Chris Traylor, as Executive Commissioner of the Texas Health and Human Services Commission And the Texas Health and Human Services Commission v. Diana D., as Next Friend of KD, a Child Karen G., as Next Friend of TG and ZM, Children Guadalupe P., as Next Friend of LP, a Child Sally L., as Next Friend of CH, a Child Dena D., as Next Friend of BD, a Child OCI Acquisition, LLC

Opinion

ACCEPTED

03-15-00657-CV

7745200

THIRD COURT OF APPEALS

AUSTIN, TEXAS

11/9/2015 2:07:47 PM

JEFFREY D. KYLE

CLERK

NO. 03-15-00657-CV

FILED IN

3rd COURT OF APPEALS

IN THE AUSTIN, TEXAS THIRD COURT OF APPEALS 11/9/2015 2:07:47 PM AUSTIN, TEXAS JEFFREY D. KYLE Clerk

CHRIS TRAYLOR, EXECUTIVE COIMMISSIONER OF TEXAS HEALTH AND HUMAN SERVICES COMMISSION AND THE TEXAS HEALTH AND HUMAN SERVICES COMMISSION, APPELLANTS

V.

DIANA D., et al

APPELLEES

ON APPEAL FROM THE 200TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS, HON. TIM SULAK, PRESIDING

APPELLEES’ RESPONSE TO APPELLANTS’ MOTION TO VACATE COUNTER-SUPERSEDEAS ORDER, OR IN THE ALTERNATIVE, INCREASE COUNTER-SUPERSEDEAS BOND

______________________________________________________________

TO THE HONORABLE THIRD COURT OF APPEALS:

I. INTRODUCTION

1) Appellants have filed a Motion To Vacate Counter-Supersedeas Order, Or In The Alternative Increase Counter-Supersedeas Bond (“Appellants’ Motion” or “the Motion”) in which Appellants claim that the trial judge abused his discretion because: a) the U.S. Secretary of Health and Human Services has exclusive

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authority to enforce the federal Medicaid statutory provisions relating to access to care; and b) the temporary injunction violates various clauses of the U.S. and Texas Constitution. Alternatively, Appellants’ Motion claims that this Court should set the bond for denial of supersedeas at $100,000,000.00 because that is the alleged two-year budget impact of the temporary injunction. 2) The Court should deny Appellants’ Motion because:

a. Appellants’ attack on the trial court actions has nothing to do with their factual or legal basis.

b. There is no federal constitutional or statutory ground to challenge the trial court’s actions.

c. The trial court’s actions do not violate the Texas Constitution.

d. None of Appellants’ objections were ever presented to the trial court.

e. Appellants expressly consented to and waived any objection to the bond for the denial of supersedeas.

f. Appellants’ claims as to the budgetary impact of the temporary injunction lack any evidentiary, or logical, basis.

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Because there is no factual or legal basis for the Appellants’ Motion, no error has been presented for review, and all claims in the Motion have been waived, the Court should deny the Motion.1 II. STATEMENT OF FACTS 3) Because this is the Court’s first opportunity to review any aspect of this case, Appellees offer this abbreviated statement of facts to provide context for Appellants’ Motion and this response. 4) Appellees include the next friends of five children who suffer from severe and disabling conditions, including seizure disorders, delayed development, autism, speech developmental delays, epilepsy, cerebral palsy, and other conditions. CR 5, 587–88. These children and thousands of other like them receive speech, occupational, and physical therapy services from home health agencies under the Texas Medicaid Program to assist with their disabling symptoms such as

1 As Appellees were finalizing this response, Appellants filed a letter asking the Court to consider the trial court’s comments at a recent hearing when making its determination of Appellants’ Motion. Letter from Kristofer S. Monson, Assistant Solicitor General, to Jeffrey D. Kyle, Third Court of Appeals (Nov. 9, 2015) (on file with Court). This request is improper for at least three reasons. First, Appellants are asking the Court to consider statements made after their Motion was filed, which are not part of the Court’s record. Second, Appellants have not attached the hearing transcript to their letter, apparently hoping the Court will adopt Appellants’ misleading and incorrect characterization of Judge Sulak’s words, which in any event did not modify the order Appellants are challenging. Third, by filing this letter the same day Appellees’ response to the Motion is due, Appellants are attempting to amend their argument and avoid a response from Appellees. The Court should disregard Appellants’ letter and decide the Motion based on the record and briefing schedule the Court has already defined. If the Court is inclined to consider Appellants’ letter, Appellees ask that the Court instruct Appellants to include in their filing all portions of any supplemental record on which they will rely, and set a reasonable briefing schedule for any response the Court would like from Appellees.

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the inability to speak, walk, control bodily movement, or mentally process information. CR 5, 588. Appellees also include three providers of these home health therapy services. CR 5, 588. Appellees filed this suit on August 11, 2015, to enjoin The Texas Health and Human Services Commission (“HHSC”) from implementing dramatic cuts to Medicaid reimbursement rates for home health therapy services, which HHSC planned to implement on September 1. CR 4–64. 5) Appellees’ suit is based, among other things, on the fact that in promulgating its proposed rates, HHSC did not comply with its own rules, including 1 TAC §355.8021(a)(2)(B), which requires that periodic rate reviews include a study of payments for, as well as costs associated with, providing Medicaid reimbursable therapy services. CR 343, 507–08. Because HHSC failed to comply with its own rules, the proposed rates constitute an effective adoption of a new administrative rule under El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 247 S.W.3d 709 (Tex. 2008). CR 507–08; see also CR 203–05, 343–46. Appellees sought to enjoin HHSC from implementing the proposed rates because they had not followed the steps required by the Administrative Procedures Act (“APA”) to adopt a new rule. Id. (citing TEX. GOV’T CODE ch. 2001 et seq.). Alternatively, Plaintiffs assert that Commissioner Traylor’s acts were ultra vires, and should likewise be enjoined. Id. (citing TEX. CIV. PRAC. & REM. CODE §37.009; City of El Paso v. Heinrich, 284, S.W.3d 366, 372 (Tex. 2009)).

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6) The trial court ordered accelerated discovery, which included a deposition of Pam McDonald as the representative of HHSC. CR 98–101. During that deposition, Appellants handed Appellees a second set of proposed rates that HHSC had created over the previous weekend in response to the litigation and discovery. 2 RR 10; 3 RR 201–02. At 9:17 a.m. on the date of the initial temporary injunction hearing, Appellants filed “HHSC’s Advisory to the Court” announcing that HHSC would “start over, with a new rate proposal, pursuant to Rider 502 and HHSC’s rate methodology as prescribed by its administrative rules.” CR 270–71. Because HHSC abandoned the proposed September 1, 2015 implementation of new rates, the injunction hearing was moot and did not proceed. 7) Nine days after abandoning the first two sets of proposed rates and promising to start over, HHSC published a third set of proposed rates to take effect on October 1, 2015. CR 342, 51–73. This led Appellees to amend their petition, CR 336–92, obtain additional discovery, CR 491–94, and set another temporary injunction hearing for the week of September 21. At the hearing, HHSC’s witness admitted that HHSC had not complied with the §355.8021(a)(2)(B) requirement of a study to determine the costs associated with providing the Medicaid-

reimbursable services. 3 RR 229–30. The trial court found, among other things, 2 “Rider 50” refers to a rider to the H.B. 1 General Appropriations budget of the 84 th Legislative Session, which was introduced as Exhibit 9 at the temporary injunction hearing. 6 RR at Ex. 9 p. 2–4. Subsection (c) of Rider 50, which provides that HHSC “should” and “may” (not “shall”) achieve General Revenue Funds savings, is the basis for Appellants’ claim that the Legislature mandated $100,000,000.00 in rate cuts over the next two years.

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that the proposed rates did not comply with the requirement of a cost study under §355.8021(a)(2)(B). CR 590–92. Because the proposed rates failed to comply with HHSC’s own rules, the trial court found that the proposed rates constituted a rule change that failed to comply with Government Code Chapter 2001 et. seq. under El Paso Hosp. Dist., 247 S.W.3d at 715. CR 592. 8) Contrary to the characterizations of Appellants’ Motion, Rider 50 of the H.B. 1 General Appropriations Bill does not mandate $100,000,000 in cuts to Medicaid over the next two years because the relevant provisions only state that HHSC “should” and “may” (not “shall”) achieve General Revenue Funds savings. 6 RR at Ex. 9, p.3–4. The trial court evidence included letters from legislators to Commissioner Traylor pointing out that this language of Rider 50 did not compel the proposed rate reductions. 6 RR at Ex. 32, App. Tab 1. 9) Appellants’ Motion claims that the legal basis of the temporary injunction is a federal statutory provision of access to care. Although the trial court found that the proposed rates would result in denial of care for Medicaid recipients, CR 597, this finding was not the legal violation that formed the basis of the trial court’s injunction, which was the failure to comply with HHSC’s own rules and the failure to fulfill the obligations to implement new rules as required by El Paso Hosp. Dist., 247 S.W.3d at 715 and Texas Government Code Chapter 2001 et. seq. CR 592. Furthermore, the trial court did not enjoin HHSC from implementing all rate

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reductions because the injunction only prohibits the implementation of rates “without conducting a review of payments for providing Medicaid-reimbursable therapy services and conducting a review of costs associated with providing Medicaid-reimbursable therapy services as required by 1 TAC §355.8021(a)(2)(B). CR 595–96. 10) At the conclusion of the temporary injunction hearing, Appellees asked the trial court to deny supersedeas under TRAP 24.2, conditioned on Appellees’ posting a $500 bond. 5 RR 5–7. Appellants opposed the denial of supersedeas, but agreed that if the trial court denied supersedeas, a $500 bond is reasonable. 5 RR 9. The trial court denied supersedeas under TRAP 24.2(a)(3), and ordered that $500 of the funds Appellees had already deposited in the clerk’s registry would serve as security for the denial of supersedeas. CR 596–97. 11) Nineteen days after the trial court’s temporary injunction hearing, Appellants filed a motion to modify the temporary injunction and attached an affidavit of Pam McDonald dated October 14, 2015. CR 674–89. This affidavit was not before the trial court during the temporary injunction hearing or the supersedeas hearing, which occurred on September 21–23, 2015. 3 RR 1 – 5 RR 9. Despite the fact that this affidavit was never presented to the trial court during the relevant proceedings, Appellants attached it to their Motion under Tab D and refer

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to it as evidence in support of their claim that the trial judge abused his discretion. Appellants’ Motion at 22–23. 12) In their appeal, Appellants waived the stay of trial court proceedings. CR 735. The case remains set for trial on January 18, 2016. In their Motion, Appellants admit that the standard of review is abuse of discretion. Appellants’ Motion, p. 3.

