TX HHSC To Implement 2015 Proposed Therapy Cuts on 12/15/2016

The Texas Health and Human Services Commission (TxHHSC) has proposed that they will be implementing their October 2015 proposed Medicaid therapy services reimbursement cuts to all therapy models in Texas on December 15, 2016. TMHP has also posted the new rates to be effective that date. Download the rates at TMHP rate release. See the Texas Tribune article for the statement released by the TxHHSC. This action follows the lifting of the injunction against TxHHSC by the 3rd Court of Appeals and the refusal of SCOTX to hear the case recently.

More specifically, the 2015 proposal reflected an approximate reduction to speech code 92507 (the most utilized therapy treatment in Texas Medicaid) of 28%, 25.75%, 15.15%, and 8.25% for OPT-CORFs, HH, individual-HH, and individual-office respectfully, a 25% reduction to all therapy evaluations (for all therapy delivery models and disciplines), and a 3.44% reduction to most PT/OT treatment codes. After a preliminary analysis, we have estimated that the weighted average Medicaid rate cut to therapy codes for OPT/CORFs will be 17.45% based on 2015 utilization data from the TxHHSC. For home health agencies, this weighted average is 15.2% and for general rehabs/individuals, the weighted averages are 9.96%/5.9% (home/office).

To make things even more difficult for therapists and Medicaid children needing therapy services and to present a more accurate picture of the true effective reimbursement rate for therapists in Texas, the Texas-contracted MCO provider discount rates being given to therapists in Texas are compounded with these to-be implemented Medicaid rate reductions. One must multiply the TxHHSC rate cut with MCO discount rate cuts to display the effective rate after MCO reimbursement. Since all of Texas Medicaid will be under the umbrella of managed Medicaid MCOs, that effective rate will be the final Medicaid rate. For example, if one has an OPT/CORF clinic contract discount rate with an MCO of 75%, the speech code 92507 will be approximately reduced by 1 – (.75)(1-.28)=.46 (46%) of the current prevailing Medicaid rate (PMR) pre-12/15/2016. Moreover, if speech assistant therapists are utilized to treat patients, an added compounded discount of 70% will be applied to that code reimbursement. In this case, for code 92507 treated by an assistant, the Superior rate would then be reduced by 1 – (.75)(.72)(.70) = 62.2% of the current PMR. These are sub-Medicare and sub-commercial insurance rates for the more severe and work intensive treatment of pediatrics.

To this effect, there are indications from Superior that when the new Medicaid rates are implemented, they will reconsider their contract discount rates with therapy providers that were in place before July 1, 2016 and were above 75% for office clinics and above 70% for home health agencies. However, the compounded discount for utilizing speech assistant therapists was not mentioned. There is no independent and written confirmation of this as yet, but we will continue our investigation of their reimbursement policies post 12/15/2016. Superior did release two notices to that effect in July 2016. See here and here for those notices. Regardless, many providers were at sub-65% discount rates with Superior and other MCOs are issuing sub-90% discount rates before July 1, 2016. For example, most new state home health agencies (Texas HCSSAs) as of 2016, have been issued Superior contracts at the 50% PMR discount rate. United Healthcare is issuing contracts at the 90% PMR discount rate for many therapy clinics.

At this juncture, the only agency with legal authority to intervene in the TxHHSC implementation of cuts would be the federal DHHS CMS (CMS). In order to initiate this intervention, CMS must first conclude their review of the TxHHSC’s SPA (state planned amendment) for the rate cut proposal. To bring credibility to this effort, all interested therapy clinics and agencies should contact CMS via the previously published contacts in this blog to give testimonials and hard statistics about their local access to care (therapy services) problems with Medicaid and the MCO programs. Recently, there have been reported long delays (waiting lists of over 3 months to treat children), and in some cases improper denials of authorization to treat from Superior and other MCOs. This phenomenon has occurred simultaneous to their drastic discount rate reductions implemented on therapists on July 1, 2016.

Firstly, while this may seem to be a difficult task to achieve, all therapy clinics and agencies should insist on MCO contract rate re-negotiations looking to the proposed Medicaid rate reduction on December 15. To initiate this, we have provided a sample letter which you may send to your MCO regional office to request such a re-negotiation meeting. The KEY point to requesting these re-negotiation meetings is to ostensibly display an access to therapy services problem for the MCO patient in your clinic, including reporting long waiting lists to treat because of changes in state agency and MCO authorization policies and a compounded reimbursement rate reduction that will lead to a significant staff contraction thereby creating a reduction in MCO patient population for that therapy entity. Giving hard numbers and statistics to these MCOs is also key to proving your case.

With that said, one must contrast how therapists in Texas must prove beyond any doubt, their statistical worth and that of their Medicaid patients, while the CEOs of the Texas-contracted managed Medicaid MCOs, by issuing terse statements to the public and the courts that their networks are more than adequate with the proposed cuts (Driscoll and Superior specifically) without any evidence displaying adequacy of their therapy provider network to the public, are legitimized by legislators and the TxHHSC. The MCOs are essentially black boxes when it comes to network adequacy transparency and the TxHHSC has not initiated any investigations into examining their network adequacy. Insurance companies such as the managed Medicaid MCOs in Texas are held to a must lower standard of network adequacy by the Texas Department of Insurance (TDI) that is not sufficient using Medicaid requirements.

Secondly, it must be proclaimed that Texas legislators are solely responsible (see the prior blog on the overwhelming vote for Rider 50) for this overreaching problem that will assuredly cause massive access to therapy services problems in Texas. Everyone should aggressively contact their state officials (state representatives and state senators) and demand that they help to prevent the actions of the TxHHSC and the state contracted MCOs in regards to the to-be implemented Medicaid therapy services rate cuts. Many of these legislators are up for reelection in the next two years. Remind them of such.  This grassroots effort must be made in order that the Texas therapy industry and the children of Texas have a fighting chance of survival. UPDATE: The Speaker of the House, Joe Strauss just announced that the cuts were a “mistake” and that the new legislative session will try and reverse the cuts. See the quorum report. This opens up the possibility for a real fight during the next session over therapy rates. Rep. Strauss, were he to keep his word, introduce changes to the rate cut legislation (Rider 50) in the Appropriations Committee during the last stages of the legislative session in June 2017. With that said, any changes could only be implemented later in 2017, best case scenario. Additionally, Lt. Gov. Patrick, Senate Budget Committee Chairwoman Nelson and Senators Kolkhorst and Schwertner would heavily lobby against removing the cuts, as they have continually stated. Governor Abbott could also veto such changes if it was not passed by a two-thirds (2/3) super majority margin.

Finally, this crisis presents with an opportunity for each therapy business to diversify in their clientele by including a wider spread of patient types, including Medicare, Medicaid, private commercial contracts, cash-pay discount programs, Texas Worker’s Compensation program, military insurances, and large employer contracts.