Medicaid cuts mandated by Legislature, state health official says

Texas Health and Human Services Commission officials say they have no choice but to carry out the will of lawmakers and cut $350 million from the state’s Medicaid program.

In September, state District Judge Tim Sulak temporarily blocked implementation of the cuts to physical, occupational and speech therapies — $150 million in state funds and $200 million in matching federal funds — covered under Medicaid that had been approved by the Legislature last year. Most of the cuts would affect an estimated 60,000 disabled children, including foster children.

On Wednesday, during oral arguments in the Texas 3rd Court of Appeals, the attorney for the state’s health commission, Kristofer Monson, said the appropriations bill passed by the Legislature last year mandated the cuts and the commission must carry them out. Delaying the cuts could mean further cuts in the future, he said.

“The commission followed the rules,” Monson said.

The plaintiffs in the case — a group of parents and providers — argued that disabled children under Medicaid could be at risk of losing their therapists, who face up to 28 percent in cuts to reimbursement rates, depending on the type of service. Dan Richards, the plaintiff’s attorney, said that speech home therapy faces $25 million of the cuts, effectively eliminating any access to that service.

Richards said the bill gives the state flexibility to find other means to save the state money and that implementing the reduced payment rates to pediatric therapists harms “the most vulnerable citizens – kids who have severe disabilities and have no money to pay for them.”

The Legislature based the cuts on an independent study from Texas A&M Health Science Center researchers — which was used by the state to develop its own summary analysis. Sulak, in signing the temporary injunction in September, called parts of it “seriously flawed.”

The researchers compared payment rates and caseloads in Texas among regions and also to therapy programs in other states. They also looked at payments to providers in commercial programs, but they didn’t study access to care, according to the state, or find out why there was a dramatic spike in patients served.

The number of Medicaid patients served by therapists grew from 170,000 in 2009 to 240,000 in 2014, according to the state.

Monson didn’t address the study during Wednesday’s oral arguments, but said only the federal government can challenge reimbursement rates.

In the months after passage of the bill, a handful of state Republican lawmakers, reversing course after they learned of the potential impact, joined Democrats in opposing the cuts.

State Sens. Jane Nelson, R-Flower Mound, and Charles Schwertner, R-Georgetown, both of whom are on the Senate Finance Committee, defended the cuts, saying they received information that showed that Texas’ rates were well above Medicaid reimbursement rates in other states and in-state commercial rates.

A hearing on a plaintiff request to permanently block the cuts will take place on April 25 in Sulak’s court.

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