Texas IG Approves Free Fraud Detection Tool

Stuart Bowen, the current Inspector General in the Tx HHSC, has approved the use of a free downloadable statistical software tool from the federal OIG, RAT-STAT, to be used in the state’s OIG fraud detection scheme. Contrast this with the debacle of the 21CT software which costs upwards of $20 million, gave hundreds of false positives emanating from bad claims extrapolations and specious associations, was championed and promoted by Jack Stick, the former Deputy IG, under FBI and DOJ investigation, for over a year now and praised and applauded by the majority party in the Texas legislature in various state hearings.

RAT-STAT is a software toolkit built in the late 1970s by federal OIG developers, used to randomly select claims for auditing and further statistical analysis, in combating fraud. The idea behind RAT-STAT is simple and is based on basic statistical sampling techniques. RAT-STAT permits the calculation of a suitable audit sample size and the sampling from a population of items based on pseudo-random number generation. It can then perform a statistical analysis on those samples. It was written using the old Visual Basic programming language and is based on 1970s, albeit valid statistical research. Therein lies two problems, (i) the updating of statistical and machine learning algorithms and research since and (ii) the need for human intervention in performing the sampling, stratification, and interpretation of the statistical analysis afterwards. Probe sampling needs to be done on the universe of claims from a provider to initially feed appropriate parameters to the software in order to have a chance at generating a valid sample size for the purpose of a statistically accurate targeted audit.

Nonetheless, RAT-STAT is a free downloadable package that is available to the general public. Providers have the opportunity to self-audit their claims using the software, as a due-diligence stage in their compliance program. SynerImages is available to help you in utilizing this tool for your compliance program. We have improved on the RAT-STAT package and can give other alternatives, (i.e., R-based tools, etc.) using more modern tools and research.

Texas’ 3rd Court of Appeals Overturns Therapy Injunction

This morning, in a surprise move, the Texas 3rd Court of Appeals (http://www.txcourts.gov/3rdcoa/about-the-court.aspx) overturned the injunction against the Tx HHSC. This court is an all-republican one and overturning the injunction appears to be an attempt to unify their political approach in all things Texas. Because of the nature of the appeals process in Texas and because of SCOTUS’s decision on Medicaid-reimbursement related federal cases, all appeals to the Texas Supreme Court and federal courts may be minimized. The scheduled injunction trial for April 25, has been canceled and the attempt to enjoin Superior in the injunction will probably not go forward as well.

The CMS, however, can be a final arbiter in this case because of their jurisdiction as pertains to all states’ Medicaid programs. They have shown a large interest in this case and the SCOTUS decision also exposed certain compromising attitudes in cases of inadequate states’ Medicaid reimbursement rates. This is a major setback for all therapy providers in Texas and indeed, in the nation. It appears to be political in nature and points to a concerted effort by some to minimize, eliminate or marginalize services for Medicaid children in Texas.

Now is the time to think political. Compromising over this issue has been fruitless as this juggernaut attempt by some in the Texas legislature to dismiss Medicaid in Texas has reached a pinnacle in its insidiousness against Medicaid children and recipients. The general election of 2016 will prove to be pivotal in changing the landscape of the Texas legislation. Medicaid providers must take part in this attempt if Medicaid children are to have any chance of survival. The Texas 3rd Court of Appeals has only two seats that are on the ballot this election year and both are republicans running unopposed. By contrast, both Texas Houses have numerous seats to be decided. When assessing political candidates, ask them what their stances are on Medicaid therapy. Obtain pledges from them (when possible) to help defend Medicaid therapy. When you notice that those who have opposed Medicaid therapy are running unopposed, encourage opposition. Lastly, educate the public about what these cuts will mean for them – even if they are not Medicaid recipients.

Now is also the time to re-think your strategies for your therapy business – staffing, insurance contracting, efficiencies, and your client portfolios. We will have more on this and any appeal attempts. The main point is this – the Tx HHSC therapy Medicaid proposal rates of October 2016 will govern all MCO discount rates and all of your business motives – even if your primary portfolio is not Medicaid because all insurance discount rates will be based on the new prevailing Medicaid rates (PMR).

