The Waiting Game …

As of today, TX HHSC had not released their proposed Medicaid rate cut schedule for therapists – this in view of the currently held injunction that will hold up until at least June 7, 2016 by rule (regardless of the 3rd Court of Appeals overturning) and new TX HHSC Commissioner, Charles Smith’s declaration in a town-hall meeting held last week on May 19, 2016 in McAllen, that the “rates” would be released in 7 days. The agency usually releases rates on a Friday or Monday (barring holidays). If this holds up, then this Tuesday, May 31, 2016, may prove to be the day for the release of the rate schedule since this Monday is a federal holiday. Nonetheless, the release may see other delays due to the TX HHSC’s reconsideration of rate calculations and more importantly, its possible implementation may be even more put off for tactical or legal reasons.

The other relevant question that remains is, “what will be the percentage rate cut of the current schedule?” TX HHSC may use the logic that the rate cuts must be larger than the September 2015 proposal to “make up” for the 9 months of not implementing a cut due to the current injunction. Those proposals were to yield savings of slightly less than the legislatively mandated $150 million for the biennial. On the other hand, a larger cut than that present in the September or October 2015 proposals would open up the prospect of a more ostensible cause of access to care problems than is already there. Therein lies the real problem for TX HHSC throughout this struggle. CMS regards their new rule regarding access to care as a post-cursor to the SCOTUS decision last year that private individuals could not sue state’s Medicaid programs for reimbursement schedule changes, (i.e. if one could not sue a state, then that state must show that a change to their reimbursement rate would not lead to access to care problems).

It is also not clear if another party would intervene with a legal block to any new TX HHSC rate proposal, given the lack of evidence on HHSC’s part in showing no harm to access to (therapy) care post rate reduction. Wrap this around the fact that Superior and other Medicaid MCOs in the state have begun implementing their own reduced discount rates that will further lower the “effective rate” schedule for therapists to an average of less than 70% of the prevailing Medicaid rate (PMR). So, we now have the prospect of a TX HHSC rate proposal that will reduce rates on top of the MCO discount rate wave – leading to effective rate cuts of over 50% for most therapists in Texas. This would present with an obvious access to care problem because of the subsequently reduced therapist population and industry in Texas.

If this was the scheme all along that majority-led legislators in Austin and Medicaid MCOs had in eliminating any therapy overhead in Texas, it will eventually backfire because no TX HHSC study or objective Medicaid MCO network analysis exists showing a lack of access to care problems post rate cuts. Medicaid MCOs would have to open up their “actuarial black-boxes” in order for the federal government to confirm their claims of “no harm to access to care”. The TX HHSC would not demand that of these Medicaid MCOs because it would be against their “rate cut” agenda interests even though they are now required to by federal Medicaid rules. Additionally, Medicaid MCOs have exhibited badly updated therapy provider directories for Medicaid patients. This only exacerbates an already existing access to (therapy) care problem. If Medicaid MCOs’ proof of adequacy of therapy provider networks is their respective currently published directories, then they are lacking.

Regardless of the legality, ethics, and politics of any proposed Medicaid therapy rate cut, many therapists are wondering what can currently be done in the form of an analysis of cost-cutting in order to stay viable or to, at the least, recover a reasonable percentage of their investments. Some consolidation of the industry may also be possible in the mix of certified rehab clinics, home health agencies, and individual therapist groups (general rehabs) in the state. Regardless of the outcome of the effective rate schedule, a robust therapy business in Texas must now diversify its client rows through various product offerings and solidify its portfolio of participation contracts. Cash pay discounts to patients can also serve as an alternative in its client portfolio. Medicare, private insurance, and other alternative state programs must also be considered in their portfolios. Consider adding new service products such as behavioral analysis which support your therapy regimens. SynerImages is now offering behavioral analysis consulting for therapy businesses. Lastly, review your staffing needs, especially with the therapy policies becoming effective. Assistant therapists must be made aware that the effective Medicaid rates will take into account at least 30% discounts for assistant therapist-coded services (the minimum of your current network contract rate and 70% of PMR). Medicaid MCOs have essentially disenfranchised assistant therapists in Texas.

Rate cuts are not the only problem facing therapy businesses. As of May 1, 2016, new therapy policies have gone into effect, including, and as mentioned above, the reduction of assistant therapist-coded claims to the lesser of your current network contract rate and 70% of the PMR. Authorizations will require more work in order for them to be obtained and in some cases, levels of severity of the condition of the patient have been elevated to prove medical necessity. We refer to these three aspects of attack – TX HHSC rate cuts, Medicaid MCO discount rate cuts, and artificial policy tightening – as the triple threat of 2016 to therapy businesses, the Medicaid patient, and the citizen of Texas. All the time that therapy rate cuts have dwindled down reimbursements in the last few years, Texas AGs (Abbott and Paxton) have sued the federal government to prevent women’s healthcare, LGBT rights, environmental protection, and more universal health insurance. It has cost the taxpayers of Texas at least $6 million in legal costs to do such (up to present cases). This figure would have translated into a slightly more modest therapy cut – breathing room for the Medicaid patient and therapist.