Denied help. Denied hope.

How Texas Medicaid is failing children with disabilities

By Julie Chang
Photos and videos by Reshma Kirpalani

Nov. 2, 2017

Medicaid services for Texas children with some of the severest disabilities have sharply declined over the past few years after state leaders enacted several measures to cut costs.

One of the biggest blows, according to advocates and parents, happened nearly a year ago when the state turned over Medicaid services for children with disabilities to private companies and hospitals called managed care organizations — part of a multiyear transition for the state’s Medicaid programs to managed care that has saved the state billions of dollars. Hundreds of children with disabilities have seen a reduction in medical services, including longer waits for prescription drugs, fewer therapy services and being kicked out of Medicaid altogether.

Between February and May, 12 percent of children with the severest disabilities were denied Medicaid services, triple the overall rate of 2016, according to the Texas Health and Human Services Commission.

“This therapy is crucial. It’s my only link to get my child back. It’s my only hope,” Jenny Robson said through tears. Her 10-year-old son, Ben Sears, who is covered by Medicaid, was hit by a truck outside of their Mueller home last year and has been denied weekly physical and occupational therapy, even though he’s unable to stand, talk or eat without a feeding tube.

Since last November, more than 2,500 complaints from providers and families have been lodged against STAR Kids, the state-created Medicaid managed care program for disabled children, according to the health commission.

“We knew challenges would occur when launching a new program, and we put a strong system in place to help families. We have been able to quickly resolve the vast majority of issues,” commission spokeswoman Carrie Williams said.

But some parents, providers and their advocates say that lawmakers and commission officials in recent years have irresponsibly slashed funds, and thus services, for children with disabilities.

In a double whammy, the Texas Legislature trimmed Medicaid reimbursement rates to physical, occupational and speech therapists by $350 million two years ago. Lawmakers restored a quarter of the cuts this year, but health commission officials made further reductions in September.

“We are monitoring these issues carefully to ensure that Medicaid services are readily available, recognizing that taxpayers should not be forced to pay rates that are significantly higher than those charged to other payers,” state Sen. Jane Nelson, R-Flower Mound, told the American-Statesman.

Nelson, who in recent months has sent at least two letters to the health commission regarding concerns about access to care in STAR Kids, was the author of the 2013 bill that created STAR Kids. She also chairs the powerful Senate Finance Committee, which approved the Medicaid cuts to pediatric therapy.

The therapist payment cuts also have led to cuts in Early Childhood Intervention, a state-administered program partially funded by Medicaid that provides therapy and other services to babies and toddlers with disabilities. Cuts to Medicaid and money specifically allocated to the program have caused six of the state’s roughly four dozen provider groups to stop offering Early Childhood Intervention services since July 2016, affecting at least 44 counties. A seventh provider, Texoma Community Center in North Texas, recently notified the health commission it plans to end services in February.

“Texas children are at the heart of what we do every single day, and at the same time we have to watch our budget. We have to be very thoughtful and efficient with the taxpayer dollars we’re spending on services,” Williams said. “We want our programs to really help people, and we’re always working to administer them as effectively and carefully as possible. As with all state agencies, we are working within the appropriations we’re given and with legislative direction.”

On Oct. 26, 2017, Chris Sears kissed his son Ben Sears at their home. Ben Sears was hit by a truck on Sept. 12, 2016 and suffered a traumatic brain injury. Following state-wide cuts, Medicaid denied his therapist's request for twice per week physical and occupational therapy. Still, the family said that they are committed to doing everything they can to help their son recover.

Transition to managed care

The impact of the collision was so severe that Ben Sears’ skull dislocated from his vertebrae and his brain was severely damaged. He was in a vegetative state for about six months.

Because his primary insurance plan doesn’t cover all of his medical needs, Ben has Medicaid coverage through the Medically Dependent Children Program, which allows the most medically fragile children to avoid living in nursing homes.

Although Ben’s doctors have said twice-a-week physical and occupational therapy could help him make a full recovery, Blue Cross Blue Shield, his Medicaid managed care organization, has denied it. The company said last month that he needs therapy just twice a month and his parents’ help with stretching, strengthening and daily movements to keep him from regressing, according to a copy of the denial letter Robson provided.

“We’re all struggling to keep our heads above water with all the things that we have to do. We’re fighting the insurance company. We’re fighting the nursing company, and we’re trying to schedule therapy and alternatives to therapy, not to mention the day-to-day care,” said Robson, who is appealing Blue Cross Blue Shield’s denial. “It’s really hard for me to have the time and bandwidth to deal with (the denials).”