On the issue of what rate proposal Tx HHSC would be implementing, if final appeals (if any) are defeated or CMS cannot proceed with an order to the Tx HHSC to cease – it is unclear. The Tx HHSC could very easily decide to propose and implement their lower-rated 10/1/2016 proposal, as opposed to their original 9/1/2016 proposal. They may also try and release a brand new proposal. If the Tx HHSC decides to implement the 10/1/2016 proposal or a new one, they would need to have a public hearing – requiring another 2 months or so for notification of and conducting a public hearing. At this point and barring any immediate movement from CMS or the plaintiffs filing an appeal with the State Supreme Court, the Tx HHSC can essentially do anything they want with the rates. They may be feeling a new empowerment as a result of this political assault on Texas children. We will keep you posted on their latest movements.

Finally, there has been a large amount of confusion as to what the Superior deeming letters mean for those that have received them. What about the question of those currently at lower contracted discount rates, (i.e. those at 50%, 60%, etc of the PMR)? Will they get raises to 70% of the PMR for assistant therapists’ coding? Definitely not. What about those getting cut to 75% (70% for HCSSAs)? Will those be for non-assistant therapy billings only? Will the 70% for assistant therapy coding be discounted off their current contracted rates or off the PMR?

As a result of discussions and written communication with some of their regional reps, it seems that Superior is trying to make the following universal policy in their networks:

  • the “preferred” therapy provider will be reduced to 75% (70% HCSSAs) of the PMR for non-assistant therapists’ coding,
  • the “non-preferred” therapy provider will stay under 75% (70% HCSSAs) of the PMR for non-assistant therapists’ coding,
  • all therapy providers (both “preferred” and “non-preferred”) will be reimbursed at the lesser of 70% or the current contracted discounted rate, of PMR for assistant therapists’ coding only.

“Preferred” therapy provider here means therapy providers that are in underserved or “therapy provider-unsaturated” regions. However, all this may be moot because Superior (and other Medicaid MCOs) may let Tx HHSC dictate the final contracted reimbursement rate based on the implementation of their lower-rated proposal after the injunction attempt. The 70% discounted rate for assistant therapists’ codings will probably stand no matter what proposal is implemented.


The Tx HHSC commissioner, Chris Traylor, has announced his resignation effective May 31, 2016. He would have been at the head of the agency for only 11 months and come September when a new commissioner is appointed, will mark the fourth commissioner the Tx HHSC has had in the past 4 years. See the Dallas Morning News article today on his resignation for more detail, including his possible successor at http://trailblazersblog.dallasnews.com/2016/04/chris-traylor-is-leaving-as-texas-social-services-czar-next-month.html/. His resignation becomes especially curious since the decision from the appeals courts against the injunction may cause an anticipated showdown with CMS and others. The TX HHSC has suffered from continual controversies through the reigns of Tom Suehs, Kyle Janek and now, Chris Traylor.

Supporting the Injunction … Fighting Back and Protecting Texas Children and Therapy Providers

This week marks the beginning of the most important month for Medicaid therapy in Texas and possibly in the nation. At stake is the very fiber of the therapy industry in Texas Medicaid and hence for most other payor options. The amended injunction that now includes Superior Healthplans as a co-defendant will be ruled on by the injunction presiding state district judge, Tim Sulak tomorrow. On April 25, the injunction will be finally ruled on as well.

At this point, in a united front, therapists and therapy businesses in Texas should consider the uniform support of this injunction. There is a website dedicated to the support of Texas Medicaid children receiving therapy and the injunction. Visit the website HTTP://PROTECTINGTEXASKIDS.COM to support this cause.

Texas legislators, including state Sen. Jane Nelson, R-Flower Mound and state Sen. Charles Schwertner, R-Georgetown who have supported the Tx HHSC and managed care MCOs to reduce the reimbursement rates for Medicaid therapy services, have justified these actions as being a stop-gap effort to curb state overspending on an increased number of therapists in the state.  Additionally, they remain defiant in their claim that therapists in Texas are overpaid – this despite the debunking of the Texas A&M study that the school itself has distanced itself from and is now in the midst of proving the opposite in another study.

Consideration of the effect of the markedly increased Medicaid market in the state which would most assuredly have caused the increase in therapists was not investigated as a cause-and-effect by the Legislature nor in any of its healthcare subcommittees. Moreover, the loss of therapy services because of a reduction of therapists through the implementation of these rate reductions, either through Tx HHSC’s base rate reduction proposals or the discounted rates being offered by Texas MCOs for Medicaid therapy services, will mean only one thing – the future deterioration of the health of Texas Medicaid children and hence the long-term debt in spending to relieve that highly probable health epidemic. The so-called $135 million gap produced by the sustainment of the current Medicaid therapy rates would easily be paid by a small fraction of the Texas Rainy Day fund.

