The Texas Sunset Advisory Commission has released the staff report for the Health and Human Services Commission and System IssuesA summary follows of Sunset staff ’s recommendations which can also be found in the report link above.

Issue 1
The Vision for Achieving Better, More Efficiently Run Services Through Consolidation of Health and Human Services Agencies Is Not Yet Complete.
In addition to saving money through program cuts and projected administrative efficiencies, the Legislature expected the 2003 consolidation of human services agencies under the direction of HHSC to strengthen accountability by streamlining programs, breaking down cultural and structural barriers, and eliminating fragmentation of services by combining like functions. While partially achieved, this vision is not yet complete.

The creation of the four system agencies as separate state agencies with their own commissioners, budgets, and statutes, within a system led by HHSC results in gray lines of accountability, policy disconnects, and lost efficiency between system agencies. The current system structure also aggravates fragmentation of client services, resulting in divided policy direction and administrative oversight, difficulty for customers to know where to go for services, duplicated administrative services, and unnecessary expenses. Regulatory functions fragmented into their respective agencies may be too closely connected with the programs they regulate and lose the benefits of being grouped together to take advantage of best practices. Management of state hospitals, state supported living centers, and other system facilities are split among agencies, reducing focused attention on similar issues. The system’s organizational structure is also not designed to gain functional efficiencies and presents uncertainty given recent legislative changes regarding Medicaid managed care and behavioral health.

Key Recommendations

  • Consolidate the five HHS system agencies into one agency called the Health and Human Services Commission with divisions established along functional lines and with a 12-year Sunset date.
  • Require formation of a transition legislative oversight committee and the development of a transition plan and detailed work plan to guide HHSC and the committee in setting up the new structure.

Issue 2
Incomplete Centralization of Support Services Deprives the State of Benefits Envisioned in Consolidating the Health and Human Services System.
A key tenet of the reorganization of the health and human services system in 2003 was consolidation of administrative support services under HHSC. Eleven years later, administrative consolidation is still incomplete, resulting in lost opportunities for efficiencies and cost savings. The review focused on information resources, contracting, and rate setting support functions, all still decentralized in various degrees within and outside HHSC, and all absolutely essential to running the system.

HHSC’s Information Technology (IT) division has formal “paper” authority over this area, but that authority has not resulted in clear systemwide decision-making responsibility, sufficient oversight over all the system’s major IT projects, or efficient planning and operation of the system’s IT resources. Although in progress, HHSC has not yet finished development of statutorily required contracting tools, such as a central contract management database, and needs to heighten its level of sophistication to successfully oversee system contracts, amounting to $24 billion in fiscal year 2013. Unlike other system agencies, rate setting for DSHS has not been consolidated at HHSC, presenting opportunities for inconsistent rate setting methodologies and potentially unjustifiable differences in rates for the same or similar services.

Key Recommendations

  • Direct HHSC to further consolidate administrative support services, as defined in a consolidation plan developed by HHSC in consultation with other HHS system agencies.
  • Direct HHSC to improve the accountability, planning, and integration of information technology in the HHS system by consolidating all IT personnel under HHSC control; clearly establishing HHSC IT’s authority for overseeing IT in the system; and preparing and maintaining a comprehensive IT plan.
  • Require HHSC to better define and strengthen its role in both procurement and contract monitoring by completing and maintaining certain statutorily required elements; strengthening monitoring of contracts at HHSC; improving assistance to system agencies; and focusing high-level attention to system contracting.
  • Require HHSC to consolidate rate setting for the HHS system at HHSC.

Issue 3
Fragmented Administration of Medicaid Leads to Uncoordinated Policies and Duplicative Services and Could Place Future Transitions to Managed Care at Risk.
Fragmentation of the state’s Medicaid program among three agencies hinders consistent decision making toward a shared vision, clear communication among staff who share the same organizational culture, and a shared awareness of program problems and how to fix them. This structure also impedes cohesive Medicaid policy changes and program administration, efficient delivery of medically necessary services, and proper administrative oversight. As Texas’ most vulnerable Medicaid populations are about to transition into managed care, the fragmented administration of Medicaid could affect the smooth transition for these critical populations.

