Print 🖨

The House Appropriations Subcommittee on Article II met to hear invited testimony from the Department of State Health Services on the current budget detailed in the House General Appropriations Bill, HB 1, as well as a summary of key budgetary issues from the Legislative Budget Board and onformation on audits related to DSHS by the State Auditor's Office. 

LBB Summary DSHS

  • Recommends $1.5B in All Funds and 3,000.3 FTEs, decreases from previous biennium due to transformation
  • Riders tend to reflect changes happening due to transformation
  • DSHS Exceptional items are not included in recommendations
  • Rep. Greg Bonnen – What is happening with the Tobacco Settlement Fund?
  • Initially, only proceeds were appropriate, but in 2011 the legislature approved appropriating the corpus for CPRIT bond debt payoff; LBB expects funds to be depleted in FY2018
  • Bonds will not be fully resolved, GR will need to be used to fully amortize unless leg. decides on another funding source
  • Rep. Bonnen – What is the status of the account now?
  • End of FY2016 is was $183M
  • SFR – Majority of DSHS programs have Moderate to Strong Centrality and Authority

 
State Audit of Selected DSHS Contracts

  • Pharma wholesaler contract to Morrison & Dickson, just over $308 million at the outset
  • DSHS did not properly manage this contract; did not monitor deliverables well and should have management staff assigned to oversee
  • Rep. Roberts – Did the state audit more entities and compare contract prices to market prices?
    • State Auditors were not able to verify exact prices for 67% of items
    • Saw insufficient paperwork for conflict of interest or disclosure; DSHS did not perform preliminary or periodic risk assessments
    • DSHS is implementing State Auditor recommendations, expected in March
  • Rep. Muñoz – What happens if you don’t fill out conflict of interest or disclosure forms?
    • In this case, forms were submitted, but not filled out adequately
  • Rep. Bonnen – If the contractor invoices DSHS incorrectly, is there a way to recoup funds assessed incorrectly?
    • There is a process, DSHS plans to recoup
  • Rep. Bonnen – Does not seem to be consequences for vendor misconduct

 
Department of State Health Services
John Hellerstedt, Commissioner

  • DSHS is the sole provider of health care for many of the counties in Texas
  • DSHS helped oversee the development of neonatal levels of care rules
  • Asking for a supplemental request @$19M for facilities, amount largely due to aging facilities
  • Population growth is large stress on public health care in Texas, has led to an increase in disease investigations, increases in public health professionals, and stepping up public disease awareness campaigns
  • Adequate funding for EMS/Trauma is essential
  • DSHS worried about changes in federal funds that support many crucial public health priorities
  • Decrease in costs and FTEs largely due to transformation
  • HB 1 removes DSHS reliance on Tobacco Settlement Funds, but emergency response is left without a defined funding source
  • HB 1 harms funding for fiscal monitoring, tobacco public education campaigns, testing capacity, and vital statistics
  • DSHS directed to operate TDLR programs, but has no funding to do so
  • Rep. Wu – Do you charge fees for access to birth registries? Do they cover the cost?
    • Yes
    • Donna Shepherd, DSHS – Fees typically cover the cost of the program, FY2016 saw one-time expenses
  • Exceptional items designed to address pressing health concerns, includes $54M for basic public health functions, $3M for lab science staff, $11.1M for disease outbreak response/public health surveillance, $1.4M for laboratory infrastructure, $4.4M frontline infectious disease staff & equipment, etc.
  • Many exceptional items are focused around TB response
  • Public health laboratory and vital records requests have been reduced
  • Rep. Bonnen – You mentioned TB and control of disease spread, can you speak to preparedness?
    • DSHS has engaged in coordinated exercises with local authorities
  • Rep. Roberts – What is the average salary for a contract manager?
    • Can get this information to you
  • Rep. Roberts – Presumably the money DSHS can recoup could go towards a contract manager
    • It could
  • Rep. Roberts – Audit report was released on June 16, 2016, is this when you received it? Did everyone read it?
    • Yes
  • Rep. Roberts – Help me understand the lack of sense of urgency, why hasn’t the $43k paid incorrectly been recouped yet?
    • Donna Shepherd, DSHS – Sometimes the invoices weren’t clear
  • Rep. Roberts – Is any of the part of the $43k owed back to the state?
    • Researching this now
  • Rep. Roberts – Did the person initiating the contract with Morrison & Dickson have pharmacy experience? Was it opened for bid?
    • Not sure, can get this info
  • Rep. Roberts – A contract for $308M is substantial, why wouldn’t someone be appointed as contract manager?
    • Contract was managed by differing parts of DSHS, there is a manager in place now
  • Rep. Roberts – Contracted price is often not assessed correctly, will the contract manager perform random audits to check prices?
    • Cannot answer to this level of detail
  • Rep. Roberts – Difficult to decide to give DSHS more money when there are issues like this
  • Rep. Sheffield and Hellerstedt discuss chronic and infectious disease, Hellerstedt worried most about chronic smoking, difficult to determine what the next dangerous infectious disease will be
  • Rep. Sheffield – So for infectious diseases, it is not a question of if, but when?
    • Hellerstedt – Yes, and it is a repeated ‘when’ as these disease pop up
  • Rep. Sarah Davis – Surveillance system bill was passed, but DSHS has not implemented and not requested funds for this
  • Rep. Sheffield – If the ACA is repealed, but not replaced, are there funds you’re worried about?
    • Roughly $33M for prevention and response is in question
  • Rep. Wu – Most of the records stored are vital statistics, how are they stored?
    • Mixed, some things like birth certificates require storage of an original paper copy
  • Rep. Wu – How big is the volume of records now? What if we had a time limit on records?
    • Time limit would be a legislative decision
  • Rep. Wu – DSHS should have a comprehensive security plan for this, definitely at risk. Would like DSHS to report back on security status
  • Rep. Wu – Rate of vaccination exemptions is almost at 1% for school kids?
    • May be over 1% now
      • Vaccines are most effective when the percentage of children who are vaccinated rises high enough to inhibit transmission – percentage of unvaccinated children is a public health concern
  • Rep. Wu – Is there a certain critical threshold for this?
    • Somewhere between 90%-95%, has to do with vaccines differences
  • Rep. Wu – Does DSHS have a report on this?
    • Not aware of any report on this
  • Rep. Muñoz – Was there a contract manager in the agency when Morrison & Dickson was made?
    • There was a contract unit in DSHS
  • Rep. Muñoz – How would the budget allocation for Zika, etc., affect disease response moving forward?
    • DSHS has new information now on vectors, etc., could have an earlier Zika season
      • Border presents a problem given ease of transmission to the US; would be difficult to stop mosquito transmission across border
  • Rep. Muñoz – Does DSHS have any info on patient revenue at hospitals?
    • Mike Maples, DSHS – DSHS collects these reports, information is collected via surveys to hospitals
  • Rep. Sheffield – Legislation for vaccinations in long-term care facilities is being worked on