The underlying political question emanating from the microcosm of this reimbursement struggle appears to be the will of the legislators to continue to maintain and support the Medicaid therapy program in Texas, (i.e., reimbursing for any therapy services for Medicaid recipients).

As Predicted … Medicaid Therapy Reimbursement War Shifts to Medicaid MCO Landscape

Last year (2015), we had predicted that because the TxHHSC was finalizing the shift from Medicaid Fee-for-Service to near 100% Managed Care Medicaid per the Legislature’s mandates, the reimbursement wars would likewise shift from TxHHSC rate reduction proposals to MCO-contracted discount rate policies. TxHHSC is in the midst of a landmark injunction against its latest rate reduction proposal with a more-than-likely final trial period set for April 25-29, 2016. This trial, so far, has not gone well for TxHHSC. Repeated appeals from TxHHSC have been vehemently denied by the presiding judge. In a reimbursement strategy that appears to endeavor to circumvent legal requirements, the Texas contracted MCOs, including now, the largest Medicaid MCO, Superior, have proposed to dramatically reduce the effective reimbursement rates for many Texas Medicaid therapy operations to come in line with the range of 75% of the prevailing Medicaid rate (PMR) for office settings (OPT/CORF/independent clinics) and 70% of PMR for therapy home health.

Effectively, if one has an operating MCO contract that reimburses above 75% (for office settings) or above 70% (for therapy home health) of the PMR respectively, discount rate reductions are being proposed to put current rates on par with the 75% (70%) of PMR range. For those that have contracts reimbursing below those figures, no change upwards is forthcoming. It appears, therefore that Superior (and other Texas Medicaid MCOs) is targeting to contract Texas therapy providers in the range of 49% to 70% of PMR for therapy home health and 50% to 75% of the PMR for therapy office settings (ORF/CORF/independent clinics) since the smallest contract discount rates we have observed have been 50% of PMR. It remains to be seen if all contracted Texas Medicaid MCOs will follow suit as many have had a policy of larger reimbursements, but harder to obtain authorizations and slower follow through with smaller networks and therefore, closed networks to new providers entering the market in most Texas HHSC regions.

Additionally, in an attempt to distinguish the usage of personnel who do render therapy care, the new policy requirement of special coding for therapy assistants’ work in treatment billing, the assistants’ work will be reduced a further 70% of those new contracted rates. The irony of such circumstances is that these reductions for assistants will be far worse than the reimbursement proposal of 10/1/2015 from TxHHSC that is currently being blocked by the injunction – the equivalent of 49% (52.5%) of the PMR respectively for home health (office settings) for those to be at 70% (75%) of the PMR for regular billing. For those already below those contract rates, say at a discounted rate of R% of the PMR, assistants’ work will be reimbursed at 70% of those rates or (0.7)R% of the PMR.

There may be a double irony here as well. MCOs who contract with the TxHHSC (and the Texas taxpayer) are obliged to keep access to care open and clear for Medicaid recipients in Texas. This is partially achieved by having adequately sufficient provider networks and coverage throughout Texas and to provide Medicaid recipients with the quality of care and access to it with sufficient education towards that end. However, by dramatically reducing provider reimbursement, MCOs endanger access to care by the threat of reducing the size of those provider networks through unreasonable reimbursement contracts. The question of adequate access to care was at the center of the arguments in the current injunction proceedings. Will this argument then be shifted to the apparent apparatus being proposed by Texas Medicaid MCOs’ reduced reimbursement contracts?

This new potential argument becomes confounded by the state requirement that a contracted MCO cannot profit beyond a certain net margin (2%) with a simultaneous ceiling on administrative overhead. If the TxHHSC’s intention was to shift the burden of therapy services overhead back to the provider, despite any potentially favorable outcome of the injunction towards the provider, through the actions of the MCO, then that action may represent a usurping of that injunction. How is managed care power displayed by the anti-business effects on providers from instantaneous MCO contract adjustments balanced fairly by the market and our social safety net of Medicaid rules?


