciplines was 3.76%.

This proposal from HHSC to cut rates is once again, an attempt to equalize across therapy service delivery models without regards to delivery model costs and comparative effectiveness and efficacy. We will be publishing a more thorough analysis of this proposal later next week. In the meantime, it is certain that the prior TRO case will be reopened as the original one was never closed when the judge refused to sign anything that HHSC put forth. Separate from this is the distinct possibility that another TRO will be filed against the proposed benefits policy changes as well. Again, we will be publishing any updates on these developments as they happen, probably by next week.

Let us look at this rate reduction in the perspective of the state and personal budgets. The State Comptroller has estimated that Texas will collect total revenues (general and federal) of approximately $220.9B during the 2016-2016 biennial. The approved budget spending during that same time period is $209.4B. The projected surplus during the next biennial is then $11.5B. The proposed rate cuts, along with the proposed benefits policy changes are projected to save at least $150M during that time period. The percentage of the projected surplus that the therapy savings will be is approximately 0.013%. By losing less than “14 thousandths of one percent” of the surplus already projected, we would preserve and/or improve the health maintenance of over 144,000 Texas Medicaid children that received therapy care in the past year. This would equate to less than $1,042 per Medicaid therapy beneficiary to cover two years or an average of less than $43.40 per Medicaid therapy beneficiary per month during that period. If just half of the current Texas census (not even counting tourists and visitors) each bought approximately $173.35 more in sales-taxed consumables in the state during the next two years or less than 23.75 cents per day for the next two years, this would more than cover that $43.40 Medicaid state therapy PMPM (per member per month) cost. Even when accounting for proportional Medicaid therapy roll increases due to natural population increases during the next two years, that per diem amount would stay well under 25 cents. This perspective should be enough to display the ludicrous nature of this attack on therapy providers and Medicaid beneficiaries in Texas.

Please keep in mind that these rates are a proposal only, subject to scrutiny by the courts, the public, and the politics, and to the first point, the TRO will be reopened because of it. You can download the new rate proposal packets at