Request for Information Interim Charges 2.2 -- 2.5 - Waiver et. al. Table of Contents

1. Health and Human Services Commission 2. Children’s Defense Fund of Texas 3. Children’s Hospital Association of Texas 4. City of Austin 5. Every Body Texas 6. Legacy Community Health 7. Meadows Mental Health Policy Institute 8. Methodist Healthcare Ministries 9. National Association of Social Workers 10. Teaching Hospitals of Texas 11. Texans Care for Children 12. Texas Alliance of Boys and Girls Clubs 13. Texas Association of Community Health Centers 14. Texas Association of Health Plans 15. Texas Conservative Coalition Research Institute 16. Texas Council of Community Centers 17. Texas Healthcare and Bioscience Institute 18. Texas Hospital Association 19. Texas Medical Association 20. Texas Policy Evaluation Project 21. Texas Silver Haired Legislature 22. Texas Women’s Health Coalition 23. University of Texas 24. Women’s and Men’s Health Services of Coastal Bend

House Human Services Committee – Interim Charge 2

Interim Charge 2: Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including: the Family First Prevention Services Act; the next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver; Texas’ Targeted Opioid Response Grant; the Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability rule, and the Healthy Texas Women Section 1115 Demonstration Waiver.

2.2: 1115 HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM WAIVER

Overview In 2011, Senate Bill (SB) 7, 82nd Legislature, First Called Session, directed HHSC to preserve federal hospital funding historically received as supplemental payments under the upper payment level (UPL) program. UPL payments were supplemental payments made to offset the difference between what Medicaid pays for a service and what Medicare would pay for the same service. House Bill (HB) 1, 82nd Legislature, Regular Session, 2011, and Senate Bill (SB) 7, 82nd Legislature, First Called Session, 2011, also instructed HHSC to expand its use of Medicaid managed care.

Federal regulations issued by the Centers for Medicare and Medicaid Services (CMS) prohibit UPL payments to providers in managed care. Therefore, CMS advised the Health and Human Services Commission (HHSC) that, to continue the use of local funding to support supplemental payments to providers in managed care, the state should employ a waiver of the Medicaid state plan as provided by Section 1115 of the Social Security Act.

Accordingly, on July 15, 2011, HHSC submitted a proposal to CMS for a five-year Section 1115 demonstration waiver designed to build on existing Texas healthcare reforms and to redesign delivery in Texas consistent with CMS goals to improve the experience of care, improve population health, and reduce the cost of

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health care without compromising quality. CMS approved the Section 1115 Transformation Waiver on December 12, 2011. In December 2017, CMS approved a five-year extension of the waiver through September 30, 2022.1

The Texas 1115 Transformation Waiver provides the federal authority for operations of most of the state’s Medicaid managed care programs, including STAR, STAR+PLUS, STAR Kids, and the Children’s Dental Program. Managed care directed payment programs—the Uniform Hospital Rate Increase Program (UHRIP) and the Quality Incentive Payment Program (QIPP)—both operate within the 1115 waiver under authority conferred in 42 Code of Federal Regulations (CFR) 438.6(c). These programs provide additional funding to hospitals and nursing homes through increases in managed care reimbursement for hospital and nursing home services.

A third managed care program, the Network Access Improvement Program (NAIP), provides pass-through payments to participating physician practices in health- related institutions and public hospitals through managed care. NAIP operates within the 1115 waiver under authority conferred in 42 CFR 438.6(d). Under federal law, pass-through payments to physicians must be phased out by July 1, 2022, and pass-through payments to hospitals must be phased out by July 1, 2027.

The non-federal share of each of these managed care directed payment programs is provided by local governmental entities.

The 1115 waiver also contains two funding pools: the Uncompensated Care (UC) and the Delivery System Reform Incentive Payment (DSRIP) pools.

For the first five years of the waiver, which began in State Fiscal Year 2012, combined UC and DSRIP funding totaled $29 billion All Funds (AF), with $17.6 billion allocated for UC and $11.4 billion allocated for DSRIP. For the first 2 years of the extension, the UC pool was $3.1 billion and $3.87 billion AF each year thereafter. This year, the DSRIP pool is $2.91 billion AF. However, in Federal Fiscal Year (FFY) 2021, the pool will be reduced to $2.49 billion, and the following FFY, to zero.

1 https://www.medicaid.gov/medicaid/section-1115-demo/demonstration-and-waiver- list/83231

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UC Pool DSRIP Pool (in billions) (in billions) FFY 2012 $3.70 $0.50 FFY 2013 $3.90 $2.30 FFY 2014 $3.53 $2.67 FFY 2015 $3.35 $2.85 FFY 2016 $3.10 $3.10 FFY 2017 $3.10 $3.10 FFY 2018 $3.10 $3.10 FFY 2019 $3.10 $3.10 FFY 2020 $3.87 $2.91 FFY 2021 $3.87 $2.49 FFY 2022 $3.87 $0

For each program, the non-federal share is provided by local governmental entities. In order to receive UC or DSRIP payments, providers must participate in one of the twenty Regional Health Partnerships (RHPs).

Uncompensated Care UC payments are cost-based and help offset the costs of uncompensated care provided by hospitals and other providers. Though previously defined as unreimbursed costs for Medicaid and uninsured patients incurred by hospitals, UC costs are currently federally defined as unreimbursed charity care costs. UC payments are based on each provider’s uncompensated care costs as reported to the state on a UC application.

Delivery System Reform Incentive Payment The DSRIP program provides incentive payments to participating providers to improve health outcomes. Providers develop and implement programs, strategies, and investments to enhance: ● Access to healthcare services ● Quality of health care and health systems ● Cost-effectiveness of services and health systems ● Health of the patients and families served

There are currently 290 participating DSRIP providers, including hospitals, community mental health centers (CMHCs), physician groups primarily associated with academic health science centers, and local health departments (LHDs). The

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participating providers have earned over $19.23 billion in DSRIP funds from 2012 to August 2020.

DSRIP Payments - Total $19.23B August 2020

Physician Practices $2.48

Community Mental Health Centers Hospitals $3.11 $12.80

Local Health Departments $0.84

DSRIP providers have served 11.7 million people and provided 29.4 million encounters from October 1, 2013 to September 30, 2017, primarily to the Medicaid, low-income, and uninsured populations.2 Participating providers have demonstrated success in increasing access to care and improving quality measurements. HHSC must report on the outcomes achieved by DSRIP providers by December 1, 2020, in accordance with the 2020-21 General Appropriations Act, HB 1, 86th Legislature, Regular Session, 2019 (Article II, HHSC, Rider 38).

CMS considers DSRIP programs to be time limited. Some other states have 1115 Waivers, including DSRIP-like programs, that are not being extended by CMS.

The 1115 waiver required HHSC to submit a DSRIP Transition Plan to describe how the state will further develop its delivery system reform efforts when DSRIP funding ends on September 30, 2021.3 In September 2019, HHSC submitted a draft DSRIP Transition Plan to CMS (see Appendix A). The milestones included in the transition plan lay the groundwork to develop strategies, programs, and policies to sustain successful DSRIP activities and for emerging areas of innovation in health care. HHSC is at risk for federal financial participation in the current DSRIP program if it does not meet the milestone deliverable due dates. CMS has approved HHSC’s

2 The numbers of people served, and encounters provided are for FFYs 2014-2017 and are not unduplicated counts. 3 https://hhs.texas.gov/sites/default/files/documents/laws-regulations/policies- rules/Waivers/medicaid-1115-waiver/dsrip-transition-plan.pdf

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requested changes to milestone deliverable deadlines due to impacts of COVID-19 and provided formal approval of the transition plan on September 2, 2020.

The DSRIP Transition Plan seeks to sustain funding to continue healthcare transformation and advance value-based payments (VBP). To achieve these goals, HHSC is considering options such as policy changes, targeted benefits, and managed care directed payments to support DSRIP providers and their traditional activities. However, many DSRIP providers serve uninsured individuals through DSRIP. While directed payments can be used to increase or target reimbursement for services provided to Medicaid recipients, federal Medicaid managed care funds cannot be used for programs for the uninsured.

HHSC must also holistically consider Medicaid payments to providers. CMS requires that managed care capitation rates, including directed payment rates, be consistent with the established reimbursement principles that payments should be economic and efficient. Typically, CMS has used an external benchmark like Medicare or average commercial reimbursement as a tool to analyze whether Medicaid rates are “reasonable.”

Lastly, COVID-19 response has significantly changed how health care is delivered, which must now be considered in determining how to further develop, sustain, and measure outcomes for effective delivery system reforms for DSRIP transition.

Budget Neutrality Under federal budget neutrality requirements, a state may not spend more Medicaid dollars under an 1115 Waiver than it would have spent without that waiver. Using the CMS methodology in place during the first five years of the waiver, combined Medicaid managed care spending, and spending for the two waiver pools, was roughly $8 billion less than the state would have spent without the waiver. This was a result of the federal government’s estimate of fee-for-service costs, caseload, and health care cost trend (without waiver) compared with actual state managed care costs per member per month (PMPM) (with waiver). During the five years of the waiver extension, the federal trend estimate (called the President’s trend) averages 4.5 percent overall versus the state’s most recent 5-year managed care trends of between 3 percent and 4 percent. The difference has helped create the budget neutrality room used for the UC and DSRIP pools.

Budget neutrality room also allows funding space for the state to add to existing programs, or create new ones, such as DSRIP replacements.

In 2016, CMS changed the policy regarding the calculation of budget neutrality for 1115 Waiver extensions. The policy changes were described in detail in State

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Medicaid Director Letter 18-009 of August 22, 2018 and apply to any 1115 Waiver extensions requested after January 1, 2021.4

CMS made two key changes to the budget neutrality calculation. First, CMS will only allow states to roll over savings from the most recently-approved five years of the waiver. Second, CMS will rebase the without waiver PMPM baselines to match actual PMPM expenditures experienced during the prior demonstration approval period. HHSC expects these changes to have material impacts on the budget neutrality room available in the extension.

According to the Special Terms and Conditions (STCs) of the current 1115 Waiver, if the annual assessment of budget neutrality indicates that the annual target has been exceeded, or is projected to be exceeded, HHSC must propose adjustments to the limits to the UC and DSRIP pools.

Next Steps HHSC will develop a project plan and timeline to determine whether we will submit an application to CMS to request an extension of the 1115 Waiver or whether we will explore other federal authority to continue the transformation of the Medicaid program. The plan will contemplate opportunities for stakeholder engagement over several months and during the legislative session. The goal would be to submit necessary requests to CMS by September 30, 2021, at least 12 months before the waiver ends on September 30, 2022.

4 https://www.medicaid.gov/federal-policy-guidance/downloads/smd18009.pdf

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2.3: TEXAS TARGETED OPIOID RESPONSE PROGRAM

Overview HHSC implements federal awards to address the opioid crisis in Texas through the Texas Targeted Opioid Response (TTOR) Program, which was created in May 2017 when the federal Substance Abuse and Mental Health Services Administration (SAMHSA) initially awarded State Targeted Response (STR) funds in the amount of $27.4 million.

On September 19, 2018, SAMHSA awarded Texas $46.2 million in State Opioid Response (SOR) funds to extend and expand HHSC’s response to the opioid crisis. On May 6, 2019, the state received a $24.1 million supplemental award under this grant. On August 27, 2020, SAMHSA awarded $52.1 million in State Opioid Response 2020 (SOR20) funds to continue these services.

SAMHSA also awarded HHSC two smaller discretionary grants in 2016 and 2017 targeting opioid use. Services provided with these funds are coordinated with the SOR and STR funds to maximize services without duplication. ● The Texas Strategic Prevention Framework for Prescription Drugs (SPF-Rx) is a five-year grant in the amount of $1,858,080 aimed at raising awareness about the risks of overprescribing to young adults and bringing prescription misuse prevention activities and education to schools, communities, and parents. ● The Texas First Responders - Comprehensive Addiction and Recovery Act (FR-CARA) grant is a four-year grant in the amount of $3.2 million. The goal of this collaborative project is to reduce opioid overdose related mortality rates, strengthen the successfulness of first response to overdose, and coordinate care for overdose survivors in Bexar County.

The TTOR program aims to address the opioid crisis by reducing unmet treatment needs and opioid overdose-related deaths through prevention, treatment, and recovery activities.

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Eligibility Requirements

Type of Service Population

Prevention General public

Treatment Persons with opioid use disorder who meet the financial and clinical eligibility requirement

Recovery Persons with a history of opioid use

Integrated Persons at risk for opioid overdose and their support systems

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Location Prevention Strategy Description Location

Awareness Provide services to Texans across the Statewide education lifespan to enhance social and emotional skills, increase knowledge about opioid misuse-related dangers, and aid in finding help for opioid use disorder.

Safe Drug Funds safe drug disposal initiatives such Statewide distribution Disposal as drug take back events, drug drop- to prevention boxes, and single-use drug disposal coalitions pouches.

Prescription The goal of this project is to increase Statewide support at Monitoring prescriber and pharmacist enrollment www.txpmp.org Program and meaningful use of the Prescription Monitoring Program to ensure not only patient screening but identification of problematic opioid use and appropriate referral to treatment.

Safe This project supports prescriber Statewide support at Prescribing education and online training aimed at http://sites.utexas.ed reducing opioid misuse through safe u/naloxone/ prescribing practices.

Overdose This project supports overdose Statewide distribution Prevention prevention education, access to through overdose reversal medication www.morenarcanplea (naloxone), and overdose reversal se.com tracking tools.

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Treatment Strategy Description Location

Treatment This project increases access to medication 8 Local Mental (outside of assisted treatment (MAT) in a variety of Health Authorities; clinic) settings outside of the traditional clinic by UT Health in increasing the number of physicians process of providing both buprenorphine and extended enrolling new release naltrexone, expanding opportunities locations for physicians to obtain DATA 2000 Waiver statewide training, creating a professional peer mentoring network, and expanding the network of state-funded treatment providers.

Treatment This project increases access to all three Approximately 35 (within U.S. Food and Drug Administration- clinics across the clinic) approved medications for the treatment of state opioid use disorder (methadone, buprenorphine, and extended release naltrexone) by expanding capacity at new and existing clinics. This will enable clinics to treat both primary opioid use disorder along with co-morbid conditions such as hepatitis C, psychiatric conditions, and wound care at a single clinic site.

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Recovery Strategy Description Location

Peer This project expands peer recovery Approximately 50 Support support services throughout the state in throughout the state a variety of settings and provides opportunities for enhanced training in medication assisted recovery for the peer support workforce.

Employment This project provides job developer and 6 programs in San Support supported employment services for Antonio, El Paso, the individuals in medication assisted Rio Grande Valley, recovery from opioid use disorders as , and well as support to the emergency services personnel referral program.

Recovery This project provides resources to Locations to be Housing increase safe housing and eliminate established serving discriminatory barriers for individuals in large metro areas, medication assisted recovery from opioid rural, border, and use disorder. tribal communities

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Integrated Strategy Description Location

Medical Serves people at high risk for overdose Programs currently and overdose survivors to ensure they in Bexar, Williamson, receive treatment induction, recovery and Harris counties support, community medical support, and adding nine and overdose prevention services. additional sites throughout the state

Community Enhances access to treatment, recovery OSAR services support, overdose prevention, and located at 14 LMHAs linkage to care through Outreach, covering all 11 Screening, Assessment, & Referral health service (OSAR) services, Mobile Crisis Outreach regions; 5 MCOT Teams (MCOT), and 24/7 overdose teams in central prevention community drop-in sites. Texas, , and ; and a community drop in site in Travis County

Legal Provides 24/7 overdose prevention pre- Drop-in sites located arrest diversion services located within in Bexar, El Paso, sobering centers. Services include and Harris counties, treatment induction, recovery support, reentry located in overdose prevention, and linkage to Harris, Tarrant, and care. This project also supports people Rio Grande Valley about to be released from incarceration area, prison reentry by providing pre-release medication location will serve assisted treatment, linkage to on-going inmates throughout treatment, peer recovery support, and the state overdose prevention services.

Contracts

As of September 2020, TTOR has 85 contracts (some contractors may provide services at multiple sites).

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Funding

SOR20 Grant SOR18 Supplemental Grant Amount: $104.3M SOR18 Grant Amount: $24M Project Period: 09/30/20- Project Period: 09/29/22 STR Grant Amount: 05/06/19- $92.4M 09/29/20 Amount: Project Period: $54.7M 09/30/18- 09/29/20 Project Period: 05/01/17- 04/30/20

The SOR20 grant is a decrease of a little more than 10 percent in funding from the previous award when coupled with the supplemental award. The reduction is the result of SAMHSA revising its funding methodology; they now utilize a 15 percent set-aside for the 10 states with the highest mortality rates due to drug poisoning deaths. HHSC does not anticipate an impact to its program due to the decreased funding. A request was submitted to SAHMSA in July 2020 to carryover unexpended funds that remained at the end of federal fiscal year 2020. The request is for $10.4 million, and we expect receive notice from SAMHSA in October 2020.

Additional Federal Funding Federal Grant Award Annual Funding Funding Period Strategic Prevention $371,616 September 1, 2019- Framework for Prescription August 31, 2020 Drugs (SPF RX)* First Responders- $800,000 September 30, 2019- Comprehensive Addiction September 29, 2020 and Recovery Act (FR- CARA)** *SPF-Rx is five-year grant (9/1/2016-8/31/2021) **FR-CARA is a four-year grant (9/30/2017-9/29/2021)

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Key Deliverables (as of April 2020) ● Prevention Services  129,097 people have participated in opioid misuse prevention activities. The Substance Abuse Prevention and Treatment Block Grant began sustaining these activities September 2018.  6,052 individuals have received overdose prevention training.  229,864 medication disposal pouches have been distributed.  3,791 medical and behavioral health professionals have received overdose prevention online continuation education.  23,276 pounds of prescription drugs were disposed.  More than 295,351 naloxone kits (each containing two 2mg doses) have been distributed. ● Treatment Services  8,096 individuals have received medication-assisted treatment; (4,879 with STR funding and 3,217 with SOR funding).  The table below reflects the breakout of opioid use disorder (OUD) medications administered.

FDA-approved Number of STR # of SOR funded Total Medications funded Clients Clients Methadone 3,745 2,498 6,343 Buprenorphine 1,106 690 1,796 Naltrexone 28 29 57 Total clients receiving MAT 4,879 3,217 8,096

 3,082 health screening, testing, and treatment for comorbid conditions made available to individuals receiving medication-assisted treatment. ● Recovery Support Services  9,403 individuals with OUD have received peer recovery coaching services as of March 31, 2020.  1,855 individuals have enrolled in long-term Recovery Coaching.  227 individuals with OUD have been authorized to receive employment services.  80 individuals with a history of opioid use have received recovery support services including overdose prevention services prior to and upon release from jail.  398 individuals with OUD have entered recovery housing as of March 31,2020. ● Integrated Services  1,200 individuals have received overdose-related emergency response services.

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 475 individuals with OUD have received overdose-related services through MCOTs.  1,172 individuals with OUD have accessed treatment services through OSAR Priority Admission Counselors within three days of screening. ● As of May 31, 2020, through evidence-based strategies implemented with TTOR funding, HHSC has seen an increase in the proportion of people served in evidence-based treatment for OUD from 16 percent to 63.23 percent.

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2.4: MEDICAID FISCAL ACCOUNTABILITY RULE

HHSC submitted comments on CMS’ proposed Medicaid Fiscal Accountability Rule on January 31, 2020. The comments are included in Appendix B.

On September 14, 2020, CMS issued a statement that due to “potential unintended consequences of the proposed rules” further study is required and therefore, “CMS was withdrawing the rule from the regulatory agenda.”

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2.5: HEALTHY TEXAS WOMEN SECTION 1115 DEMONSTRATION WAIVER

Overview The Healthy Texas Women program (HTW) offers free women's health and family planning services to eligible, low-income women. These services help women plan their families, whether they want to achieve, postpone or prevent pregnancy. Health services offered through HTW include:

● Contraceptive services, including long-acting reversible contraception ● Clinical breast exams ● Pregnancy testing and counseling ● Preconception health screenings (e.g., screening for , , , cholesterol, smoking and mental health) ● Sexually transmitted infection services ● Sterilizations ● Treatment for the following chronic conditions:  Hypertension  Diabetes  High cholesterol ● Treatment of postpartum depression ● Breast and cervical cancer screening and diagnostic services  Radiological procedures, including mammograms  Screening and diagnosis of breast cancer  Diagnosis and treatment of cervical dysplasia ● Immunizations

HTW services are delivered by a statewide network of fee-for-service providers. To be reimbursed for HTW services, providers must:

● Deliver the types of services available through the program. ● Have completed the Medicaid enrollment process through the Texas Medicaid & Healthcare Partnership. ● Certify that they do not perform or promote elective abortions or affiliate with an entity that performs or promotes elective abortions.

Historically, HTW was funded through state general revenue.

1115 Waiver Demonstration

HHSC submitted the HTW Section 1115 Demonstration Waiver application to CMS on June 30, 2017. Through the HTW demonstration, HHSC seeks to enhance

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women's health care services by increasing access to and participation in the HTW program. The goals and objectives of the HTW demonstration are to:

● Increase access to women's health and family planning services to avert unintended pregnancies, positively affect the outcome of future pregnancies, and positively impact the health and well-being of women and their families. ● Increase access to preventive health care, including screening and treatment for hypertension, diabetes and high cholesterol; to positively impact maternal health; and reduce maternal mortality. ● Increase access to women's breast and cervical cancer services to promote early cancer detection. ● Implement the state policy to favor childbirth and family planning services that do not include elective abortions or the promotion of elective abortions within the continuum of care or services and to avoid the direct or indirect use of state funds to promote or support elective abortions. ● Reduce the overall cost of publicly funded health care (including federally funded health care) by providing low-income Texans access to safe, effective services consistent with these goals.

HHSC received CMS approval for the HTW 1115 demonstration waiver on January 22, 2020. Client benefits and provider requirements did not change as a result of federal approval. Under the demonstration, services may be delivered to eligible women ages 18-44. Young adults ages 15-17 may still receive the same benefit package, with parental consent. Due to federal restrictions, HTW services for young adults are not eligible for federal matching funds and are provided through general revenue funds.

