The Appropriations Subcommittee on Article II met to hear invited and public testimony on the following issues related to interim charge 18:

Charge 18: Monitor the agencies and programs under the Committee’s jurisdiction and oversee the implementation of relevant legislation passed by the 85th Legislature. In conducting this oversight, the Committee will also specifically monitor:

  1. Implementation of therapy rate increases and policy changes at HHSC;
  2. HHSC’s use of appropriated funds to expand Texas’s inpatient psychiatric infrastructure;

f. Ongoing impact of critical-needs funding at DFPS

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it 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.

Invited Testimony

Jordan Dixon, Deputy Executive Commissioner Office of Transformation & Innovation, HHSC

  • Their team has worked with program implementation, making sure deadlines are met, and contracts are in place
  • Sees this program as an opportunity to modernize how healthcare is delivered to individuals who need it

 

Mike Maples, Deputy Executive Commissioner over State Operated Facilities, HHSC

  • In 2014 they had a consultant who evaluated all the state hospitals and gave a report saying 5 facilities needed to be replaced and 5 needed to be remodeled
  • Also recommended that over the next 10 years, they’ll need about 1,100 more beds in each facility
  • A rider was given to them last session that asked them to develop a comprehensive plan for the state-funded in-patient mental health services system, which was developed
  • Plan is online and available to everyone
  • Some of the guidelines of the plan include:
    • Enhancing the safety, quality, and access to care and treatment for persons with mental illness and to expand that capacity so there’s not a waiting list
    • Increase collaborations with academia
  • They’re participating in and are a part of the statewide strategic plan to look at how they’re coordinating care among all the agencies
  • Initiatives they’re working on to ease the entry access to state facilities:
    • Optimizing telemedicine and working with the universities on that
    • Repurposing resources they already have
  • They were appropriated $300 million, they submitted their proposal and have asked for the first installment of $47 million
  • That money went to planning for a new 100 bed unit at Rusk State Hospital, architectural work and renovation at Kerrville State Hospital, a new hospital named Harris County Continue of Care Campus that will be adjacent to the current facility they work with
  • Received pre-planning money for Austin & San Antonio State Hospitals
  • All in all with the projects they were approved for and received money for will add 228 beds in Houston, 40 beds in San Antonio, and 70 beds in Kerrville, of those 130 will be for maximum security
  • Explained timeline for construction and bed implementation
  • Legislature gave about $160 million for deferred maintenance and they have a number of projects they’re doing with that money
  • Rep Howard – Back to the statement of having 100 beds offline due to staffing vacancies, those are beds that could add to the capacity and address the waiting list right?
    • Absolutely
    • Rep Howard – Are they concentrated in certain areas?
    • The bulk of those are at the North TX State Hospital
    • Rep Howard – We all know that there are still shortages of nurses and staff, is the issue from your perspective the sheer lack of availability or other factories like salary?
    • They’re an employer in a competitive market so it does become challenging for them to keep up, but wouldn’t say it’s the only issue – other issues like infrastructure, recruiting & retaining
    • Rep Howard – Are y’all making use of advanced practice nurses?
    • Absolutely, they’ve got initiatives using nurse practitioners, PAs, etc.

 

Tamela Griffin, Medicaid Department & Victoria Grady, Rate Setting Department, HHSC