Key Recommendation

  • Consolidate administration of Medicaid functions at HHSC.

Issue 4
HHSC Has Not Fully Adapted Its Processes to Managed Care, Limiting the Agency’s Ability to Evaluate the Medicaid Program and Provide Sufficient Oversight.
State efforts to oversee Medicaid services have not kept pace with the state’s movement into managed care. While the state could previously rely on its fee-for-service claims contractor to run data and analyze trends in the Medicaid program, the addition of 21 managed care organizations has made this task more difficult and requires increased sophistication for the agency to identify problems and make needed changes. Other aspects of managed care oversight that have similarly not evolved include monitoring of prescription drug benefits, coordination of managed care audits, inclusion of managed care organizations on certain advisory committees, and development of tools to better monitor billions of dollars in managed care contracts. In addition, having separate a Pharmaceutical and Therapeutics Committee and Drug Utilization Review Board, whose decisions work in tandem, could impede a unified approach with simultaneous decision making to ensure the safe and cost-effective use of prescription drugs.

Key Recommendations

  • Require HHSC to regularly evaluate the appropriateness of data, automate its data reporting processes, and comprehensively evaluate the Medicaid program on an ongoing basis.
  • Adapt processes for the state’s prescription drug program, audits, and advisory committees to reflect the state’s transition to managed care.
  • Eliminate the Pharmaceutical and Therapeutics Committee and transfer its functions to the Drug Utilization Review Board to create a single entity to oversee these related responsibilities.

Issue 5
Fragmented Provider Enrollment and Credentialing Processes Are Administratively Burdensome and Could Discourage Participation in Medicaid.
The state’s lengthy and cumbersome Medicaid enrollment processes and its disconnect with managed care organizations’ credentialing processes cause providers to submit the same information multiple times to numerous different entities to participate in Medicaid, creating an administrative burden for providers and delaying services to clients. In addition, OIG lacks decision-making guidelines for evaluating providers’ criminal history and duplicates criminal history checks already performed by state licensing boards.

Key Recommendations

  • Require HHSC to streamline the Medicaid provider enrollment and credentialing processes.
  • Require OIG to no longer conduct criminal history checks for providers already reviewed by licensing boards, develop criminal history guidelines for checks it will continue to perform, and complete background checks within 10 days.

Issue 6
The State Is Missing Opportunities to More Aggressively Promote Methods to Improve the Quality of Health Care.
HHSC’s three largest quality initiatives are not aligned, limiting the agency’s ability to accomplish meaningful change to improve healthcare delivery in the state. Specifically, quality initiatives for managed care organizations, hospital reimbursement rates, and Delivery System Reform Incentive Payment (DSRIP) program initiatives lack a cohesive vision for improving the quality of health care. Additionally, most managed care providers are paid through a fee-for-service approach, which may incentivize more, instead of necessarily better, care.

Key Recommendations

  • Require HHSC to develop a comprehensive, coordinated operational plan designed to ensure consistent approaches in its major initiatives for improving the quality of health care.
  • Require HHSC to promote increased use of incentive-based payments by managed care organizations, including development of a pilot project.

Issue 7
HHSC Lacks a Comprehensive Approach to Managing Data, Limiting Effective Delivery of Complex and Interconnected Services.
In the course of running hundreds of programs, Texas’ health and human services agencies have amassed more than 200 terabytes of information related to services provided to clients and public health trends — double the amount of everything the Hubble Telescope has sent to Earth. Organizing and analyzing this data has become of national importance in driving efficiency of healthcare programs, outcomes for clients, and planning for the future. However, the system’s highly decentralized approach to data management prevents basic, appropriate uses of information to measure performance and inform key policy decisions. Fragmentation in oversight also creates risk considering the complicated privacy laws and other regulations governing the data, much of which contains protected personal information.

Key Recommendation

  • Direct the Health and Human Services Commission to elevate oversight and management of data initiatives, including creation of a centralized office with clear authority to oversee strategic use of data.

