The House Appropriations Subcommittee on Article II met Tuesday, February 12, 2019 to take up invited testimony on the Office of the Inspector General, the Department of State Health Services, and special provisions related to Article II agencies. The Committee also heard public testimony on Article II.
This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Office of the Inspector General
Mike Diehl, LBB
- HHSC selected for partial Strategic Fiscal Review (SFR) in 2018, including OIG.
- $110.3m in all funds, increase by 1.5% form previous biennium.
- SFR analysis includes an additional $23.8m in all funds, which is appropriated to other strategies to HHSC but supports functions of OIG.
- OIG exists to inspect, prevent, and investigate fraud, waste and abuse in provision of state health services.
- Allocate resources to cases with the greatest potential for recovery of funds.
- Net decrease $0.7m in GR, net increase $0.5m in all funds for agency administration.
- Increase of $1.2m in all funds to biennialize certain FTEs.
- Decrease HHSC FTE cap by 149 to remove consistently unfilled FTEs from OIG allocation
- New OIG administrative support strategy.
- OIG disproportionately focused on fraud, waste, and abuse in fee for service Medicaid, despite fact that majority of Medicaid services are now being delivered through a managed service model.
- In 2018 OIG established unit designed to modernize processes with regard to managed care
- Over $115m in recoveries in FY 2018.
- Majority are from offsets to future bills or benefits.
- Recovered funds are almost always available for use in program which made the overpayment.
- Almost none of the recoveries go back to the treasury.
- Continue base funding levels for Medicaid Fraud Abuse Detection System (MFADS).
- Exceptional item requests total $4.6m in all funds, 52 FTEs
- OIG continues to re-evaluate how to shift audits to deal with managed care
- Turner – You mentioned they has withdrawn an exceptional item request, which one was it?
- Diehl – Exceptional item 1 relating to MFADS.
- Davis – Does the subject matter experts team review any determination of medical necessity or approval/denial of claims?
- Diehl – Defer to agency for full answer, they generally consult with other activities within OIG for determining medical necessity.
Sylvia Hernandez-Kauffman, Inspector General
- Does the subject matter experts team review any determination of medical necessity or approval/denial of claims?
- Kauffman – For the medical necessity piece yes.
- Davis – In presentation you indicate 17% increase in recoveries, why did you see that increase?
- Kauffman – When someone is delinquent on payments we take that money from the treasury offset program and that increased from $10m to $16m. There were also new algorithms for the recovery audit contractor, and they recovered more money than in the past.
- Davis – Are those permanent changes?
- Kauffman – Yes
- HB 1 established baseline request as $4.5m in GR, $110m in all funds across biennium.
- HB 1 reduces FTEs by 134, puts FTE count in line with what can be afforded.
- Asking for an additional 26 FTEs for critical functions, which would be affordable.
- Davis – For these new FTEs, what critical functions are they performing? From the SFR it seems there are issues with the fee-for-service model.
- Kauffman – WE are operating some in fee-for-service but are moving toward managed care.
- Davis – Considering all the MCOs have their own SIUs, they have the incentive to stop providers they are contracting with are not engaging in fraud waste and abuse. Knowing that it seems there needs to be a better way of monitoring MCOs.
- Kauffman – Yes each MCO has a way to view what the providers in their specific MCO but we can see across the board.
- Davis – The MCOs still have every advantage to ensure providers are not committing fraud waste and abuse.
- Fix automated system for OIG, current system (ASOG) is old and does not work properly. New system would generate more recoveries
- Davis – Is ASOG a creature of fee for service and is this something that would change with the shift to managed care oversight?
- Kauffman – These are for client investigations, when a client does not include appropriate info in their application they become eligible.
- Requesting additional FTEs for client investigations in SNAP, WICK, and TANIF
- Turner – So before the withdrawal of exceptional item 1 you would have been requesting around $12m and now both together are around $2.5m?
- Kenny McCluskey, Finance Director – It was $12m and both of them together are now $4.5m.
- Turner – Is the 628 FTE number including the exceptional items?
- Kauffman – That will be an extra exceptional item we will submit, but we are not requesting additional funding for that.
Department of State Health Services
Amy Ma, LBB
- $1.6b in all funds, decrease of 3.9%
- $7.9m increase for XALD newborn screening offset by $1.6m decrease in GR for one-time funding of XALD implementation and laboratory deferred maintenance.
- Increase of $6.1m in public health Medicaid reimbursements account 709
- HIV fund rebates will not be available for newborn screening programs beyond 20-21 biennium.
- $87.3m in all funds for each FY next biennium for immunization activities.
Dr. John Hellerstedt, Commissioner, DSHS
- HB 1 maintains DSHS budget at steady level
- HB 1 addresses maternal mortality and morbidity, XALD, other items in base budget
- Public health laboratory is the “backbone of our state health system”.
- Lab is running at ongoing shortfall of $8.9m per year.
- 90% of the gap is from the newborn screening program.
- Perform around 800,000 newborn screenings every year, one of the largest programs in the world.