According to a statement from Blue Cross Blue Shield, the company has tried “to provide the best possible access to health care options for all our members, while complying with existing program guidelines and requirements.”

Managed care organizations denied Medicaid services to at least 313 Texas children in the Medically Dependent Children Program between February and July, according to the health commission.

Like several other states, Texas has been shifting its Medicaid program to the managed care structure since 1993. According to a 2015 study by the Texas Association of Health Plans, the state’s Medicaid program has saved $3.8 billion since 2010 through managed care.

The structure splits the state into regions, where private companies or hospitals, instead of the state, make decisions on how Medicaid benefits are delivered, including what kinds of services are covered and the physicians who are in their networks. The state pays the managed care organization by the patient, not the services delivered.

In 2013, state lawmakers approved rolling children with disabilities on Medicaid into managed care by November 2016. Of the 164,000 children in STAR Kids, about 6,000 of them are in the Medically Dependent Children Program.

It’s not clear how much STAR Kids is expected to save the state, although any savings won’t be realized immediately because the program is still fairly new, according to the health commission.

“The underlying core problem of all of this is that managed care is not a system that was ever meant to handle children with such severe problems,” said Hannah Mehta, executive director of Protect TX Fragile Children, a nonprofit advocacy group comprising mostly parents of children with disabilities. “It’s to help prevent folks from requiring access to specialists and additional services. It’s not something designed to manage 15 doctors and six therapists and three pharmacies.”

The transition to managed care was done haphazardly despite warnings from parents and the STAR Advisory Committee, said Anne Dunkelberg with the Center for Public Policy Priorities, an Austin-based liberal think tank. In October 2016, just days before STAR Kids went into effect, the committee — comprising providers, parents and advocates — recommended to the health commission that it delay incorporating the Medically Dependent Children Program into managed care by one year.

Commission officials said the managed care system was ready and moved forward with a phased-in implementation, Williams said.

Not every part of the state’s managed care structure in the state is fraught with problems, according to Dunkelberg. Driscoll Children’s Hospital, the managed care organization that serves South Texas, has an extensive record of working with children with disabilities, and the hospital has improved care for area children in STAR Kids, Dunkelberg said.

“There’s no reason why every single plan in STAR Kids can’t do just as good of a job,” she said.

The commission is addressing the increase in denials by analyzing whether the assessment tool used by managed care organizations to determine services is accurate and following up with families over the phone about their right to appeal the managed care organizations’ decisions.
“I think about others who maybe they don’t have families, maybe they don’t have money, maybe they’re a single parent, maybe they don’t speak English — how on earth can they possibly advocate?” Robson said.

After two months of waiting, Jill Bradshaw of North Austin won her appeal through Superior Health to receive twice-a-week speech therapy for her 4-year-old daughter, Elise, whose disabilities include deafness and blindness. She fears that families who don’t have the time or money to fight are resigning themselves to less care.

“If we had decided not to fight, that’s a lifetime of missing out because a 4-year-old who needs therapy, that’s a critical time. There’s no getting that time back,” Bradshaw said. “They’re picking on the weak because they can’t fight back. It’s just really kids who are being harmed in the long term.”
Superior Health did not return a request for comment.

On Oct. 15, 2017, Jill Bradshaw looked through one of several boxes of paperwork pertaining to her four-year-old daughter's rare disorder, CHARGE syndrome. Elise Bradshaw is both deaf and blind. Her speech therapy sessions were scaled back after state cuts to Medicaid. Jill Bradshaw appealed her provider's decision at a Fair Hearing. "The thought of a hearing when they have lawyers on their side representing a big large insurance company versus an individual family who has a need is pretty scary, " said Bradshaw.

Therapists fleeing Medicaid

Lawmakers in 2015 based cuts to Medicaid reimbursement rates for pediatric therapists on a Texas A&M University study that showed that Texas’ Medicaid rates were higher than those of other states and commercial providers. Researchers, however, were never told to study whether cutting rates would reduce access to care.

Parents and therapists told lawmakers during the regular legislative session that ended in May that access to care has been reduced because therapists are shutting their doors. This prompted lawmakers to restore 25 percent of the $350 million cut from the program.