As a condition of federal approval, HHSC must comply with federal Medicaid eligibility, application, verification, and demonstration regulations. Effective February 18, 2020, clients are provided 95 days (referred to as reasonable opportunity) to provide verification of citizenship or immigration status at initial application if they declare themselves to be U.S. citizens or declare to have an eligible immigration status. Verification is only required at renewal if there was a change in citizenship or immigration status. If all other eligibility requirements are met besides citizenship or immigration status, an individual is eligible for HTW during the reasonable opportunity period.

In addition, by July 2021, HHSC must use Modified Adjusted Gross Income (MAGI) methodologies to determine household composition and countable income, and the HTW Federal Poverty Level (FPL) threshold will be converted to a MAGI equivalent. As a result of the requirement to use MAGI methodologies, women eligible for

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Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), the Supplemental Nutrition Assistance Program (SNAP), or who have a child eligible for Medicaid will no longer be automatically financially eligible for HTW. Women will be determined ineligible for full Medicaid and CHIP before being determined eligible for HTW.

CMS also requires a waiver implementation plan addressing a variety of topics, including how HHSC will monitor access to care, the adequacy of the provider network, inquiries, and complaints. HHSC is working with CMS to obtain approval of an implementation plan, which will be posted to HHSC’s website and become an attachment to the federal waiver once approved.

As a result of federal approval, HTW is now funded through both federal and general revenue funds. HHSC receives federal funds at a 90 percent match rate for family planning services and approximately 60 percent5 match rate for all other services in the approved waiver for the approved population. The change in method of finance provides Texas significant general revenue savings for the program.

Healthy Texas Women Plus

As required by SB 750, 86th Legislature, Regular Session, 2019, HHSC evaluated postpartum care services provided to women enrolled in the HTW program after the first 60 days of the postpartum period. Based on the evaluation, HHSC developed an enhanced, cost-effective, and limited postpartum care services package for women enrolled in the HTW program to be provided:

● after the first 60 days of the postpartum period and; ● for a period of not more than 12 months after the date of enrollment in the HTW program.

The 2020-21 General Appropriations Act, HB 1, 86th Legislature, Regular Session, 2019 (Article II, HHSC, Rider 176) appropriated $13,643,638 in general revenue

5 Non-family planning services are matched at the state’s federal medical assistance percentage (FMAP). CMS updates the FMAP rate annually based on each state’s average per capita income. For federal fiscal year (FFY) 2020, Texas’ Medicaid FMAP is 60.89 percent. Texas uses a one-month differential FMAP figure that takes into account differences between the FFY (October through September) and the state fiscal year (SFY) (September through August). The one-month differential FMAP for Texas in SFY 2019 is 60.67%. This includes one month of the FFY 2019 rate and 11 months of the FFY 2020 rate. The 6.2% stimulus FMAP bump is excluded from the figures referenced but also applies to HTW from January 2020 until the COVID-19 public health emergency ends.

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in state fiscal year 2021 for the implementation of postpartum services related to SB 750.

The services package for postpartum women enrolled in HTW, which became available on September 1, 2020, is referred to as HTW Plus.

HTW Plus services focus on treating major health conditions recognized as contributing to maternal morbidity and mortality in Texas:

● Postpartum depression and other mental health conditions  Services include individual, family and group psychotherapy services, and peer specialist services. ● Cardiovascular and coronary conditions  Services include imaging studies, blood pressure monitoring, and anticoagulant, antiplatelet, and antihypertensive medications. ● Substance use disorders, including drug, alcohol, and tobacco use  Services include screening, brief intervention, and referral for treatment (SBIRT); outpatient substance use counseling; smoking cessation services; medication-assisted treatment (MAT); and peer specialist services.

As required by SB 750, HHSC will seek an amendment to the 1115 waiver to receive federal funding to provide these enhanced services under the HTW program. HHSC intends to initiate the required public notice period on October 1, 2020, and submit the waiver amendment on December 1, 2020, with a requested CMS approval date of April 1, 2021. With CMS approval of the HTW Plus amendment to the HTW 1115 waiver, HTW Plus services will receive federal matching funds.

State and Federal Budgetary Impacts to HTW

COVID-19 is significantly impacting state and federal healthcare systems and the economy. To ensure maximum flexibility and avoid disruption in healthcare during the public health emergency, HHSC made changes to HTW, including:

● Allowing telemedicine and telehealth as service modalities to promote access to care while maintaining physical distance.  COVID-19 telemedicine and telehealth flexibilities for HTW align with Medicaid policies for these services. ● Adding COVID-19 testing as a benefit.  Currently, COVID-19 testing services are being paid with general revenue, but HHSC has submitted a disaster waiver amendment seeking retroactive

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approval to receive federal funding for COVID-19 testing services under the HTW 1115 waiver. ● Extending HTW program eligibility for recipients.  Eligibility extensions are required for states to receive enhanced federal Medicaid match during the COVID-19 public health emergency. States must not terminate eligibility for the duration of the public health emergency unless the client is deceased, moves out of state, or voluntarily terminates coverage.  HTW recipients who have renewals due during the pandemic will get a notice on the next steps to take to maintain their coverage after the pandemic ends.

Contact Name: Amanda Martin, Director of Government & Stakeholder Relations Organization: Health and Human Services Commission Mailing Address: 4900 N. Lamar Blvd. MC 4001, Austin, TX 78745 Telephone: (737) 203-7786 Email: [email protected]

21 Texas Health and Human Services ● hhs.texas.gov HHS Interim Charge 2 – Appendix A

2021 Texas DY 11 Transition Plan Milestones Legislative Session (Oct. 2021 – Sept. 2022)

December 2020 March 2021 June 2021 September 2021

 Identify and submit to  Update the Texas  Assess Texas’ current  Identify and submit to CMS any proposals for Medicaid quality strategy financial incentives for CMS any additional new programs, and VBP Roadmap to Medicaid MCOs and proposals for new including state-directed address program goals providers to enter into programs, including payment programs, to and sustain key DSRIP meaningful quality- potential new Medicaid sustain key DSRIP initiatives based alternative benefits, to sustain key initiative areas in DY 11  Complete an assessment payment models DSRIP initiative areas of current Waiver of which social factors are  Identify options for the that would start when period correlated with Texas Regional Healthcare the current waiver  Conduct a preliminary Medicaid health outcomes Partnership structure expires analysis of DY 7-8 post-DSRIP DSRIP quality data and  Assess the current related core activities capacity and use of to outline lessons telemedicine and learned on health telehealth, particularly system performance in rural areas of Texas, measurement and to inform next steps to improvement address access gaps

Ongoing, Active Stakeholder Engagement HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P

To Whom It May Concern:

The Texas Health and Human Services Commission (HHSC) appreciates the opportunity to provide comments on the proposed rule regarding Medicaid Program; Medicaid Fiscal Accountability Regulation, as requested in the Federal Register Vol. 84, No 222, issued on November 18, 2019 [File Code CMS–2393-P].

HHSC's comments follow.

General Comment

HHSC appreciates the desire on the part of the Centers for Medicare and Medicaid Services (CMS) to increase accountability related to public funds. The State of Texas strongly believes that the use and derivation of Medicaid funds should be widely understood so that taxpayers and Medicaid clients have the opportunity to examine how funds are spent in their name. However, HHSC believes portions of the proposed rules threaten to introduce unnecessary uncertainty and, in certain instances, exceed CMS’s statutory authority.

HHSC supports CMS’s efforts to have information about supplemental payments disseminated broadly. HHSC hopes that CMS will continue to work with stakeholders to find optimal ways to move forward with greater accountability in these vital programs.

HHSC’s comments on specific provisions follow.

42 CFR § 430.42 Disallowance of claims for FFP

Comment

The proposed amendments to 42 CFR § 430.42 “alter the means of communication with regard to the disallowance reconsideration process from one based on registered or certified mail to one based on electronic mail or another electronic system as specified by the Secretary.” See 84 Fed. Reg. 63737.

The State supports the use of electronic communication in the disallowance reconsideration process but asks that CMS amend § 430.42(a)(2)(C) to provide that State submissions are considered made on the date they are sent, rather than the date of receipt. The State does not have control over the time of receipt. This change would also align with § 430.42(c)(4)(i) and (c)(6), which provide that the Administrator’s notification is considered made on the date it is sent by the Administrator.

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The State also asks that CMS reexamine § 430.42(c)(3). The new sentence added to paragraph (3) addresses when “submissions are considered made” instead of when notifications are considered made. Given that in this paragraph CMS is sending a request to the State, the next sentence should relate to the date on which the State is notified of that request. “Submissions,” on the other hand, seems to refer to what the State provides in response to the request, which is not addressed until the following paragraph (§ 430.42(c)(4)). The State suggests revising § 430.42(c)(3) to provide that notifications are considered made on the date they are sent by the Administrator and revising § 430.42(c)(4) to provide that submissions are considered made on the date they are sent via email or electronic system specified by the Administrator.

42 CFR § 433.51 State share of financial participation

Comment

HHSC requests that CMS reconsider its proposed revision of 42 CFR § 433.51, which HHSC believes is inconsistent with statute.

Section 1903(w)(6) of the Social Security Act says that “the Secretary may not restrict States’ use of funds where such funds are derived from State or local taxes” (italics added) unless funds transferred from units of government are impermissible donations or taxes. The statute does not limit “public funds” to tax-generated and appropriated funds. Rather, that section of the Act restricts CMS’s ability to limit states’ use of funds derived from certain sources. It does not address public funds derived from other revenue sources, or imply that other revenue sources are not permitted.

HHSC believes that the same legislation that enacted section 1903(w)(6) of the Act is contrary to this proposed revision. Section 5(b) of the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991 Public Law 102-234 (not codified) limits CMS’s ability to change the treatment of “public funds as a source of State share of financial participation under title XIX” as reflected in the then-current regulations, now contained in 42 CFR § 433.51. The current regulation and its predecessors have directly authorized the use of any “public funds” (not limited to tax- generated funds), including those transferred or certified by “public agencies,” as the non-federal share of Medicaid expenditures. HHSC believes that the Act does not permit CMS to limit the non- federal share of Medicaid payments beyond its specification of “public funds.”

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CMS intends the proposed replacement of “public funds” to clear up “confusion among states” with respect to the permissible sources of the non-federal share. 84 Fed. Reg. 63737. But the states are not confused. Congress was clear when it was considering the 1991 legislation that:

Current transfers from county or other local teaching hospitals continue to be permissible if not derived from sources of revenue prohibited under this Act. (House Conference Report, emphasis in the original.)

As CMS itself explained in 1992, in connection with the interim final rule to implement Public Law 102-234:

Prior to the enactment of Public Law 102-234, regulations at 42 CFR 433.45 delineated acceptable sources of State financial participation. The major provision of that rule was that public and private donations could be used as a States’ share of financial participation in the entire Medicaid program. As mentioned previously, the statutory provisions of Public Law 102-234 do not include restrictions on the use of public funds as the State share of financial participation. Therefore, the provisions of § 433.45 that apply to public funds as the State share of financial participation have been retained but redesignated as § 433.51 for consistency in the organization of the regulations. 57 Fed. Reg. 55119.

CMS reiterated this understanding in 2007, when it published the ‘‘Medicaid Program; Cost Limit for Providers Operated by Units of Government and Provisions to Ensure the Integrity of Federal- State Financial Partnership’’ final rule. 72 Fed. Reg. 29748.1 CMS noted “a perceived CMS position that the provisions of the regulation require that the sources of all IGTs must be state or local taxes.” 72 Fed. Reg. 29766. To dispel this perception, CMS quoted section 1903(w)(6)(A) of the Act and said this statutory language “allows” (as opposed to requires) funding derived from State or local taxes to be used for purposes of financing the non-Federal share of Medicaid payments. See id. CMS went on to acknowledge that units of government that are not health care providers may collect revenue from a variety of sources. CMS included a non-exhaustive list of such sources and noted that any would be “acceptable sources of financing the non-Federal share of Medicaid payments, as long as the general fund does not derive any of its revenue from

1 This final rule was rescinded in 2010. 75 Fed. Reg. 73972. 3

HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P impermissible sources (such as ‘recycled’ Medicaid payments, Federal grants precluded from use as State match, impermissible taxes, non-bona fide provider-related donations).” Id.

CMS then addressed governmentally-operated health care providers specifically:

The governmentally-operated health care provider’s account may include patient care revenues from other third-party payers and other revenues similar to those listed above. Such revenues would also be acceptable sources of financing the non-Federal share of Medicaid payments, as long as the governmentally-operated health care provider’s operating account does not derive any of its revenue from impermissible sources (such as, ‘‘recycled’’ Medicaid payments, Federal grants precluded from use as State match, impermissible taxes, non-bona fide provider-related donations). Id.

CMS concluded by saying providers are not required to demonstrate that funds transferred are, in fact, tax revenues; a governmentally-operated health care provider is always able to access tax revenue. Id.

Nothing has changed in the statute since the enactment of the 1991 legislation or the implementing regulations to warrant limiting permissible state or local funds that may be considered as the state share to the sources now specified in § 433.51. To the extent the proposed amendment is similar to the 2007 final rule that was later rescinded, the proposal is against the expressed will of Congress. As CMS recounts in this proposed rulemaking, “[a]fter a series of Congressional moratoria against its implementation, Congress stated its sense that it should not be implemented.” 84 Fed. Reg. 63737.

If CMS were to impose such a change, there would be serious consequences on the continued ability of many public providers to participate in Medicaid programs that benefit Texas’s most vulnerable residents. Some public providers may use patient care revenues as a source of the non- federal share of Medicaid payments. Restricting the source of the non-federal share in the way now proposed leaves public providers with a choice of serving vulnerable populations or raising taxes. HHSC recommends that CMS withdraw the proposed amendments to 42 CFR §433.51 and reaffirm that as long as there is sufficient public revenue for a unit of government to transfer funds for purposes of a Medicaid payment, such a transfer of funds is permitted under the Act.

HHSC also requests that CMS confirm that the non-federal share of certified public expenditures (CPEs) need not be derived from taxes. In discussing the phrase ‘‘transferred from or certified by’’

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P in section 1903(w)(6)(A) of the Act, CMS says the phrase refers to both the intergovernmental transfers (IGTs) and CPEs, respectively. Further, CMS states that the statute “clearly indicates that those funding mechanisms must be derived from state or local taxes (or funds appropriated to state university teaching hospitals).” 84 Fed. Reg. 63736. CMS attempts to make this understanding plain in the revision to § 433.51(b)(2), the subparagraph that refers to IGTs, by adding “derived from State or local taxes (or funds appropriated to State university teaching hospitals),” to the provision. CMS has not added that same language in § 433.51(b)(3), the subparagraph that refers to CPEs; that provision is silent as to the source of CPEs.

HHSC believes it is unreasonable to tie a certified public expenditure to taxes in this context. A CPE is simply a statement from a governmental entity that an expenditure was made. That expenditure, being made by a governmental entity, is by definition public. HHSC requests that CMS confirm that § 433.51(b)(3) does not require that CPEs be derived from taxes.

In summary, HHSC believes the proposed amendments to 42 CFR § 433.51 are inconsistent with statute, legislative intent, and longstanding federal practice. HHSC recommends that CMS withdraw this proposed amendment and reaffirm that “public funds” is the appropriate description of what may constitute the non-federal share of Medicaid payments.

42 CFR § 433.52 General definitions

Comment

HHSC is concerned that the proposed amendments to this section introduce ambiguity and uncertainty. The relationship between the proposed amendments to 42 CFR §§ 433.54 and 433.68 and the proposed definition of “net effect” in § 433.52 is unclear. Beyond being subjective, the “totality of the circumstances” and “net effect” tests appear to be duplicative. The proposed amendments to §§ 433.54 and 433.68 provide, “Such a guarantee will be found to exist where, considering the totality of the circumstances, the net effect of an arrangement between the State (or other unit of government) and the provider (or other party or parties responsible for the donation) results in a reasonable expectation that the provider, provider class, or a related entity will receive a return of all or a portion of the donation.” However, the proposed definition of “net effect” in 433.52 includes this language: “The net effect of an arrangement is determined in consideration of the totality of the circumstances, including the reasonable expectations of the participating entities…”. To the extent CMS decides to retain such language, the State requests clarification regarding the interaction of these two provisions. 5

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The definition of “net effect” includes language indicating that “reciprocal actions” will be considered. To the extent that CMS intends to consider actions among private parties in which neither the state nor local government has played a part, CMS lacks the statutory authority to do so. Please see comments related to § 433.68 for further explanation.

42 CFR § 433.54 Bona fide donations

Comment

HHSC is concerned that the proposed amendment replaces an objective test (for the existence of a hold harmless arrangement through a direct or indirect guarantee) with one that is subjective. The proposal would amend 42 CFR § 433.54(c)(3) to specify that such a guarantee will be found when “the net effect of an arrangement… results in a reasonable expectation that the provider, provider class, or related entities will receive a return of all or a portion of the donation either directly or indirectly.” 84 Fed. Reg. 63739. This language comes from CMS’s commentary to the February 2008 final rule titled “Medicaid Program; Health Care-Related Taxes,” which introduced the “reasonable expectations” standard, and Departmental Appeals Board (DAB) Opinion No. 2886, Texas Health and Human Services Commission (2018), which introduced the “net effect” standard. If CMS adopts the proposed language, HHSC is concerned that the required analysis will be too subjective and variable to provide certainty as to what constitutes a direct or indirect guarantee. HHSC believes that criteria used to determine when there is an impermissible provider-related donation should be standardized and result in consistent outcomes.

As CMS has proposed amending § 433.54(c)(3), it appears that the new test for finding a hold harmless practice under this prong relates both to direct and indirect guarantees. Unlike the proposed amendment of § 433.68(f)(3) which says “[a] direct guarantee will be found to exist,” the proposed amendment of § 433.54(c)(3) says “[s]uch a guarantee will be found to exist.” However, it is not clear this is CMS’s intention. The portion of the preamble that discusses this change says it applies to direct guarantees. See 84 Fed. Reg. 63739. Please clarify if the new language applies to both direct and indirect guarantees.

HHSC believes that the “net effect” standard is not a clarification of existing policy, but rather appears to consider the actions of unrelated third parties. See 84 Fed. Reg. 63739. CMS previously explained in its February 2008 final rule that “the element necessary to constitute a direct guarantee is the provision for payment by State statute, regulation, or policy.” 73 Fed. Reg. 9694. Under the

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P proposal, however, CMS might find a direct guarantee based on the wholly private actions of unrelated third parties that are only incidentally related to any state statute, regulation, or policy.

The relationship between the proposed amendments to § 433.54 and the proposed definition of “net effect” in § 433.52 is unclear. The proposed amendments to § 433.54 provide, “Such a guarantee will be found to exist where, considering the totality of the circumstances, the net effect of an arrangement between the State (or other unit of government) and the provider (or other party or parties responsible for the donation) results in a reasonable expectation that the provider, provider class, or a related entity will receive a return of all or a portion of the donation.” However, the proposed definition of “net effect” in 433.52 includes this language: “The net effect of an arrangement is determined in consideration of the totality of the circumstances, including the reasonable expectations of the participating entities…” To the extent CMS decides to retain such language, the State requests that it clarify how these two provisions interact.

42 CFR § 433.55 Health care-related taxes defined

Comment

HHSC requests that CMS provide examples of what circumstances it would consider in applying the “totality of the circumstances” provision. Such a provision exists throughout the proposal, and it is not clear what may constitute such circumstances. HHSC is concerned that the ambiguity of such a test threatens to introduce uncertainty and will change over time depending on who is applying it. As with several of the provisions in this proposal, HHSC fears the text is so broad and nebulous that it may be costly, if not impossible, to monitor on an ongoing basis, and would make it difficult for states to engage in long-term planning.

42 CFR § 433.56 Classes of health care services and providers defined

Comment

HHSC supports CMS’s proposal to add “health insurer” as a class of health care service as part of 42 CFR § 433.56. However, HHSC recommends that the term be defined not to include life or accident insurance policies. HHSC does not believe CMS intends to include such insurance policies under the “health insurer” class, but would be grateful for clarification.

42 CFR § 433.68 Permissible health care-related taxes

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Comment

CMS proposes two substantial amendments to 42 CFR § 433.68. Proposed amendments to § 433.68(e) create a new “undue burden” standard in the context of health care-related tax waivers. Proposed amendments to § 433.68(f)(3) create a new “net effect” standard for determining if a hold harmless practice exists within the context of a health care-related tax. HHSC believes both amendments are improper. CMS’s proposed amendments to 42 CFR § 433.68(f)(3) would add language to one of the three hold harmless tests used for determining the permissibility of a health care-related tax. The tests as they currently read are taken from statute verbatim.

HHSC believes that these proposed amendments are 1) contrary to statute; 2) not merely a clarification; and 3) so subjective that they cannot be implemented.

CMS’s Proposal is Inconsistent with the Social Security Act

First, the proposed amendment to 42 CFR § 433.68(f)(3) is not consistent with section 1903(w) of the Social Security Act or its enabling legislation, the Medicaid Voluntary Contribution and Provider Specific Tax Amendments of 1991 (Pub. L. 102-234). In the preamble describing this rule, CMS states that it will find a hold harmless where taxpayers of a health care-related tax redistribute payments among themselves. However, unlike provider-related donations, Congress established specific “hold harmless” tests for provider-related taxes, rather than simply granting the Secretary the authority to do so.

Therefore, CMS is constrained by those sections of Social Security Act. Specifically, CMS is constrained by section 1903(w)(4)(C) of the Act, which provides that there is a hold harmless provision with respect to a broad-based health care related tax if “[t]he State or other unit of government imposing the tax provides (directly or indirectly) for any payment, offset, or waiver that guarantees to hold taxpayers harmless for any portion of the costs of the tax” (emphasis added). Congress specified that the hold harmless standard in § 433.68(f)(3) is tied to government, rather than private, conduct. Consequently, the proposed “net effect” standard, which CMS suggests can result in the denial of federal financial participation (FFP) based on the actions of the private taxpayer, is not supported by 1903(w)(4)(C). As CMS itself notes, Public Law 102-234 was intended to prohibit FFP “for health care-related taxes where the state has implemented a hold harmless provision.” 73 Fed. Reg. 9690 (emphasis added).