- HIV rebate money will no longer be available.
- Davis – To be clear, the change in what HIV rebate funds can eb used for came down from the Feds, and because of that we are left with a shortfall in one of the state’s most important areas. And we are now in a situation where we will have to use state dollars where we used to have federal funds.
- Hellerstedt – Yes that is correct. We need to find alternative sources. What HIV money we do have available we can only use for very narrow purposes.
- Turner – What is the role of DSHS for infectious disease outbreak identification? And how do you work with the feds in that process?
- Hellerstedt – Reporting system called NEDS, used for reports of diseases which is shared with the feds. We are looking for outbreaks of things that are threats to public health, for example foodborne illnesses, mumps, or measles. NEDS blinks off from time to time and data is lost, we would like to fix that situation.
- Davis – Texas AIM initiatives seem to be very popular, how can we get more hospitals to adopt those initiatives?
- Hellerstedt – We provide bundles, which are not payments they are ways of organizing care, which have been shown to reduce maternal mortality. In Texas 90% of all births are accounted for under this program. We also have programs to address opioid abuse among young mothers.
- Davis – Was overdose the number one killer of this population?
- Hellerstedt – Yes within a year of birth drug overdose, especially from opioids, is among the highest of all causes of death.
- Davis – There is an exceptional item for 8 additional FTEs in this area, why is this staffing needed?
- Hellerstedt – Texas AIM is a coalition of the willing, hospitals and medical staffs are volunteering to do it. It is very labor-intensive work to implement these policies.
- Davis – You are requesting 3 pilot sites for implementation of a maternal care coordination program for high risk women, have you identified where those would be located?
- Donna Sheppard, DSHS – The pilot would have one urban county and one rural county, but not specifically which counties those would be.
- Davis – Base funding in HB 1 will result in reductions to RACs, would you like to address those cuts?
- Hellerstedt – That is a policy decision, they are great assets to the state in my opinion. I support the concept of the RACs and realize that difficult decisions must be made regarding funding of RACs.
Special Provisions related to Article II agencies
Elizabeth Prado, LBB
- Two provisions moved to HHSC bill pattern because the provision only applies to HHSC
- Two new provisions added to HHSC
- Authority for local funds transferred from three agencies bill patterns
- Requirement for reporting child abuse transferred from DSHS and HHSC bill pattern, now applied to all agencies.
- Rider related to foster care rate methodology.
Public Testimony
- Dennis Borel, Coalition of Texans with Disabilities – Runs a very small managed care provider with 4 employees, being burdened by requests from OIG.
- James Lukefahr, Texas Pediatric Society & Texas Medical Assoc – Increase funding for MEDCARES program by $2m. Also need additional FTEs to improve efficacy and capacity of local child death review teams.
- Davis – What is MEDCARES’ relationship with the child assessment centers?
- Lukefahr – Each MEDCARES site works very closely with child advocacy centers.
- Khrystal Davis – Should support newborn screening.
- Rekha Lakshamanan, The Immunization Partnership – Support for vaccination programs. There are a significant number of diseases that could be prevented through vaccines, including measles, influenza, pneumonia.
- Davis – There are 7 cases of measles in Texas?
- Lakshamanan – Yes and there are major outbreaks in Washington state and New York.
- Davis – Is Texas in prime position of an outbreak due to various factors including legislative inaction on promoting science-based vaccination policies?
- Lakshamanan – We are on the precipice of a major outbreak, and we are concerned about misinformation being shared about vaccines.
- Davis – It is my understanding that the vast majority of Texans agree we should be vaccinating children, it is hard to understand how we are in this environment where we are seeing 57,000 unvaccinated children?
- Lakshamanan – Yes it is close to that number.
- Davis – What is your organization doing about this issue?
- Lakshamanan – We promote science- and evidence-based information, and the science is very clear that vaccines are very safe and effective, and they are very cost-effective.
- Davis – It even includes prevention of certain cancers with the HPV vaccine correct?
- Lakshamanan – Yes.
- Frances Broussard Denenburg – Support funding for ALD screening.
- Cortez – How do you diagnose ALD?
- Denenburg – There are genetic tests and tests of long-chain fatty acids.
- Cortez – Do other states provide newborn screening?
- Denenburg – Yes there are other states, around a dozen.
- Kammie Robertson – Support funding for ALD screening.
- Darrell Pile, Southeast Texas Regional Advisory Council – Should continue funds for RACs even if funding sources change.
- Davis – Could you explain how state funding for your RAC has changed over time?
- Pile – Funding has increased by about $64k in the past 7 years. Funds were originally provided to address trauma in emergency healthcare system. Funding has not adjusted properly with population or demand. Shocked that funding might decrease.
- Thomas Kim, Texas Medical Assoc – Should fully fund DSHS. Especially in support of $8m for immunization in order to address low vaccination rates in Texas. Support TB control efforts.
- Jeffrey Beeson, Texas EMS, Trauma, and Acute Care Foundation – Support funding for RACs.