The health commission, however, recently standardized rates for all types of therapists, reducing payments to home health therapists as well as licensed clinics required to meet higher standards than other types of therapists. The state also changed the way home health therapists are reimbursed — instead of per visit, the state pays by 15-minute increments for time therapists spend with clients — ignoring how long it takes therapists to travel to and from clients’ homes.

The changes were to bring Texas in compliance with federal regulations, Health Commissioner Charles Smith told the Texas House Appropriations Committee in July.

“We’ve seen nothing changed. Based on the rates that I see provided by HHSC, there won’t be any 25 percent restoration,” said Teresa Franzke, an Austin speech pathologist.

Franzke said she’s seen a 15 percent decline in her income and has had to dip into savings to pay for her living expenses.
Catherine Carriker, 15, who suffers from an intractable seizure condition, hasn’t seen an occupational therapist since June after her therapist, Katherine Murphy, closed Family Connections Center, which she co-owned in Dripping Springs. Families’ inability to afford therapy, Medicaid reimbursement cuts and increased amount of paperwork proved too much for Family Connections Center’s bottom line.

“It’s not a sustainable business unless you’re in a highly populated area,” Murphy said.

Murphy then tried becoming a home health therapist, but that wasn’t sustainable either, and she now works for a clinic that is too far away for Catherine, who juggles school and multiple therapy appointments per week.

Because Catherine, who has partial paralysis, hasn’t been receiving occupational therapy, her left arm has become weaker, and her hand is starting to curl.

“It’s a hard emotional place to have to either sacrifice the rest of my family or sacrifice some of her functions. For years, the clinic was right by the high school and middle school,” Catherine’s mother, Terri Carriker, said.

On Aug. 24, 2017, Elise Bradshaw played in the backyard of her home in Austin, TX with her caretaker, Shawnee Thomas. The Medicaid provider for Bradshaw, who is deaf and blind, scaled back speech therapy services in December, just as the state enacted $350 million in cuts to Medicaid service providers.

Babies and toddlers

Payment cuts to pediatric therapists have also contributed to decisions by provider groups to stop offering Early Childhood Intervention.

This is on top of already steep cuts to Early Childhood Intervention that provider groups have had to shoulder.

“It’s a continual outflow of nonprofit providers who can’t sustain the funding. They’re trying to raise money locally but they can’t. It’s a state responsibility,” said Stephanie Rubin, head of the Austin-based policy group Texans Care for Children.

Early Childhood Intervention provides therapy, family education and screenings for children up to 3 years old who have developmental delays or disabilities. Studies have shown that such services help prepare children with delays and disabilities for kindergarten while saving the state money on costly special education services down the road.

In 2011, a tough budget year for the state, lawmakers cut costs by limiting eligibility for Early Childhood Intervention services tochildren with the severest disabilities. Since then, enrollment has dropped 14 percent statewide to 59,000 and funding has declined 11 percent to $142 million in 2017.

When the Legislature convened this year, lawmakers added $4 million to the program. They also boosted funding for the program in the 2018-19 budget by $13 million, but it still fell $17 million short of what the health commission had requested.

Although the state tries to find immediate replacements for providers who leave the program to avoid gaps in service, some families still fall through the cracks, Rubin said.

Paula Paddock with Hill Country MHDD Center said the facility ended Early Childhood Intervention services in October because center officials had been forced to siphon off money from budgets of other programs within the organization to keep Early Childhood Intervention afloat. Paddock said the center’s Early Childhood Intervention program was facing a $400,000 budget shortfall due to Medicaid funding cuts, serving more kids than they were given funding for, and not being reimbursed for therapists’ and staff members’ travel to and from their clients’ homes.

Hill Country MHDD Center had 435 children from 16 counties, including Hays County, in its Early Childhood Intervention program. The state has found three providers to replace the care in the 22,000-square-mile rural area the center had served.

“The Legislature — they have their priorities, but there’s only so much money in the pot,” Paddock said. “We’ve got to educate the legislative representatives, their people in their offices, as to what ECI does, and how continuing to cut the rates and continuing to cut the funding through Medicaid, it’s going to make a big impact.”

On Oct. 11, 2017 Elise Bradshaw, who is deaf and blind, received Occupational Therapy incorporating Hippotherapy at Cadence Therapy in Manor, TX. The therapy helps Bradshaw with symptoms of her rare disorder, including core strength and stability, balance and sensory integration. Nori Crain and Caitlin Baltzell assisted Bradshaw, while her mother, Jill Bradshaw looked on.