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CMS states that proposed § 433.68(f)(3) “aims to thwart efforts by states to skirt hold harmless provisions by paying supplemental payments to private entities, who then pass these funds on to other private entities that have lost gross revenue due to a health care-related tax.” 84 Fed. Reg. 63742. However, despite the claim that state efforts or behavior is the problem, CMS states that it is targeting agreements between private parties. CMS appears to arrive at this result by attributing private decisions among private actors to the State and penalizing the State if the private actors’ decisions are impermissible according to CMS. This proposed policy seems to assume that States must be involved with such agreements. However, CMS has offered no evidence (anecdotal or otherwise) that the States are part of any agreements between private parties that pay health care- related taxes.

CMS lacks statutory authority to hold the states responsible for the actions of private entities. The statutory language is clear that CMS’s authority extends only as far as an arrangement that involves “the State or other unit of government imposing the tax provid[ing]…for any payment, offset, or waiver that guarantees to hold taxpayers harmless for any portion of the costs of the tax.” See § 1903(w)(4)(C). CMS simply does not have the statutory authority to require states to police arrangements between private parties.

However, even if the Social Security Act authorized CMS to implement such a regulation, HHSC believes that the proposed amendment violates established principles of federalism, rooted in the Tenth Amendment to the Constitution and “the belief that issues that are not national in scope or significance are most appropriately addressed by the level of government closest to the people,” by requiring states to monitor and regulate relationships between third parties. Executive Order 13132 on Federalism (August 4, 1999). Moreover, neither Congress nor the Executive branch have power to regulate private parties through the states. Where, as here, state governments identify uncertainties regarding the constitutional or statutory authority of the national government, the national government “should be deferential to the States when taking action that affects the policymaking discretion of the States and should act only with the greatest caution.” Id.

While the States must assure that payments are consistent with efficiency, economy, and quality of care as required in section 1902(a)(30)(A) of the Social Security Act, the states are not required to regulate private arrangements between third parties. If the proposed amendment becomes final, HHSC does not know how it will legally discover, let alone restrict, any private arrangements CMS wants to eliminate.

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In light of these uncertainties and the proposed policy’s federalism implications, HHSC requests that CMS reconsider the legality and prudence of this part of the proposal.

The “Net Effect” Test is not a Clarification of Existing Policy

Second, CMS says that the “net effect” standard is a clarification of existing policy and would not impose any new obligations or restrictions on the States. 84 Fed. Reg. 63742. HHSC is concerned that this characterization is inaccurate. CMS previously explained in its February 2008 final rule that “the element necessary to constitute a direct guarantee is the provision for payment by State statute, regulation, or policy.” 73 Fed. Reg. 9694. Under the proposal, however, CMS can find a direct guarantee based on the actions of third parties, not through the provision for payment by state statute, regulation, or policy.

Further, the claim that the standard represents existing policy is inconsistent with a 2003 HHS Inspector General (IG) report. In 2003, the HHS IG issued a report relating to the Missouri Disproportionate Share Hospital (DSH) program, of which the non-federal share was funded through a health care-related tax. Review of Medicaid Disproportionate Share Funds Flow in the State of Missouri (A-07-02-02097) (April 8, 2003). The report found that after the state had made DSH payments to individual hospitals in accordance with federal regulations and the State plan, the hospitals pooled the payments pursuant to private agreements, and a private association distributed the funds according to pooling formulas established by the private association to mitigate the effect of the health care-related tax. Id. The redistribution resulted in some hospitals receiving payments in excess of their DSH limits. Id. However, the IG determined that the redistribution agreements were voluntary between the hospital providers. Therefore, it could not recommend a disallowance because the federal government did not have the authority to reach such arrangements. Id.

In 2008, five years after the IG report was issued, CMS amended the health care-related tax provisions. 73 Fed. Reg. 9685-01. In response to comments on the proposed changes, CMS stated that it was “not aware of any state tax programs that would have been permissible under the Secretary’s prior interpretation of the rules but are no longer permissible under the new rules.” 73 Fed. Reg. 9690. Accordingly, Missouri hospitals’ private agreements would not have been affected by the 2008 amendments. Now, however, CMS appears to believe that the new position announced in November 2019 is and always was the position of CMS. When it comes to the consistent application of the “net effects” standard, it is not possible to reconcile CMS’s response to comments in 2008 and the position taken in MFAR.

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The New Tests in 42 CFR §433.68 are Subjective, Leaving States in an Impossible Position

Third, HHSC is concerned that both proposed amendments to 42 CFR § 433.68(e) and (f)(3) are subjective and leave states entirely at the mercy of potentially shifting interpretations. If CMS adopts the proposed “undue burden,” “net effects,” “reasonable expectations,” and “totality of the circumstances” language, any analysis of a health care-related tax will be subjective and variable, and HHSC believes there may be almost no certainty with regard to what will be deemed permissible. States must have certainty of, and protection under, the law in order to appropriately and efficiently operate any public program. The criteria used to determine when there is an impermissible health care-related tax should be standardized and result in consistent outcomes.

HHSC is concerned that the “undue burden” test proposed for § 433.68(e) changes what was once a quantitative analysis for health care-related tax waivers and adds an element that may lead to inequitable treatment across states. As discussed previously, the “net effects” test proposed for 42 CFR § 433.68(f)(3) is subjective and will also lead to inequitable treatment across states. HHSC recommends removing the proposed amendments to § 433.68.

In addition, as CMS has proposed amending § 433.68(f)(3), it appears that the new test for finding a hold harmless practice under this prong relates only to direct guarantees. Unlike the proposed amendment of § 433.54(c)(3) which says “[s]uch a guarantee will be found to exist,” the proposed amendment of § 433.68(f)(3) says “[a] direct guarantee will be found to exist.” However, it is not clear to HHSC whether this is CMS’s intention. The portion of the preamble that discusses this change says it applies to both direct and indirect guarantees. See 84 Fed. Reg. 63742. HHSC requests that CMS clarify if, to the extent the amendments are adopted, the new language applies to both direct and indirect guarantees.

42 CFR § 433.72 Waiver provisions applicable to health care-related taxes

Comment

Although HHSC does not operate any health care-related taxes waivers, HHSC is concerned that a three-year renewal period, as proposed in 42 CFR § 433.72, is unnecessary. Such a change could be administratively burdensome and would be without justification. Such formal review and renewal of tax waivers is unnecessary, as the State already has ongoing responsibility to comply with all waivers granted by CMS. If facts have changed such that the previous approval of a tax waiver would be in doubt, a state would already be in discussions with CMS. Creation of tax programs is

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P highly sensitive and the specter of constant renegotiation provides no security for states or providers that must make such tax payments. HHSC recommends that CMS withdraw the proposed requirement for re-approval of health care-related tax waivers.

42 CFR § 433.316 When discovery of overpayment occurs and its significance

Comment

HHSC appreciates CMS’s attempt to clarify when discovery of an overpayment occurs. However, even after the state submits the DSH independent certified audit report, changes can still occur as a result of litigation or other circumstances beyond the control of the state Medicaid agency. For example, HHSC has experienced litigation affecting the outcome of the audit. In 2013, HHSC was sued by a children’s hospital regarding the appropriate calculation of the hospital specific limit. Likewise, CMS was sued by multiple hospitals regarding the same subject. Depending on the outcome of these lawsuits, HHSC might have been in the position of having to recoup payments from providers that would not otherwise be subject to recoupments once the audit report was updated. HHSC recommends that CMS make it clear that discovery of an overpayment will not be triggered if circumstances outside the control of the state Medicaid agency makes recoupments impossible.

42 CFR § 447.201 State plan requirements

Comment

HHSC has concerns that limiting variation in fee-for-service payment by eligibility category, as proposed in 42 CFR § 447.201, will have serious unanticipated consequences. All Medicaid programs must ensure that access is adequate for its members. Sometimes, a state must adopt higher rates to ensure provision of certain services to some categories of patients. For example, the rate necessary to assure adequate access for a service might be lower for an adult than it would for a child. The same could be true for an individual with intellectual or developmental disabilities. Medicaid programs often provide more complex and costly services to these individuals. However, having the same rate regardless of that important population distinction would necessitate higher rates than a state, or even the federal government, would typically find appropriate. Thus, there is a risk that in attempting to ensure efficiency, economy, and quality of care under the Social Security Act, the proposed amendment could have the opposite impact. The result of this proposed rule would be an unnecessary increase in federal and state spending.

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To the extent CMS is concerned about states choosing higher rates solely on the basis on relative FMAPs, HHSC agrees that such a practice should be limited. However, states should be able to determine an appropriate rate for particular populations given the needs of those populations.

42 CFR § 447.206 Payments funded by certified public expenditures made to providers that are units of government

Comment

HHSC supports CMS’s effort to make it clear that payments funded through CPEs must be limited to actual, incurred costs of providing covered services. But, section (b)(4) of the proposed new 42 CFR § 447.206 would require that the certifying entity of the CPE must receive and retain the full amount of FFP. This appears to be inconsistent with Social Security Act section 1902(a)(32) and 42 CFR § 447.10, which permit a Medicaid provider to assign a Medicaid payment to a governmental agency or entity. HHSC recommends removing Section (b)(4) of the proposed rule.

42 CFR § 447.207 Retention of payments

Comment

Proposed 42 CFR § 447.207 attempts to require that a Medicaid provider retain its Medicaid payments. In determining whether a Medicaid provider is retaining such payments, the proposal says it will consider “associated transactions.” Such transactions “may include, but are not necessarily limited to, the payment of an administrative fee to the State for processing provider payments….” Texas suggests clarifying that “associated transactions” would not include an administrative fee to the state for the purpose of enhancing the state’s oversight of the Medicaid program.

The preamble states, “Payment arrangements that comply with an exception in section 1902(a)(32) of the Act and the implementing regulation in § 447.10 would not be deemed out of compliance with this proposed provision.” 84 Fed. Reg. 63746. The preamble also states, “We have noted circumstances in some states where participation in a Medicaid supplemental payment under the state plan is conditioned upon the state receiving a portion of that payment back….” Id. CMS seems to imply that conditioning participation in such a manner is impermissible. CMS’s position is wholly inconsistent with the Social Security Act. Section 1902(a)(32)(B) of the Act permits assignment to a government agency. The widely accepted definition of “assignment” is “the transfer of rights or property.” See Black’s Law Dictionary (11th ed. 2019). This broad definition does not 13

HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P prohibit the assignee from conditioning a thing of value on the assignment (e.g., conditioning a Medicaid supplemental payment on the assignment), and section 1902(a)(32)(B) contains no such requirement. CMS should clarify that a state may condition participation in a Medicaid supplemental payment program on an assignment under 1902(a)(32)(B).

HHSC is attempting to expand its monitoring capabilities for supplemental payments and the sources of the non-federal share. However, to do that, HHSC must pay for that increased administration. By hindering states’ abilities to cover that added administrative burden, CMS sets states up for failure. CMS should allow for administrative fees scaled to benefits accrued to providers. A flat fee across a broad class of providers has a deleterious effect on smaller, often struggling, providers. For example, if the state were to charge an application fee of $100 on all hospitals that wish to participate in an upper payment limit (UPL) supplemental payment program, that $100 is far more important to a hospital that would receive a $1,000 UPL payment than a hospital that would receive a $10,000 UPL payment. Limiting Medicaid participation on the part of smaller or struggling providers limits access for patients and encourages provider concentration.

42 CFR § 447.252 State plan requirements

Comment

HHSC has two concerns regarding the proposed 42 CFR § 447.252, which creates new requirements related to supplemental payments under the state plan. First, HHSC believes the three- year re-approval of state plan-based supplemental payments is unnecessary and ill-advised. There is simply not enough certainty under the proposed rule for states to effectively operate their Medicaid programs while seeking such frequent re-approvals. Additionally, it is not clear why such programs must be re-approved at all. Currently, the federal government has tools to determine if Medicaid programs, including state plan-authorized supplemental payment programs, comply with the law. CMS operates financial management reviews and HHS IG conducts audits.

Second, the proposed monitoring plan is administratively burdensome. States typically create a program in line with the original approvals from CMS. If any changes to those programs are considered, it is part of the normal course of business for a state to compare such changes to the previous CMS approval and, if CMS approval is necessary to implement such changes, request that approval. Accordingly, a plan for ongoing monitoring is unnecessary and burdensome.

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Lastly, HHSC is concerned that CMS does not have adequate administrative capacity to review and approve these new SPAs, especially if it intends to thoroughly review monitoring plans and the results of those plans. With this new responsibility, in addition to the proposed tax waiver renewals and the normal course of business, HHSC fears it will be a challenge for CMS to timely review these submissions. These administrative capacity issues could indirectly impact review of state submissions that are not otherwise related to these new rules. HHSC requests that CMS remove the required re-approvals of state plan-based supplemental payments and monitoring plans.

42 CFR § 447.272 Inpatient services: Application of upper payment limits

Comment

HHSC agrees with CMS’s attempts to limit wasteful spending but is concerned that the description of UPLs contained in 42 CFR § 447.272 will have a detrimental impact on a key eligibility group in Medicaid: children. In large part, Medicare and Medicaid cover different populations. One of the largest populations covered by Medicaid is children. In Texas, roughly 62% of the more than 4,000,000 Medicaid clients are under the age of 14. Medicare is a program largely developed for those over the age of 65. The needs, costs, and expectations of the two programs are not aligned. In determining UPLs, HHSC requests that CMS consider the significant amount of care provided to children in Medicaid.

42 CFR § 447.284 Basis and purpose

Comment

HHSC requests clarification of the limitations of new Subpart D as described in this section. The text of the proposal seems to set out requirements for supplemental payments made under the state plan. However, the preamble’s use of the term “supplemental payment” seems as though it can apply to both payments made through Section 1115 Waiver authority and even some managed care payments, in addition to the state plan. See 84 Fed. Reg. 63726. HHSC requests that CMS clarify that the requirements described in new Subpart D apply only to supplemental payments authorized through the state plan.

42 CFR § 447.286 Definitions

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Comment

HHSC is concerned that the proposed definitions in proposed 42 CFR § 447.286 are vague and unduly burdensome. First, CMS seeks to define “supplemental payment” and distinguish it from “base payment.” Unfortunately, it is not clear to HHSC how some payments would be categorized. CMS states in the definition that such payments “cannot be attributed to a particular provider claim for specific services provided to an individual beneficiary and are often made to the provider in a lump sum.” HHSC fears that this proposed change unnecessarily introduces subjectivity and uncertainty.

For example, CMS states in the preamble that it is possible for certain managed care payments to be considered supplemental payments. HHSC agrees that pass-through payments described in 42 CFR § 438.6(d) could be considered supplemental payments. However, directed payment programs under § 438.6(c) are put in question by the proposal. All such payments are to be paid out based on Medicaid utilization, so they can be tied to services provided to an individual beneficiary. In addition, it is possible for directed payments to be made in a lump sum. HHSC requests that CMS confirm that pass-through payments described in § 438.6(d) are the only form of managed care payment that would be considered a “supplemental payment” for purposes of the proposed rule.

Second, CMS defines state and non-state government provider. HHSC is concerned that this change, too, introduces unnecessary subjectivity and uncertainty. With the exception of reporting the results of UPL demonstrations, states are traditionally relied upon to determine ownership of various health care entities. States should continue to be the entities making such determinations. In addition, CMS extends to this section the inconsistencies related to the non-federal share that HHSC has pointed out in 42 CFR § 433.51 on state share of financial participation. The proposed changes will only increase the administrative burden on states and leave states unsure as to how categorize many providers.

42 CFR § 447.288 Reporting requirements for upper payment limit demonstrations and supplemental payments

Comment

Regarding the proposed reporting requirements for supplemental payments in 42 CFR § 447.288, as previously stated, HHSC fully supports efforts to increase transparency of these payments. HHSC is

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P taking steps itself to make information about such payments more broadly accessible to the public on an ongoing basis.

However, HHSC has two suggestions regarding the proposal. First, HHSC does not believe reporting should be necessary more than annually. It is not clear to HHSC what benefit the public derives through quarterly reporting. Second, HHSC suggests removing the requirement that a physical address be included in the report. Given the fluid nature of provider identification numbers in relation to physical address, such information is not possible to report.

Additionally, HHSC does not act as an intermediary between providers and the Medicaid managed care organizations regarding their specific payment arrangements, except in certain circumstances as permitted under 42 CFR § 438.6(c). As such, HHSC does not believe that payments to providers made by a Medicaid managed care organization should be subject to the upper payment limit demonstration, as the provider payments made by the Medicaid managed care organization are presumed to be, as already required under §1902(a)(30)(A) of the Act, “consistent with efficiency, economy, and quality of care” and “sufficient to enlist enough providers.”

42 CFR § 447.290 Failure to report required information

Comment

While HHSC supports generally the proposed reporting requirements for supplemental payments, it believes that the proposed penalty for failure to report is not consistent with the Social Security Act or existing CMS regulations.

CMS proposes in 42 CFR § 447.290(b) to reduce future grant awards through deferral if a state fails to timely, completely, and accurately report information required under 42 CFR § 447.288. Under proposed § 447.290(b), a grant award can be reduced by the amount of FFP that CMS estimates to be attributable to payments made to the provider(s) as to which the state has not reported properly. CMS gives itself authority to defer FFP even if a state submits the required report but the report fails to comply with applicable requirements. According to CMS, “[o]therwise allowable FFP for expenditures deferred in accordance with this proposed section would be released when we determine that the state has complied with all reporting requirements under proposed § 447.288.” See 84 Fed. Reg. at 63758.

CMS says the proposed deferral under § 447.290(b) will be in accordance with 42 CFR § 430.40, but § 447.290(b) as proposed is inconsistent with § 430.40. First, § 430.40 authorizes deferred 17

HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P payments only when CMS questions the allowability of the claimed expenditure and needs additional information to resolve the question; the regulation does not allow deferral as a result of noncompliance with CMS regulations (e.g., noncompliance with § 477.288). Additionally, and contrary to § 447.290(b) as proposed, a deferral pursuant to § 430.40 is not indefinite. Generally, funds may be deferred for 90 days, at which point CMS must either release the funds or take a disallowance (and provide appeal rights to the State). See 42 CFR § 430.40(c)(5)-(6).

Finally, CMS should not finalize § 447.290(b) as proposed because it already has the authority to impose a remedy for noncompliance with CMS regulations. The proper remedy for noncompliance with CMS regulations is section 1904 of the Social Security Act, which provides that CMS may only withhold funds “after reasonable notice and hearing to the state agency.” Given the foregoing, the penalty for failing to comply with the proposed reporting requirements should be consistent with the notice and hearing requirements of section 1904.

42 CFR § 447.297 Limitations on aggregate payments for disproportionate share hospitals beginning October 1, 1992

Comment

HHSC requests that CMS adopt no proposed changes to 42 CFR § 447.297 in order to avoid inadvertently hindering states’ ability to operate their programs. First, for planning purposes, it is extremely helpful for a state to know by a date certain what the DSH allotment will be for that state. For example, HHSC takes the DSH allotments into account when determining the appropriate amount of funds for other supplemental and directed payment programs. If DSH allotment dates were to slip, it is difficult for states to adjust payment timelines, which have become quite complex. It is rare for HHSC to have an open space in its supplemental and directed payment calendar due to limited administrative capacity.

Second, HHSC objects to removing the requirement that the DSH allotments be posted in the Federal Register. Nothing prevents CMS from posting the allotments in whatever electronic format it believes would be widely accessible. However, from the standpoint of continued reliability, the Federal Register is a known, regularly published source of information that can only be updated through later publicly released issues, and accordingly provides a reliable, permanent public record. Therefore, HHSC would recommend continuing to require posting of the DSH allotment in the Federal Register in addition to any other online source CMS finds appropriate.

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P

42 CFR § 447.299 Reporting requirements

Comment

Auditors have noted that state Medicaid agencies, including HHSC, do not have access to out-of- state payment information. This has the potential to hinder the determination of the financial impact of audit findings. Will CMS require Medicaid agencies to provide out-of-state payment information to auditors of other states? If so, how will such a requirement be implemented to allow for other states to access each other’s Medicaid Management Information System (MMIS)?

In addition, HHSC has no general concern with the proposed timelines for collection of overpayments and issuance of redistributions. However, there are sometimes issues outside the control of the state. For instance, as discussed in our comment on 42 CFR § 433.316, HHSC has experience with litigation that resulted in the state not collecting overpayments and issuing redistributions as that litigation directly impacted such actions. HHSC requests that CMS make allowance in rule for issues outside of state government control, such as litigation.

42 CFR § 447.302 State plan requirements

Comment

HHSC has the same concerns with proposed 42 CFR § 447.302, which creates new requirements related to supplemental payments under the state plan, as it does with 42 CFR § 447.252. First, HHSC believes the three-year re-approval of state plan-based supplemental payments is unnecessary and ill-advised. There is simply not enough certainty under the proposed rule for states to effectively operate their Medicaid programs while seeking such frequent re-approvals. Additionally, it is not clear why such programs must be re-approved at all. Currently, the federal government has tools to determine if Medicaid programs, including state plan-authorized supplemental payment programs, comply with the law. CMS operates financial management reviews and HHS IG conducts audits.

Second, the proposed monitoring plan is administratively burdensome. States typically create a program in line with the original approvals from CMS. If any changes to those programs are considered, it is part of the normal course of business for a state to compare such changes to the previous CMS approval and, if CMS approval is necessary to implement such changes, request that approval. Accordingly, a plan for ongoing monitoring is unnecessary and burdensome.

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P

Lastly, HHSC is concerned that CMS does not have adequate administrative capacity to review and approve these new SPAs, especially if it intends to thoroughly review monitoring plans and the results of those plans. With this new responsibility, in addition to the proposed tax waiver renewals and the normal course of business, HHSC fears it will be a challenge for CMS to timely review these submissions. These administrative capacity issues could indirectly impact review of state submissions that are not otherwise related to these new rules. HHSC requests that CMS remove the required re-approvals of state plan-based supplemental payments and monitoring plans.