III. ARGUMENT

A. Appellants’ Motion should be reserved for full panel consideration.

13) Appellants’ Motion, if granted, would grant case-dispositive relief as measured by the impact on the lives and livelihood of Appellees and many Texans. Based on the evidence presented, the trial court found that if the proposed rates are implemented, Medicaid beneficiaries would be denied essential Medicaid-funded services and service providers would be forced out of business. CR 595. The trial court found that allowing the State to supersede the temporary injunction would render any relief granted ineffective. CR 596. The Texas Supreme Court has recognized in a similar case that the “State's position—boundless entitlement to supersede adverse non-money judgments—would vest unchecked power in the executive branch, at considerable expense to the judicial branch, not to mention the wider public we both serve.” In re State Board for Educator Certification, 452 S.W.3d 802, 808 (Tex. 2014). In that case, the Supreme Court recognized that allowing the State to supersede the trial court’s order without security would cause

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unrecoverable loss to the prevailing party. “The State—as yet unsupported by a victory on the merits in any court—wants to strip Montalvo of his livelihood while the appellate process grinds on, and if he manages to regain his professional license after having been kicked out of his profession for years—well, bygones. That's a striking assertion of unbridled executive power—to enforce administrative orders that a trial court has reversed—and TRAP 24.2(a)(3) recognizes the judiciary's authority to say no.” Id. at 809. Just as the State requested in In re State Board, HHSC asks this Court to allow them to supersede the temporary injunction, which would cause devastating setbacks to children in need of services and force many service providers out of work. Repairing the damage caused by such deprivation after the fact is impossible, and the citizens of Texas deserve the Court’s protection from such “unbridled executive power.” Because the outcome of Appellants’ Motion would in effect permanently deprive Appellants, and many other Texans, of any relief in this case, the Court should reserve Appellants’ Motion for consideration by the full panel.

B. Appellants’ Motion is actually an attack on the temporary injunction, not the denial of supersedeas.

14) Pages 5–21 of Appellants’ Motion consist of arguments that the Appellees’ substantive claims are barred by federal law, the U.S. Constitution, and the Texas Constitution. This is a substantive attack on the temporary injunction mislabeled as a challenge to the denial of supersedeas because all of the arguments are directed at

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the underlying claims and causes of action, not at the trial court’s discretion to deny supersedeas under TRAP 24.2(a)(3) and In re Board of Educator Certification. The temporary injunction is already the subject of a pending interlocutory appeal with a schedule for briefing on the merits. The Court should disregard Appellants’ arguments regarding the substantive claims because such arguments are not properly before the Court in the form of briefing on the merits of the interlocutory appeal. The Court should limit the consideration of Appellants’ Motion to only those issues actually directed at the trial court’s discretion to deny supersedeas. However, nowhere in Sections I, II, III or IV of the Motion is there any explanation as to how the denial of supersedeas, as distinct from the temporary injunction itself, constitutes a violation of any of the cited constitutional provisions. Accordingly, the Court should limit its consideration of the Motion to Section V, which is the only part of the Motion that actually addresses the trial judge’s decision on the denial of supersedeas.

C. The grounds for relief asserted in Appellants’ Motion have nothing to do with the basis of the temporary injunction and denial of supersedeas.

15) Appellants’ Motion is premised on the argument that only the U.S. Secretary of Health and Human Services has authority to enforce the access to care provisions under the federal Medicaid statute. Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378 (2015). As discussed below, Appellants’ reading of

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Armstrong is overly broad. Infra at §III.E. Although that case does stand for the proposition that only the Secretary may enforce §30(A) of the Medicaid Act, that proposition is completely irrelevant to this lawsuit because: a) this lawsuit is based exclusively on Texas law, not federal law; and b) access to care is not the basis for the trial court’s temporary injunction. HHSC’s own regulatory rules provide that “HHSC may conduct periodic rate reviews that include, but not be limited to, payments for as well as costs associated with providing these Medicaid- reimbursable therapy, nursing, and aide services.” 1 TAC §355.8021(a)(2)(B) (emphasis added). HHSC admits that it did not comply with the requirement of a cost study under this rule when it promulgated the proposed rates. 3 RR 229–30. When HHSC fails to follow its own regulatory rules in making rate decisions, such rates constitute a new rule which must comply with the APA under Texas Government Code Chapter 2001. El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 247 S.W.3d 709 (Tex. 2008). Because HHSC did not comply with §355.8021(a)(2)(B) and did not undertake the necessary steps for the adoption of new rules under the APA, the trial court enjoined implementation of the proposed rates because they were promulgated in violation of Texas law. CR 592–97. Nowhere in the pleadings, briefing, or temporary injunction, is there any reference to the federal statutory Medicaid right to access to care. Appellants’ Motion therefore wholly ignores and completely mischaracterizes the legal basis of the

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lawsuit and the temporary injunction in an effort to argue that the claims and the temporary injunction are preempted by federal law. Because the lawsuit and the temporary injunction are based exclusively on the violation of Texas law by HHSC, the Court should disregard Appellants’ arguments regarding federal preemption.

D. Fundamental Error under McCauley is irrelevant to Appellants’

Motion.

16) Appellants’ Motion cites to McCauley v. Consolidated Underwriters, 304 S.W.2d 265 (Tex. 1957) for the proposition that the temporary injunction and the denial of supersedeas are reviewable under the doctrine of fundamental error. The purpose of this argument is not clear because the temporary injunction and the denial of supersedeas are already subject to ordinary review under applicable statutes and rules of appellate procedure. However, the citation to McCauley is irrelevant. Fundamental error is a discredited doctrine used in rare circumstances. McCauley holds that when an appellate court lacks jurisdiction, the Texas Supreme Court can address the lack of jurisdiction even if the parties fail to present jurisdiction as assigned error. Id. at 265–67. This is merely an early recitation of what is now a common doctrine of jurisdiction. “[J]urisdiction cannot be waived or conferred by agreement, must be considered by a court sua sponte, and can be raised for the first time on appeal. Reata Constr. Corp. v. City of Dall., 197 S.W.3d 371, 379 (Tex. 2006). Clearly in considering the interlocutory appeal of the

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temporary injunction, the Court may, either by issue presented or sua sponte, consider whether there is jurisdiction either in the trial court or the Court of Appeals. To the extent that any doctrine of fundamental error continues, it has no bearing on Appellants’ Motion. [D]ue to the policy concerns favoring preservation of error during trial or during appeal, the fundamental error doctrine is a discredited doctrine that is used in rare circumstances only.” Goodson v. Castellanos, 214 S.W.3d 741, 750 (Tex. App.—Austin 2007, pet. denied). Appellants’ Motion does not present any rare circumstance and the fundamental error doctrine is irrelevant.

E. There is no federal basis to challenge the trial court’s actions.

17) The exclusive right of the U.S. Secretary of Health and Human Services (the “Secretary”) to enforce §30(A) of the Medicaid Act does not preempt Texas law regarding adoption and compliance with regulatory rules. Appellants argue that Armstrong v. Exceptional Child Ctr., Inc., 135 S.Ct. 1378 (2015), preempts any challenges of any sort to a state’s implementation of Medicaid. Appellants’ Motion at 5. This reading of Armstrong is far too broad, and is contradicted not only by other Supreme Court holdings and subsequent lower court decisions interpreting Armstrong, but by Armstrong itself. In Armstrong, the Supreme Court held broadly that the United States Constitution’s Supremacy Clause does not by itself create a federal cause of action. Armstrong, 135 S.Ct. at 1383. The Supreme Court went on

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to hold that the Medicaid Act (42 U.S.C. §§ 1396 et seq.) “implicitly precludes private enforcement of §30(A).” Id. at 1385 (emphasis added). Armstrong goes no further. 18) Armstrong is still very new law, but the only trial court within the Fifth Circuit that has examined it has confirmed the limit of its holding. See Planned Parenthood Gulf Coast, Inc. v. Kliebert, 2015 U.S. Dist. LEXIS 146988 (M.D. La. Oct. 29, 2015). In Kliebert, the District Court rejected the Louisiana Department of Health and Hospitals’ argument that Armstrong prevented the plaintiffs from bringing a cause of action under Section 1396a(a)(23)(A)of the Medicaid Act. Id. at *86 (“Armstrong can be read as definitive as to the breadth of [§30A] but of no other section”). Armstrong does not even reach the entire Medicaid Act, much less beyond it. The Kliebert court determined this by looking at Justice Breyer’s concurrence, which, as the narrowest position supporting the judgment, is the holding of the Court. See Marks v. United States, 430 U.S. 188, 193 (1977). Justice Breyer’s concurrence discusses numerous alternative remedies available to the plaintiffs, including their right to bring an action under the federal Administrative Procedure Act. Armstrong, 135 S. Ct. at 1389–90 (Breyer, J., concurring in part and concurring in judgment). Accordingly, although Armstrong holds that private enforcement of §30A is foreclosed, it does not stand for the proposition that the Medicaid Act broadly preempts any other state or federal cause of action. Because