The plaintiffs in the injunction have amended their suit to now enjoin (added as a co-defendant) Superior. The presiding injunction judge will be hearing arguments to this amendment next week. It appears through various interviews with providers and others, but not proven conclusively, that Superior may have taken their cue from the TxHHSC’s insistence on lowering therapy reimbursements rates in exchange for continuing their state contracts as a Medicaid MCO. Additionally, there is anecdotal evidence and personal discussion that Superior may have been informing therapy providers that TMHP had told them to lower their reimbursements in conjunction with the roundup of new policies that would include the new modifier code for utilizing assistant therapists.

The two allegations against Superior sighted above, if true, may point to a collusion to circumvent the current injunction. While presently, these allegations are unsubstantiated from lack of clearly written and oral evidence from Superior, TxHHSC, and TMHP, they would, nonetheless, represent a grave legal usurpation of the injunction and subsequent development in the Medicaid therapy reimbursement struggle in Texas.

Additionally, the flat 70% discount rate for utilizing therapy assistants seems to be a uniform change among all new participating MCO contracts. It remains to be clarified if the 70% discount is towards any new reduced contract rates or to the PMR. We have received conflicting information on this interpretation. This is an important distinction since the difference between these two interpretations could be up to 22.5% of the PMR for therapy office settings and 21% of the PMR for therapy home health at the 75% (70%) new rates respectively. For those at the lowest contracted rate of 50% of the PMR, the new assistants’ billing will be at (.7)(.5) = .35 (35%) of the PMR. This lowest reimbursement would be one of the lowest Medicaid rates, if not the lowest rate, in the nation and substantially lower than the Medicare rate, in any event. It would, in all likelihood, represent not only an unreasonably low reimbursement for the therapy business but a clear indication of an intent to endanger access to therapy care, that is a crucial concomitant treatment for children, for Medicaid recipients in Texas.


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: RADAcuteCare@hhsc.state.tx.us.

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 https://www.hhsc.state.tx.us/rad/rate-packets.shtml.

TX HHSC Therapy Policy Changes – Some Further Interpretations and the Hearing

The proposed changes to Medicaid therapy policy changes released by TX HHSC last week and of which public hearings are being conducted for today in Austin include dramatic changes to the authorization process, periods, and requirements, home health limitations and personnel tracking. Many were not discussed with stakeholders prior to their release.

Previous blogs discussed these major changes. However here we go into some detail and interpretation.  The most prominent and affecting changes pertain to therapy home health. Home health therapy timed units are proposed supposedly to better equate work done between the delivery models. However, no equalization was mentioned for transportation involved in such delivery of therapy.  Also no at-risk component was given. Furthermore, equating therapy in such manners may violate certain statutes of home care given in prior injunctions and the TAC. Therefore timed units for home therapy will be problematic.

Additionally, home-bound medical necessity was, once more, vaguely outlined, solely put in terms of the medical necessity of such limitations, to be dictated by the referring physician.  The “inconvenience” of the family or beneficiary was exclusively eliminated as a legitimate reason for home therapy. Does “inconvenience” include all degrees of socio-economic disadvantage such as lack of funds, transportation or extenuating family circumstances involving multiple family members that would need other types of simultaneous supervision and/or care?

Assistant therapists are now required to use a special billing modifier (“UB”) when they render services. Obviously, the motive for this was to track their usage in the eventual hope of revealing any type of usage pattern in the state towards more economical healthcare, (i. e., reimbursing less for those services). Ironically, therapy businesses have needed to utilize assistants more because of rate cuts. This is a circular and insidious argument used by HHSC to track assistants usage. Instead, one could simply utilize the NPI of the supervising vs assistant therapists rendering those treatment services.

Co-treatment scenarios have been more clearly defined and tightened, and requirements for billing such services assigned. The modifier (“U3”) must be used in co-treatment scenarios.

The threshold for medical necessity for authorization under chronic cases for speech therapy in developmental delay now becomes a std dev. of 1.6 or below from a “norm” (using norm-referenced standardized tests) on at least one subtest of the assessment test rather than the more inclusive 1.2 std. dev. range. Is this requirement now based on the “therapy expertise” within HHSC, (i.e., practicing therapy within Texas without a therapy license on behalf of all of HHSC actuaries and analysts)? Even when the beneficiary is tested below this new threshold, the referring physician must review and approve it as a means to prove medical necessity.

Authorization periods were shortened so that the therapist is now relegated to obtain more frequent referral source signatures and checks for therapy service extensions. Without good referral source liaisons, this will burden the continuity of therapy care process in legitimate cases, further making it difficult to retain the beneficiary’s plan of care compliance.