42 CFR § 447.321 Outpatient hospital services: Application of upper payment limits

Comment

HHSC shares the same concerns with proposed 42 CFR § 447.321 as it did with 42 CFR § 447.272. HHSC agrees with CMS’s attempts to limit wasteful spending but is concerned that the description of UPLs contained in § 447.321 will have a detrimental impact on a key eligibility group in Medicaid: children. In large part, Medicare and Medicaid cover different populations. One of the largest populations covered by Medicaid is children. In Texas, roughly 62% of the more than 4,000,000 Medicaid clients are under the age of 14. Medicare is a program largely developed for those over the age of 65. The needs, costs, and expectations of the two programs are not aligned. In determining UPLs, HHSC requests that CMS consider the significant amount of care provided to children in Medicaid.

42 CFR § 447.406 Medicaid practitioner supplemental payment

Comment

Although HHSC does not currently operate any programs that would be impacted by the cap on Medicaid practitioner supplemental payments proposed by 42 CFR § 447.406, HHSC does not understand why a cap is necessary, particularly the one described in the proposed rule. In general, payments must currently be consistent with efficiency, economy, and quality of care. HHSC believes that further limits beyond those laid out in statute are unnecessary.

42 CFR § 455.301 Definitions

Comment

As noted above in comments on 42 CFR § 447.299, auditors have noted that state Medicaid agencies, including HHSC, do not have access to out-of-state payment information to determine the

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HHS Interim Charge 2 – Appendix B Texas Health and Human Services Commission Comments: File Code CMS– 2393-P financial impact of a finding related to such payments. The DSH audit rule preamble states that “(w)hen the State has the most central and current information through its MMIS (for example, data on Medicaid payments in State fee-for-service inpatient hospital, outpatient hospital and DSH payments) that system will be the best source of the information.” HHSC requests that CMS clarify whether it will require Medicaid agencies to provide out-of-state payment information to auditors of other states. HHSC also requests clarification regarding how such a requirement may be implemented to allow for other states to access each other’s MMIS.

42 CFR § 457.609 Process and calculation of State allotments for a fiscal year after FY 2008

Comment

While HHSC appreciates CMS’s attempt to find user-friendly means of disseminating information, the CHIP allotments should officially be posted in the Federal Register. Nothing prevents CMS from posting the allotments in whatever electronic format it believes would be widely accessible. However, from the standpoint of continued reliability, the Federal Register is a known, regularly published source of information that can only be updated through later publicly released issues. As such, HHSC would recommend posting the CHIP allotment in the Federal Register in addition to any other online source CMS finds appropriate.

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LAURA GUERRA-CARDUS, M.D. DEPUTY DIRECTOR

1910 E MLK JR BLVD AUSTIN, TX 78702

SEPTEMBER 25, 2020

Response to Formal Request for Information by the House Human Services Committee Regarding Interim Charge 2.2

With the dissolution of the Texas Medicaid 1115 waiver in 2021, Texas should expand its Medicaid program to meet the needs of millions of Texans without affordable health insurance. Texas has the highest uninsured rate in the nation, and since the COVID-19 pandemic began, our state has added 695,000 Texans to the ranks of the uninsured, bringing our state’s uninsured rate to 29% as of May 2020.

The 1115 waiver was adopted to help pay for the Texas healthcare safety net by establishing funding through a $25 billion 5-year agreement between the state and federal government. Although many advocates argued that Medicaid expansion was the most cost-effective way to cover the health costs of currently uninsured individuals, the waiver instead created two different programs to equip state hospital and healthcare infrastructure. The first program directed the state government to reimburse state hospitals for “uncompensated care,” or services provided to vulnerable populations (UC). The second program, Delivery System Reform and Incentive Payment (DSRIP), provided funding for cost-effective initiatives to improve healthcare quality, especially in regards to people without insurance.

State hospitals have relied on these sources of funding to create new programs and to avoid financial difficulties when providing services to people without insurance. From 2011-2017, programs funded by DSRIP served 11.7 million Texans over 29.4 million appointments. They were especially helpful for hospitals like Parkland in the area with 70% of their patient base depending on Medicaid and charity clinics to get much needed medical care. With 70% of Texas counties classified as rural, hospitals in those areas depended on funding from DSRIP and UC to stay afloat.

As the 1115 waiver comes to an end, many state hospitals are left without an alternative source of funding. Many will have to cut services and tighten their budgets, and some may even have to close their doors. The needs of millions that were met under the DSRIP programs and UC will be left unmet while in the middle of a continuing public health emergency.

We recommend that Texas expand Medicaid as the state government transitions from 1115 transformation waiver for the following reasons:

1. Medicaid expansion would provide healthcare services to patients that depended on the 1115 transformation waiver and those in the Texas coverage gap.

As public hospitals transition from sustainable funding previously provided through DSRIP and UC, hospital administrators will be left with insufficient funds to serve the needs of Texans without health insurance. The state legislature has not offered other forms of funding to replace the 1115 waiver. Compared to the waiver, Medicaid Children’s Defense Fund – Texas Page 1 of 3 expansion would bring far more federal funding - estimated at 10 billion dollars per year - to support Texas’ healthcare infrastructure and provide a healthcare coverage option to an estimated 2.2. million low-income Texans.

2. Medicaid expansion would save Texas money.

Because the federal government covers 90% of Medicaid expansion costs, many states that have expanded Medicaid have actually experienced net savings in their state budgets. In Arkansas, studies project the state’s net savings to total $444 million from 2018 to 2021 and in Michigan, the projected net savings equals $1 billion during the same time frame. Similarly, a new report sponsored by the Episcopal Health Foundation finds that expanding Medicaid in Texas would have a net positive impact on the state budget. With increased accessibility to medical services, there is less burden on hospitals to pay for uncompensated care which translates to state and local savings. Medicaid expansion is a direct solution to the funding crises faced by many public hospitals, especially those located in rural and medically underserved areas.

3. Medicaid expansion allows patients to access primary care and practice preventative health.

Children’s Defense Fund – Texas Page 3 of 3

When individuals have readily accessible health insurance, they are more likely to use primary healthcare services regularly and less likely to put off addressing their health needs. This translates to reductions in emergency room costs. Studies show that preventative care leads to reduced spending on Medicaid patients.

4. Medicaid expansion helps decrease maternal mortality and morbidity.

Consistent coverage is a critical factor for decreasing maternal mortality and morbidity, yet Texas has the highest rate of uninsured women of child-bearing age, with one in four lacking coverage. To properly care for Texas mothers and babies, women need healthcare coverage throughout their lives. Medicaid expansion is not only the most efficient way to do this but data from other expansion states shows that we can expect improvements in prenatal access to care through expansion. Studies show that churning (switching between being insured and uninsured) decreased by 10.1% during the perinatal period (critical period for the development of the baby) in 13 states that expanded Medicaid compared to states that did not. In addition, women of childbearing age are twice as likely to be uninsured in states that did not expand Medicaid compared to the states that did.

5. Medicaid expansion reduces racial disparities in health.

Troubling disparities in health outcomes across racial lines plague our state. In Texas, Black women are 2 to 3 times more likely to die in the year after childbirth and face greater risks of and low birthweight compared to their white counterparts. People of color, particularly non-white Hispanic and Black populations, face higher risks of catching and dying from COVID-19 than white populations. These stark health disparities are largely due to poor access to affordable health insurance. While 15% of white Texans lack coverage, 23% of Black and 38% of non-white Hispanic Texans are uninsured.

While programs under the 1115 waiver attempted to meet the needs of vulnerable populations, steady coverage is essential for protecting the health of all Texan. We strongly urge this committee to support Medicaid expansion in the upcoming session.

Children’s Defense Fund – Texas Page 3 of 3

Children’s Hospital Association of Texas Phone:512-320-0910 Address: 823 Congress Avenue, Suite 1500, Austin, Texas 78701 Name: Christina Hoppe Email: [email protected] House Human Services

Topic: Interim Charge 2.2 - 2.5

The Children’s Hospital Association of Texas (CHAT) represents eight free-standing, not-for-profit children’s hospitals located throughout the state of Texas. CHAT’s mission is to advance children’s health and well-being by advocating for policies and funding that promote children’s access to high-quality, comprehensive health care. CHAT appreciates the opportunity to provide information to the House Human Services Committee.

The number of children under age 18 living in Texas exceeds the total population of 38 U.S. states and territories,1 and one of every 10 children in the country lives in Texas. Thus, the State has a unique opportunity to nationally lead in ensuring that children receive the best healthcare. Children’s hospitals and their affiliated health systems are the natural expert centers to help drive this effort, which will include measurable outcomes that demonstrate children are receiving high-quality healthcare at lower cost.

2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver

There is no better investment that can be made to improve the future health of Texas than to invest in the health of the children of Texas. Children make up 69% of the Texas Medicaid population2 so children’s hospitals are heavily reliant on Medicaid funding. To continue to serve as the safety net for these low-income children, children’s hospitals need stable Medicaid financing.

Children’s hospitals serve one of the most vulnerable populations in Texas - children with medically- complex and chronic conditions. Almost 60% of children in Texas with special healthcare needs are covered by Medicaid.3 Additionally, 41% of the Medicaid days in CHAT member hospitals are for children suffering from the most severe medical conditions,

1 World Population Review, last accessed on 9/23/20. 2 https://hhs.texas.gov/services/health/medicaid-chip/about-medicaid-chip/reference-guide, p. 3, last accessed 9/23/20. 3 http://files.kff.org/attachment/fact-sheet-medicaid-state-TX;, p. 1., last accessed 9/23/20.

9/25/2020 Children’s Hospital Association of Texas Phone:512-320-0910 Address: 823 Congress Avenue, Suite 1500, Austin, Texas 78701 Name: Christina Hoppe Email: [email protected] House Human Services including cancer, organ failure, and cystic fibrosis.

Currently, the 1115 Healthcare Transformation and Quality Improvement Program Waiver provides critical Medicaid funding for children’s hospitals in the state of Texas. The 1115 Waiver and its essential supplemental funding have helped shore up safety net providers like children’s hospitals.

On behalf of our members, CHAT requests that the state:

 Maximize Federal Medicaid Funding – Federal Medicaid policies allow states to pursue Medicaid program flexibility through waivers, directed payment programs, and other agreements in the Medicaid state plan. CHAT supports the state maximizing the federal funding available to hospitals through the existing federal flexibilities to ensure hospitals continue to provide the high-level of care to vulnerable children in the state.

 Partner with Children’s Hospitals to Transform Care – Children are the largest population served by the Medicaid program in Texas. Addressing cost drivers and quality of care issues for children could have a significant impact on the over-all effectiveness and health outcomes of the program. Children’s hospitals are uniquely positioned to lead the transformation of pediatric health care delivery for the more than 3 million children covered by Medicaid in Texas.

Failure to continue the funding that is currently available through the waiver and supplemental payments will cause serious negative consequences to the delivery of health care throughout the state. It is becoming increasingly challenging for children’s hospitals to maintain the full array of services to care for children with serious chronic conditions due to continuing funding reductions and disruptions.

2.4) The Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability Rule

On behalf of our members, CHAT believes that the Centers for Medicare and Medicaid Services (CMS) proposed Medicaid Fiscal Accountability Rule (MFAR) would have significant detrimental impacts on safety-net hospitals in the state. The proposed regulation will likely severely impair the Medicaid program, on which our member hospitals are heavily dependent. CHAT believes that the proposed regulation will substantially harm children’s hospitals in Texas for a number of reasons.

Medicaid is the primary payor for care provided by children’s hospitals in Texas.

Children’s hospitals in Texas rely heavily on Medicaid funding due to a confluence of factors, including:

 The number of children in Texas;  The poverty rate for children in Texas; and  The limited number of payors for children (i.e., no Medicare payments).

According to the Texas State Demographer, 7.4 million children under the age of 18 lived in Texas in 2019. About half of those children are enrolled in Medicaid or the Children’s Health Insurance Program (CHIP).

9/25/2020 Children’s Hospital Association of Texas Phone:512-320-0910 Address: 823 Congress Avenue, Suite 1500, Austin, Texas 78701 Name: Christina Hoppe Email: [email protected] House Human Services

According to the Annie E. Casey Foundation’s 2019 Kids Count Book,4 21% of children, more than 1.5 million kids, live in poverty in Texas. With the sheer number of children in Texas and Texas’s Medicaid eligibility criteria, discussed in more detail below, Medicaid is the payor for between 50% and 80% of all inpatient days at children’s hospitals.

A disruption or reduction in vital Medicaid funding will limit the availability of life-saving and life-sustaining services for all children. Children’s hospitals serve as the safety net for all children, not only in the state but often across the region, nation, and world. These hospitals do not differentiate care based on a patient’s payor. In fact, children’s hospitals often subsidize specialists’ and sub-specialists’ payments to ensure that they are accessible to all children. Any disruption in Medicaid funding threatens the availability of specialized pediatric services to every child who needs medical care.

The proposed rule would substantially damage the Medicaid program in Texas. In its comment letter to CMS, CHAT pointed out that MFAR is overly broad in its scope, as it goes further than is necessary, and likely beyond CMS’s authority, to remedy specific perceived problems. For example, by moving away from a standardized test to determine whether a provider tax is generally redistributive and using unclear “totality of the circumstances” and “net effect” language, CMS is injecting vague and subjective standards into Medicaid funding structures that will likely cause large and unpredictable swings in program funding. This unpredictability in such a large amount of children’s hospital funding will potentially result in both reductions in current services and limitations in making long-term investments to meet the growing needs of patients.

4 https://www.aecf.org/resources/2019-kids-count-data-book/, last accessed on 9/23/20.

9/25/2020

September 25, 2020

The Honorable James B. Frank Chairman, House Committee on Human Services Texas House of Representatives P.O. Box 2910, Austin, TX 78768-2910 Via E-Mail: [email protected]

Re: City of Austin Comments on Interim Charge 2.2

Chair Frank and Members of the House Committee on Human Services:

Thank you for the opportunity to submit written comments on the Committee’s Interim Charge 2.2, concerning the next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver.

The COVID-19 pandemic has highlighted the need for a robust public health infrastructure to address health disparities, provide services to vulnerable populations, and protect the health of the general population. Local health departments play a crucial role in the state’s health care delivery system and successfully use the Delivery System Reform Incentive Payment (DSRIP) pool under the 1115 waiver to improve health outcomes in communities throughout the state.

Since 2012, the City of Austin has utilized DSRIP programs to enhance access to health care, increase the quality and cost-effectiveness of care, and improve population health and the health of the patients and families served. The focus of Austin Public Health (APH) DSRIP programs is on the Medicaid, Low-Income, and Uninsured (MLIU) population. We are happy to share that, with the help of DSRIP programs, APH surpassed its October 2019 goal to service 28.33% MLIU out of our total patient population, ultimately serving 29.43% MLIU. (Examples of Austin Public Health DSRIP programs appended).

Austin Public Health (APH) anticipates the ending or transition of the DSRIP 1115 Medicaid Waiver by the end of 2021, with the last reporting date to be in April 2022. APH carefully planned for this disruption of DSRIP funding by forecasting DSRIP payments until 2023 and working to realize savings in annual program-level budgets, which could potentially extend the funding further. The department continues to problem-solve ways to supplement funding for programs that currently benefit from the 1115 Medicaid Waiver.

At the state level, legislation establishing local health departments as a provider-type recognized by Managed Care Organizations (MCOs) would allow health departments to be reimbursed for the services they are currently providing to Medicaid recipients. The Legislature considered such a proposal last session with S.B. 2021, which was approved by this Committee. Prior to the Medicaid Managed Care environment, local health departments were able to receive direct reimbursement from Medicaid for services provided to Medicaid recipients. Allowing MCOs to reimburse local health departments for services already being provided would significantly help departments continue to provide critical services to a particularly vulnerable population at a particularly vulnerable time.

Thank you for your consideration of these comments and your genuine commitment to improving public health in our state. Please do not hesitate to reach out if you have any questions or would like any additional information.

Sincerely,

Assistant Director Adrienne Sturrup for Stephanie Hayden Director, Austin Public Health The City of Austin is committed to compliance with the Americans with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request.

EXAMPLES OF AUSTIN PUBLIC HEALTH DSRIP PROGRAMS

Maternal Infant Outreach Program The Maternal Infant Outreach Program (MIOP) provides peer support and advocacy to African American women who are pregnant in efforts to address and eliminate racial disparities in birth outcomes1 and improve maternal and infant health. MIOP’s mission to create a village of healthy black moms, healthy black babies, and healthy black families is supported by a program focus on at-term births, healthy infant weight, breastfeeding, Intimate Partner Violence (IPV) screening, and postpartum health visits.

MIOP Community Health Workers are paired with expecting mothers and provide one-on-one support through home visits, navigation of social services, and overall maternal and infant health education throughout pregnancy and up until the baby’s first birthday. In fiscal year 2020, MIOP has served 78 clients, conducted 326 home visits, and 708 encounters through phone and video conferencing.

The Community Diabetes Initiative The Community Diabetes Initiative (CDI) provides diabetes self-management and prevention education to individuals living with , people at risk, and caregivers/support persons. This program focuses on reducing health disparities related to diabetes, especially in the Hispanic/Latinx and African American communities. In the last five years of the program, CDI has served 2078 individuals (not unduplicated). In the last two years of the program (DSRIP 2.0), the program has reached 392 individuals.

Immunizations APH’s immunizations program seeks to increase the provision of immunizations to decrease morbidity and mortality to uninsured or Medicaid/Medicare eligible high-risk populations. The immunization project specifically targets clients seeking STD & HIV services, day laborers, homeless individuals, substance abusers, and other high-risk individuals.  Older adults are at the greatest risk of severe illness or death due to pneumococcal disease. The CDC recommends pneumococcal vaccination for all adults 65 years or older.2 APH’s adult immunization program increased the percentage of patients 65 years of age and older who ever received a pneumococcal vaccination from 2.93% in 2017 to 18.15% in 2019.  Influenza or “flu” is highly contagious and can be a potentially serious and even deadly disease for anyone, regardless of age or health status. With the help of the DSRIP program, the percentage of patients 6 months and older seen for at least two visits or at least one preventive visit during the measurement period increased from 11.44% in 2017 to 42.34% in 2019.

Permanent Supportive Housing Permanent Supportive Housing services provide intensive community-based services to individuals with history of chronic homelessness and multiple health conditions. This program serves chronically homeless individuals and those who have been chronically homeless and are currently at risk of losing stable housing. This population is one of the costliest to taxpayers as they are often uninsured yet use the most expensive emergency services. Providing these services helps individuals maintain housing stability and improve their quality of life, which not only benefits them but the community at large.

These services provide treatment, rehabilitation, and support services to individuals who typically have a history of multiple hospitalization treatments, chronic health conditions, criminal justice involvement, and chronic homelessness. In fiscal year 2020, APH utilized nearly $1.5 million in funds to contract with two vendors to provide permanent supportive housing.

1 In Travis County, the rate is 16.1% among African American women, 9.6% among whites, and 10.9% among Hispanics (March of Dimes Peristats, 2014). 2 Centers for Disease Control and Prevention. “Pneumococcal Vaccination: What Everyone Should Know.”

September 25, 2020

Courtney DeBower Assistant Committee Clerk Human Services Committee Texas House of Representatives Via Email: [email protected]

RE: Comments in Response to Request for Information – Interim Charges 2.2 – 2.5

Dear Members of the Human Services Committee:

Every Body Texas (formerly the Women’s Health and Family Planning Association of Texas) appreciates the opportunity to provide information and input on how Texas is preparing for state and federal budgetary changes that impact the state’s health program, including the Healthy Texas Women Section 1115 Demonstration Waiver, in response to the Notice of Formal Request for Information posted on Friday, August 14, 2020. Every Body Texas is a non-profit organization dedicated to ensuring that every person in Texas can access safe, unbiased, high-quality sexual and reproductive healthcare. As the statewide Title X Family Planning Program grantee for Texas, Every Body Texas funds a diverse network of 35 providers— including federally qualified health centers (FQHCs), public health departments, hospital-based clinics, and free-standing family planning clinics—that serves nearly 200,000 clients at more than 160 service sites throughout Texas. Title X providers supported by Every Body Texas also participate in Texas Medicaid and the state-funded women’s health programs administered by the Texas Health and Human Services Commission (HHSC), including Healthy Texas Women and the Family Planning Program. Providers rely on these critical revenue sources to offer robust family planning services to their clients and communities. As the rates of unemployed and uninsured Texans rise across the state as a result of the COVID-19 pandemic, it is critical for state leaders to both fund safety net healthcare services and to reduce the number of uninsured Texans to ensure that our health and economy recover. For the reasons outlined below, Every Body Texas urges the to maintain funding levels for Healthy Texas Women and the Family Planning Program during the 87th Legislature and to work with HHSC and key stakeholders to address outstanding women’s health program implementation issues.