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this case does not involve a challenge under §30A, or any other federal law, nothing in Armstrong can be construed to hold that the temporary injunction or the denial of supersedeas constitutes a violation of the U.S. Constitution or the Medicaid Act. 19) Furthermore, the Supreme Court has previously held that the Medicaid Act does not preempt state laws that do not conflict with the Act. In Pharm. Research & Mfrs. Of Am. v. Walsh, 123 S.Ct. 1855 (2003) a group of prescription drug manufacturers claimed that the Medicaid Act preempted a Maine statutory provision regarding Medicaid prescription drug rebates. The Court held that a party asserting Medicaid preemption bears the burden to prove that there is no Medicaid related goal or purpose served by the allegedly preempted state law. Walsh, 123 S.Ct. at 1868. Because there was no showing that the Maine rebate program would result in any impediment to any Medicaid recipient’s access to prescription drugs, or any other impediment to any Medicaid purpose, the Maine statute was not preempted. Walsh 123 S.Ct. at 1870. In the case at bar, HHSC claims that the trial court’s temporary injunction is somehow preempted by the exclusive remedy of the Secretary under §30A, even though the temporary injunction is not based in any way on §30A or any other Medicaid provision. 20) The actual basis for the temporary injunction is HHSC’s failure to comply with the cost study requirements of 1 TAC §355.8021(a)(2)(B) and HHSC’s failure

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to follow the APA as required by El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 247 S.W.3d 709, 715 (Tex. 2008). In order to challenge the temporary injunction on the basis of Medicaid preemption, Walsh requires HHSC to demonstrate that §355.8021(a)(2)(B) results in an impediment to a Medicaid goal or purpose. Because HHSC has not made any attempt to do so, Appellants’ Motion presents no basis to claim that the temporary injunction is preempted by the Medicaid Act.

F. The trial court orders do not violate any provision of the Texas Constitution.

21) Rider 50 does not mandate rate reductions. On page 18, Appellants’ Motion claims that the temporary injunction violates the separation of powers clause of the Texas Constitution because the reductions are mandated by Rider 50. This is a mischaracterization of Rider 50, Subsection (c) of which provides: “HHSC shall reform reimbursement methodology to be in line with industry standards, …while considering stakeholder input and access to care. … $50,000,000 in General Revenue Funds savings should be achieved through rate reductions and $25,000,000 in General Revenue Funds savings may be achieved through various medical policy initiatives…” and Subsection (d) of which provides: “HHSC shall develop a plan to allocate the reductions required by Subsection (a) of this rider by taking actions such as those suggested under Subsections (b) and (c) of this rider…” 6 RR at Ex. 9, p.3. (emphasis added). The only mandate in this provision

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is the requirement that reimbursement methodology shall be reformed. The language regarding rate reductions and other savings is in permissive, not mandatory language. The absence of mandatory language was pointed out to Appellants by letters from legislators which were introduced as evidence at the temporary injunction. 6 RR at Ex. 32. Because Rider 50 did not compel the proposed rate reductions, there is no basis to claim that the temporary injunction improperly interfered with any legislative or executive authority in violation of the Separation of Powers clause. 22) The temporary injunction does not prevent Appellants from adopting rates in conformity with applicable rules. On pages 6–8, Appellants’ Motion claims that the temporary injunction constitutes “judicial review” of HHSC’s rates, which is yet another mischaracterization of the temporary injunction. The trial court found that HHSC failed to comply with state law, namely 1 TAC §355.8021(a)(2)(B) and the APA in adopting and promulgating the proposed rates and merely prohibited the implementation of rates promulgated in violation of Texas law. CR 592–96. This is not a substantive review of the rates themselves, but is merely a reflection of the unremarkable proposition that HHSC, like all other State actors, is not authorized to act in an arbitrary and capricious manner in disregard of Texas law. 23) Furthermore, Appellants claim that the temporary injunction somehow prevents HHSC from complying with an alleged legislative mandate to implement

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rate reductions. This is completely false – nothing in the temporary injunction prohibits HHSC from promulgating and adopting rates in conformity with Texas law. The temporary injunction only prohibits two things: a) implementation of the rates that were adopted and promulgated in violation of Texas law, CR 595; and b) adoption and implementation of new rates without complying with the requirements of §355.8021(a)(2)(B). CR 595–96. While the temporary injunction remains in effect, HHSC is fully permitted to implement new rates so long as the rates comply with Texas law. Therefore the temporary injunction has not prevented HHSC from adopting rates to implement the alleged mandatory budget requirements of Rider 50. It merely, and unremarkably, requires that HHSC comply with state law while doing so. Because the temporary injunction allows HHSC to promulgate and implement rates in accordance with state law, there is no violation of separation of powers or business with the United States clauses of the Texas Constitution. 24) The Texas Supreme Court has expressly approved the judicial review of reimbursement decisions made by HHSC in violation of state law. In El Paso Hosp. Dist. v. Tex. Health & Human Servs. Comm’n, 247 S.W.3d 709 (Tex. 2008), HHSC had ignored its own regulatory rules in changing its system of calculating Medicaid reimbursement rates. The Texas Supreme Court did not dismiss the case on the basis that the separation of powers or the business with the United States

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clauses of the Texas Constitution prohibited the courts from reviewing HHSC’s failure to comply with its own rules and the APA. The Court held that because HHSC did not comply with its own regulatory rules and did not comply with the APA to promulgate new rules, the change in reimbursement calculation was a violation of Texas law. El Paso Hosp. Dist. at 715. This case is no different and there is no basis to claim that the temporary injunction violates the Texas Constitution.

G. Appellants never presented any of these arguments to the trial court, nor have they cited any record references for any briefing or evidence in support of their contentions.

25) Appellants admit that this Court should apply an abuse of discretion standard of review to their Motion. Appellants’ Motion at 3. In order to show this Court that they have preserved error as claimed in the Motion, Appellants must show that the complaint was presented to the trial court by a timely request, objection, or motion that stated the grounds for the ruling sought. TRAP 33.1(a). “As a rule, a claim, including a [federal] constitutional claim, must have been asserted in the trial court in order to be raised on appeal.” Osterberg v. Peca, 12 S.W.3d 31, 39 n.6 (Tex. 2000). Appellants never presented any request, objection, or motion to the trial court claiming that the relief sought in this lawsuit violated the Medicaid Act, any provision of the U.S. Constitution, or any provision of the Texas Constitution. Furthermore, Appellants’ Motion is wholly devoid of any

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citations for presentation of preserved error, evidence in support of their contentions, or trial court rulings on their objections. Appellate courts are not required to search the record for support for an appellant’s objections. Fredonia State Bank v. General Am. Life Ins., 881 S.W.2d 279, 283 (Tex. 1994). If the appellant does not include record references, the Court may consider the point waived. Id. at 284. Because Appellants’ Motion does not comply with TRAP 33.1(a) and fails to cite any record support, the Court should deny the Motion because all grounds have been waived. 26) The only evidence cited by Appellants’ Motion is the October 14, 2015 affidavit of Pam McDonald. Appellants’ Motion p. 22–23. The temporary injunction and denial of supersedeas hearings took place from September 21–23, 2015. 3 RR 1 – 5 RR 9. Clearly the Court did not consider Ms. McDonald’s affidavit in entering the temporary injunction and the denial of supersedeas, because the affidavit did not even exist. Appellants cannot claim that the trial judge abused his discretion based on evidence that did not exist and was not presented prior to the ruling on the temporary injunction and denial of supersedeas, therefore the Court should disregard the affidavit of Pam McDonald and any arguments based on it.

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H. Appellants expressly consented to the bond and have not preserved any appellate review.

27) As an alternative to vacating the denial of supersedeas, Appellants now urge the Court to “reduce the Counter-Supersedeas Bond.” Appellants’ Motion at 21.3 During the hearing on the request for denial of supersedeas, Appellants expressly consented to the $500 bond. Appellants’ counsel stated that Appellants’ had “proffered $500,” and acknowledged “that that’s reasonable.” 5 RR 9. This constitutes express consent to the amount of the bond. Appellants cannot contend that the trial judge abused his discretion in ordering a bond amount which Appellants agreed was reasonable. 28) Not only did Appellants consent to the bond, they never requested the trial court to review the adequacy of the bond. An appellate court “cannot review the trial court’s exercise of discretion in ordering the amount of security unless the record demonstrates that a request was presented to the trial court to determine the sufficiency of the bond and that the trial court made a ruling thereon.” Law Eng’g & Envtl. Servs. v. Slosburg Co., 100 S.W.3d 389, 390 (Tex. App.—Houston [1st Dist.] 2002, order) (citing Hamilton v. Hi-Plains Truck Brokers, Inc., 23 S.W.3d 442, 443 (Tex. App.—Amarillo 2000, no pet.)). Without a motion in the trial court to increase the amount of the bond, the court of appeals “does not have jurisdiction

3 Presumably, Appellants meant “increase.” Appellees have no objection to a reduction in the bond amount.

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to consider this matter.” Law Eng’g, 100 S.W.3d at 390. Because the request to increase the bond was not presented to the trial court, the Court has no jurisdiction to consider the request and Appellants’ Motion should be denied.

