Texas has Not Disclosed Data Used to Achieve Massive Funding Cuts for Medicaid Reimbursement Rates

HHSCNote: This story written by Emily DePrang originally appeared in The Quorum Report. Join us there daily for coverage of Texas politics and government – SB 

With the deadline looming to finalize new Medicaid therapy rates, stakeholders fear they’ll never get answers to serious questions about how the Health and Human Services Commission arrived at its newly proposed, dramatically lower pay rates.

The new rates are based on research that patient and therapy industry advocates claim is fundamentally flawed and has never been fully released to the public. HHSC, however, says the study was conducted in a way meant to protect its independence and that its methodology produced smaller rate cuts than other methods would have.

The new rates will be finalized some time in the next week and take effect September 1st.

As written, they’ll slash by 25 to 90 percent what Texas pays for medically necessary physical, occupational and speech therapy through the Texas Medicaid Acute Care Therapy Program, which serves about 440,000 poor people with severe disabilities each year, most of them children. Advocates say at least 7,500 therapists will lose their jobs and 60,000 children will lose access to medical care because of the cuts. HHSC can’t refute these claims because it conducted no research in potential impact before announcing the new rates on July 8th.

The study being used to justify the rate cuts was commissioned by the 83rd Legislature and produced during the interim using data from researchers at Texas A&M. They were instructed to look at what commercial insurance providers and some other states pay for therapy. From their data, HHSC created what it termed the Texas Median Commercial Rate. It then limited payment for certain types of therapy to 145 percent of that rate, causing the steep cuts.

But stakeholders say they still don’t have nearly enough information to understand how HHSC arrived at the Median Commercial Rate – or even what that is. While the state has released some of the data it received from A&M, other information has remained hidden, even after industry advocates filed an open records request with HHSC.

“For any rate reduction, the data and information has to be transparent,” says Rachel Hammon, executive director of the Texas Association for Home Care and Hospice. “In my mind, that’s just the bottom line.”

Hammon, whose group represents more than a thousand therapy providers likely to be affected by the change, says the state’s failure to make all the rate data public is “unconscionable.” “You don’t make that kind of decision without giving the public the information that was used to reach it,” she says.

In April, Hammon filed an open records request asking HHSC for all the data from Texas A&M, but she only received “Arm 1,” the first of two large deliveries by the researchers. HHSC also readily provided Arm 1 to Quorum Report. But “Arm 2” was withheld in both cases. When Hammon re-requested it and other absent information from A&M, HHSC appealed to the Attorney General. That office doesn’t have to rule on whether Hammon can see the missing data until late September—weeks after the new rates will have taken effect.

HHSC Commissioner Chris Traylor was unavailable for an interview throughout the writing of this story, but communications director Enrique Marquez said via email that HHSC hasn’t hidden anything. “HHSC responded directly to each open records requests regarding reimbursement rates for therapy services, and any other assertion is false,” Marquez told Quorum Report. “A portion of an open records request was referred to the Office of the Attorney General for clarification, as required by law. End of story.”

In addition to questioning the availability of data used for the rate report, some say the state has misrepresented it as being written by the A&M researchers, when actually it was created within HHSC.

For example, in a statement emailed to a reporter for the San Angelo Standard Times last month, Geoff Wool of HHSC wrote, “According to a recent study by Texas A&M University, Texas pays considerably above the average commercial rate for these kinds of outpatient and home health, and independent therapy services. The proposed changes would lower the reimbursement rates to 145% of the commercial rate.”

But Texas A&M didn’t write the study being cited. HHSC did.

An email from Jenny Jones, an executive with the Texas A&M Health Science Center, to Rachel Hammon, dated April 6, 2015, clarifies:

“Our faculty expert sent [HHSC] two reports that were done in two separate phases and that apparently involved hundreds of tables of analysis. From that they produced their summary report. We were not involved in the production of the report, have no idea the process they used or how they are going about their policy decisions, and have not had contact with HHSC following submission of our information.”

Jones told Quorum Report that there was an “absolute distinction” between the data collected by Texas A&M and the summary released by HHSC.

“We were commissioned to do this initial data analysis,” she says. “They gave the study perimeters for our analysis and looked at what the results had to say. … Then they extrapolated from that to create a summary report justifying their cost containment and rate reductions.”

When asked whether A&M’s contribution had been misrepresented, Jones said, “I think it was easy to have confusion between our initial work product and the summary report. … There were two distinct phases of this. Our initial analysis was the ‘Texas A&M study.’ The summary report was not a ‘Texas A&M study.’”

Hammon and others are also upset that HHSC told the researchers not to consult them during the data gathering, which prevented them from raising questions or pointing out missing components in the data tables.

“[Researchers] were specifically directed not to engage with stakeholders during the study process,” Hammon says. “There was no outreach. So Texas A&M really could not even gauge whether or not they were on the right track.”

Marquez with HHSC wrote in an email, “We did not seek stakeholder input for the study so that there was true independence in the findings.” Marquez also pointed out that HHSC sought stakeholder input “prior to the commencement of the study” and that only “unexpected delays in data acquisition” prevented them from being consulted again.

But even the proposal on which stakeholders were able to comment seems not to have been used for the actual study.

The proposal released in 2014 asked researchers to gather broad information about how the Medicaid therapy program was being used and could be used better, including consideration of “pros and cons” of the current rate structure, the authorization process, the characteristics of clients, and different utilization patterns. But the final product, unseen by stakeholders until March 2015—after all chances for public testimony on the budget had passed—showed that the study “examined the rate structure of pediatric acute care therapy” exclusively. It left out any research of authorization and utilization patterns, elements of the overall cost of the program that stakeholders had been led to believe it would study.

The new rates may save the state money fast, but some legislators worry it will backfire in the long run. These reductions are meant to satisfy a cost-containment rider in the new state budget by cutting general revenue for the Medicaid therapy program by $150 million over the next two years. In doing so, the state will also lose $200 million in federal money, reducing the program’s total funding by more than half. If that has the devastating effect on provider access that stakeholders say it will, Texas could be in violation of federal law or invite a lawsuit over pediatric therapy access similar to one the state settled in 2005.

All of this has lawmakers worried.

Last week, 28 legislators cosigned a letter to Commissioner Traylor asking him to any delay rate changes until HHSC had conducted an impact study. Their request joined several similar letters from lawmakers, along with testimony given by about 200 stakeholders during the only public hearing on the cuts.

“We urge you to comprehensively study the effect this level of reductions could have on access to care prior to the implementation of any cost-reduction strategy,” read the last letter. “While short-term cost containment may be possible using this methodology, the longer term cost to our state and to those most in need is potentially catastrophic.”

Marquez says no more hearings or studies are planned.

Copyright August 04, 2015, Harvey Kronberg, www.quorumreport.com, All rights are reserved. Reprinted with permission. 

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