Healthy Texas Women Section 1115 Demonstration Waiver Implementation HHSC received approval for the Healthy Texas Women Section 1115 Demonstration Waiver on January 22, 2020 and began drawing down federal funds on February 18, 2020. HHSC submitted an implementation plan to the Centers for Medicare and Medicaid Services (CMS) in July 2020 and reviewed key aspects of the plan in a post-award public forum on July 16, 2020.i During the July 16th post-award public forum, HHSC shared a number of changes to Healthy Texas Women eligibility and enrollment policies and practices, citing the waiver’s requirement to comply with

314 East Highland Mall Blvd. | Suite 400 | Austin, TX 78752 www.everybodytexas.org | (512) 448-4857 | [email protected]

federal Medicaid eligibility, application, verification, and demonstration regulations. The following changes were of particular concern to stakeholders:

• Eligible women whose Medicaid for pregnant women coverage period is ending will no longer be automatically enrolled into Healthy Texas Women; and • Women eligible for WIC, SNAP, or who have a child eligible for Medicaid will no longer be automatically financially eligible (adjunctively eligible) for Healthy Texas Women. Stakeholders have urged HHSC to consider a number of solutions to limit the impact of proposed changes to Healthy Texas Women enrollment, including:

• Improving the administrative renewal process, which HHSC proposes to use in lieu of auto- enrollment. Currently, Texas’s policies and systems for performing administrative renewals for MAGI-based eligibility groups have a very low success rate in achieving renewals compared to other states. According to a 50- state survey from the Kaiser Family Foundationii, Texas is one of only eight states with an administrative renewal rate of less than 25% (Note: Stakeholders understand that Texas’s success rate is actually significantly below 25% and is one of the lowest in the country). Our coalition partner, Every Texan, recently provided HHSC with specific recommendations to improve administrative renewals and we strongly support the implementation of these policies. • Utilizing post-enrollment verification in addition to the administrative renewal process. Post-enrollment verification allows a better transition for new moms, who could submit pay stubs or other required paperwork during a temporary period (90-day window) after she is enrolled. Post-enrollment verification is already used in Texas Medicaid for Pregnant Women and does not require a waiver from CMS. HHSC could work with CMS to utilize post-enrollment verification in Healthy Texas Women without expanding this to all Medicaid populations. • Re-entering negotiations with CMS over the use of adjunctive eligibility. Since the beginning of Healthy Texas Women and its predecessor programs in 2007, HHSC has used adjunctive eligibility to accurately confirm whether a woman is income eligible for the program while minimizing burdens on women, clinics, and agency employees. If at application or renewal a woman is enrolled in the Women, Infants and Children Program (WIC), has a child enrolled in Medicaid, or is in a household that receives SNAP or TANF, she is not required to prove her income again for Healthy Texas Women. CMS has long allowed adjunctive eligibility for certain eligibility groups. For example, CMS allows what is known as “express lane eligibility” for Children’s Medicaid. Express lane eligibility allows the state to identify, enroll, and recertify children by relying on eligibility information from other programs, like SNAP or WIC. CMS also has allowed adjunctive eligibility for certain adult eligibility groups through time-limited waivers. To date, HHSC has not shared the Healthy Texas Women Section 1115 Demonstration Waiver implementation plan with stakeholders; as a result, the foregoing recommendations were developed based on limited information provided by HHSC. We urge legislators to continue monitoring implementation of the Healthy Texas Women Section 1115 Demonstration Waiver during the 87th Legislature and, if needed, to direct HHSC to implement eligibility and enrollment policies and practices—including those that may require a waiver amendment and/or systems changes—to limit the impact of proposed changes to Healthy Texas Women enrollment.

Every Body Texas www.everybodytexas.org | (512) 448-4857 | [email protected] 2

HTW Plus Implementation On September 1, 2020, HHSC announced the launch of an enhanced postpartum care services package for eligible women enrolled in Healthy Texas Women, called HTW Plus, as directed by Senate Bill 750, 86th Legislature, Regular Session, 2019.iii Covered services will include:

• Cardiovascular imaging and laboratory studies, blood pressure monitoring equipment, and antihypertensive, anticoagulant, and antiplatelet medications; • Diabetes management services including labs, additional injectable insulin options, blood glucose testing supplies, and voice-integrated glucometers for women with diabetes who are visually impaired; • Asthma medications and supplies; • Psychotherapy and peer specialist services for postpartum depression and other mental health conditions; • Screening, brief intervention, and referral to treatment (SBIRT); medication assisted treatment (MAT); and peer specialist services for the management of substance use disorders; and • Tobacco cessation drugs. The successful delivery of these enhanced postpartum care services is contingent upon HHSC recruiting and enrolling specialty providers into the Healthy Texas Women program. Additionally, to ensure program effectiveness, HHSC must provide clear guidance about how to find an eligible HTW Plus provider to both Healthy Texas Women clients seeking to obtain enhanced services and Healthy Texas Women providers seeking to make referrals for enhanced services. Following the HTW Plus announcement, stakeholders expressed concerns to HHSC regarding the lack of information about the HTW Plus provider network—a critical component of service delivery. When requested by stakeholders, HHSC was unable to provide information about the number of providers available to offer HTW Plus benefits at program launch and noted that recruitment of specialty providers using existing relationships with managed care organizations was slated to begin in October 2020.

We urge legislators to continue monitoring implementation of SB 750 during the 87th Legislature to ensure effective implementation of HTW Plus—and to identify any unintended impacts on HTW Plus as a result of the changes to Healthy Texas Women eligibility and enrollment policies and practices outlined above. Senate Bill 750 also directed HHSC to seek an 1115 Waiver Amendment to draw down federal funds for the postpartum care services package. HHSC has stated that it plans to initiate the required public comment period in October 2020, submit the waiver amendment to CMS in December 2020, and request an effective date of April 1, 2021. In the event that HHSC does not receive a response to its waiver amendment during the 87th Legislative Session, general revenue may be required to support continued delivery of HTW Plus services in the 2022-2023 biennium. While we are supportive of these enhanced services, we caution against reducing general revenue funding for other critical women’s health programs, including Healthy Texas Women and the Family Planning Program. Every Body Texas appreciates the opportunity to provide these comments. If you require additional information about the issues raised in this letter, please contact me using the information provided in my cover email.

Every Body Texas www.everybodytexas.org | (512) 448-4857 | [email protected] 3

Sincerely,

Kami Geoffray Chief Executive Officer i Texas Health and Human Services Commission. (2020, July 16). Healthy Texas Women 1115 Waiver Public Forum. Texas Health and Human Services. https://hhs.texas.gov/sites/default/files/documents/laws-regulations/policies-rules/1115-waiver/HTW/htw-1115-waiver-public-forum- slides.pdf. ii Brooks, T., Roygardner, L. (2020, March 26). Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2020: Findings from a 50-State Survey. Kaiser Family Foundation. https://www.kff.org/coronavirus-covid-19/report/medicaid-and-chip-eligibility- enrollment-and-cost-sharing-policies-as-of-january-2020-findings-from-a-50-state-survey/ iii Texas Health and Human Services Commission. (2020, August 31). HHSC’s Healthy Texas Women Program Launches Enhanced Postpartum Care Services. Texas Health and Human Services. https://hhs.texas.gov/about-hhs/communications-events/news/2020/08/hhscs-healthy-texas- women-program-launches-enhanced-postpartum-care-services.

Every Body Texas www.everybodytexas.org | (512) 448-4857 | [email protected] 4

September 23, 2020

Chairman James Frank and Members House Human Services Committee Submitted via: [email protected]

RE: Committee hearing comments related to Health Care Access and Medicaid; 2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver and 2.5) The Healthy Texas Women Section 1115 Demonstration Waiver.

Chairman Frank and Members of the House Human Services Committee,

On behalf of Legacy Community Health, the largest Federally Qualified Health Center (FQHC) in Texas, we appreciate the opportunity to comment. Legacy has 41 locations across , Deer Park, Baytown and Beaumont. 27 of our facilities are school-based and have been closed due to school closures associated with COVID-19. We are hoping to re-open these facilities when appropriate. Legacy was at the forefront of the COVID-19 crisis in Harris County and Jefferson County, and was the first healthcare entity to open three public walk-up testing sites to serve patients in Houston and Beaumont.

We are thankful for the swift action by Governor Abbott and HHSC that provided a waiver for FQHCs to provide telemedicine services, and we look forward to the finalization of these rules in the fall to make them permanent.

2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver;

Although FQHCs, for the most part, are not the recipient of 1115 waiver project funding directly, some FQHCs contract with hospital districts, participate in DSRIP projects, are Healthy Texas Women’s grantees, and collaborate with hospital districts informally to deliver care because but we are often treating many of the same patients as our hospital districts.

It is essential that our hospital district partners receive 1115 waiver funding. FQHCs are designed for preventative care and healthcare maintenance, but depend greatly on our hospital districts to care for patients that need to be hospitalized or receive specialty care.

We also recommend that FQHCs be at the table during discussions of renewing the 1115 waiver, more so than they have in the past. We believe that FQHCs play a vital role in lowering healthcare costs and creating innovative approaches to treating vulnerable patient populations.As this committee is studying the importance of safety-net facilities in Texas and considering the renewal of these programs, our hope is that FQHCs will be central to those discussions.

Thank you for the opportunity to engage on these important issues.

Sincerely,

Katy Caldwell, CEO Request for Information: The Next Phase of the 1115 Waiver – September 2020 1

Meadows Mental Health Policy Institute Request for Information: The Next Phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver – September 2020 House Committee on Human Services

In December 2011, Texas received federal approval of an 1115 Healthcare Transformation and Quality Improvement Program Waiver (1115 waiver). A key component of the 1115 waiver was the creation of a Delivery System Reform Incentive Payment (DSRIP) pool, which was designed to incentivize providers to transform their service delivery practices by improving quality, health status, patient experience, coordination, and cost effectiveness. Since 2012, 300 participating DSRIP providers in Texas have implemented locally-driven initiatives to increase access, test innovative ways to deliver care, and improve health outcomes. Participating providers include hospitals, Community Mental Health Centers (CMHCs), physician practices associated with health-related institutions, and local health departments.

Upon renewing the 1115 waiver in December 2017, the Centers for Medicare & Medicaid Services (CMS) authorized DSRIP in Texas through September 30, 2021. Under the renewal terms, DSRIP is phased out and the funding available gradually declines.

Federal Fiscal Year DSRIP Pool 2018 $3.1 billion 2019 $3.1 billion 2020 $2.9 billion 2021 $2.49 billion 2022 $0

CMS required the state to submit a transition plan by March 2020. The transition plan contained key milestones, with a goal of working with key stakeholders to identify and submit proposals to CMS for new programs to sustain key DSRIP initiative areas. In August 2020, the Health and Human Services Commission (HHSC) requested, and CMS approved, a revised deadline to December 2020.

The loss of DSRIP dollars will impact the health care system as a whole but will have a detrimental impact on the mental health services across the state. The impact will be particularly harmful for individuals with Serious Mental Illness (SMI). The public mental health system has received over $2.5 billion dollars from DSRIP, which is 16 percent of the total DSRIP

Request for Information: The Next Phase of the 1115 Waiver – September 2020 2

payments for Demonstration Years 1-8.1 Today, 40 percent of the funding for the public mental health system comes through DSRIP.

In 2018 alone, the impact of this additional funding source allowed more than 100,000 existing clients of the public mental health system to receive enhanced services and provided services to more than 120,000 new clients.2 While some of these clients will have continued access to Medicaid services when DSRIP goes away, 80 percent of this population are uninsured, leaving no funding source to continue services for these people. 3

DSRIP Transition for Mental Health Services The importance of taking steps to maintain our public mental health system is particularly important in light of the COVID-19 pandemic. Beyond the physical health consequences of the pandemic, the shutdown, economic recession, and social isolation are leading to additional behavioral health needs for Texans.

Furthermore, if Texas cannot maintain the current level of mental health services being provided under DSRIP, taxpayers will incur additional expenses. Maintaining services in our public mental health system is particularly important; HHSC noted in a November 2018 report to the legislature that people with SMI are more likely to access services in the emergency

1 Greenberg, C. & Vasquez, A. (2019, Nov. 12). Medicaid Supplemental and Directed Payment Programs and 1115 Waiver Update. https://hhs.texas.gov/sites/default/files/documents/laws-regulations/reports- presentations/2019/leg-presentations/house-human-services-nov-12-2019.pdf 2 Texas Council of Community Centers. (2019, Dec. 3). Presentation to Senate Committee on Health and Human Services. 3 Texas Council of Community Centers. (2019, Dec. 3). Presentation to Senate Committee on Health and Human Services.

Request for Information: The Next Phase of the 1115 Waiver – September 2020 3

department.4 There are also costs related to inappropriate use of the criminal justice system; in 2016, the Meadows Mental Health Policy Institute (MMPHI) helped county leaders document that local governments in Texas spend over $2 billion a year due to unmet mental health needs in jails and hospital emergency rooms.

We must continue to increase the capacity of our mental health system and not lose ground, and Texas has an opportunity to amend the 1115 waiver to continue these needed services. MMHPI supports a proposal submitted by the Texas Council of Community Centers (Texas Council) to HHSC as part of the transition planning process. This proposal would allow the state to maximize general revenue funding to continue these services. The proposal’s goal is to promote timely access to coordinated care, at the right time and place, for adults aged 18-64 who have a SMI and meet financial eligibility criteria.

There are three components of the Texas Council’s proposal:

• Build on the STAR+PLUS managed care program framework. Establish Certified Community Behavioral Health Clinics (CCBHCs) as a class of providers and create a directed payment strategy through managed care to pay for CCBHC services. CCBHCs are a service delivery model that provide comprehensive integrated services including primary care, mental health, and substance use disorder (SUD) services. As of mid- September 2020, HHSC has certified 18 sites as CCBHCs and has a goal of certifying 19 by the end of the year.5 • Promote Access to Care for SMI Target Population under the STAR+PLUS managed care program. Create a target population of adults with SMI who meet financial and diagnostic eligibility criteria who would be assessed annually (note that, under CMS rules, Texas has the flexibility to identify a target population and put controls in place, such as capping enrollment, to provide budget certainty for the state). • Establish an Integrated Capacity Building Initiative. Maximize local and federal funding through the 1115 waiver, establishing a mechanism to take integrated care for people with SMI to scale. This funding would allow the system to increase access to integrated primary, mental health, and SUD services, as well as address social determinants of health, in ways that make the most sense to communities across Texas. To fund this initiative, CMHCs will continue to provide match to draw down local funds.

4 Health and Human Services Commission. (2018, Nov.). Managed Care Organization Services for Individuals with Serious Mental Illness – Performance Metrics. https://hhs.texas.gov/reports/2018/11/rider-45-managed-care- organization-services-individuals-serious-mental-illness-report 5 Health and Human Services Commission (2019). Blueprint for a Healthy Texas. https://hhs.texas.gov/sites/default/files/documents/about-hhs/budget-planning/hhs-inaugural-business-plan.pdf

Request for Information: The Next Phase of the 1115 Waiver – September 2020 4

Conclusion Thank you for the opportunity to provide data-based information on behavioral health needs and recommended solutions to the House Committee on Human Services. MMHPI stands ready to serve as a resource as you gather information and consider actionable solutions for your interim charges.

If you have questions regarding this submission, please contact:

Nelson Jarrin, JD | Vice President of Government Affairs | Meadows Mental Health Policy Institute | 1303 Street, Suite 810, Austin, TX 78701 | 281.639.5452 |

House Committee on Human Services Interim Charges 2.2-2.5: Review how Texas is preparing for state and federal budgetary changes that impact the state’s health programs. Written testimony submitted by: Christine Yanas—VP of Policy & Advocacy Methodist Healthcare Ministries of , Inc. Chair Frank, and members of the committee: Thank you for the opportunity to provide information regarding budgetary changes impacting our state’s health programs. My name is Christine Yanas; I serve as the Vice President of Policy & Advocacy for Methodist Healthcare Ministries of South Texas, Inc. A brief background on Methodist Healthcare Ministries. We are a private, faith-based, 501(c)3 not-for-profit organization dedicated to increasing access to health care for uninsured and low- income Texas families through direct clinical services, community partnerships and strategic grant-making in 74 counties spanning the Rio Grande Valley and South Texas. Created in 1995, we are a half owner of 10 Methodist Hospitals – nine in San Antonio and one in Atascosa County. Through our partnership with HCA Healthcare, Methodist Healthcare Ministries provides the local governance for the Methodist Healthcare System to ensure that the healthcare needs of the community are served. On an annual basis, Methodist Healthcare Ministries manages an estimated $125 million budget to operate its primary care clinics and fund more than 90 community partners. My submitted testimony, on behalf of Methodist Healthcare Ministries, focuses on encouraging state leaders to invest in efforts to improve health care services and coverage for millions of uninsured Texans. Additionally, I also request the preservation of crucial program policies that will not only help achieve healthy outcomes for women and children but will also result in significant cost savings to the state. Respectfully, we offer the following points for the committee’s consideration: State leadership should support initiatives that reduce the number of uninsured Texans and secure healthcare coverage for millions upon expiration of the 1115 Texas Transformation Waiver. Texas has the highest uninsured rate in the nation with five million hard-working Texans in lower wage service industry jobs, such as waiters or home health aides, who are unable to access affordable healthcare services due to a lack of insurance coverage. It is estimated that 761,000 low-wage Texans,i out of 2.3 million adults nationally, continue to fall into the “coverage gap.”

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These are individuals (with incomes below 100% of poverty) who do not have employer sponsored coverage, earn too little to qualify for health insurance subsidies through the federal healthcare exchange programs and do not qualify for Medicaid coverage. According to recent projections, if there is no intervention to address the millions of Texans who don’t have health coverage, the cost of lower lifetime earnings and the health of uninsured Texans will increase from $57 billion in 2016 to $178.5 billion by 2040. ii

BACKGROUND INFORMATION In 2011, The Texas Health and Human Services Commission (HHSC) obtained federal approval for a $29 billion, Section 1115 research and demonstration waiver, known as the 1115 Texas Transformation Waiver. The waiver is a national model of innovation and efficiency. It enabled Texas to expand its managed care delivery system and create two funding pools for Medicaid recipients, the uninsured and low-income: Uncompensated Care (UC), which pays hospitals for delivering care to patients without health insurance, and Delivery System Reform Incentive Payment (DSRIP) Program, which provides funding for innovative healthcare initiatives. In 2017, the renegotiated $25 billion waiver called for the winding down of DSRIP funded projects and significant funding changes to UC payments. The waiver's $3.1 billion in DSRIP programs have been a vital part of the hospital and healthcare provider safety net system, making available primary, school-based, behavioral health and specialty health care to uninsured Texans who otherwise would not have received care.

TEXAS 1115 Medicaid Waiver Funding

Without an alternative plan to care for vulnerable Texans, Texas stands to lose $3.1 billion a year in federal and local dollars starting in October 2019, dropping from $3.1 billion a year to $0 by October 1, 2021iii. Over the next 12 months alone, Texas hospitals and healthcare providers will lose an estimated $610 million in DSRIP funding, causing vital providers to shut down, especially in our rural counties. Additionally, Texas rural hospitals are estimated to lose between $200-300 million a year starting in 2020 in uncompensated care and an additional $150 million a year with the winding down of DSRIP.iv These changes are endangering healthcare for uninsured Texans everywhere especially at a unprecedented time in our nation’s history due to the COVID-19 pandemic.

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RECOMMENDATION: The lack of Medicaid Expansion in Texas has placed great importance on the substantial funding the state receives through its 1115 Transformation Waiver. Kaiser Family Foundation estimates show that 1.6 million Texans could become uninsured during the COVID-19 pandemic following job lossesv. These losses are projected to further widen the coverage gap by 50% by January 2021 in the absence of Medicaid expansionvi. The 39 states (plus the District of Columbia) that have implemented the ’s (ACA) Medicaid expansion are better positioned to respond to the COVID-19 public health emergency and prevent the ensuing economic downturn from worsening access to care and health outcomesvii. The 12 remaining states, like Texas, must act swiftly to expand coverage that can then draw down billions in federal dollars to be used to cover Texans who fall into the coverage gap and help them weather the current crisis. With Medicaid expansion, we can build a stronger health care infrastructure, drive down health care costs and improve access to affordable health care coverage for millions of uninsured Texans, especially for our families below 100 percent of the federal poverty level. 2.5 – State Leadership Should Not Support HHSC’s Proposed Termination of Crucial HTW Policies such as Auto-Enrollment, Adjunctive Eligibility, and the Simplified Application Form The federal Centers for Medicare and Medicaid Services (CMS) approved Texas’ ability to receive federal Medicaid funds to support the Healthy Texas Women (HTW) program in January 2020 under the 1115 Healthy Texas Women Demonstration Waiver. Since the approval, HHSC has announced proposed changes to the HTW program under the waiver. The changes include the termination of three crucial policies: (1) auto-enrollment of new mothers from Pregnant Women’s Medicaid into HTW; (2) adjunctive eligibility for women applying for HTW that are already enrolled in WIC, have a child in Medicaid, or in a household that receives SNAP or TANF benefits; (3) simplified HTW application form (Form H1867). Without these crucial program policies, the efficiency of the HTW program will be disrupted resulting in serving fewer Texan women and increasing state Medicaid costs.

BACKGROUND INFORMATION The HTW program offers a wide variety of services such as breast cancer prevention and screening and treatment for diabetes and postpartum depression to name a few. These services ensure that eligible Texas women can lead healthy and productive lives. In HHSC’s most recent women’s health programs report, the agency found that HTW services saved Texas $96.8 million in General Revenue.viii As the HTW client base and program investment has grown, so have the cost savings to the state. These immense cost savings are primarily rooted in HTW services preventing unintended pregnancies as half of all Texas births costs are paid for by Medicaid. In 2016, birth and delivery-related services for mothers and infants during their first year of life cost the state $3.5 billion.ix Auto-enrollment is an important HTW program policy that allows new mothers who were eligible and enrolled in the Pregnant Women’s Medicaid program to be automatically enrolled in the HTW program once their Medicaid coverage expires. This policy ensures the

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continuum of care and access to critical postpartum services for new mothers. HHSC has proposed to replace this policy with agency’s current administrative renewal process. The current administrative renewal process in Texas has a known success rate of 25% according to the Kaiser Family Foundation.x With the success of the HTW dependent upon the continued client base growth, enacting HHSC’s proposed termination of auto-enrollment would result in decreased numbers of women enrolled and served. Adjunctive eligibility has been a longstanding policy used by HHSC and approved by CMS. The policy states that women who are eligible for and enrolled in the Women’s Infants and Children’s Program (WIC), has a child enrolled in Medicaid, or lives in a household that receives SNAP or TANF benefits, then they are not required to resubmit proof of income to the agency. Without the continuation of this policy, increased costs to HHSC, women, and healthcare providers are expected. The simplified HTW application form (Form H1867) is a one-page document that can be filled out on the same day that a woman visits a clinic for services and is available online. HHSC’s proposal would replace Form H1867 with the Texas Health Coverage Application (Form 1205). Form 1205 is not only longer but requires multiple extensive requests for specific pieces of proof and information such as pay stubs for all household income, the social security numbers for all members of a household, proof of payment documents for childcare expenses, and even financial documents for money gifts received from a family member. The unnecessary burden Form 1205 would place on women and healthcare clinics will undoubtedly have a negative impact on HTW enrollment. As part of the 1115 HTW Demonstration Waiver, Texas is required to maintain budget neutrality. HTW can assist in meeting this expectation by increasing access to women’s health and family planning services which reduces Medicaid costs associated with adverse health outcomes from the lack of preventative care and treatment. HTW cannot accomplish these objectives if enrollment decreases as is expected by the elimination of these three policies. If Texas cannot achieve budget neutrality as dictated by the Standard Terms and Conditions of the approved waiver, then continued federal funding would be in jeopardy. It should also be noted that in these unprecedented times of this public health and economic crisis, state leadership should consider the implications and burden of increased Medicaid costs. The novel coronavirus pandemic has taken a toll on Texans’ health and financial wellbeing, and the need for assistance programs such as HTW can be expected to increase. In addition, HHSC has allowed for the automatic renewal and access to COVID-19 testing and telehealth services to women currently enrolled in the HTW program under COVID-19 program updatesxi. Texas women who are already dealing with the immense responsibility of motherhood should not bear the additional burdens that would be associated with new enrollment under HHSC’s proposed policies especially during this national crisis. RECOMMENDATIONS State leadership should not consider replacing the auto-enrollment policy with the HHSC administrative renewal process without improvements made to ensure it is an effective process.