I. There is no evidentiary or rational basis for the alleged budgetary impact of the temporary injunction.

29) Appellants have requested the Court to order a $100,000,000 bond as the alleged harm to be caused due to the supposed mandatory budget obligations that span the next two years. There is absolutely no evidence to support Appellants’ claim of $100,000,000 in harm – Appellants have not cited to any documentary evidence, trial court testimony, or affidavit supporting this claim. One obvious reason for this is that no rational person could provide such testimony because it has no relation to the effect of the temporary injunction. Even if Rider 50 is a mandate — which it is not — the $100,000,000.00 would be saved over the next two fiscal years. 6 RR at Ex. 9 p. 3–4. Trial in this case is set for January 18, 2016. CR 596. At most, the Appellants’ exposure is for whatever portion of the savings would be realized by that date. But more fundamentally, the only evidence relating to the impact of the rate cuts on HHSC is the testimony of Richard Allgeyer, Director of HHSC’s Center for Strategic Decision Support. Mr. Allgeyer testified that “because Medicaid is an entitlement, if we run out of our appropriation, they will give us a supplemental appropriation next session. They won’t like it, but they

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will, and they almost always do because this is a lot of money.” 4 RR 240. There is simply no evidentiary basis for the alleged impact of the temporary injunction. 30) Even if this Court were inclined to consider Appellants’ request without the benefit of an underlying trial court order or supporting evidence, Appellants bear the burden to show that their request for a $100,000,000.00 bond is not likely to cause Appellees substantial economic harm. Accord TEX. CIV. PRAC. & REM. CODE §52.006(c); TEX. R. APP. P. 24.2(b) (instructing trial courts to lower amounts of security required to suspend enforcement of judgments to amounts that will not cause substantial economic harm to judgment debtors). Such a bond amount would obviously cause Appellees tremendous substantial harm. Though Appellees would be happy to offer evidence to that effect in an appropriate proceeding with the trial court, this Court can infer as much from Michael Reiswig’s testimony. Mr. Reiswig is president and CEO of Care Options for Kids, 3 RR 80, whose revenue makes up approximately 9% of the home health market for pediatric therapy. 3 RR 84. He testified that an annualized loss of just $4.5 million dollars would force his company to “close the doors.” 3 RR 100. Posting a $100,000,000.00 bond would certainly have the same effect. 31) Finally, Appellants cannot show that the temporary injunction has any actual impact on the HHSC budget because HHSC is not prohibited from adopting rate reductions so long as they comply with their own regulatory rules and the APA.

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The temporary injunction permits HHSC to adopt rate reductions so long as it complies with 1 TAC §355.8021(a)(2)(B). CR 595–96. If HHSC believes it is under a legislative mandate to implement the rate reductions, all it needs to do is comply with its own regulatory rules, or adopt new rules as required by the APA, to promulgate and implement the new rates. HHSC has not made any attempt to do so, therefore the failure to implement rate reductions to achieve the alleged mandatory budget savings is due to HHSC’s own inaction, not the temporary injunction.

IV. CONCLUSION

32) Appellants’ Motion constitutes a direct attack on the temporary injunction without even a thin disguise in the form of a motion to vacate the denial of supersedeas. The Motion wholly mischaracterizes the basis for the relief sought and the legal grounds for the temporary injunction in order to fabricate claims of federal preemption and constitutional violations out of whole cloth. Nothing in the relief requested or granted violates any federal statute or any constitutional provision. Furthermore, Appellants failed to preserve and have waived all objections in the Motion because Appellants never presented those objections to the trial court, nor is there any attempt to show preservation of error or evidentiary support through record citations. Appellants expressly consented to the bond amount and never requested the trial court to reconsider the bond, therefore there is

25

no basis for the Court to consider the request to increase the bond. Even if such request had been preserved for appellate consideration, there is absolutely no evidence to support the claimed bond amount, which is wholly divorced from any actual impact that might result from the temporary injunction. Accordingly, the Court should deny Appellants’ Motion.

Respectfully submitted,

RICHARDS RODRIGUEZ & SKEITH, LLP 816 Congress Avenue, Suite 1200 Austin, Texas 78701

Telephone: 512-476-0005

Facsimile: 512-476-1513

By: /s/ Daniel R. Richards_____________ DANIEL R. RICHARDS

State Bar No. 00791520

drichards@rrsfirm.com

BENJAMIN H. HATHAWAY

State Bar No. 09224500

bhathaway@rrsfirm.com

CLARK RICHARDS

State Bar No. 90001613

crichards@rrsfirm.com

CHASE C. HAMILTON

State Bar No. 24059881

chamilton@rrsfirm.com

ATTORNEYS FOR APPELLEES

26

CERTIFICATE OF SERVICE

I hereby certify that the foregoing document has been delivered to the following counsel of records on this, the 9th day of November 2015 by electronic notification and e-mail:

Kristofer S. Monson Assistant Solicitor General Office of the Attorney General of Texas P.O. Box 12548, (MC 059) Austin, Texas 78711-2548 Kristofer.monson@texasattorneygeneral.gov

/s/ Daniel R. Richards_____________ DANIEL R. RICHARDS

27

APPENDIX

TAB 1 Letters from legislators to Commissioner Chris Traylor (6 RR at Ex. 32)

TAB 1

STATE of TEXAS

HOUSE of ILEPILESENTATIVES

JUL

Chris Traylor, Executive Commissioner July Texas Health and Human Services Commission Brown-Heatly Building 49oo N. Lamar Blvd. Austin, TX 7875I-~3~

Re: HHSC proposed rate reductions for certain acute care providers in home health and outpatient settings.

Dear Commissioner Traylor,

I first want to reiterate both my enthusiasm for and congratulations on your appointment as Executive Commissioner of the Health and Human Services Commission. The agency is in great hands, and that is great news for all Texans,

I therefore write to you with the hope that you hear my strong opposition to the rate reductions that HHSC has proposed for physical, occupational, and speech therapy provided in certain home health and outpatient settings, While other states are accepting billions in federal dollars to create actual healthcare systems for their poor and working class citizens, Texas is now deciding whether to implement changes that could deny critical services to 50,000 poor and sick children.

This does not have to happen. First, Rider 50 does not compel these reductions, and in light of what we kamw now, I question whether it even allows such reductions, The language contained in the rider does not require HHSC to reduce rates by a certain amount, The rider was carefully written to use the word "should" - not "shall" - in reference to a potential dollar amount with regards to these redflcfions. This is no small difference, particularly when the same subsection does in fact compel - by the use of the word "shall" - HHSC to make these reimbursement reforms "while considering stakeholder input and access to care,"

Exhibit

Date

Kelly Fisi:iel;

HHSC00002354_00022

I therefore ask whether HHSC h~s in fact considered these two required f~ctors, Access to care will certainly be cut off for tens of thousands of Texas children, many of whom have chronic but very treatable conditions. As for stakehb]der input~ you have not just heard from me and so many of my colleagues; you have also heard from the almost 200 people who were able to make it to HHSC’s Overcrowded public hearing on Monday to describe the harm these reductions would cause.

Meanwhile, I do not know of any Legislator who has written in support of these cuts. A.~er all, what elected official would want to put their name next to a decision so harmful to Texas children? And that is exactly the problem with HHSC moving forward with the proposal. We all lauow that tough choices must be made, but the citizens of this state deserve do have their elected representaf2ves make - and defend - those choices. It is not HHSC’s job to make the unpopular deci.sions the Legislature will not, and doing so would be a disservice to you, the agency, and the people of this state.

I therefore ask that HHSC not move forward with the proposed cuts. They are unnecessary, harmfi~l, and could even be self-defeating in terms of cost hy allowing currently manageable conditions to transform into chronic, lifelong ailments.

Thank you for your good work and service to the State of Texas.

Sincerely,

Garnet F. Coleman Texas State Representagve District 147 5t2.453.o5~4

HHSC00002354 00023

TEXAS HOUSE OF REPRESENTATIVES

GENE Wu

Dis’rl?lc’r I ;37

-July 16, 2015 The H~norable Chris Traylor EXecutive Commissioner Texas Health and Human Services Commission Attn: Rate Analyslse Mail Code H-,tO0 Brown-Heatl~, Building 490O North Lama, Austin, Texas 78751

Deaf Commissioner Trayior:

I am writing to express my deep concern about the proposed cuts to Med[cald reimbursement rates for physical, occupational, and speech therapy. Such cuts are projected to result In the disastrous loss of access to medically necessary services for t~ns of thousands of low4ncome children with devel.opmetlta] delays arid.~pedal needs. I Join fellow legislators In opposing these cuts, and ask thai: you priorttize the needs of our most vulnerable Texans by ensuring access to these services,

Medical communities widely accept that children with disabilities reach thelr fu!les~ potential when they have access to eady and consistent Intervention. Klds who use these much needed evldence~based :~beraptes are mare likely to succeed In school and later In the workfotce, which reduces.their dependence on care and services later tn life. It ls our s~te’s legal and e~hlcal obligation to ensure access to care for children with special needs - and this rate @I: will mean that many low-income families will no longer have access to necessary care.

.Many of the clinics tha~ provide these, medical!y necessary services wlll not be able te Continue to. operBte when these deep raise ~uts go into effecL S~afF at one clinic In my dls~c’~ wh!ch serves over 600 child[on told my offtcetha~ theywou d need to shuI~ their doors. Not only will the children they serve lose the care they need, but their 100 employees wll lose their Jobs. Tliis wll!. be the situation for Clinics aci’o~ T~as if HHSC authorizes this rate change. Children

C^~rou; P.O. Box 2910 . Aus’no, TX 78768-29 I0. (512) 463-0492. F~x: (512) 463-1182 D~rmcr; 6500 Roo~m. S,ao. C, HousTon, TX 77074. (713) 271-3900

H HSC00002354_00003

from families with means wil! continue to have access to the services they need, while children from low-Income families wlll be left behind,

I do not belleve that budget Rider 50 mandates these drastic cuts, especially given the effec~ they would have on access to care. The lmpac~ of this rate change’may violate the righl: of children with disabilities to access medically necessary services, ;1 urge you not to proceed with this dangerous plan. :[t threatens the well-being of Texas children, and Is counter to our duLM as a state to provide medical care for low-income klds.

Thank you t~or your consideration. Please do not. hesitate b~ contact my office If you have any questions or would like to dlscuss this issue further.