HHSC’s public hearing on the therapy benefits changes proposal has come and gone with, once again, impassioned and deliberate testimonials. One can still submit your electronic testimony to HHSC by September 11, 2015. Although we are all aware of the lower weight that HHSC is now giving public hearing testimonials under their rigor of a budget cut ransom versus more direct methods such as legal and federal interventions, we highly encourage all to submit your thoughts and more importantly, your alternative solutions to HHSC by that deadline.


TX HHSC Drops Appeal to Therapy Rate Proposal TRO, but …

Yesterday, in less than 10 minutes in court, lawyers for the TX HHSC declined o continue their appeal to the plaintiffs TRO and injunction merit case. What this essentially means is that TX HHSC will restart their rate analysis in order to come up with a suitable rate reduction proposal for therapy services in Texas Medicaid – one that, mind you, must not result in an access to therapy care problem for Medicaid beneficiaries and must use a constitutionally appropriate methodology. In addition, according to a steadfast HHSC spokesperson yesterday, will meet legislatively mandated budget cut requirements in full. This will be a tall order since all those financial, numerical, and social policy constraints are inconsistent and counterintuitive.

In an immediate pushback from TX HHSC and some legislators, it was made clear that a subsequent new therapy rate cut proposal will include the use of other states’ Medicaid rates and historical trends. There is only one problem with this plan – these data were inconsistently collected and abused by the TAMU-SPH study and the follow up HHSC interpretive summary report – the same means that were challenged in court by the TRO.  In order to meet the LBB’s stringent and last minute budget constraint specifically targeting therapy, a corresponding rate cut would have to lead to access to care problems via a massively reduced therapy workforce in Texas – proved by none other than the TAMU-SPH study. This presents with a circular conundrum for HHSC. This time around, will a new and truly scientific study be done with the input of relevant therapy industry experts? This smacks of a reasonable logic and throwing a small amount of money towards finding a non-biased answer to the truth behind the worth of therapy for Texans, hence, no such announcement of such future action was made by the TX HHSC.

Additionally, in a pounding-of-the-chest, bravado moment for HHSC, after the court adjournment, an overzealous announcement was made that the full force of the budget cut would be used for the next redo of a therapy rate cut proposal. This was clear politically motivated rhetoric – something that a supposedly politically neutral state agency should, at least, not be exposing so venomously (internal politics are human nature). As a state agency, it should directly serve the states’ constituency and not a handful of politicians and their staff. Alas, this is fantasy in our currently charged policy-biased environment.

What holds for the future of therapy in Texas after this initial tug-of-war? Will HHSC once more, test the will of the courts, the therapy industry, and it’s people against the force of a majority party backed and hastened LBB requirement? One must observe that the LBB is not a publically elected body and its credentials are not clearly shown to that public. The therapy cut budget was crafted in little less than one night under the pressure of a legislative deadline. A special session could have been called for in order to give sufficient time to display a more actuarially responsible budget proposal for the Medicaid therapy budget. Instead, it was hurried up to force the therapy industry and Medicaid beneficiaries to haul a large disproportional  brunt of the state’s budget deficit – the sins of years passed overspending in other nonessential areas and favors given to others.

Texas Therapy HHSC TRO/Injunction Hearing Postponed and the Real Reasons Behind the New Therapy Benefits Policies

The hearing in the Travis County TX District Courts to decide on the therapy TRO-to-temporary injunction status against TX HHSC has been postponed until Wednesday, 08/26/2015. This comes as no surprise as the courts have had a large caseload and the parties involved are holding large amounts of information in their dealings with each other – nearly 2,300 documents of which one was the alleged redo of the therapy rate reduction proposal from TX HHSC.

To the point of the new proposal from TX HHSC on therapy benefits policies, the real hit comes to home health therapy services because the bar to prove medical and home-bound healthcare necessity was raised, as well as billing in timed units. In terms of equating untimed to timed units codes and billing, home health therapists would now have to service a beneficiary for at least 53 minutes to recover a full untimed code reimbursement. Because of these added obstacles to home therapy care, there may be more legal wrangling to come with respect to these therapy benefits policies. The public hearing scheduled for these policy changes in Austin on 8/31/2015 can produce quite different takes on these issues and once more, present with a division within the therapy services industry in Texas and elsewhere. More directly, adding these restrictions to the benefits policy changes, more than therapy stakeholders had suggested earlier in their talks with TX HHSC, may add another schism in the industry between therapy delivery models – a divide and conquer strategy.