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Post enrollment verification should be considered so that women may have 90 days instead of the current 40 days to submit proof of eligibility. This would be especially beneficial to new mothers as they will have time to recover and care for their newborn and not risk loss of coverage. It is also recommended that HHSC request an additional waiver amendment from CMS that would allow for the adjunctive policy to continue. HHSC should consider providing technical training and assistance to HTW providers as they make the transition to be compliant with the modified adjusted gross income (MAGI) eligibility requirements. To maintain HTW enrollment, healthcare providers would need continued cost reimbursement to subsidize efforts associated with completing the new and complicated application process. Thank you for your time and consideration of these comments and recommendations. If you have any questions or if we may provide further information, please contact me at (210)253- 3523 or [email protected] Respectfully submitted, Christine Yanas i Kaiser Family Foundation. (2020, January). The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid. Retrieved January 2020 from https://www.kff.org/medicaid/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid ii Episcopal Health Foundation (2019, January). The Impact on of Uninsurance on Texas Economy. Retrieved September 2020 from https://www.episcopalhealth.org/wp-content/uploads/2019/01/Econ-Impact-of-Uninsured-Applied-Policy-McClelland-004.pdf iii Texas Comptroller of Public Accounts. (2019, August). FiscalNotes: Texas and the 1115 Medicaid Waiver. Retrieved January 2020 from https://comptroller.texas.gov/economy/fiscal-notes/2019/aug/healthcare.php iv Texas Organization of Rural & Community Hospitals. (2019, September). Priority State and Federal Issues for Texas Rural Hospitals. Retrieved January 2020 from https://www.torchnet.org/advocacy--legislative-priorities.html v Kaiser Family Foundation. (2020, May). Eligibility for ACA Health Coverage Following Job Loss. Retrieved September 2020 from https://www.kff.org/coronavirus-covid-19/issue-brief/eligibility-for-aca-health-coverage-following-job-loss/ vi Episcopal Health Foundation. (2020, May). Eligibility for Affordable Health Insurance Options for Texans Following Job Loss Due to COVID-19. Retrieved September 2020 from https://www.episcopalhealth.org/wp-content/uploads/2020/05/EHF-COVID-19-Health-Coverage-for-Texans- Issue-Brief-05.18.20-FINAL.pdf vii Center on Budget and Public Priorities. (2020, July). States that Have Not Expanded Medicaid Are Better Positioned to Address COVID-19 and Recess. Retrieved September 2020 from https://www.cbpp.org/research/health/states-that-have-expanded-medicaid-are-better-positioned- to-address-covid-19-and viii Texas DSHS. “Texas Women's Health Programs Report Fiscal Year 2019.” Texas Health and Human Services, May 2020, hhs.texas.gov/reports/2020/05/texas-womens-health-programs-report-fiscal-year-2019. ix French, Leslie, and Evelyn Delgado. “Presentation to the House Committee on Public Health ...” Texas Health and Human Services, 19 May 2016, dshs.texas.gov/ConsumerandExternalAffairs/legislative/2016Reports/HousePublicHealthBBO.pdf x Tricia Brooks, Lauren Roygardner. “Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2020: Findings from a 50- State Survey.” KFF, 31 Mar. 2020, www.kff.org/medicaid/report/medicaid-and-chip-eligibility-enrollment-and-cost-sharing-policies-as-of- january-2020-findings-from-a-50-state-survey/. xi Texas HHSC; Healthy Texas Women. “COVID-19 Benefits and Program Updates” https://www.healthytexaswomen.org/

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The National Association of Social Workers – Texas Chapter (NASW/TX) appreciates the opportunity to provide the House Human Services Committee feedback in preparation of the 2021 legislative session. NASW/TX represents over 5,000 social workers across the state and advocates for the wellbeing of all Texans. Please consider the following recommendations related to Medicaid, mental health workforce initiatives, mental health and substance use treatment.

Interim Charge 2.2 - 2.5: Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including:

2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver;

2.3) Texas’ Targeted Opioid Response Grant;

2.4) The Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability rule; and

2.5) The Healthy Texas Women Section 1115 Demonstration Waiver.

Mental Health and Substance Use Services Implement recommendations from the HHSC Behavioral Health Workforce Workgroup report to improve the mental health and substance use workforce across the state. The HHSC Behavioral Health Workforce Workgroup is a subcommittee on the Statewide Behavioral Health Coordinating Council. The Workgroup has spent the last year developing a comprehensive report on all previous strategies to improve the mental health and substance use workforce in the state and address the continuing provider shortages. We recommend the committee consider ways to incorporate the report’s “short term next steps” in their interim report, as the next steps have been thoroughly vetted and approved by a variety of stakeholders. The next steps include activities related to Medicaid reimbursement rates, incentives, loan repayment and more.

Extend comprehensive Medicaid postpartum coverage from two months to 12 months. Texas legislators, state agencies, and stakeholders have been working tirelessly to reduce maternal mortality and morbidity and improve overall maternal health outcomes. One solution recommended by many women’s healthcare experts is to extend Medicaid post-partum coverage from two months to 12 months. We recommend that the committee provide guidance to HHSC to request necessary administrative permission and request funding as needed in order to extend coverage. Mothers and babies across the state would benefit from increased access for preventative, primary, and specialty care before, during, and after pregnancy.

Ensure HHSC Healthy Texas Women (HTW) program has resources for adequate provider networks to provide comprehensive mental health and substance use services. SB 750 (Kolkhorst/Button) directed HHSC to evaluate and develop a limited postpartum care package for women enrolled in HTW. NASW/TX is grateful for the legislature’s efforts with SB 750 and has stood ready to work alongside HHSC on bill implementation. We want to ensure that comprehensive mental health and substance use services are included in the HTW package. Currently, HTW provides a screening for postpartum depression (PPD) and medication if needed. HTW does not include counseling or therapy for any mental health condition, including PPD. SB 750’s fiscal note detailed potential coverage for a limited number of PPD benefits and SUD services. NASW/TX applauds the efforts to include PPD and SUD treatment for women in HTW and asks that Committee ensure HHSC has adequate funding for the “limited benefit package” from SB 750 to include more PPD benefits in addition to comprehensive mental health and substance use care for women.

Raise rates for substance use disorder (SUD) providers, with a focus on providers who work with maternal populations. NASW/TX applauds HHSC’s continuous dedication to provide SUD treatment options to eligible Texans across the state. However, chronically low reimbursement rates for these services creates areas of the state with little to no provider availability. While the legislature did include a small funding increase for SUD provider rates, more is needed. We ask that the legislature provide funding for SUD providers with a focus on providers who work with specialized maternal populations. Mothers with young children often forego treatment purely due to the needs associated with traveling across the state or entering a program where they are not able to bring their children. We encourage the committee to invest in and promote existing programs who work with this population and consider ways to increase the amount of SUD treatment options for mothers.

September 25, 2020

House Committee on Human Services Texas Capitol - E2.125 Austin, TX 78701

RE: Interim Charge 2.2 - Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including: The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver

Chair Frank and Members of the Committee,

Thank you for the opportunity to provide information on Interim Charge 2.2. The Teaching Hospitals of Texas members include large public urban teaching hospitals and several affiliated non-profit health systems. Eleven of the 20 regional health partnership (RHP) waiver anchors are THOT members. Our members also provide the majority of the funding needed to access federal transformation funds under the Delivery System Reform Incentive Payment (DSRIP) program.

We understand that the Committee is evaluating the next phase of the 1115 waiver and its effect on the state budget. In light of COVID-19’s unparalleled, disruptive and ongoing impact on Texas’ health care delivery system the Teaching Hospitals of Texas along with other stakeholders have urged Texas to seek a one-year extension of the current Delivery System Reform Incentive Payment Program (DSRIP) program under the state’s Medicaid 1115 Transformation Waiver. With just one year left in the current Waiver, DSRIP funding of $2.49 billion is set to zero out just 12 months from now (FY 2022; September 30, 2021) with just over 13 weeks left to finalize Texas’ proposal for transition projects and financing. A one-year extension of DSRIP will not be a cost to General Revenue and we believe the extension will ensure critical public health, behavioral health and uninsured care services that will either be lost or require additional General Revenue. With a five percent reduction to the overall state budget and the potential reduction to the next biennium’s budget, any loss in DSRIP funding to providers will likely have detrimental impact on to Texas’ health care safety-net.

An extension will allow Texas DSRIP-participating providers to recover and stabilize from the pandemic’s economic toll, complete the current DSRIP programs that were unexpectedly disrupted as a result of COVID-19, and have the time necessary to assess alterations in the health care landscape before setting about to transform DSRIP programs and plan for necessary health system reforms for Waiver III.

Early in the pandemic, Texas quickly activated its resources to prepare for the pandemic. Even so, the pandemic continues to take a heavy toll and is still unfolding with no clear end in sight. It is taking lives, jeopardizing the health of essential health care workers, and undermining the stability of the health care safety net. It has slowed commerce, increased unemployment, and altered our way of living. Yet to date, DSRIP providers and HHSC also have continued to meet the required 1115 Waiver DSRIP transition metrics and planning timelines.

With characteristic grit, Texas continues its work to support our critical health system infrastructure, meet the critical health and social safety needs of its citizens, and navigate the pandemic’s shifting sands. Yet, despite the state’s overall resilience, COVID-19 has starkly revealed long-time weaknesses in the state’s health care safety net and

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undermined the health care delivery system’s capacity to manage the significant changes required for a successful DSRIP transition.

That transition will shift $2.49 billion in provider-driven health care funding; end current DSRIP support for uninsured Texans; and require planning, development, financing and staffing for new programs and data reporting even as our healthcare providers are navigating extraordinary challenges to manage the continuing pandemic. Since March, patient care delivery, healthcare facility infrastructure, health care finances, supply chain management, health care staffing, patient volumes and utilization trends, workflows, and clinical operations have all changed in response to the pandemic. Our providers are nimble, dedicated, professional, and responsive. Yet, successfully implementing a $2.49 billion program change in 12 months while also remaining focused on sustaining care through a still-evolving pandemic would be like asking them to build a new bridge while the one they are on crumbles.

We therefore have requested that Texas seek CMS flexibility to keep $2.49 billion available in DSRIP funding in DY 11 through an extension of its DSRIP program. Doing so will allow HHSC and its waiver participants to:  Assess and stabilize healthcare systems before adding another system change and associated system shock and transition.  Help make up for the progress lost this year due to COVID-19 and offer providers two full years to achieve their current DSRIP goals.  Maintain critical access for the 40% of uninsured individuals served through DSRIP funds who will lose those services when the DSRIP funding ends.  Provide health care stakeholders time to better evaluate the impact of COVID-19 on the state’s health care delivery system so that they can better identify the future improvements that can be operationally and financially integrated into Texas’ delivery system during and after COVID-19.  Align Texas’ post Waiver-II delivery system planning with the end of DSRIP, allowing for o uninterrupted continuation of programs serving uninsured Texans, which will be particularly essential as the number of uninsured increases to due rising unemployment; and o comprehensive delivery system improvements that align waiver budget neutrality, financing, and programmatic planning post Waiver II with the DSRIP transition.

Below we share provider perspectives collected through mid-June. Since that time, the challenges summarized here have been exacerbated by COVID-19 case growth, and our ability to successfully transition DSRIP and to implement new programs and financing within 12 months has been further diminished.

Rapid Change, Challenges, and Innovation in the Current Delivery System Health care is COVID-19’s ground zero, causing disruption and unexpected restructuring throughout the delivery system. Limiting harm, ensuring safety, and creating clinical capacity have required restructuring physical access, increasing Intensive Care Unit (ICU) and isolation space and duplicating processes to keep patients and staff safe and preserve Personal Protective Equipment (PPE). For example early in the pandemic, Parkland Hospital staff took just five days to convert their entire Post-Anesthesia Care Unit (PACU) and half of the operative suites into a 116-bed negative-air pressure unit dedicated to COVID-19. Similarly, and due in large part to DSRIP initiatives that expanded technology infrastructure and platforms for telemedicine and other technology enhancements, Community Mental Health Centers across the state were able to adapt to video-audio only service within a few days to ensure sustained access to outpatient mental health treatment.

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At the same time, non-emergent, in person visits plummeted, threatening the viability of many providers. Among primary and specialty care physicians, 63% reported losing 50 % or more of their revenue because of the pandemic, with little cash on hand to weather the hemorrhage. As a result, many practices have reduced salaries, furloughed, or laid off staff, discontinued certain services, or closed their doors, some permanently.

Many facilities critical to access are also struggling. Two rural clinics in Electra closed when 12 of 16 staff in one clinic contracted COVID-19 after an undiagnosed asymptomatic COVID-19-positive patient came in for unrelated care. Both clinics were closed for two months and have only recently and slowly been re-opening. Clinics remaining open have experienced steep reductions in preventive, primary and chronic care management services, some by as much as 75% to 90% of their typical in-person visits. A recent poll1 showed that nearly half of Americans or one of their family members deferred healthcare due to worries about COVID-19. While most of these are expected to come back, the timing and nature of their return is uncertain, making planning, metrics and financial risk challenging. In those two rural clinics that closed, patients are still hesitant to return for care – even needed care.

Because of clinic closures and patient concerns about seeking primary and specialty services during initial months of the pandemic, our members worry that “the lack of access and/or fear of seeking primary care services is negatively impacting the health status of those with chronic conditions.2” Some hospitals’ emergency departments report seeing a higher volume of patients with chronic disease and worse health status.

As the COVID-19 survival population increases, providers anticipate seeing more patients with special care needs and chronic disease (El Paso projects that their patient population with heart disease, for example, may double). At the same time, medication compliance is emerging as a growing challenge. Patients are afraid or unable to travel to a pharmacy; they report affordability issues due to job losses and fiscal constraints; and not all providers have in-house pharmacies with mailing capacity or the ability to provide discounted medications.

Providers are also seeing an increase of COVID-19-survivors in indigent care clinics – some of whom have been redirected from other hospitals after discharge and presenting as new patients with significant comorbidities and health challenges. And with the number of uninsured Texans on the rise due to increasing rates of unemployment, all providers are concerned that more patients will face unmet health care needs. Safety net providers also are concerned that revenue losses in the larger healthcare system will force providers to prioritize paying patients, leaving uninsured Texans with fewer options, and exacerbating pressures on their capacity to provide care. The simultaneous drop in revenues and the increasing need for charity care would strain safety net clinics’ and facilities’ ability to meet community needs, particularly with the impending loss of DSRIP funding.

Crisis Spurred Rapid Adoption of Innovative Alternate Access Models. In response to the crisis, priorities for providing care eclipsed reimbursement restraints leading to innovations in access: creating new centralized drive through blood testing for patients on anticoagulants; giving pulse/oxygen monitors to COVID-19 positive patients in the emergency department for remote at home symptom reporting to care managers; giving blood pressure monitors

1 https://www.kff.org/report-section/kff-health-tracking-poll-may-2020-health-and-economic-impacts/ 2 e.g., Quotes included in this document are from provider surveys and interviews and used without specific citations to share direct provider perspectives.

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to high risk pregnant women for phone reporting in lieu of weekly clinic visits; and using remote glucose monitors and having patients call in results rather than come in face to face. Much of the innovation enabled by DSRIP - including that related to telemedicine/telehealth, patient care navigation, chronic care management, better integration of physical, behavioral and public health, and coordination with community stakeholders – positioned Texas to be able to respond to the crisis better than they would have been able to absent DSRIP. And even as providers quickly shift to telehealth and telemedicine, in many cases neither workflow changes nor IT systems have caught up. Standards, protocols, development and integration into data systems and practices need to be established and stabilized.

Uncertainty and Planning Challenges The unpredictable trends and timelines for COVID-19 cases, reductions in workforce due to economic fallout from the pandemic, and the unintended costs to retool care delivery systems while also maintaining surge capacity means providers throughout the state do not have the stability or capacity to plan and implement significant new programs. It also is too soon to predict what new post-COVID-19 patient behavior and health systems will look like. Providers have lost significant levels of critical revenue at the same time many have made unbudgeted investments in COVID-19 preparations, protections, testing and critical care. While budgeting involves predicting future trends and developing reasonable and rational assumptions, the level of unknowns in the coming year for some providers makes it “impossible to budget at this point.” Unknowns such as COVID-19, the DSRIP transition, patient responses, and system changes exacerbate budget variability. Add to these other unknowns, like state budget decisions, pressure on property taxes and current law DSH cuts. “This is unsettling as we move into our next budget year. As we begin budgeting, we are uncertain about which programs we need to start scaling back to maintain solvency once they are discontinued.”

At a time when the delivery system faces severe financial instability, it will be enormously risky to have so much funding at risk for services and outcomes that are unknown, beyond providers’ control and cannot be planned for. In today’s world, the new “normal” continues to unfurl, making it difficult to predict what the new normal will look like. Texas will need a least a year to better understand the implications of the virus’ impact on patients and health care delivery systems before it can have an informed strategy for the future.

Uninsured If DSRIP terminates as planned in 12 months, there is no proposed replacement program to continue some level of care for the 40% of those served through DSRIP who were uninsured.3 Loss of DSRIP funding will result in less access, increased reliance on more costly places of service, such as the ED, in lieu of DSRIP’s more cost effective programs, and increased pressure on public providers and indigent access programs at the same time local and county revenues are strained by COVID-19. As noted above, the financial fall out of COVID-19 combined with increasing uncompensated care will strain the ability of the safety to meet community needs. Ultimately, without DSRIP funding or equivalent alternative funding, access to care for Texans without insurance will be reduced. This loss of programs will be exacerbated by a growth in the number of uninsured Texans since COVID-19 job losses and related losses of health insurance are predicted to hit Texas with an additional 1 million uninsured Texans.4 Adding to the challenges, increases in unemployment rates and other pandemic pressures on individuals and families are expected to create surge demand on behavioral health providers currently relying on DSRIP funds to increase access to mental health and

3 HHSC reported that the patient mix of those accessing DSRIP services from DY 3 – DY 6 was: 25% Medicaid; 35% other and 40% low income / uninsured. 4 https://www.urban.org/research/publication/how-covid-19-recession-could-affect-health-insurance-coverage. Up to an additional 1.16 million Texans could be without insurance this year Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497

substance use disorder treatment.5 If alternate plans are not well in place, this surge, with commensurate loss of public mental health capacity, could be devastating to individuals and communities across Texas. Innovative DSRIP initiatives include funding for homeless shelter programs, palliative care and hospice programs, home health visits and Nurse Family Partnership programs6. While we acknowledge that the current waiver required Texas to identify how it would sustain worthwhile projects going forward, the ability to do so successfully has been greatly diminished by the ongoing pandemic. The most likely source of dollars to continue effective DSRIP work — state and/or local revenues —has dropped precipitously over the past several months. While the state’s economy has shown signs of a rebound, many jobs have been permanently lost. Unemployment is forecast to be at 10 percent or higher for the next several years followed by a concomitant increase in need for health and social services. Unexpectedly, Texas will not have the means to replace DSRIP funding.

Texans Want to Finish Their Investments and DSRIP Work – Not Leave It Hanging DSRIP providers of all stripes said they do not want the COVID-19 disruption to result in them losing years-long momentum and community health improvements. An extension will help them stabilize and recover from COVID-19, help make up for the progress lost this year and give them two full years to complete current DSRIP initiatives and move to broader system transformation.

Going Forward: Coverage Options Beyond the DSRIP extension, THOT has proposed a community-based coverage option for the next phase of the waiver. Using available budget neutrality, local communities could choose to provide the non-federal share of funding to support an integrated, local system of care for Texans without insurance. Structured like a provider accountable care organization, these programs could pilot value-based integrated coverage programs that partner with community based organizations and other to address social factors of health, and improve health equity and access to care based on community priorities and care needs.

Thank you for your consideration of these comments. Please let me know if you have any questions or we can be of assistance to the Committee.

Maureen Milligan, President & CEO Teaching Hospitals of Texas

5 Brown, E., & Wehby, G. L. (2019). Economic conditions and drug and opioid overdose deaths. Medical Care Research and Review, 76(4), 462– 477. https://doi.org/10.1177/1077558717722592 Compton, W. M., Gfroerer, J., Conway, K. P., & Finger, M. S. (2014, June 14). Unemployment and substance outcomes in the United States 2002– 2010.Drug and Alcohol Dependence,142, 350–353.