Issue 8
Administration of Multiple Women’s Health Programs Wastes Resources and Is Unnecessarily Complicated for Providers and Clients.
In fiscal year 2014, HHSC and DSHS provided women’s health and family planning services to an estimated 268,109 women through three programs: the Expanded Primary Health Care and Family Planning programs administered by DSHS and the Texas Women’s Health Program administered by HHSC. The programs share similar goals but have distinct eligibility criteria, benefits packages, and administrative structures. As a result, state-funded women’s health programs comprise a patchwork of services that are difficult to navigate and result in unnecessary administrative costs. Programmatic differences also limit useful data comparison to measure the impact of significant legislative investments, problems compounded by the lack of a comprehensive vision for women’s health across agency lines. The programs were developed separately due to different funding sources and related requirements, but recent changes in state funding and policy provide, for the first time, an opportunity to improve service and efficiency for clients, providers, and the state.

Key Recommendation

  • Require HHSC to establish a single women’s health and family planning program for the health and human services system.

Issue 9
NorthSTAR’s Outdated Approach Stifles More Innovative Delivery of Behavioral Health Services in the Dallas Region.
An outdated model for delivery of behavioral health services for clients in the Dallas area hinders more holistic care for clients and misses opportunities to expand funding for behavioral health services. While the rest of the state is moving to integrate behavioral and physical health to reduce costs and improve client outcomes, the NorthSTAR model prevents such integration. NorthSTAR’s structure also prevents the Dallas area from taking advantage of new federal funding opportunities, which does not incentivize local investment in the model, as other mechanisms provide greater local benefits. The NorthSTAR model also prevents a comprehensive evaluation of statewide behavioral health policies and outcomes in Medicaid.

Key Recommendations

  • Transition behavioral health services for both Medicaid and indigent populations in the Dallas area from NorthSTAR to an updated model, including associated legislative funding changes.
  • Require the state to assist with maintenance of Medicaid eligibility and ensure full integration of behavioral health services into managed care organizations statewide.

Issue 10
Poor Management Threatens the Office of Inspector General’s Effective Execution of Its Fraud, Waste, and Abuse Mission.
OIG has the difficult and crucial job of protecting the integrity of the HHS system and its public assistance programs, including Medicaid. However, OIG’s highest profile responsibilities — investigative processes — lack structure, guidelines, and measurement of data needed to analyze and improve its processes and outcomes. Absence of basic tools such as decision-making criteria to guide its investigative work may contribute to inconsistent results and unfair investigative processes. Inefficient and ineffective processes lead to limited outcomes and a modest return on investment to the state. These concerns, taken in sum with other issues such as poor communication and transparency, limited staff training, and a lack of performance data from a case management system, point to limited oversight and the need for further review. OIG also performs many functions that do not align with its fraud, waste, and abuse mission, and OIG would benefit from increased focus on its most critical functions. Additionally, the inspector general’s gubernatorial appointment and OIG’s creation as a division of HHSC raise questions about the inspector general’s accountability to the governor versus the executive commissioner.

Key Recommendations

  • Remove the gubernatorial appointment of the inspector general and require the inspector general to be appointed by and report to the HHSC executive commissioner.
  • Require OIG to undergo special review by Sunset in six years.
  • Require OIG to conduct quality assurance reviews and request a peer review of its sampling methodology used in the investigative process.
  • Direct OIG to better define its role in managed care, and to work together with HHSC to transfer certain OIG functions to other areas of the HHS system where they would fit more appropriately.
  • OIG should improve basic management practices, including establishing and tracking criteria and timelines for investigative processes and enforcement actions, narrowing its focus on the highest priority cases, and improving training and communication among staff.

Issue 11
Credible Allegation of Fraud Payment Hold Hearings Do Not Achieve the Law’s Intent to Act Quickly to Protect the State Against Significant Cases of Fraud.
OIG is required by federal law to withhold Medicaid payments from providers under investigation based on a credible allegation of fraud. OIG’s implementation of this mandatory payment hold, known as a credible allegation of fraud or CAF hold, has gone beyond the law’s intent for use as an enforcement tool in serious matters. Hearings to appeal placement of a CAF hold have exceeded their narrow scope, duplicating the function of hearings used to establish whether the state overpaid a provider. CAF hold hearings provide for excessive process and create undue burdens on providers as compared to cases presenting more serious risks to the state and public.

