Fight ramps up to stop Medicaid cuts to disabled Texas children

When Brianna Dupuie was a year old, a babysitter shook her so hard she had a stroke that paralyzed her right side. Everything Brianna had learned to do — how to walk, crawl and speak — was erased.

In the seven years since the incident, Medicaid has covered the cost of intensive weekly physical, occupational and speech therapy sessions to help Brianna, who lives in Driftwood, overcome learning and physical deficits — a service granted to her because she was a former foster child.

“Having Medicaid has been a Godsend,” Brianna’s mother Dena Dupuie said. “We haven’t had to worry about that part of the financial burden.”

However, $350 million in Medicaid payment cuts to acute therapy providers — $150 million in state funding and $200 million in matching federal funds — approved by the Legislature last year threatens to reduce the number of therapists and stall progress for Brianna and an estimated 60,000 other Texas children with disabilities who rely on the subsidized health care coverage for such therapies.

Critics said that lawmakers slipped the reductions into the appropriations bill toward the end of the last session and based their reasoning on manipulated data from a flawed independent study.

Republican lawmakers who supported the cuts said that they are justified and will save the state money. They said the number of Medicaid therapy providers grew 30 percent between 2009 and 2014, costing the state as much as $759 million in 2012. Meanwhile, reimbursement rates surpass those of private insurers and Medicaid reimbursement rates in other states.

“While the state has a clear responsibility to provide these life-changing therapies to the children and families that depend on them, taxpayers shouldn’t be expected to continue paying for these services at rates which are, at times, more than twice as high as those in the commercial market,” said state Sen. Charles Schwertner, R-Georgetown, chairman of the Senate Committee on Health and Human Services.

A group of providers and parents, Brianna’s included, who sued the state over the summer, have accused state officials of using false rate comparisons and won a temporary injunction to halt the cuts that were supposed to go into effect Sept. 1. The state has appealed the ruling and oral arguments are Wednesday. The trial for a permanent injunction will start April 25. The goal is to fend off the cuts until next Legislative session, which begins in January.

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Who is affected

The cuts would hit hard pediatric speech, occupational and physical therapists, including those who travel to patients' homes to deliver services.

Home health agencies expect to see an average reduction of 18 to 20 percent in revenue for therapy services, while providers who offer only speech therapy would see far greater cuts, according to the Texas Association of Home Care and Hospice.

Rachel Hammon, head of the association, said that when the cuts were first announced, several providers stopped treating Medicaid patients. Texas Health and Human Services Commission officials said they couldn’t immediately provide the number of therapists that accepted Medicaid in 2015, but Hammon’s group has learned that at least two clinics in the Houston and Panhandle areas stopped treating Medicaid patients.

Child Care Options For Kids, a plaintiff in the lawsuit and home health care agency that serves the Abilene, Waco, Killeen and Temple areas, reported that up to 600 children on Medicaid were waitlisted for therapists, according to court documents.

Brianna lost her speech therapist as a result of the threat of the cuts, her mom said. The 8-year-old has anxiety which causes stuttering. During the month Dupuie was trying to finalize paperwork with a new provider, Brianna’s stuttering worsened.

“What’s pretty devastating and alarming is that we had already started seeing things happen and the cuts haven’t even gone through,” Dupuie said. Brianna also receives physical and occupational therapies at home to help with tasks like brushing teeth, preparing breakfast and riding a bike.

Dupuie, who has fostered eight children in the past, fears that people will no longer want to foster children — many of whom have disabilities — because of the proposed cuts.

Child advocates also fear that children who live in rural areas will be disproportionately affected.

Dupuie is one of five parents and four provider groups from across the state who are suing the health and human services commission. The children named in the lawsuit have autism, seizures, trouble swallowing and are nonverbal and wheelchair bound, among other disabilities.

Jolene Sanders, who is not a party in the lawsuit, has a son — 11-year-old Lourson Stallard — who has autism and receives Medicaid for speech therapy at her Austin home. He has a hard time gauging people’s emotions and social cues and expressing himself, which has caused meltdowns.

The family has one car and going to speech therapy at a clinic in addition to the other therapies Lourson receives would be nearly impossible, Sanders said.

Sanders, also a child advocate, said that the state’s proposed cuts are based on faulty information.

“If we’re going to make a decision this big that impacts children with disabilities, there has to be full transparency,” Sanders said.

Occupational therapist Amanda Halbert works with Brianna Dupuie on tying her shoelaces. Laura Skelding/American-Statesman

Flawed study?

The Legislature based the cuts on an independent study from Texas A&M Health Science Center researchers — parts of which state District Judge Tim Sulak, in signing the temporary injunction in September, said were “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 were not tasked with studying access to care, university representatives said in court, or with finding out why there was a dramatic spike in patients served.

Sanders said that lawmakers assumed the increase in patients was because of fraud even though she suspects that the Affordable Care Act had helped increase people’s awareness of Medicaid and that emerging best practices had led more children to be diagnosed with autism.

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

Other flaws plaintiffs say are in the study:

  • The study ignored the overhead costs shouldered by therapists to deliver services.
  • Texas home health reimbursement rates were improperly compared to clinic rates, which tend to be lower.
  • The only speech therapy rate included for comparison was a $17.86 rate from Florida, which the state has said would not be enough to provide home health speech therapy services.

“HHSC knew the report was flawed, so the agency repackaged the parts it liked…and submitted it to the Legislature,” said Chuck McDonald, a representative for the plaintiffs.

The state does not directly address the study in its appeal of the temporary injunction but rather is arguing that only the federal government can challenge reimbursement rates and the federal government can withdraw funding if it finds that state levels are too low. The state says that that delaying the implementation of the lower rates could mean further cuts down later.

“Throughout this process the Health and Human Services Commission has been committed to working with stakeholders, the public and legislators to ensure we meet the terms set by the Legislature and maintain access to care for Texans,” Bryan Black, commission spokesman, said.

During the summer, a handful of Republican lawmakers joined Democrats in opposing the cuts, reversing course once they learned of the potential impact.

State Sen. Jane Nelson, R-Flower Mound, head of the Senate Finance Committee, has defended the need for gradual cuts.

“My goal has always been to bring our rates to an appropriate level. Texas taxpayers should not be forced to pay Medicaid rates that are in some cases double the rates being paid by other payers,” Nelson said. “I will continue to advocate for a flexible, gradual effort to bring our rates to an appropriate level, while ensuring that every special needs child in Texas receives the services they need.”

The state has cut Medicaid reimbursement rates to therapists every biennium since 2010: Up to 5 percent in 2010-2011, up to 19 percent in 2012-2013 and up to 4 percent in 2014-2015.

What’s at stake

The state has proposed $350 million in Medicaid payment cuts to acute therapy providers — $150 million in state and $200 million in matching federal funds. Advocates say that an estimated 60,000 children with disabilities who are on Medicaid could be at risk of losing physical, occupational and speech therapists, particularly those that provide services at patients’ homes.

If plaintiffs are successful in blocking the cuts, that leaves a $150 million funding gap in the next two years because that money wasn’t appropriated by the Legislature. That gap would need to be plugged in the interim by money from the state’s general fund with the approval of the governor and the Legislative Budget Board, a board spokesman said.

What’s next

Oral arguments for a temporary injunction on the cuts will be 9 a.m. Wednesday in the Austin-based Third Court of Appeals.

Trial for the permanent injunction on the cuts will start at 9 a.m. April 25 in state District Judge Tim Sulak’s court in Austin.