6 NFP programs have been shown to reduce future Medicaid and SNAP use, increase academic performance and family incomes. https://www.nursefamilypartnership.org/about/proven-results/18-year-follow-up-study/ Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497

THOT MEMBERS September 25, 2020 AUSTIN Central Health House Committee on Human Services Dell Seton Medical Center at the Texas Capitol - E2.125 University of Texas at Austin Austin, TX 78701

CORPUS CHRISTI CHRISTUS Spohn Health System RE: Interim Charge 2.4 - Review how Texas is preparing for state and federal Nueces County Hospital District budgetary changes that impact the state's health programs, including: the

Centers for Medicare and Medicaid Services proposed Medicaid Fiscal DALLAS Children’s Health System of Accountability Rule. Texas Parkland Health & Hospital System Chair Frank and Members of the Committee, The University of Texas Southwestern Medical Center Thank you for the opportunity to provide information on Interim Charge 2.4. EL PASO The Teaching Hospitals of Texas members include large public urban teaching University Medical Center of El Paso hospitals and several affiliated non-profit health systems sharing three core commitments. They provide quality care to all, in particular vulnerable GALVESTON Texans; are prepared for and provide trauma and disaster services and care; The University of Texas Medical Branch and support Texas’ healthcare workforce and graduate medical education as well as clinical and delivery system research and transformation. HOUSTON Harris Health System The University of Texas MD On Monday, September 14, 2020, CMS announced they would be withdrawing Anderson Cancer Center the Medicaid Fiscal Accountability Rule (MFAR). While CMS has announced the

LUBBOCK rule withdrawal there is the potential for the federal agency to republish the UMC Health System of Lubbock rule and move forward with the regulation in the future. This rule would

MIDLAND adversely impact Texas’ Medicaid Program by reducing program clarity and Midland Health oversight transparency, reducing access and causing instability in the health care safety net by restricting local funding in the Medicaid program, narrowing ODESSA Medical Center Health System provider definitions, placing new requirements and reviews related to state plan amendments and waiver-based supplemental payments, and interjecting SAN ANTONIO new discretionary authority for CMS that is unclear and subjective. It has the University Health System potential to put $11 Billion in Medicaid hospital financing at risk. TYLER University of Texas Health Science Center at Tyler In the rule summary, CMS notes the purpose of the proposed rule is to “promote transparency” and “strengthen the overall fiscal integrity of the GME Affiliate Medicaid Program.” CMS identifies the need for more information to assist in RIO GRANDE VALLEY - EDINBURG improving transparency and in assuring consistency with efficiency, economy Doctors Hospital at Renaissance

Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497 and quality of care in the program: “this proposed rule would promote transparency by establishing new reporting requirements for states to provide CMS with certain Hospital districts in Texas information on supplemental payments to Medicaid providers.” THOT is fully have a state constitutional supportive of improving transparency in the Medicaid program and as a vehicle to obligation to provide care ensure the fiscal integrity of the program. We agree with CMS on the need for financial to individuals who are reporting at a level sufficient to meet the Medicaid program’s fiscal integrity indigent, and as such have requirements. Texas supplemental payment programs require reporting to HHSC. HHSC partnered with the state to consistently collects and reports hospitals, and other eligible provider, Medicaid and finance vital supplemental uninsured eligible costs and payments through the DSH/ UC application. In addition, payments to ensure HHSC has also set up a portal to capture data regarding local provider participation stability in the safety net. funds (LPPF). Texas has worked over the While CMS proports to be promoting transparency, the rule actually reduces program years with CMS to transparency by interjecting new discretionary authority for CMS that is unclear and implement methods of subjective; and usurps state authority. finance that are uniquely tailored to the needs of our When evaluating what state and local funding is allowed, MFAR adds a very broad state. definition of “net effect,” enabling CMS to subjectively look at the “totality of the circumstances” in its decisions. CMS’ broad and subjective purview, lacking specific THOT believes this criteria for enforcement, will further destabilize Medicaid financing and policy since partnership has worked states, local governments and providers will have no certainty regarding program well and should not be financing. disrupted by new restrictions and subjective MFAR also limits the use of current state matching funds by dictating which public decision making proposed funds state and local governments can use to match federal Medicaid funding. The rule by CMS in MFAR. also penalizes government providers and state health systems that have reduced their reliance on tax revenues, and chills limits public-private partnerships. If MFAR were to move forward again, Texas communities would need to either cut services or increase taxes to offset these new limits. Reduced funding to safety net providers caring for the uninsured and fortifying Texas’ disaster planning and public health responsei would put the health of Texas and its economic engine at risk.

Additionally, MFAR gives CMS the authority to determine which state and local entities are defined as government units for purposes of Medicaid financing, creating a new, narrow definition for them and proposes a definition of “public funds” at odds with the Texas Constitutionii. The rule also provides CMS wide discretion on determining provider types. This provision interferes with how states allocate dollars across provider types, making it difficult for states to determine with confidence whether their payment and financing approaches meet federal requirements.

MFAR increases uncertainty with new requirements and more reviews of state plan amendments. MFAR limits federal approvals (state plan amendments (SPA)) for supplemental payments to three years and requires new criteria to be included in plans, causing administrative burdens for states even when programs are unchanged.

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These proposed changes will cause delays and instability in the financing Te system with potential backlogs or changes in CMS administration delaying Texas Medicaid covers a critical payments to hospitals and providers. CMS seeks broad discretion on diverse population of more SPA approval and provides little direction on meeting economy, efficiency, than 4 million Texans, quality of care and access requirements. including children, nursing Significantly, CMS provided no estimated fiscal impact for the proposed rule, home residents, and simply claiming the impact is unknown and that it does not “have sufficient individuals with disabilities. data to predict or quantify the impact of the proposed provisions,” except for a $222 million reduction related to new limits on supplemental payments Texas Medicaid to professionals. supplemental payments are To reiterate, the uncertainty related to how CMS will apply its proposed crucial as Medicaid base vague but expansive authority to disallow programs and Medicaid funding payments on average cover could put at risk a significant share of $11 billion in funding that today helps only 69% of hospital costs offset otherwise catastrophic Medicaid and uninsured losses. (and according to the most recently published state Resulting reductions in Medicaid funding will leave states and local governments with limited options to identify new revenue (e.g., increases in public data, just over 50% of local property taxes); or service reductions (e.g., cuts in cost- effective hospital costs for large Medicaid optional services or reductions in care for those who lack health urban public hospitals). insurance).

In addition to Medicaid, In addition, many of the proposed provisions in the rule would have taken effect immediately, leaving Texas with insufficient time to make policy and Texas Hospitals provide budgetary adjustments to mitigate the loss of non-federal share and federal billions in uncompensated funding. care to uninsured Texans the costs of which these THOT is appreciative of CMS’ decision to withdraw and the work of Texas’ supplemental payments leaders in communicating the serious unintended consequences to Texas of also help defray. the proposed rule. Thank you for your consideration of these comments. Please let me know if you have any questions or we can be of assistance to the Committee.

Maureen Milligan President and CEO Teaching Hospitals of Texas

i THOT’s Safety Net providers are prepared for disasters and public health such as the Wuhan coronavirus. ii Section 3 Article 52 of the Texas Constitution.

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THOT MEMBERS September 25, 2020 AUSTIN Central Health House Committee on Human Services Dell Seton Medical Center at the Texas Capitol - E2.125 University of Texas at Austin Austin, TX 78701

CORPUS CHRISTI CHRISTUS Spohn Health System RE: Interim Charge 2.5 - Review how Texas is preparing for state and federal Nueces County Hospital District budgetary changes that impact the state's health programs, including: The

Healthy Texas Women Section 1115 Demonstration Waiver. DALLAS Children’s Health System of Texas Parkland Health & Hospital Chair Frank and Members of the Committee, System The University of Texas Thank you for the opportunity to provide information on Interim Charge 2.5. Southwestern Medical Center The Teaching Hospitals of Texas members include large public urban teaching EL PASO hospitals and several affiliated non-profit health systems sharing three core University Medical Center of El Paso commitments. They provide quality care to all, in particular vulnerable Texans; prepare for and provide trauma and disaster services and care; and support GALVESTON Texas’ health care workforce and graduate medical education as well as clinical The University of Texas Medical Branch and delivery system research and transformation. Our members also provide a significant amount of care to Texas Women. HOUSTON Harris Health System The University of Texas MD Texas has invested substantially to create a strong women’s health Anderson Cancer Center infrastructure, with the Family Planning Program (FPP) and Healthy Texas

LUBBOCK Women (HTW) working together to ensure that women throughout the state UMC Health System of Lubbock have access to care. HTW and FPP programs provide eligible women access to

MIDLAND women’s health and family planning services at no or low cost. These Midland Health programs increase access to services that avert unintended pregnancies and positively impact the outcome of future pregnancies. Both of these programs ODESSA Medical Center Health System have seen a steady increase of clients enrolled and served since their launch in the summer of 2016. For example, in fiscal year 2019 HTW saw a 16.2 percent SAN ANTONIO increase in client enrollment from the previous year. HHSC in its most recent University Health System Texas Women’s Health Programs Report estimated a $13 million net savings TYLER due to births averted by HTW and $6.6 million net savings due to births University of Texas Health Science Center at Tyler averted by FPP. These programs are cost effective and work to provide access and improve the health of the clients they serve. GME Affiliate RIO GRANDE VALLEY - EDINBURG Doctors Hospital at Renaissance

Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497 In January 2020, HHSC received approval from US Centers for Medicare and Medicaid Services (CMS) for a five-year 1115 Healthy Texas Women demonstration project. Approval of this waiver will allow the state to draw down federal funding to support the current programs efforts which were all general revenue funded. HHSC held a briefing to inform stakeholders that as it transitions the current program, three critical enrollment policies will be eliminated or changed:

• Auto-enrollment will be replaced with the HHSC’s current administrative renewal process.

• Adjunctive eligibility for women applying for HTW that are already enrolled in WIC, have a child in Medicaid, or in a household that receives SNAP or TANF will be eliminated

• Simplified HTW application will be discontinued, and women will be required to complete the Texas Health Coverage Application.

The policies above were implemented to streamline the enrollment process for women into HTW and have been effective in ensuring that eligible women are able to enroll and access services in a timely manner. Removal of these policies could create barriers and disrupt the efficiency of the current program and may result in fewer women being served, increasing unintended pregnancies -- thereby increasing Medicaid costs to the state. While we understand that some of these changes may be federally required, we would ask that where the State has flexibility that they work with stakeholders to simplify the enrollment process for HTW clients. HTW Plus We also appreciate that the State has made additional investments to develop an enhanced, cost-effective post-partum care service package for women enrolled in HTW. This additional 12 months of coverage will provide access to a limited array of critical services postpartum, helping to ensure the state has healthy mothers and babies. We understand that the program has launched as of September 1st, 2020. As the state builds out the program, we would encourage that a strong provider network be in place to provide the additional benefits such as cardiology, psychotherapy, and other mental health professionals. 12 months Medicaid postpartum coverage for mothers We applaud the Legislature’s work to address maternal death and pregnancy related complications by creating the Maternal Mortality and Morbidity Review Committee and making substantial investments in Women’s Health programs. The Maternal Mortality and Morbidity Review Committee (MMMRC) found that the majority of maternal deaths occurred more than 60-days postpartum and that many of them were preventable.i We know one of the best strategies to reverse these trends is to ensure women have access to health care before, during, and after pregnancy.ii One of the Committee’s recommendations was to “increase access to services during the year after pregnancy and throughout the interconception period to improve the health of women, facilitate continuity of care and enable effective care transitions and promote safe birth spacing.” Programs like HTW Plus provide coverage for many of the top causes of maternal mortality and morbidity, which is encouraging, however it does not provide the same level of coverage that a client receives

Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497 on Pregnant Women's Medicaid. We recommend extending the 60 days Medicaid postpartum coverage to 12 months coverage to better address and treat postpartum conditions.

Thank you for your consideration of these comments. Please let me know if you have any questions or we can be of assistance to the Committee.

Maureen Milligan President and CEO Teaching Hospitals of Texas [email protected] 512.476.1497

i Texas Department of State Health Services. “Maternal Mortality and Morbidity Task Force and Department of State Health Services Joint Biennial Report.” September 2018. ii Ibid

Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497 KATIE MITTEN HEALTH POLICY ASSOCIATE [email protected] 1016 LA POSADA DR, SUITE 240 AUSTIN, TX 78752 512-473-2274 SEPTEMBER 25, 2020

With Phase-Out of DSRIP Funding Texas Should Maximize Federal Funds To Insure More Texans

Response to Formal Request for Information by the House Human Services Committee

These comments are in response to Interim Charge 2.2 that calls on the committee to review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including the next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver.

The phase-out of Delivery System Reform and Incentive Payment (DSRIP) funding from the 1115 Healthcare Transformation and Quality Improvement Program Waiver will be a loss for communities across Texas that have benefitted from many improved services for people who are uninsured. Texas could more than replace these funds by maximizing federal funding by implementing Medicaid expansion to provide health coverage to child care educators, grocery store clerks, and other workers. Medicaid expansion would also provide health care to improve women’s health before, during, and after pregnancy, including contraception, mental health, and chronic care.

Texans want kids and families to be healthy.

We want our fellow Texans to get the health care they need to address concerns like depression, a lump that could be cancer, a second grader’s ear infection, or a toddler’s speech delay. And we want them to get that help early — when care is often cheaper and more effective — instead of waiting until things get worse.

Amid the current pandemic and economic meltdown, we also want our neighbors to be able to quickly seek medical attention for COVID if they need it. And we want some financial stability for the waiters and small business owners who have lost jobs, work hours, or sales.

But we know that these goals will remain out of reach for many Texans if they don’t have access to health insurance.

Unfortunately, before COVID struck, Texas already had the highest uninsured rates in the nation for children, adults, and women of childbearing age, with those rates headed in the wrong direction over the last two years. The problem continues

Texans Care for Children is a statewide, non-profit, non-partisan, multi-issue children's policy organization. We drive policy change to improve the lives of Texas children today for a stronger Texas tomorrow. We envision a Texas in which all children grow up to be healthy, safe, successful, and on a path to fulfill their promise. to grow during the pandemic and recession, with an estimated 1.6 million Texans losing job-based health insurance by May 1. According to one recent estimate, the Texas uninsured rate has climbed to 29 percent for nonelderly adults during the pandemic, the worst rate in the nation, with an additional 659,000 uninsured Texans.

Additionally, we know that reducing the state’s uninsured rate will help Texans of all backgrounds while also taking an essential step to combat racial injustice.

Because of state policy decisions, there is a high uninsured rate in every Texas community — from Longview to McAllen to Amarillo and beyond — and among Texas children of every racial/ethnic background. At the same time, there are significant racial disparities in Texas when it comes to access to health insurance, infant mortality, coronavirus, and more.

Black Texans face higher risks of infant mortality, , maternal mortality, and other tragic health outcomes compared to other Texans. The coronavirus pandemic has also placed Texans of color at greater risk than other Texans. One of the reasons for these health disparities is the lack of access to health insurance. In Texas, there are big gaps between the uninsured rates for White adults (15%), Black adults (23%), and Hispanic adults (38%) under age 64.

With the phase-out of DSRIP funding and the impact of COVID, this is a critical time to bring federal health care dollars to Texas.

The federal government is offering Texas an estimated $8 billion to $10 billion per year to cover 90 percent of the cost of providing Medicaid health insurance to adults with low-wages. Recent Medicaid expansion discussions in Texas have assumed that the funding for the remaining “non-federal” 10 percent share of the cost would be financed by local governments and health care provider taxes, similar to the way Texas covers the state’s share in the current 1115 Medicaid Waiver. Not only can Medicaid expansion avoid costing general revenue, it is likely to SAVE the state general revenue. Other states reduced state spending in particular areas — such as mental health and corrections — by using federal Medicaid expansion dollars. The funding will help the state economy through the recession and help Texas leaders fully fund — not cut back — the many services in the state budget that Texans need now more than ever.

Now is the time for Texas to reduce the uninsured rate by expanding Medicaid to cover essential workers — such as grocery store workers and child care teachers — and other low-wage Texas adults, including those who have lost jobs or work hours due to COVID.

Voters in and Missouri have chosen to accept federal Medicaid expansion funding. Texas is one of only 12 remaining states where there is essentially no health insurance option for working age adults below the poverty line who do not receive insurance from their employers. Below are just some of the many reasons Texas should expand Medicaid.

● Medicaid expansion would provide an insurance option to 2.2 million uninsured low-wage Texas adults, according to pre-pandemic estimates. Over half of the 2.2 million Texans are in the Coverage Gap, meaning they are below the poverty level with no insurance options. The other nearly 1 million people are between the poverty level and 138% of the line.

Texans Care for Children 2 ● Most people who would benefit from Medicaid expansion are working — or would be able to work thanks to Medicaid expansion. Over three-quarters of uninsured Texans who would be covered by Medicaid expansion are in a family with at least one worker. Many are employed in construction, food preparation, sales, and other fields. Medicaid expansion also helps more people start working or go back to school. ● In addition to covering adults, Medicaid expansion has been shown to indirectly decrease the children’s uninsured rate by connecting more families with health coverage. ● Reducing the uninsured rate is critical for detecting and stopping cancer, supporting healthy moms and babies, managing mental health challenges, treating substance use disorders, and addressing other health needs. Research shows that when people have insurance, they are healthier and less likely to die prematurely. Uninsured individuals typically wait longer to seek medical care, leading to worse health outcomes and higher costs for families and taxpayers, and they are less likely to see a health care professional. ● Pumping billions of Medicaid expansion dollars into Texas would help reboot our struggling state economy, help rural hospitals stay open, create jobs, and take pressure off of property taxes. By implementing Medicaid expansion, Texas would draw down $10 billion or more per year in federal health funding. The funding would help the economy recover from the current recession. It would create — and save — health care jobs. (A 2013 study estimated it would generate 231,000 new Texas jobs by 2016.) It could prevent more closures of rural hospitals. It would reduce the need for local governments to use property tax revenue to provide health care services to uninsured residents. It would also cut down the amount of uncompensated care that hospitals provide. These are some of the reasons that so many Texas leaders from the business community, local government, and other sectors have endorsed Medicaid expansion. ● Medicaid expansion has been a big success in other states. This recent Kaiser Family Foundation report summarized over 400 studies of Medicaid expansion, concluding that expansion has been a success — in many ways — in the states that have implemented it. For example, residents of those states have seen better overall health outcomes, more financial security, and less medical debt. ● Texans support Medicaid expansion. Last year, a poll commissioned by the Episcopal Health Foundation found that 64 percent of Texans support Medicaid expansion. A 2016 poll by the Texas Medical Center Health Policy Institute found that 63 percent of Texans backed expansion. Other polls show similar results.

Texans Care for Children 3

September 25, 2020

The Honorable James Frank Chairman House Committee on Human Services

RE: Interim Charge 2.3

Chairman Frank & Members,

On behalf of more than 400,000 youth across Texas, Boys & Girls Clubs in Texas fill the gap between school and home. We provide welcoming, positive environments in which kids and teens have fun, participate in life-changing programs and experiences, and build supportive relationships with peers and caring adults.

Statistics show that 35% of Club youth live in single parent households, 71% qualify for free or reduced-price lunches, and 85% represent minority populations. These are the youth most likely to experience opportunity gaps including inadequate academic supports, lost academic ground, food insecurity and lack of social supports. Boys & Girls Clubs in Texas help to fill that need to support youth and teens in their emotional and educational needs.

One of the goals of Boys & Girls Clubs in Texas is to equip our youth with the education to empower themselves to face one of our nation’s most pressing health concerns – the opioid and substance abuse crisis. Boys & Girls Clubs in Texas can have a lasting impact and safeguard the health of an entire generation of kids. Weaving education, prevention, and intervention into a program where our youth and their parents meet to discuss issues gives kids and teens the important foundation for positive and healthy decision-making.

Positive Action is uniquely positioned to confront the challenges of substance use. The program teaches students the practical “how and why” they can be strong and live without drugs as they become aware of negative consequences of using illegal substances. Positive Action’s supplemental drug prevention program further supports the prevention of substance abuse, including marijuana, methamphetamines, opiates, stimulants, steroids, hallucinogens, inhalants, and prescription drugs.

We believe Boys & Girls Clubs in Texas play a vital role in educating our state’s young people about the dangers of opioid and substance abuse and our programs and services are effective in preparing Texas’ most at risk youth to make positive decisions now and as they become adults.

Thank you,

Mitzi Stoute Faniola Executive Director Texas Alliance of Boys & Girls Clubs Boys & Girls Clubs in Texas

166 Hargraves Dr. Suite C-400-248 • Austin, TX 78737 • phone 512.301.7771 • fax 512.301.7773

September 25, 2020

Honorable Chairman James B. Frank House Committee on Human Services Via email to Assistant Committee Clerk Courtney DeBower at [email protected]

Re: Notice of Formal Request for Information on Health Care Access and Medicaid and Interim Charges 2.2-2.5

Dear Chairman Frank and Members of the Committee:

The Texas Association of Community Health Centers (TACHC) appreciates the opportunity to submit comments in response to the Notice of Formal Request for Information posted on Friday, August 14, 2020. These comments encompass the topics of Health Care Access and Medicaid, and Interim Charges 2.2 and 2.5.

The Texas Association of Community Health Centers represents federally qualified health centers (FQHCs) throughout the state. FQHCs provide a wide array of primary and preventive care services including medical, dental, behavioral health, and vision services. The 72 health centers in Texas operate over 575 clinic sites located in 132 counties across the state.1 FQHCs served over 1.6 million Texans and provided more than 6 million patient visits in 2019.2 Individuals without insurance made up 41% of patients, followed by Medicaid 29%, and Medicare 7%. FQHCs employed more than 12,000 FTEs.3

FQHCs have been on the front lines of pandemic response in their communities, providing COVID-19 screening, testing, and treatment while their normal operations have been upended. From April 3rd to September 4th 2020, FQHCs provided more than 380,000 COVID-19 tests.4 The coronavirus pandemic has only highlighted the need for continued investments in the robust primary and preventive care safety-net that FQHCs provide for Texans across the state.

Health Care Access and Medicaid

TACHC supports efforts to improve healthcare services, enhance quality, and maximize efficiencies to reduce healthcare costs. These comments focus on continuing efforts to promote primary and preventive care as well as consideration for other social services that impact overall health and well- being. TACHC recognizes the solution is not immediate, but further study can provide data to support policy recommendations and actions. TACHC recommends considering the following when developing innovative models to reduce costs and improve care:

Examine Primary Care Innovation Models

1 National Association of Community Health Centers (NACHC). Key Health Center Data by State, 2020. Federally- Funded Health Centers Only. Available at: https://www.nachc.org/wp-content/uploads/2020/09/2020-Key-Facts- by-State.pdf 2 Ibid. 3 Ibid. 4 Based on HRSA COVID-19 weekly surveys from the week of April 10 through September 4, 2020. Response rates vary among weeks. Total includes both virus and antigen detection tests.