Sincerely,

Gone Wu State Representative Dlstdct 137

HHSC00002354_00004

Mary E, Gonz ez

Sta~o Represen~atlve, District 75

July 17, 2015 JUL 2015

Commissioner Chris Traylor Texas Health and Human Services Commission Attention: Rate Analysis, Mail Code H-400 Brown-Heatly Building 4900 North Lamar Austin, Texas 78751

Re: Proposed changes to reimbursement rates under Rider 50 of the 2016-2017 Biennium Budget Dear Commissioner Traylor,

]t has come ta my attention that HHSC is currently reviewing proposed changes for the reimbursement rates as a part of fulfilling the cost reduction plans outlined in Rider 50 of the 20 ! 6-20] 7 budget. ] want to share, in no. unclear terms, my deep concern about the possibly devastating potential of the proposed rate reductions for Medicaid reimbursements,

Reducing reimbursement rotes entries a significant risk for those who rely on Med~cald. When reimbursement rates fall, the impact is felt most distlnefly by the patients - in this case, children and families with serious medical needs. Ira Medicaid patient becomes a financial burden, physicians may have no choice but to turn them away.

According t6 conservative estimates, a $50 m~lllon reduction in reimbursement rates for these Texans would leave’60,000 pediatric patients without access to vital healthcam services - and this is the low end of the potential cost to publi~ health in our state.

Further, these reimbursement rate reductions stand to impact the availability of therapy services. At a time when Texas faces shortages of tralned healthcare l~rofessionals across the state, we could lose a further 7,500 therapists who would find themselves unemployed as a result of these rate r~duotions.

The patients who receive these services are lacing birth defects, genetic disorders, and physical or cognitive disabilities, They have cerebral palsy, developmenta! delays, or were born preterm and require intensive medleal services and ewe. By ~’ocusing the reimbursement r~duetions requested in Rider 50 on ~ese services, we are placing the burden on the Texans who most need our support - and their families,

For me, this isn’tjust about policy - it is personal, My youngest sister has a developmental disability, and I have soon firsthand the importance ofhealtheare access to her quality of Itfe, My family strives to support her the best way we can, but if she were ever unable to access healtheare services duo to an attempt to reduce reimbursement rotes, the impact would be devastating. For the ten.s of~oussnds of

2910, Agstln, T~s 78768-~910 ¯ ~hone (5!2) 468-0613, fax 1~12)4’~,3-1237. rnao’.gonzale~@house.~l~le,~.us Dhlrkt O~ic~: 1 }200 Sanlo~ ,~nch~z Roed, Socorro, Texas 79927, phone (915) 790-229?, fox (9~ 5) 790,2

HHSC00002354_00008

Mary E. Gonz lez

Slate RepresentatiVe, Dislr~c~ 75

famillesjust like mine, who have children and brothers and sisters they love, who stand to feel the most dir~ot impact ~om this rate reduot}on - f ask you to rejeot th~s proposal. We should be supporting these families, not asking them to carry an oven greater burden,

Thank you for your consideration, If there is ever any way 1 ~an be of assistance on this issue ot any future rule proposal, please feel free to contact me at any time by calling my office at (512)463-0613 or emailing me at Mary.G6nzalez@house,state.tx,us,

Sineemmert~e,.

House Dis~et 75

P.O. Box 2910. Ausgn~ T~×os 78768.2910 ¯ phone (512) 4fi~-0613, t’a~ (512) 463.1237. rnapi.f]onzalez@house.slale.lx.us Dis{’ri¢/Office: 11200 Sonlos Soncl~ez Rood ¯ Socorro, Texos 79927 ’ phone {915) 790-2299,/’o~ (915)790.2144

HHSCO0002354_O0009

Re, so~ 2~1o

SYLV~STI~R TURNEH

STAT~ REPREs ENTATIV~:

July 20, 2015

Mr. Chris Traylor Executive Commissioner Texas Health and Human S~rviees Commission Atlention: Rate Analysis, Mall Code H-400 Brown-Heafly Build~g JUL 21 ’ 015 4900 North Lamar Austin, Toxas 78751 0FR~EOF~E

Dear Commissioner Traylor: Thank you for yourprompt reply to my previous inquiry regarding pediatric therapy rates.

Pi~asO allow me to :dt~e0t your attention to the *~access to ear~" referenez in Rider 5.0. This !aaguago first app~arecl, and was adopted overwhelmingly, in the Texas HoUse. The words are pur~0sOful anti carry intent. " ’

provide .m~ With a copy Of all impact s.tudles and e~onom[~ analyses ~athavo b~n. conduced pmvtder no~orks. Pteaso al~o fd~d to me ~y slm~l~ stu~os Or e~omin ~alyses ~at hav~ be~n e0ndueted by anyon~ of~SC~s con~ae~d managed-care organt~ons ~g~ding ~is Issue.

.~iS,..SO ~hat lmay ~a~e?f~lly mvie~ me aee~ t0 ~ta whloh you ~o basing ~ d~o~Si0ns rog~dlng ~hese ra~reducaom. ’ ......

Thank you wry muoh, Sincerely,

Rep. 8ytvester Turner Distrlot 139~ Houston, Texas

HHSC00002354_00001

COMMI’fTISES;

PRE~81DENI" PRO TEMPORE 1999 - 2000

Tranepodallon

July 20, 2015

Mr. Chris Traylor, Executlvo Commissioner Health and Human Services Commission JUL 2, t ’2015 4900 N. Lamar Blvd.

Austin, TX 78751.2316

Dear Commissioner Traylor,

It has come t0 .my attehtioa !hat them are proposed reductions to Medlca~d reimbursements for physical, occupational, and _~..~e~h therapy provided by Comprehensive Outpatient Rehabilitation Facilities/Outpatient ~-ehabfl~tation Facilities .(CORF]ORF), Home Health Agencies (HHA), and .~dependemt Therapists set to .,go into effect in September, Medical providers of these criti~at s~,r~ices in my district have ~i~ress~d concern that ahese reductions could make it difficult to provide fllese esse.,afial services.

Reducing all Medicaid reimbursement rotes for physical, occupational and speech therapy to 145-

pereen~ of the median Texas commeroi~ reimbursement rate will have a damaging impact on access to services for medically £ragiie.elflldren, Thes~ rate reductions will likely decrease patient options for thet~p~ services in my d~Striet~ reduce the tir~e frame for when services can begin, and risk provider eontlnuity for therapy services needed by tSe~patient,

I untierstand that tlie.Health and Human.~,erwces’ Commission ..... (HHSC)

RiderS0"

..... (e) in H;B, i, g4th Legi~Iature, Regular Session, 20i5, directs. ~8C to achieve at feast $50 million in General Re~)enue ~avings each fiscal yoaz~ through rate reduetions~ However, Rider 50 (~): allows I-II-ISC to e0nsider~stakeholder input and ae~ss: to ears wlae:n determini.ng the methodology to be usod for reimbursement of therapy services,

1 would urge you to carefully consider how these reductions will impact therapy services throughout the state b~£ore making a decision to implement reductions that COuld rextuee access ~o essential therapy services,

Thank you for your consideration, Please contact my office if you need additional Information or have any questions,

Lydo aani’m P.o. ~ax 12068 2440 Texas Parkway, Sulle 110 Houslon, Texaa ~f102 (612) 463-01t8 (713) 236-0308 (281) 281-2380 FAXt (512) 403.0008

FAX~ (713} 236,0604 FAX: (281) 26!~726 Dial 711 For Relay Dells

E.MaI/: rods ey, ellls @son ate,slata.~,u8

HHSC00002354_00002

COMMITTEES COMMITTEE8

FINANC~ W~ Chair THE SENATE OF TEXAS NATURAL RESOURCE8 & LEGISLATIVr~ BUDGRT I~OARD.

ECONOMIC DEVELOPMENT

SUNSh’TADV~SORY COMMISSION JUAN aCHUY" HINOJOSA AGRICULTURE, WAT~iR~:

PRESIDENT PRO TEMPORE RURAL A~AIP~ C~E~AL JLTSTIC~

DISTRICT 20

July 20, 2015

C VED

Comm~!o..neeChrls Traylor Texas Health anti Human Services Commission Brown-Heafly Building 4900 N, Lamar Boulevard Austin, Texas 78751-2316

Dear Commissioner Tro!! or,

I am concerned with the proposed Medicaid payment rates that the Health and Human Services Commission h~s recommended for physical, cecupationfl, and speech therapy provided by .Comprehensive Outpatient Rehabilitation Facilities/Outpatient Rehabilitation Fa0illties (CORF/ORF), Home HeMth Agencies (HHA), 0rid Independent Therapists. The proposed rate reductions are not equitable and I am concerned that a significant access to care problem will ensue should these rates be implemented.

As Vice Chair of the Senate Finance Committee, I am well aware of the legislative directive for rate reductions in Medicaid spending by the State of Tex~s, and that these proposed rates are intended to accomplish the goals of the General Appropriations Act, Heal~ and Human Services Commission Rider 50 (House Bill 1, 84R). Utilizing cost containment measures to reduce our state’s Medicaid burden is necessary and frequently beneficial, however, these proposed rates are a very Iorge rate reduction in a short amount of time.

Implementing the proposed rates could result in an inadequate network of these providers in our state, ~ud threaten the aocesslbility to therapy for our most vulnerable populations, Many therapy providers will not be able to absorb such a large rate cut and may no longer remain viable causing them to go out of business. This is particularly concerning in rural areas ~d areas with high Medicaid populations such as my Senate District in the Rio Grande VMley.

P,O, BOX 12068 SOUTH FADRE ISLAND DRIVE, SUITE 291 McALLEM~ TEX.4S 7~504-30~9 CAPITOL DUILD1NG CORPUS CHRISTI, TEXAS 784aS AUffHN, TF~KAS 787H 3611ZZ%1200 ¯ FAX:361/225,0119 TOLL FREI~ 866/269-5016

S12/465-1)120 ¯ FAX:512/dfi3..03..93 DIALTI1 IZOR RELAYCALLS

HHSC00002354 00005

It is critical that the HHSC rate setting process take into account the comments, suggestions, and perspectives of our Texas therapy providers, all of whom have first.hand insight of the situation and wilt be impacted by your decisions, The intent of the Legislature is to effectively reduce Medicaid spending, yet implement an equitable rate reduction ~hroughout provider types and allow providers to remain viable and maintain the quality of care Texans deserve.