  • Griffin – In September 2015, they were directed to achieve $150 million in GR savings over the biennium relative to therapy services
  • In May 2016 they adopted some policy updates such as documentation of functional goals and began tracking when a service was delivered by a therapy assistant
  • In September 2017 they had a direction to restore partial rate restoration and also changed the speech therapy reimbursement rate and standardized billing procedure codes policy wise
  • Chairwoman Davis – Back to September 2015, do you recall why the legislature directed the agency to come up with those cuts?
    • Grady – In the 84th session there was a lot of discussion around the cost containment rider, rider 50 included other things like Subsection C that discussed therapy reimbursement rate changes – those changes came about due to legislative direction and after a long history of looking at reimbursement around therapy services
    • Chairwoman Davis – So was there not a report that came from the agency and was the agency not counseling the legislature to make those cuts, even though we later found issues with that report?
    • Grady – During the 84th, HHSC published a study that included information produced by A&M – that study was done in response to legislative direction from the 83rd session
    • There were some questions about whether that Medicare comparison was appropriate since we were looking at pediatric therapy services vs. Medicare not targeting pediatric clients
    • The proprietary info is proprietary so we don’t have the ability to disclose the detailed level data they were looking at
  • Griffin – In December 2017 there was a reduction for the therapy assistance to 85% of the rate and there will be a further reduction to 70% of the rate in September 2018
  • Grady – Prior to December 15, 2016, they had 3 different rates and in their efforts to meet the cost containment direction of rider 50 they made those rate reductions
  • They did a different percentage rate reduction in order to move them to an equal rate and that was the rate that was in place moving forward
  • Based on rider 59 from this session, there was a direction to restore 25% of the reduction
  • The first thing they did was to put the funding back into the rates
  • In response to provider complaints, they then made efforts to move each code to the billing unit that was described by the code – ultimately they have 3 providers who are all receiving the same rate for the same billing unit in compliance with the National Correct Coding Initiative
  • Rep Howard – So you’re looking at the ratio of providers, are you looking at the capacity of those providers in terms of number of clients that they can or are willing to see?
    • In that particular ratio, that’s not the comparison they were looking at, it’s looked at elsewhere
  • Griffin – At the time those changes were made they were concerned about implementation
  • When monitoring implementation in year 1, they looked at member and provider complaints and substantiated complaints and were responsive to them
  • They heard from about 800 members, 84 were substantiated – most were in category of a payment issue or providing of care and all were addressed
  • Chairwoman Davis – Was there any type of common denominator with these complaints?
    • 800 were of complaints and 84 were substantiated that fall into those two categories
    • Chairwoman Davis – So was it the providers?
    • We had complaints that come in from the member that might be that their provider was not being paid for the service so we categorize it as a member complaint
    • Chairwoman Davis – What about complaints from members who felt that they were being denied services or that their services were being cut?
    • Resolved those with the substantiated complaints
    • Chairwoman Davis – So was there any sort of common denominator with those?
    • Believes only that most complaints fell into those two categories and it was dispersed across providers
  • For provider complaints, majority of those were with frustrations of not receiving payment
  • Provider terminations were tracked in the first year – 5 home health agencies were terminated as well as 3 outpatient rehabilitation clinics which resulted in 230 members being impacted
  • ACA required them to re-enroll all Medicaid providers, during that time providers of therapy services showed a short-term decline in eligible providers and they lost about 653 providers
  • Chairwoman Davis – Regionally where were these lost providers located
    • Does not have that data
  • Bonnen – When did the equalized rate go into effect?
    • September 1st, 2017
    • Bonnen – So the providers decreased and then stabilized?
    • Correct
  • Howard – Looking at the provider drop off that you had after the first rate change, the capacity of the provider network before that drop-off and the capacity now, is that something y’all are going to address?
    • We’ll partially address that in our data collection we’re going to talk about
  • Going forward they will be surveying their health plans in a detailed manner
  • By doing more surveys they will be able to understand what the actual reasons are for those on the waitlist
  • They will be looking at their network adequacy standards quarterly now and will be doing on-site reviews of plans
  • Chairwoman Davis – About the standards – where do these come from?
    • They’re similar to Medicare standards

 

Julie Lindsey, LBB

  • Read through the presentation on CPS spending history
  • The total CPS expenditures increased each biennium
  • Wu – Do you have this caseload breakdown by region?
    • The agency would have the historical information prior to the critical needs request, they just have the information during the request
    • Wu – Is it reported to you by region or statewide?
    • We get it by region and the statewide average
  • In the agency’s request, the purpose was twofold – the first was to provide salary increases and the second one was to provide funding to hire additional staff
  • Altogether the critical needs funding request totaled to $113.2 million to the agency $19.2 million in related benefits for a total cost of $142.4 million to the state
  • Rep Wu – This was the $140 that the Governor provided before the legislature?
    • This request came to both the legislature and Governor’s office
    • Rep Wu – Is this the money the agency got before the session?
    • Yes
  • The department submitted this request on November 22, 2016 and it was approved 9 days later contingent on the additional reporting requirements
  • Presented the reporting requirements and information that was reported by CPS
  • Wu – One of my regrets from last session is that we didn’t get more money into the section of kids aging out – do y’all have more data on how the $1.2 million was spent on the preparation for adult living?
    • That particular amount of funding was tied to the passage of SB 1758 which required the agency to start working with those children at an earlier age and expand those services

 

Hank Whitman, Commissioner, Department of Family and Protective Services

  • Discussed the lawsuit DFPS has been involved in the past 7 years
  • The funding request has not only allowed them to hire additional staff but also provide a $1000 a month raise to CPS frontline staff
  • CPS was also in need of a culture and training shift for retention and morale
  • In October 2016 their CPS turnover rate was 25.4%, as of January 2018 that turnover has decreased by 19.6%
  • As of this fiscal year according to the SAO, DFPS turnover was lower than the average for state agencies
  • As of February they’re seeing 91.4% of priority one intakes within the first 24 hours – a 24% increase
  • APS is in need still with caseworkers being overwhelmed and critical adults in need more than ever
  • Chairwoman Davis – We definitely need to discuss APS funding going into the next session
  • Wu – What does a boost to APS need to look like?
    • They need funding, the best supervisors and training, making sure morale is in place