Key Recommendations

  • Require HHSC to streamline the CAF hold hearing process.
  • Clarify OIG’s payment hold authority, including adopting clearer standards for good cause exceptions and limiting payment holds to certain circumstances.
  • Require OIG to pay all costs of CAF hold hearings at the State Office of Administrative Hearings.

Issue 12
HHSC’s Uncoordinated Approach to Websites, Hotlines, and Complaints Reduces Effectiveness of the System’s Interactions With the Public.
HHSC’s statutory requirement to ensure the public can easily find information and interact with health and human services programs through the Internet has led to the five system agencies developing about 100 websites and maintaining 28 separate hotlines. The system’s piecemeal approach to developing these resources requires users to navigate an increasingly complex network of information, frustrating even savvy stakeholders familiar with the system.

The Legislature also required HHSC to establish an ombudsman’s office to provide systemwide dispute resolution and consumer protection services for the public. However, without more authority and visibility, the office cannot obtain a comprehensive understanding of the challenges faced by stakeholders, escalate appropriate issues stuck in agency complaint processes, identify systemwide problems, or know whether consumer complaints are actually resolved.

Key Recommendations

  • Require HHSC to create an approval process and standard criteria for all system websites.
  • Require HHSC to create policies governing hotlines and call centers throughout the health and human services system.
  • Clarify the role and authority of the HHSC ombudsman’s office as a point of escalation for complaints throughout the system and to collect standard complaint information.

Issue 13
HHSC’s Advisory Committees, Including the Interagency Task Force for Children With Special Needs, Could be Combined and Better Managed Free of Statutory Restrictions.
HHSC oversees 41 advisory committees, 35 of which are in statute, to allow stakeholders and members of the public to provide input to the agency. However, the numerous advisory committees create an administrative burden to HHSC staff and their presence in statute can prevent the agency from responding to evolving needs. Additionally, some of these advisory committees are either no longer necessary or have overlapping jurisdiction, creating duplication. For example, the Interagency Task Force for Children With Special Needs, currently under Sunset review, is one of four advisory committees created to focus on issues related to children. While these four committees’ compositions are different, their jurisdictions are difficult to distinguish and often overlap, causing confusion for HHSC staff, committee members, and involved stakeholders.

Key Recommendations

  • Remove advisory committees from statute, including those with Sunset dates, and allow the executive commissioner to re-establish needed advisory committees in rule.
  • Remove the Task Force for Children With Special Needs, the Children’s Policy Council, the Council on Children and Families, and the Texas System of Care Consortium from statute and direct the executive commissioner to recreate one advisory committee in rule to better coordinate advisory efforts on children’s issues.

Issue 14
HHSC Statutes Do Not Reflect Standard Elements of Sunset Reviews.
Among the standard elements considered in a Sunset review are across-the-board recommendations that reflect criteria in the Sunset Act designed to ensure open, responsive, and effective government. HHSC’s statutes do not include standard provisions relating to conflicts of interest and alternative rulemaking and dispute resolution. The Texas Sunset Act also directs the Sunset Commission to recommend the continuation or abolishment of reporting requirements imposed on an agency under review. Sunset staff found that the agency is required to produce 42 reports, four of which are no longer necessary and should be eliminated, and eight required by advisory committees would be removed from statute under Issue 13.

Key Recommendations

  • Update two standard Sunset across-the-board recommendations for HHSC.
  • Eliminate four unnecessary reporting requirements, but continue others that serve a purpose.

Issue 15
Allow the Texas Health Services Authority to Promote Electronic Sharing of Health Information Through a Private Sector Entity.
The Legislature created the Texas Health Services Authority (THSA) as a public-private partnership to accelerate the adoption and secure sharing of health-related information among providers through seamless, integrated health information exchanges across the state. THSA is an independent entity that contracts with, but is not a part of, HHSC and is subject to the Sunset Act. While Texans have a clear interest in the development of health information exchanges for the improvements they bring to the overall healthcare system, the state does not need a statutorily authorized entity to support health information exchanges, which could be accomplished by an independent entity, such as THSA.

Key Recommendation

  • Remove the Texas Health Services Authority from statute, allowing its functions to continue only in the private sector.