Thank you for your time and consideration of this matter. Should you have any questions or need additional information, please contact my office.

~I2 NOLANA, SUITI3 410B P,O, IIOX 12088 ~OUTH PADRE I~LAND DR1VE~ SUITE 291 CAI’D’OL B UILDING CoRPus C[-[RIS"TI~ TII,YAS 78415 AUSTIN, T~<AS 78711 361/225-121~0 ’ ["AN: 361/22~-Dl19 9551972-:]~41 ’, 9~5/664-0602PAX TOLL FREE: fl66/o-59-~016 5121453,012~ , FAX~5121463,0229 DIAL 2]l FOR RELAY ~L~

E-MA~ ~uan.hinoja~ag~enale,slat~,~us

HHSC00002354_00006

July 22, 2015

Mr. Chris Traylor OFFI[~EOF T.fIE ¯ ]~xecutlve Commissioner Texas Health and Human Services Commission ATTN; Rate Analysis, Marl Code H-400 Brown-Hourly Bufldlng 4900 North Lamar Austin, Texas 78751

RE: Proposed Adjusted Medicaid Payment Rate Redvcttons for Physical, Occupationalj and Speech Therapy

Dear Commissioner Traylor:

We writ~-today ia,opp:q~itlon to the rates proposed by the Health and Human Services Commission ~HHSC)for physical, occupational, and speech therapy provided by C0 mprehens!:~,,e .Outpatient Rehabilitation Fael]ltIes/O~t~at[en~ Rehabilitation Facilities (CORE/ORF), Home Health Agencies (HHA), and Independent Therap[~, W~ fear the proposed reduc~o~s will severely I~mlt access to medicallynecessary scribes fsr ~e m~st vulnerable in our state.

HHSC has identified budget Rider 50 as the driver for these rate reductions, However, when que~timaed abau~ th~..JmpaC~ fhismeasu re we[rid have on those receiving servlces, Chairman John Otto of~e House CommitteeoaApprUprlatlons made [t c[eae that "it was not intended to ~take .anybodyoff services." Yet HHSC’S proposed rates would do just that- [’educe providel~ and’access [o care for thousands o£Texans. In Communication with our o£~ces~ providers estimated that if these rate reductions are implemented statewlde, 60,000 ped~atrIc patients will ~ose access to care and 7,500 therapists will be unemployed.

The therapf~s under consideration are designed to m!tigate aay ~ar~h6r ph2siCal:df.c0gnIttvedeIays that ~fght [mpac~ a child’s w~!I~baing, tnd[~dua!s rebe m,os~ tmp~c~ed :bY ~h~s~prop,o~a! ~ndude Children rece!~ng services for bfr~b defects,,g~neffC disorders, and/or:,phys~cal or cognitive .d~abiIities, I thinkyou would agree that, ra~her than ~ubject them t~ addi~lonal barriers, we have a :du ~f0 safeffitard these fragile young Texans;

HHSC00002354_00010

Page2 Of 3

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 s~rategy, 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,

Your time and efforts to better the State of Texas are much appreciated. If you have any questions or concerns regarding cur request, please contact our offices,

Sincerely,

State Rep. Carol Alvarado State Rep, Rafael Anchla Rep, Diego Bernal House District E4S House District :103 House District 123

State Rep, Terry Canales State Rep. (3arne[ Coleman State Rep. Dawnna Dukes House District 40 House District 147 House District 46

State Rep. Jesslca Farter State Rep. Ryan Guillen St~rez

House Dlstr]ct ~.48 House District 31 House District

State Rep, Donna Howard State Rep, Celia Israel State Rep, i=rtc Johnson House District 48 House Dlstrlct 50 House District :[00

State Rep, Eddie Luc[o Itl State Rep, Armando Martlnez State Rep, Ruth Jones McClendon House Dls~rlct 38 House District 39 House District ;~20

State Rep. Borris Miles State Rep, In& Minjarez State Rep, Joe Moody House District 3.46 House District 3.24 House District 78

HHSC00002354_00011

Executive Commlssionee Chris Tvaylor July 22, P~ge 3 of 3

State R.ep. Serglo Mufioz, Jr. State Rep, Elllott NaIshtat State Rep, Ron Reynolds House Distrlct 36 House District 49 House District 27

State Rep, Eddie Rodrlguez State Rap. Justin Rodrlguez State Rep. Ramon Remero, Jr.

House District House District House District 90

State Rep. Toni Rose State Rep. Chris Turner State Rep, Hubert Vo House District :tlO House District 101 House District :~49

State Rep, Armando Walle House Dl~r[ct 140

HHSCO0002354_O0012

State Representative

Dis "trlct 109

July 23~ 20!5

Mr. Chris Traylor, Executive Commissioner Texas Health and Human Servlces Commission Attention; Rote Analysis, Mall Code Brown-Heatley Building 4900 North Lamer Austin, Texas 7875:[

RE,’ Poyment rates "for Physlcol, Occupotiond, end Speech Theropy provided by Comprehensive Outpotlent Rehabllitotlon F~cllftles (CORF/ORF}~ Home Health Agencies (HHA}~ and Independent Therapists are proposed to be effective September 1~ 2015.

Dear Commissioner Traylor:

You recently received a letter (enclosed), signed ljy 28 Texas HOuse Repr~sent,atlves, which oppa~e~ the rate reductions proposed by the Health and HUman so.Ices ~ommlsslen (HHSC) for physical, oc~upatlona!, and speech therapy provided bY Comprehensive Outpatient R~habllltatlon Facilities/Outpatient Rebabltatlon Facilities (CORF/ORF), Home Health ABencles (HHA), and Independent The~aplsts,

1 write you. today.to Join my colleagues In their concern and opposition to the proposed rote reductions for these important therapies.

Thank you very much for your time and consideration of our co~tcerns for the very vulnerable children who deserve uninterrupted access to care. Please do not hesitate to corltact me directly at 512-463- 0953.

Sincerely,

Helen Glddlngs

HHSC00002354_00040

J au s B.

Dis~r~ct 69

July 23, 203.5

Commissioner Chris Traylor Texas Health and Human Services Commission JUL 27 2015 Brown-Heatly Building 4900 N, Lamer Boulevard OFFICEOFTflI~ Austin, Texas 78751-233.6 HHS EXECtlTIVI~ CO~O~ER

Commisslo net TrayIor, ’~

I write this letter to express my thoughts and ~oncetng~ega~ding:the proposed Medicaid payment rates for physical, occupational, end speech therapy Outpatient Rehabilitation

Earlier this

fulfill HHSC Rider 50 In House 8111 L I bellev~~.~!~m~nt Is sound policy and a frscaJ necessity for the .. an~ voted, for HB ~, However, I believe that~lt should state In the Medl~td. pro jram which Is a,=~:~,,re~so~l;sug~orted.~ not and F~.~..~9~ ~a~net~ha~,{~£~ns~n6~guata acee~to care for man In our~ate

simply 8o~ fist allow k ~rovlders to a tar’their business practt~es su~ lan~ly t6 adjust to

I do not envy ~he job that HHSC has In attemptln~ to find ~ost savlnBs on a program as large and comple~ Medicaid, However, this proposed rate redu~lon Is not the rl~h~ answer and will mean Inadequate access to care for some of our mos~ vulnerable populations,

Thank you for your consideration In this matter, If I can be of assistance on this or any other subJect~ please contact my office.

Sincerely,

C^vrro~. Om,mv~ l:O, no~ 2910 . ht..~, "gl!~^s 78768~2910 ¯ (512),16;3-055,f , t~,:x (512)463-816t DrsTmCr O~mtcll: 1206 Iff~.’tTOn RO,’,I~ , \VICIII’~. ~t~Ua, ’rl~x^.~ 76302

HHSCO0002354_O0039

July 23, 2015

Chds Traylor, Executive Director Texas Health and Human Services Commission 4900 N. Lamar Blvd Austin, TX 787~1-2M6

Dear Commissioner Traylor:

Th~ you for your continued leadership to pm~id~ health and-human services that support many TVx~ fami~ie. S, esp~dattyth~ir children: This is:to .~Xpre~s m~ serious concerns regarding the H~alth mad Human Services Commission’s (HHSC) proposed Medicaid rate outs to pediatd0 speech, OOOUpafional,and physioa! thempy services. Became these entitlement services areprovided to children who haVO tho highest l~vels ofneed, it iS critical that the decreases do not.dimin~sh their access to care or compromise the current continuity of ca~r~ and futura netWOrk adequacy. Givem your September t implementation date, I would appr~ate yourdirecting the appropriate HH8 C personnel to meet with my s~aff and interested stakeholders and advobates immediately, fit is my hope that this discussion wtlI clarify how these rates.weredeveloped; how they wilt impact access to care, providers, services, and children; and whcthe~ there areany solutions and ~dtemafives.

PuMi~ testimonyheard on Juty,~O over~vh~lmingly opposed thesepropbs~d cu~s. Witnesses stated th~ these~reductions, as high as.68 percent for some. ~-~rvices, would resul~ in reduced access for Texans Who have:q0mplex needs, They also no~extthat a 37 percent reduction in ~he reimbursement £or an evaluafiori eou!d prevent access to the vcryassessments %ottuired to receive services, I share the concerns raised by many who testified receding:the lack of transparency throughout this proee~S~.

~-. T~em... reportedly.

. was.

. noOppo~i~for.

. public ¢~m.ment regarding the related cost ontamment rMer dunng the legmtative session, and the.method010gy ~ed to develop these :reductions has.not been published 0r sI~ared, What% more,, it is uncle~ Whether H!-ISC considered the impact these cuts would have on p~ograms:suoh a~ the Early ChildhoOd Intercenfionprogrmn, as the agency has not released estimates regarding change~to access to.ear~ o~ quatRy 0f afire in specific programs.

