About Face on the Medicaid Reimbursement Cuts*

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*Or, What to Make of the Apparent Meaninglessness of a Court-Issued Injunction Against the State of Texas

The drama over the proposed cuts Medicaid reimbursement rates for acute therapies seems headed to an end with the news of yesterday’s letter from HHSC Executive Commissioner Chris Traylor’s letter to Lt. Gov. Dan Patrick and Senate Finance Chairwoman Jane Nelson yesterday stating that HHSC would now “preserve access to care even if it means the full rate reductions contemplated by Rider 50 cannot be achieved.”  In other words, HHSC will not prioritize cuts over access to care as it proceeds to implement the cost containment measures enacted in the 2016-17 budget. Good news, certainly, for the Texas children and adults who depend on these therapies. We should all be glad that the state agency charged with providing and overseeing low-income Texans’ access to health care (well, some low-income Texans) is going to do just that, rather than endanger that care.

But once again, I’m puzzling over my reaction to the latest developments in this story. The temptation is simply to describe the events of the past couple days as the clarification of legislative intent and the agency’s response to that clarification. Straightforward enough. A series of letters between the legislative and administrative branches of government, more like something out of an 18th century history than the stuff of juicy, click-bate headlines. However, this version of the narrative omits the critical event that actually forced this resolution, State District Judge Tim Sulak’s temporary injunction against HHSC that put the cuts as originally planned on hold.

Fortunately, Commissioner Traylor is not asserting this flawed version of the story. He acknowledges the suit’s role in his agency’s new approach to the cuts:

As you know, HHSC was sued by therapy providers who claimed they would no longer provide services to Medicaid at the rates proposed on September 4. And, just last week, a state district court issued an injunction to prevent implementation of those rates in part because the court specifically found that implementing the full therapy rate cuts would likely impact access to care.

Given your direction, and the court’s injunction, HHSC will continue its efforts to achieve the maximum therapy rate reductions possible while maintaining adequate access to care.

So, what’s bothering me? The new HHSC executive commissioner understands what happened and is responding appropriately. I shouldn’t have anything to complain about, right?

The problem is not Commissioner Traylor’s version of events nor his response. It’s in the absence of the lawsuit and the temporary injunction in how the two most powerful players in this story tell their version of the tale. Traylor’s letter is in response to one he received from Patrick and Nelson the day before. Their letter begins [emphasis mine]:

We are writing to urge the Health and Human Services Commission (HHSC) to follow our clear legislative direction as you implement Medicaid rate reductions in accordance with Rider 50. As previously communicated, our offices agree that Rider 50 gives you the flexibility to strive for achieving $100 million savings in Medicaid therapy services while preserving access to services.

As I read this, according to Patrick and Nelson, Rider 50 is perfectly clear: strive to cut costs and preserve access. Unfortunately, standing in the way of achieving those twin aims, it the problem of the rider itself. This is the text of the section of the rider that instructs HHSC about making the cuts to Medicaid therapy reimbursement rates and access to care [emphasis mine]:

HHSC shall reform reimbursement methodology to be in line with industry standards, policies, and utilization for acute care therapy services (including physical, occupational, and speech therapies) while considering stakeholder input and access to care.

“While considering.” That’s the “flexibility” in the “clear legislative direction” Patrick and Nelson are talking about. Perhaps “while considering” is commonly used in appropriations legislation to mean “make sure to give this priority” but that would make it the only place where it has that meaning. I would argue that the rest of the rider, which details specific levels of cost reductions per year and 10 possible ways to achieve them, emphasizes cost reduction over preserving access to care. (And I am happy to defend the difference in meaning between “consider” and “preserve,” if asked.)

And what of the lawsuit and the injunction? When I first read Patrick and Nelson’s letter, I was floored. Not only did they insist that the language of the rider was clear in the first place, their letter did not mention the temporary injunction at all. I interpreted it as the two most powerful players in the Texas Senate telling the head of the largest state agency that nothing that happened in the hearing mattered–the findings that the data provided by HHSC behind the original analysis of this reimbursement rate was deeply flawed and that no study or analysis in the impact of the proposed cuts was made prior to the original date of implementation–essentially, that Judge Sulak’s ruling was not to be taken into account.

While that message may be open to interpretation in the letter to Traylor, Patrick made it perfectly clear in his statement on HHSC Medicaid Rate Reduction Implementation, issued at the same time the letter was made public [emphasis mine]:

Anyone claiming the legislature arbitrarily instructed HHSC to save taxpayers $100 million by eliminating waste, fraud and abuse without consideration of the potential impact on Texas’ most vulnerable citizens – is just flat wrong.

Strong words. So, who are they meant for?

First, I believe they are a direct rebuke to Judge Sulak. My reason for thinking this is the word “arbitrary.” It’s used by Judge Sulak in his injunction, in one of the most damning sections of the ruling [emphasis mine]:

31) The September 4, 2015 Proposed Rates are probably based on arbitrary criteria that lack adequate or appropriate consideration for the impact on service providers or recipients, and probably lack adequate or appropriate consideration for the legal obligations of Commissioner Traylor and HHSC with regard to the adoption of reimbursement rates.

No wonder they didn’t mention the suit or the injunction in their letter. The hearing, the evidence of misinterpretted data and claims of non-existant studies, the state’s bizarre handling of the case, the injunction, none of that should be taken into account. Especially that injunction.

It’s also a slap against the Democrats who’ve been drawing attention to the actual harms these cuts were going to have and the manner in which they were added to the budget. Make no mistake of it–Dan Patrick does not like it when people imply that the well-being of Texas children is of great concern to him. He said as much in his official statement, going so far as to remind everyone of his years on the board of

I’m pretty sure no one in the state Republican leadership likes it when Congressman Joaquin Castro and State Representative Trey Martinez Fischer are in the news talking about these cuts and the terrible consequences they would have. I’m pretty sure the Republican leadership doesn’t like most of the things these two men do, but it must really chap their collective hides when doing the thing that their base most wants them to do–cut Medicaid–turns out to be, at worst, a potential disaster for disabled Texas children. I’m going to give these Republicans the benefit of the doubt here and accept them at their word. I believe they care deeply for the Texas children who need and depend on these acute therapies. And I bet, someplace deep down, they wish this situation could have been avoided and truly believe that the rider was balanced and provided enough direction to HHSC to avoid this mess. Which still feels a bit like magical thinking to me.

I keep coming back to the same question I had last week: how did we get into this mess in the first place? I’ll leave that answer to a follow up post. This one’s long enough for all our eyeballs. To be continued.


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