TX HHSC Releases New Therapy Medicaid Rate Proposal Amendment and Notice for July 1, 2016

In a move meant to give short forewarning to providers and patients in Texas of Medicaid cuts, the Tx HHSC released a public notice today that outlines their proposed amendment to the Medicaid Fee Schedule for therapy. We have now learned, directly from the HHSC rate analysis team that that proposal will be based on the October 1, 2016 proposal that was also blocked by the current injunction. In that proposal, each CPT rate is to be cut based on whether it is currently higher than 150% and by how much, of the 11-state median rate as published in the now defunct Texas A&M study. Those rates lower than that threshold were to be cut by lesser amounts. You can download that proposal (for each therapy provider type) at http://www.hhsc.state.tx.us/rad/rate-packets.shtml. Those rates reflect the following patterns: cuts to evaluations – 25%, cuts to ST treatment – 28%, and cuts to most OT/PT treatments – 25%. The average cut was 13.2% (OPT/CORF), 12.2% (HH), and 11%-12% (independents). The weighted average cuts (based on utilization rates in Texas) were 17.5% (OPT/CORF), 15.2% (HH), and 6% – 10% (independents).

Additionally, the TX HHSC is proposing not to inform CMS of those cuts, for their consideration, until the 90-day Medicaid rule period has elapsed – around the end of September 2016. We have received conflicting information on that intent. Currently, the injunction has not been officially lifted because the 3rd Court of Appeals has not issued a mandate to the original court. On Tuesday, the plaintiffs filed an appeal to the 3rd Court of Appeals decision to the Texas Supreme Court. With this, the injunction should be extended until that case is heard in the highest court of Texas – a legal precedent. So, it comes as a surprise that TX HHSC, knowing this, posts an effective date of July 1. 2016 for their rate proposal, bypassing any public hearing because one was given back in September 2015 for that proposal.

When the TX HHSC informs CMS of the cuts they must, by Medicaid rules, show compelling evidence of no danger to access to care via credible studies and data analysis. This was not shown in the original court case, nor has it been shown since. Moreover, cuts to discount rates coming from all Medicaid MCOs to therapy businesses have not been considered, nor have the effects of the recent therapy policy changes. Evidently, these events point to the triple threat of MCO discounts, HHSC rate cuts, and tightening policy changes – a Cerberus-effect (a Greek mythological three-headed dog monster guarding the gates of hell) on access to therapy care in Texas that it cannot recover from anytime soon, if so implemented.