Ple2se o~k your stoffto contact my health and human services legislative’a~de, Isabel Casas, at 5 ~2[463~02.21 oriSabel,casas@senate state tx us; immediately to schedule thls meeting as soon as pozZ~le, T.har~ you for your attention to ~s m~Iter.

Very.trUly yours~ , , ,

~udith Zaffirtni

HHSC00002354..00025

COMMITTE~ ON

WI4SHINOTON OFFICE:

EDUCATION AND THe" WORKFORCE RANKING MhM~3En, SU~COMMI~ ~N

~0~ AND PENSIONS

OOI~MITTEE ON RNANCIAL SERVICES

House of Representatives

Rub& Hinojosa

ISth District, Tex~ts

Jtlly 24~ 20 ] 5 Rop.HltmJoza @mnlhhouso.9 0v www, hou~a,govhl[no~ona

Commissioner Chris Traylor Texas Health and Human Services Brown-Heatly Building 4900 N. Lamar Boulevard Austin, Texas 78751-2316

Dear Commissioner Traylor;

As the federal representative of the 15’~’ Congressional Dislrlct ofTexa~, I write to exp.r~s concern .over the changes to Medieald payment rates under the Texas General Appropriations Act~ Health and Human SeWides Commission Ktder 50.1(House Bill 1~ 84~), The reJmburs~mentreductionsf~r~habjUtatbn.and therapy, services may create additional obstacles ~or the vulnembIe populations tn my district,

Both patients and h~ith.servlce prbvlders in ’the Rio Grande Valley have expressed their concern with Ibis change The. 0UtHn~ed Medicaid r~mbursement d~ereases wilt add additional finanofal strains to current occupational, physical, and si~e.i~c.h therapists, who may be forcedto limli their hours or go out of business as a ~sult. l.lfe:~ar these rate reductions will limit patient access to care.

It is my hope tha~ the State will reconsider the current r~te: redue.ti0n and formulate a fair payment rate, ensuring Texans’ aeeess to important rehabilitative services is unaffeetad

I thank you for your attention to this matter and appreciate the service the Texas Health and Human S~rvlces Commission provides for the p~0ple O~my. Congressional District, If there is anything I can do to assist you in your efforts, pJease contact my Edlnburg DistrictOff~ce at (956) ~82.;5545.

Sir!core!y,

Ruben Hinojosa Member of Congress

Thb mailing Wa~ prepared, published, and moiled nt (o×payor oxper~se

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ROSERT L. NICHOLS

STATE ~ENATO~

July 28, 2015

JUL

Commissioner Chris Traylor Ex cutive Comm~sslonsr, Health and Human Services Commlss~on Mail Code-40010 4~1~ Floor 4900 North Lamar Blvd, Austin, Texas 78751

Dear Commissioner Traylor;

CongratuIation~ on yore’ recent appointment as Executive Commissioner of the Texas Health and Human SePciees Commission (HHSC), I know you are committed to m~Jn~ning mad improving the health and bureau services system in Tex~s, and administering its programs in ac0ordmace with the highest standards of customer service and accofintabilRy for the effective use of runts,

I am writing to share concerns raised by Medicaid providers in Senate District 3 regarding proposed rate cuts tbr acute care therapy providers, including physical, oceupafional and speech therapisfs, While the Legislature directed HHSC to implement Medicaid funding reductions and cost containment strategies (House Bill I - General Appropriations Act, 83r~ Regular Session HHSC Rider #50), the effect of the proposed rate reductions, if implemented as scheduled on September Ia, 2015, may have the unintended effect of limiting a~eess to care, particularly in rural areas i~Muding Senate District 3.

It is my understanding the basis for the proposed rat~ reductions stem form an HH~C analysis of a data collected by Texas A&M University. The I-fHSC analysis, dated February 25, 2015 and entitled, ..Rev~ew.of,. Texas Medicaid’Acute Care ~I~aerapy Pr~gram~ raay not fully refiner an equitable comparison of states’ Medicaid rates. Furthermore, rules in Title 1, Part 15, Chapter 355 of the ’f’ex~s Administrative Code limiting the methodology to establish rates makes no reference to ~onsidemtion of commemial rates. As you know, commercial rates may be affected by additional fact6rs including limits on utilization, coinsuranc¢ and copaymonts.

It is my understanding several stakeholders have met with HHSC to provide altemafive strategies to aclfieve the savings required by law, Please ensure I-IHSC gives ful! and due consideration to these proposals, so as to ensure the effect of any rate reduction doe,s not result in a decrease in access to care. Additionally, I ask the agency to work to ensure that ~y rate cuts do not have a disproportio~mte share on a~cess to ~ervtce~ in rumt ar~as,

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Thank you for your ¢o]~sideration, and thank you for your leadership of tim Texas Health and Human Servicss Commission, Please do not h~sitato to contact m~ if I may b~ ~f assistance to you and the agency in this or any other matter,

Sincerely,

Robert L, Nichols

State Senator, Dis~t~t 3

RLN/al

HHSC00002354_00045

J~lly 30, 2015

Mr. Chris Traylor Health and Human Services Commission P,O. Box 13247 AUB 0 ~ 2015 Austin, TX 78711 OFR~EOETf~E ~ Dear Mr. Traylor,

As yo.u know, our Local Mental Health Authorities provide critical services to those in our community who are moStfn need. In my homet0~vn ofLufldn, we a~e blessed to have the Burke Cer~ter~ which I and many.~thers consider to-do a ~hining example ofhbw:L~s ~hould 0pore!to: for-th .e betterment offile con~munity. I have.recently, b~en in discussion with the Burke Center teadersl!ip, and I wanted to share some 0~’~y condoms with you regarding Early Childhood Intervention (EC1) and acute care therapy rate reduoti0ns, " "

As HHSC implements, thecost sa.v.lng measures£~}und in Rider 50:otits bill pattern, I would like to encourage you to consider the different obs~l~S Need by t~0S~:~n o~ eommtm~t~es, In our.m~a o£East Texas, we do not have ~e ple~ora of providers and options that exist in our ~b~. and saburb~ eommunffies, O~ rural way of life also makes mass ~sit mef~c~ent and unaffordable, and m many mst~ces ~ose m the ~eatest need require m home ~ea~en~ in order t0 r~~efv~.se~iees, In sh0~; if the B~k~ C.enter is not providing ~e.ne~ess~ S~Ces,m~y in E~t T~:S simply would have no other Options. Texas i~..requlred to provide. " adequate access to seMe~ for MedioNd recipients, and I am concerned ~e eu~ent proposal affedt access, possibly leaving ~e state out ofeampli~ee wl~ federal law,

Due to other funding reductions in DARS bill pattern, the proposed therapy rate cuts would, have a di~prop0rtiomt~e impact on Lhe Burke Ceriter’~ ECI program, Th~s pr0g~am has been eXtrat~td~nar[ly s~ee~Ssful, an~ by using natlonally re.cognized assezSment~, this outcomeb ~sed pro~m-n has yMded exoepfionaI results for our region, As a former school board member, I kn0wt!ie irrtlT0.r.~.an~e 0._.f the ECI progr~ and the long term benefits it provides to the children of our ~iate. I tear thlS:.fundjng reduction, Coupled with the therapy rate cuts could cripple the ECI program i~ our region, actually driving up other healtheare and education costs in our community, I appreciate the hard work you do tbr Texas, and as a member of the House Appropriations Committee, I ’also understand the lengths you go to provide the e~are our cidzens need wlth!n the :confines of a limited budget, A~you impl~ment these cost saving measures, I would respectfully request thatyou do not ~imply apply a e0olde-cutter mold to the entire state.

P.O. Box 2910 . At,.~r=s, ’rl:x~s 78768.2910 291"3 AT~mSO,~ , /,t’PRI.~. "rl{N^tl 75901 . (936)63,t.27(i2 ¯

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Each program is unique, and our. LMHAs experience disfinotive regional and local hurdles as well, Please also consider the impacts of rate cuts across the entire spectrum, and take into " consideration compounding effects, such as the situation with the Burke Center’s ECI program.

’ 1 appreciate your consideration of this request, Should you have any questions regarding this issue, please do not hesitate to contact me or my Chief of Staff, Chris Kirby, at (512) 463- 0508,

81neerely,.

] rent Ashby ~*""

State Representative

Susan Rushing CEO, Burke Center

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HHSC00006539

September 10, 20~i5

Andrew Stavitt Acting Administrator Centers for Medicare & Medicaid Services Department of Health and Human Services Hubert H. Humphrey Building, Room 445-G 200 Independence Avenue, SW Washington, DC 20201

Dear Acting Administrator Slavitt:

As you know, there are over foul- million Medicaid recipients in the State of Texas, including a significant number of children that have an immediate issue facing them ~hat demands urgent attention.

Specifically, we are concerned that the severity of the rate reductions being proposed by the Texas Health and Human Services Commission will have a devastating impact’on the ability of children to access, medically necessary therapy services.

As background, the first of the rate reductions were scheduled to take effect September I, 20 I5 and are now scheduled to be implemented October :l, 2015. Rider 50 (c), H.B. % 80~ Texas Legislature, directs the Texas Health and Human Services Commission to make $150 million worth of reductions in generaI revenue over the FY 20 :l 6-2017 state biennium to Medicaid acute care therapy services through a combination of rate reductions and policy changes.

It is our un derstanding that the state will have to submit a State Plan Amendment to the Centers for Medicare and Medicaid Services ~CMS) to ’h~plementthe proposed rate reductions.