Public Testimony

Roy Hollis, CEO, Houston Behavioral Healthcare Hospital

  • A small percentage of their patients are CPS adolescents
  • The biggest challenge with these kids is their extended stay due to the lack of placement for them outside of the hospital
  • Also have experienced a large amount of communication problems between caseworkers and hospital staff
  • Chairwoman Davis – Have you noticed any change since there has been the increase in funding and subsequent drop in casework?
    • It still needs to improve and hasn’t noticed any change in that

 

Vicki Gilani, Speech-Language Pathologist

  • Her salary and benefits were significantly reduced in March 2016
  • Had to say goodbye to special patients due to therapy cuts

Jennifer Riley, VP Operations, Sage Care Therapy

  • Questioned the reasoning behind the way HHSC chose to carry out rate cuts
  • HHSC says they have reached out to inquire about waitlists but they have not been contacted by HHSC at all

 

Judi Joseph, Executive Director, TX Occupational Therapy Association

  • Received over 100 responses from everyone a part of their association reporting clinic closures, waitlists, and non-approval for children that need therapy services
  • Provided committee with a map showing where their complaints have come from, which is all over TX

 

Amy Litzinger, TX Parent to Parent

  • Reimbursements have taken way too long according to many of their members

 

Gabriel Den, Chief Administrative Officer, Kids Developmental Therapy

  • Concerned with the implementation of what the House did last session and HHSC’s compliance
  • Concerned with their need to standardize all the rates

 

Jerry Vandenment

  • Struggling because of HHSC pay cut
  • Hopes there are mechanisms available to them through LBB to lessen the impact of the second cuts that will go through in September

 

Shawn Montgomery, Countryside Therapy Group

  • They’re on track to lose $150,000 annually, which will be about a 10% loss overall for them each year
  • It is them and the kids that are suffering because of what’s happening at HHSC
  • When they see any kind of reduction from HHSC paired with the 20-50% reduction from MCOs, it’s basically impossible to maintain a business

 

Shannon Butkus, TX Speech Language Hearing Association

  • Concerned with impact on therapy reductions across TX, which is resulting in practices closing and the limitation of new patients
  • Elaborated on the negative impacts and possibilities the cuts will have on TX practices and children needing therapy
  • It took her 8 weeks to get her evaluation approved and therapy services started for her own foster child and it takes longer for parents who do not understand this system

 

Marissa Machado, TX Association for Homecare & Hospice

  • Discussed the benefits of homecare
  • Has a question for HHSC – What did HHSC mean by children receiving better access than the general public as mentioned earlier?

 

Amanda Sasser, CEO, Rainbow Pediatric Home Health & Step-by-Step Homecare & Therapy

  • Policy changes are needed to prevent HHSC from participating in personal relations with MCOs
  • The volumes of denials from MCOs makes sense when the people denying them are the same that receive bonuses from HHSC
  • They were forced to lay off over 30% of their staff and had to reduce everyone’s salaries
  • When HHSC says there is plenty of availability of services for children needing therapy that is incorrect
  • Their rates have always been decreased every year, never increased

 

Jolene Sanders, Easterseals Coalition Central TX

  • Concerned about the impact on the workforce in TX the cuts will have
  • They’re now down to 44 providers from 55 in 2015 due to this crisis

 

Justin Hillger, Angels of Care Therapy

  • When the Medicaid fee schedule changed, the policy restoration bounced back
  • Reimbursement was $135 a visit which decreased to $90 and is now down to around $80
  • The STARR programs had to adjust all of their rates due to all the rate changes that happened within that year and a half so practices have not been accurately paid out because of this
  • The adult therapy industry is going to continue to recruit and draw away pediatric therapists to other settings and other states

 

Kathleen Nutt, Rainbow Pediatric Home Health & Step-by-Step Homecare

  • The rate cuts and policy changes are necessary in order to protect vulnerable children that are being denied necessary services
  • There’s now a shortage of in school assistants

 

Deborah Scholasky, Rare Diseased Action Network

  • Gave personal examples of how the rate cuts have prevented children from not being able to receive necessary occupational therapy
  • Wu – How is rare diseased defined?
    • It’s defined as a disease that affects less than 200,000 people in the world
    • There are 7,000 diagnosed rare diseases and only 500 directed drugs for them

 

Greg Hansch, Public Policy Director, NAMI

  • The psychiatric therapy cuts should also not be ignored, the state has not overcome these issues but is on the right track
  • As a result of a rider in SB 1 there’s a report on the current waitlists in TX
  • Contracting with private hospitals should not be ruled out as an option
  • There’s also a workforce issue that needs to be addressed

 

Rep. Howard – Chairwoman Davis mentioned the A&M study at the beginning of the hearing and hopes that the legislature can do something to encourage the completion of this report

  • Believes they need to have some sort of verifiable assessment since they’re getting conflicting information
  • We’re squeezing these programs that effect fragile children and doesn’t understand why we’re still discussing this issue 2 years later

Chairwoman Davis – There were various riders put on during session, but we won’t see complete reports until December

  • Howard – Asking that we look at a statewide audit