We would.urge CMS to car.efu!ty review any rate reductions to acute care fl~erapy, services submitted by the Texas Health and Human Services Commission to ensure that the amount of rate reductions and the methodology being employed by the state to implement rate reductions does not restrict access to medically necessary therapy services, regardless of setting,

Thank you for your prompt attention to this matter, Sinqerely,

Gene Green ~Jba@in Castro Member of Congress ~.e.~ber of Congress ’ ~’" ~" .~,’~#,l"~"..’~._ i,.:.~.~¢8.L.-~?&_.~

Eddie Bernice Jol~r<t~on Member of Conga"~ss MemBer of Congress

Sheila Ruben Hinojosa Member of Congress Member of Congress

Hen: :liar Al:Greed Mem :r of Congress Memb er o f Congress

Beto O’Rourke Marl~’Veasey Member of Congress Member of Congress

F:tl.m~bn Vela’ M~mt~er of Congress

TEXAS HOUSE OF REPRESENTATIVES

CAPITOL OFFICE:

DISTRICT OFFICE:

P.O. BOX 2910 AUSTIN, TEXAS 78768-2910 JOHN OTTO ~0. BOX 965 DAY~ON, TEXAS 77835

$12M63-0570 STATE REPRESENTATIVE 936-28B-813S FaX: 512-463.031s FAX: 936-258-7190 DISTRICT 18

Executive Commissioner Chris Traylor Health and Human Services Commission 4900 N. Lamar Blvd.

Austin, Texas 78751

September 10, 2015 Dear Commissioner Traylor:

As you know, the 84th Legislature passed.th.e..~....2,916-2017 General Appropriations Act (HB 1)

urmg the leNslative session. HB 1 cont~8a~.~ Rider .50, which . m.~aets, the Commission to "

"reform reimbursement ’::r-..~::. m::>..

methodology ~t.o..-i.~,j!;m:~e with industry, standards, policies, and utilization for acute care theraPY .~..

Sd~’~’,k;’:~i~~’dludin

~.S.--: ~. g physical,. occupational, " and s eech

therapies) whale considering stakeho!~< ~,’.~a)esS.to care."

. . .

,e goal .9f this rider ~ 1o ~s~e.:X~,.-p,~yerqd~!I.~s .are .used efficiently and.. providers~ are .~dm~ursed at a rate simila~{:~to.:.4hd:’:~{o.,~erei:at. :~."m~kket and MedieVal-rates;:~f 0~er States, services,’ -:,-," . ,"-, . , . " , ’ . , ,. . , o ¯ ., ,

:M.. ~g !~o:u.s..e);~era-.5av6 ,eaehe;d ~out-Tm-.,he::; C~ssion wi~ ~_e~f:4oneer:n;’: ,W.N.~h: I ’share,:

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network adequacy,!~:it ~iates {0 a¢cesg~b d~’~ls a eri{erio~i to maintain’~g~

I.t is my belief the ianguage in Rider $0 gives the Commission the necessary flexibility to achieve certain rate reductions without jeopardizing access to care or compliance with federal law.

Sincerely,

Cc: Governor Greg Abbott Lt, Governor Dan Patrick Speaker of the House Joe Straus Senate Finance Chair Jane Nelson Members, Texas House of Representatives COMMITTEE ON HOUSE _A_PPKOPKtATIONS, CHAHK REPRESENTING LIBERTY, SAN JAGINTO AND WALKE1K COUNTIES DI STRICT18.OTTO @FIOU S E.STATE,TY~US

P,O, BOX 12068 CAPITOL BUILDING AUSTIN, TEXAS 78711 FINANCE, CHAIR 512/463-0112 SUNSETADVISORY COMMISSION, CHAIR FAX: 512/468-092~] LEGISLATIVE AUDIT COMMITTEE LEGISLATIVE[ BUDGI2Pl" BOARD DISTRICT OFFICE STATE AFFAIRS 1235 S, MAIN STREEt, SUITE 280 GRAPEVINE~ TEXAS 76051 8171424-3446 F~X’, 8171488-6646 E.MAlL: jane.nelson@senate.state.tx.us

September 10, 2015

Executive Commissioner Chris Traylor Health arid. Human Services Commission 4900 N. Lamar Bird Austin, Texas 78751

Dear Commissioner Traylor:

I am writing to reiterate my strong support for the Health and Human Services Commission (HHSC) to follow ¯ the LeNslature’s clear written instructions and intent that adjustments to Medicaid therapy rates proceed in a mamaer that preserves access to these important services.

Last year, an independent study conducted by rese~ehers at the Texas A&M School of Public Health concluded that’Texas Medicaid rates for pediatric acute care therapy services are sigttificanfly higher than the Texas commercial rate, commercial rates in other states, and MediCaid rates in other states. This is ha addition to research conducted by HHSC that demonstrated similar findings.

As a result, the Legislature included HHSC Rider 50 in the 2016-17 General Appropriations Act, which directs the Commission to reduce Medicaid pediatric acute care therapy rates to a more appropriate level. Rider 50 explicitly states that the Commission should consider access to care when implementing these rate reductions. Furthermore, federal Iawreoub’es.that in setting Medicaid rates states must.preserve access to care.

We must re-align mtr rates to prevent tgxpayers from being overcharged for these services. However, we need to move forward in a responsible manner that complies with Rider 50 and federal law. I believe, mad have c6mmutticated to you, that the language in the rider gives the Commission the flexibility to phase-’m the rate reduction to prevent any disruption in the delivery of these important services to children across the state.

Very truly yours,

Senator Jane Nelson

CC: Governor Greg Abbott Speaker of the House Joe Straus Lieutenant Governor Dan Patrick House Appropriations Committee Chairman John ~)tto 911112015 Quorum

September 10, 2015 3:23_PM

Speaker Straus puts ~SC on notice: The agency needs to tell lawmakers if cuts will harm access to.. care for disabled kids Straus says it is HHSC’s "responsibility to inform the Legislature if the proposed reductions would harm access to care and network adequacy."

Speaker Joe Straus on Thursday afternoon posted this statement on Facebook:

"My office has received a number of inquiries regarding proposed Medicaid rate reductions for acute care m~lJy se~wc~s. ~11e~ seiwices m’e crmcm~y important to many Texas families.

The state is required to provide Medicaid recipients with the services for which they are qualified.

The state is also committed to making sure that the Medicaid program is managed efficiently and that taxpayer dollars are used wisely. ;

Earlier this year, the LegisIature directed the Health and Human Services Commission to reform the acute care therapy reimbursement methodology to be in line with industry stanciards, policies and utilization. That realignment calls for a reduction of rates. The Legislature also directed IzII-ISC to get stakeholder input and to consider access to care, which includes network adequacy, as required by federal guidelines, when deciding how to implement those reductions.

The Commission originally proposed reducing therapy rates by $50 mitlion per year for the next two years. My office was in regul.ar contact with the other members of the Legislature, the Commission, and pro~,iders of acute therapy services to ensure that sufficient access to services were maintained.

HHSC also proposed a modified plan that I viewed as a reasonable compromise. However, before a final proposal could be considered, a court challenge was filed.

That lawsuit has been dismissed, which means the agency will begin the process again by proposing new rates. I expect the Commission to keep us in compliance with federal law as it works through a new proposal. I also believe it is the agency’s responsibility to irffo~au the Legislature if the proposed reductions would harm access to care and network adequacy.

I wiI1 continue to monitor this issue closely as HHSC considers how best to implement these reductions. It is important to me and many of my House co!leagues that I-!HSC implement these rate changes in a way that does not harm access to care." http:llwww.quommreport.com/Subscfibers/Arficle.cfm?IID=24282 112 91! 1/20.I5 Quorum Report: Article By Scott Braddo,:k

lid 24282

Copyright September 10, 2015, I-Iarvey Kronberg, www.quorumreport.com, All rights are reserved

http:/Iwww .quorumrepomcom/Subscribers/Ar tiele .cfm.OllD=24282 2/2

Senator

¯ Craig Estes

September 14, 2015

Commissioner Chris Traylor: , Executive Commissioner, Health and Human Services Commission Mail Code-4001, 4th Floor ¯ 4900 North Lamer Blvd,

.Austin, TX 78751

Dear Commissioner Traylor,

Medicaid providers in my district have alerted me to serious concerns tl~at will result from proposed rate cuts for acute care therapy providers, including physical, occupaV~onal and speech therapists. It is my understanding that the Legislature directed Health and Human Services ComraiSsio~ to implement Medicaid fundingre~U~ions and cost containment strat~g~es.ir~:~HS.~Rider #~0; I hard :learned the eff6ct 0~the:proposed rate reductions, if implemented as scheduled, may unintentionally limit access to care, particularly in rural areas,

~ ~ ~:. Rider #S0 was meant to safeguard taxpayer dollars by directing those dollars be used ~:, efficiently and providers be reimbursed at a rate similar to the commercial market and ¯ Medicaid rates of other states. As you know, commercial rates may be affected by ,-’"i~dditional factors including limits on utilization, coinsurance and copayments.

’,, .. ’ Pl.ease ensure HHSC gives full and due consideration to stakeholder proposals that have met ¯ :.’ . ):~h HH~C.toprovide:al~e~nafive strategies to achieve the S~vings required while.ensuring ¯ "" ,,!~;..":

:::. :~t,.. anyrate, efi~. do noth:a~ea.

. disr~ro~ortiona~e

.......... share on access to se~ces for the Texans".

¯

¯ ’. ¯ :’~.k Who depend on these services in rural areas. ~.

:’. : :.~i ~ppr.eciate your consideration and thank you for your leadership of the Texas Health an~ ~.~. .Hum,.a.n Services Commission. As always, please feel free to contact me if I may ever assist you in any way.

Respec ~t~Yl .~

CAPITOL O~F~CE:

~,O. Box 12068 DENTON DISTRICT OFFICE: SI-~ RMAN DISTRICT OFI~ICJ]:

A~Jetin~ Texas 78711 4401 NortI~ 1-35, Suite 202 1117 GalJaghcr~ Su][e 340 512-463-0130 Denton Texss 76207 8herm~, ~x~ 750~ lAX: 512-463-8874 ¯. 940-898-0331 903-86~2~7 Dial 711 for Relay C~lls Yax~ 940.898-0926 Fax: 903-868-9666