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FQHCs are, in and of themselves, an innovative model to deliver comprehensive primary care to medically underserved populations, with medical, dental, behavioral health, and other support services all provided in a medical home model under one roof. FQHCs’ network of primary health care providers offers services to all regardless of ability to pay. Studies show that access to primary care can improve preventive care and chronic disease management while at the same time reducing the need for more costly health care services.5 TACHC urges the legislature to support further investments in primary care innovation to develop promising practices for health system transformation efforts in Texas.

Continue Flexibilities to Enhance Value-Based Care

Value-based payments and alternative payment models can shift payment structures from paying for volume to health outcomes. A recent CMS letter to state Medicaid directors highlighted the variety of value-based payment approaches across states. 6 CMS did not provide additional requirements for VBPs in the letter, but did open the door for states to explore options to meet their unique needs and capabilities. Texas Medicaid and CHIP health plans and providers have flexibility to work within their service delivery areas, populations, and providers to develop alternative payment models to meet the needs of their members. TACHC continues to work with key partners in the healthcare landscape to explore models and pilots to extend value-based payments to FQHCs.

Data is key to evaluating any innovative approaches in healthcare such as value-based care initiatives. TACHC encourages further efforts to allow for data sharing between the state, health plans, and providers to track and improve health outcomes.

Integrate Trauma Informed Care into Primary Care Settings

Serving vulnerable populations uncovers many events and conditions that may have resulted from exposure to trauma (i.e., evacuation/displacement due to disasters, immigration, homelessness, active shooter experience, adverse childhood experiences, etc.). To address and respond to those events, TACHC is now approaching these critical issues through a preventive and early identification strategy by creating training and skills building to support a trauma informed care environment in our health centers. To date, TACHC has initiated two cohorts, with a total of 21 health centers currently participating in the program. TACHC recommends consideration of Trauma Informed Care for additional Medicaid populations.

Focus beyond traditional healthcare services and include Social Determinants of Health

FQHCs provide enabling services such as case management, translation/interpretation, transportation, and health education. Enabling services at FQHCs can reduce access to care barriers and address social determinants of health to increase utilization of primary and preventive care.7 National data shows that health center patients who used enabling services had a 12-percentage point higher likelihood of getting

5 PwC Health Research Institute. ROI for Primary Care: Building the dream team. October 2016. https://www.pwc.com/us/en/health-industries/health-research-institute/weekly-regulatory-legislative- news/pdf/pwc-hri-primary-care-roi.pdf 6 CMS. Value-Based Care Opportunities in Medicaid. September 15, 2020. 7 Yue, Dahai et al. Enabling Services Improve Access to Care, Preventive Care, and Satisfaction Among Health Center Patients. Health Affairs. September 2019. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05228

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a routine checkup and a 16 percentage-point higher likelihood of getting a flu shot.8 Investing in these preventive services can reduce cost in the health care system in the long term. TACHC recommends further study of social determinants of health to improve health outcomes and health equity. TACHC supports continued study on how to integrate efforts to address social determinants of health in Medicaid and CHIP programs.

Interim Charge 2.2: The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver

Texas’s 1115 Waiver will be expiring in 2022, with funds for the Delivery System Reform and Incentive Payment (DSRIP) program expiring in 2021. While FQHCs are not performing providers in DSRIP projects, they are partners in this work and understand waiver funds help provide vital services that benefit the uninsured across Texas. At the end of the current waiver, Texas will have invested $25 billion in tax payer dollars to expand access to health care services throughout the term of the waiver. Texas should prioritize ensuring the innovative approaches funded by these investments continue. The COVID-19 pandemic has stretched even further an already underfunded safety-net health care delivery system in Texas. TACHC urges legislators to develop a comprehensive plan to continue projects funded through the waiver and consider the most cost-effective and efficient way to expand access to health care services in Texas: drawing down millions in federal funds to expand Medicaid to uninsured, low-income Texans.

Interim Charge 2.5: The Healthy Texas Women Section 1115 Demonstration Waiver With over 300,000 current enrollees, HTW provides vital women’s health services across Texas while also generating significant savings to the state.9 In the most recent women’s health programs report, HHSC estimated that services provided by HTW in 2019 will save the state $96.8 million in General Revenue funds.

FQHCs are a core provider in the HTW program. In FY2019, Texas FQHCs served more than 16,000 women in the HTW program and provided over 28,000 procedures.10 As comprehensive primary care providers, FQHCs are well-equipped to participate as providers in the HTW Plus program created by Senate Bill 750 in the 86th Legislative Session, though concerns remain about the rollout of this program and whether providers and beneficiaries are aware and able to access program benefits. TACHC urges lawmakers to monitor the implementation of HTW Plus to ensure services are reaching the populations intended to be served under the program.

TACHC was encouraged to see HHSC revise their implementation plan for the 5% budget reductions to not include cuts to direct client services, preserving women’s health funding and other critical programs from the reductions. Protecting the HTW and Family Planning budget is critically important, especially during a global pandemic when so many Texans have lost or are at risk of losing healthcare coverage through their employers. However, TACHC does have concerns about the revised plan to reduce enrollment and eligibility workers, which will lead to delays in enrolling pregnant women, HTW

8 NACHC. Community Health Center Chartbook 2020. https://www.nachc.org/wp- content/uploads/2020/01/Chartbook-2020-Final.pdf 9 Texas HHS, 2020 Healthy Texas Women Enrollment 10 Texas HHS. [annual report]. Table 4. Fiscal year 2019 HTW Service Utilization, Medical Claims, by Procedure Code.

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applicants, and other applicants for critical social service programs. TACHC urges the legislature to find other solutions to address revenue shortfalls caused by the ongoing pandemic.

Again, thank you for the opportunity to provide information on these topics. Please do not hesitate to contact Shelby Tracy ([email protected]) with any questions about these comments.

Sincerely,

Jana Eubank Executive Director Texas Association of Community Health Centers

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September 25, 2020

House Human Services Committee via email to Committee Clerk Courtney DeBower, [email protected]

Chairman Frank and House Human Services Committee Members,

The Texas Association of Health Plans (TAHP) is the statewide trade association representing health insurers, health maintenance organizations, and other related health care entities operating in Texas. Our members provide health and supplemental benefits to Texans through employer- sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid.

We are writing to provide information in response to your RFI regarding the Healthy Texas Women program (Interim Charge 2.5). The managed care organizations (MCOs) that administer Texas’ Medicaid program are committed to continuously improving access to care and the quality of care provided to women in this state. Prior to Medicaid managed care, Texas Medicaid operated under a fee-for-service system in which less than 15% of women received timely prenatal care. Today, because of managed care, 90% of expecting mothers in Medicaid receive timely prenatal care. Through the use of care coordination, integrated physical and pharmacy data, value-added benefits, and innovative pay for quality initiatives, Medicaid managed care organizations are able to identify high-risk pregnancies faster, connect clients with the specialized care they need to have a healthy pregnancy, and provide more than just health care services. Today, through the use of integrated pharmacy and medical data, an MCO can receive notification the minute a mother with substance use disorder services fills a prescription for buprenorphine and immediately initiate case management for that high-risk pregnancy. Thanks to the collaboration of DSHS, HHSC, and the MCOs, health plans receive data on pregnant women who previously had a pre-term birth and can immediately provide that pregnant woman with a progesterone injection that can help reduce preterm births if injected early enough during pregnancy.

Given all the progress in improving health outcomes and ensuring pregnant women get access to timely prenatal care, MCOs still face many barriers to addressing health outcomes. Last session, the Legislature passed SB 750 to help address several of these barriers, but there are still ways Texas can increase access to health care for women before, during, and after pregnancies — healthy women lead to healthier mothers and children.

1

The most significant barrier preventing health plans from improving care for new mothers is the short timeframe for Medicaid eligibility before and after pregnancy, as well as the lag time it takes to get a client into managed care once they have been deemed eligible.

Today, a pregnant woman’s Medicaid eligibility and benefits end 60 days after birth. Studies show the majority of maternal deaths occur after those 60 days when mothers are no longer eligible for Medicaid in Texas, after the Medicaid eligibility period ends.1 And Texas’ Maternal Mortality Task Force also indicates that the most common causes of maternal death are cardiac events, overdoses from illicit drugs (mostly opioids), and hypertensive disorders. The loss of Medicaid eligibility just 60 days after childbirth eliminates an MCO’s ability to ensure Texas mothers are receiving continued treatment for their medical conditions at the time when they are most vulnerable.

Thanks to the passage of SB 750, HHSC announced the launch of an enhanced postpartum care services package for eligible women enrolled in Healthy Texas Women called HTW Plus. In addition to the core women’s health and family planning services offered by the Healthy Texas Women program, HTW Plus will provide physical health, mental health, and substance use disorder services. These services will address asthma, diabetes, hypertension, and certain cardiovascular conditions; perinatal mood and anxiety disorders, including postpartum depression; and substance use disorders, including drug, alcohol, and tobacco use. While this program will provide many women with access to services they need to stay healthy between pregnancies, we are concerned it will be fragmented and uncoordinated because it will be delivered via a fee-for-service program. For example, it is unclear how these women will be able to find a provider and how the HTW Plus provider network will be established. If provided through managed care these women would have immediate access to a network of providers and access to assistance in finding a provider.

The best solution for ensuring women in Texas — especially women served through the Healthy Texas Women program — have access to the care, continuity of care, and quality of care they need to stay healthy is to administer the Healthy Texas Women program through Medicaid managed care. Recognizing that managed care may be a better delivery option, the legislature, through SB 750, directed HHSC to study the cost-effectiveness and feasibility of contracting with Medicaid managed care organizations to provide Healthy Texas Women program services through managed care in one or more health care service regions in Texas if the Healthy Texas Women Section 1115 Demonstration Waiver is approved. The waiver has been approved but we have not seen any requests for information or any studies from the agency to date.

Improve continuity of care and health outcomes — Today, even though MCOs can give a client 17p to help reduce pre-term births, the efficacy of that treatment depends on how quickly the client can get the treatment. It takes 15 days for pregnant women to enroll in a managed care plan. In the meantime, the client is served through a fragmented fee-for-service program without

1 DSHS Texas Maternal Mortality and Morbidity Task Force and Department of State Health Services Joint Biennial Report, July 2016

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access to care coordination, value-added services, or the benefit of innovative models of care specifically designed to help improve maternal health. Administering the Healthy Texas Women program through managed care will eliminate the gap time between when a woman becomes pregnant and when the MCO can start providing the necessary prenatal care she needs, allowing MCOs to quickly identify and treat pregnant mothers and gaining precious time to ensure healthy deliveries and healthy babies. Women with high-risk pregnancies could begin receiving case management immediately, resulting in better birth outcomes.

Patients who experience continuity of care have better health outcomes, higher satisfaction rates, and more cost-effective care. Carving the Healthy Texas Women program into managed care and allowing women to stay with the same health plan they received Medicaid STAR services through would improve continuity of care, decrease pregnancy complication rates, and enable women to seek appropriate medical help from their current providers. In its current fee-for- service structure, maintaining an adequate number of Healthy Texas Women providers has been challenging — women must find providers who offer services near them; have available, timely appointments; stock, prescribe, or administer their desired contraceptive method; and charge fees they can afford. And the new services provided in the HTW Plus program will make connecting a client with a provider that can offer all these services even more complex. Administering the Healthy Texas Women program through managed care would immediately open the door to a robust network of providers that offer these services and allow women to experience continuity of care from their health plan and provider — before, during, and after pregnancy and Medicaid eligibility. Federal approval to fund the Healthy Texas Women program as an 1115 Medicaid waiver and the roll-out of HTW Plus should have coincided with a study and decision to deliver these services through managed care.

Improve tracking of health outcomes and promote innovative models of care — Another issue caused by the lack of care continuity for women served through Medicaid and the Texas Healthy Texas Women program is the inability to track health outcomes. If women could be served by a single health plan in both STAR Medicaid (while pregnant) and the Healthy Texas Women program (after pregnancy), Texas could track health outcomes and better measure whether women are receiving appropriate care. The ability to track outcomes and continuous eligibility in a single health plan also helps incentivize physicians and health plans to develop innovative payment models that reward providers for quality. Continuous eligibility in a health plan would allow implementation of innovative models of care in the Healthy Texas Women program, which is not currently an option through the fee-for-service delivery model.

Provide coordinated care — Women with complex health needs, including chronic health conditions associated with an increased risk of maternal mortality and morbidity, often require care or services from multiple providers and specialists. To improve quality care coordination, the Maternal Mortality Task Force recommends expanding care management services for pregnant and postpartum women. Care coordinators can provide important patient education, service coordination, and advocacy for women’s acute and chronic medical and psychosocial needs. They can also facilitate coordination between providers to ensure health needs are met and connect women with beneficial resources and services in the community. Care coordination

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and case management are the most important elements of the managed care delivery model. Administering the Healthy Texas Women program through managed care would allow women access when needed to caring nurse care coordinators who help connect them to the health care and social services they need.

Address social determinants of health — The only way to fully address maternal mortality rates and improve the overall health of women in Texas is to address inequalities in social determinants of health. For example, although a pregnant mother may know fresh fruits and vegetables are important for her diet, the cost may be too high for a tight food budget. Transportation and child care can present huge challenges for a mother trying to make her prenatal appointments. While the quality of health care Medicaid clients receive plays an important role in their overall health, health outcomes are also driven by the conditions in which people live, learn, work, and play. Studies show social determinants of health can drive as much as 80% of health outcomes.2

Individuals with inadequate access to food or stable housing are at greater risk of developing, and have a more difficult time managing, chronic conditions. They also face higher costs for health care and services that might otherwise be avoidable if the social determinants that prevent them from being fully healthy were addressed. Health plans recognize the important role that social and economic factors such as housing, nutrition, and income play in a “whole person” approach to health care, which is why Medicaid managed care plans go beyond providing just health coverage for vulnerable Texans. They also help their clients get jobs, find housing, coordinate medical transportation, and live independently in their communities. Many of the social services that help address social determinants of health are not considered “allowable” or covered Medicaid services in Texas, which means health plans use their own resources to develop partnerships and invest in ways to address them. Carving the Healthy Texas Women program into managed care would give women more access to the types of services that are unavailable through a fee-for-service model.

In an effort to improve health outcomes and provide more efficient care, Medicaid agencies across the country are increasingly exploring opportunities to address social determinants of health. To improve access to services that address social needs for all Texas Medicaid clients, Texas should explore ways to allow for managed care organizations to cover these services that help address social determinants of health, improve health and social outcomes, and reduce long-term health costs as covered and allowable Medicaid covered benefits.

While MCOs, HHSC, DSHS, and bills like SB 750 are addressing access to care and improving maternal outcomes through critically important improvements to the Medicaid and Healthy Texas Women programs, significant barriers still exist for women in the Healthy Texas Women program because of the fee-for-service model being used to administer the program. The next step to improving access and quality of care for women in Texas is to complete the comprehensive review of administering the Healthy Texas Women program through managed

2Medicaid’s Role in Addressing Social Determinants of Health, Robert Wood Foundation, February 2019.

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care as required by last session’s SB 750 and to pass legislation next session directing HHSC to move the model into a managed care model.

Sincerely,

Jamie Dudensing, RN CEO, Texas Association of Health Plans [email protected]

5

Texas Conservative Coalition Research Institute

Comments to the House Committee on Human Services Response to Request for Information September 25, 2020

Provided via email to Assistant Committee Clerk Courtney DeBower, at [email protected].

Regarding the following portions of Charge 2: Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including:

2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver.

2.5) The Healthy Texas Women Section 1115 Demonstration Waiver.

2.2- 1115 Healthcare Transformation and Quality Improvement Program Waiver

History of Texas’ 1115 Healthcare Transformation and Quality Improvement Waiver

The Medicaid program allows for supplemental federal funding to be provided to certain providers outside of traditional claim-based reimbursements. These funds are not represented in the Texas budget because no General Revenue (GR) is involved. Under this scenario, local governments provide the non-federal share of matching money through Intergovernmental Transfers, or IGTs. The Health and Human Services Commission (HHSC) is then responsible for drawing down the federal match and distributing those funds to eligible providers.

The purpose of these supplemental programs is primarily to assist hospitals and other safety net providers (i.e. physician and other provider groups, mental health authorities, local health departments) that provide care to a disproportionately high number of indigent uninsured patients and to address the Medicaid shortfall- generally defined as the difference between what a service costs and what Medicaid reimburses for that service.

The Legislature directed HHSC to expand Medicaid managed care statewide to achieve savings and to preserve access to supplemental Upper Payment Limit (UPL) funding,1 which traditionally paid the difference between what Medicaid pays and what Medicare would have reimbursed for the same service.2 Federal regulations historically did not allow a supplemental UPL payment for a claim paid under a capitated (i.e. managed care)

1 arrangement.3 In order to expand Medicaid managed care and preserve hospital funding, HHSC sought an 1115 demonstration waiver from the Centers for Medicare and Medicaid services (CMS).

In December 2011, Texas received federal approval for an 1115 Healthcare Transformation and Quality Improvement Waiver that would preserve the former UPL funding under a new methodology, allow for managed care expansion, and fund regional projects to improve the quality of, and access to, healthcare in Texas. The waiver was initially approved for a 5-year period of 2011-2016, drawing down an estimated $29 billion during this initial period.4 Since then there have been multiple extensions and one major renewal, but Texas now faces the ends of a major funding source in September 2021 and renewal of the waiver once again in September 2022.

Current Waiver Status

Under the waiver, traditional supplemental and “new” funds are distributed to hospitals and other providers through two funding pools (this is not inclusive of other supplemental payments outside of the waiver):

• Uncompensated Care (UC) Pool – helps offset costs related to uncompensated care for hospitals, physician groups, and other eligible providers. • Delivery System Reform Incentive Payment (DSRIP) Pool- a new program created under this waiver to support coordinated care and quality improvements via regional programs throughout the state.

Unlike traditional Medicaid payments that are reimbursed based on the service provided, DSRIP payments are earned by meeting project-specific metrics each year. The primary purpose of DSRIP projects is to serve both Medicaid and low-income uninsured individuals with the goal of transforming delivery systems to improve care; improve population health; and/or lower costs through efficiencies and improvements.

At its height, the DSRIP pool was funding about 300 providers operating more than 1,400 DSRIP programs throughout the state.5 While projects could vary in size and scope depending on the needs of local communities, some key areas were the focus of multiple projects. These major areas included behavioral health; access to primary care; chronic care management/ assistance navigating the health care system; access to specialty care; and health promotion/ disease prevention. During the waiver’s first renewal period CMS and HHSC began working to strengthen reporting around DSRIP projects, better measure program development and outcomes, and increase data exchange among projects.

The DSRIP pool was originally established as a temporary measure to fund transformation projects with the expectation that these programs would eventually achieve self-sufficiency. In September 2021, DSRIP will expire having provided an estimated $25 billion in supplemental federal funding since its inception.6 Some (or many) entities that operate these programs will undoubtedly be seeking to compensate for this loss of funds and lawmakers should be aware they will likely seek assistance from the state to keep initiatives going if they do not have the resources to do so themselves. While the waiver renewal in September 2022 is looming large on the horizon, the expiration of the DSRIP pool will be the most immediate issue facing safety net providers and lawmakers in the upcoming session.

2 Conclusion and Policy Recommendations

The current waiver does allow for expanded access to care and services to both Medicaid and the low-income uninsured population. It does so without enrolling the uninsured in an entitlement program and ties some outcome measures to funding so providers are not paid solely on volume. For these reasons, the waiver is far superior to expanding the open-ended Medicaid program. As the state moves forward, Texas should continue to seek renewal of the 1115 waiver with an emphasis on funding that relies on objective, measurable outcomes, building on what the state has achieved over the past nine years. TCCRI recommends that lawmakers focus on the following three areas:

• Clearly Define Priorities for Any New Directed Payment Models : Over the past several years, CMS has increasingly encouraged states to send directed payments via the Medicaid managed care system based on quality metrics.7 HHSC clearly reiterated this point in its August 2020 Transition Plan noting “CMS has indicated to HHSC that directed payment programs are a potential model for Texas to consider as it transitions the DSRIP program,” indicating that there will likely be an effort to continue funding some DSRIP-like projects through this mechanism. State leaders must ensure that any new or continued projects have clearly defined goals and measurable outcomes that can demonstrate true health and/or system improvements and are not simply a “number of patients served” brute force performance target. Lawmakers should also consider focusing on projects that support more streamlined state goals rather than a model that again results in more than 1,400 projects throughout the state that would most likely prove unwieldy to manage and measure for any true improvements.

• Ensure Any New Projects Focus on Medicaid Enrollees and the Indigent: Of the Texans served by DSRIP projects, about 25% are on Medicaid and 40% are low-income/ uninsured. The remaining 35% are classified in an HHSC as “other,” leading to the likely conclusion that these are insured and/or non-indigent patients. It is crucial that state leaders keep in mind that this waiver has paid out billions of dollars that are not patient specific. These large blocks of funding reduce accountability and, because they do not appear in the state budget, also lack true transparency. While these dollars are dedicated to the care of Medicaid and low-income uninsured patients, when DSRIP dollars are used to establish a heart catheter lab for example, that new infrastructure will also be used for commercial and private pay patients, allowing supplemental Medicaid dollars to be used to subsidize care to all patients in some cases. It is critical to point out that federal money is not free and that Texas taxpayers are a significant contributor to the federal budget. Going forward, Texas should ensure that waiver projects focus on preserving finite resources for those most in need.

• Equip Lawmakers with More Detailed Information on Various Funding Pools: As has been alluded to in these comments, billions of dollars flow to various safety net providers and are not accounted for anywhere in the state budget. This can result in lawmakers and budget writers making decisions in a vacuum without being presented with a thorough picture of all of the state and federal funds being paid out. For instance, in addition to the UC and DSRIP pools under the waiver, there are various other “off-budget” funding sources, including Graduate Medical Education (GME); Disproportionate Share Hospital (DSH); Uniform Hospital Rate Increase Program (UHRIP); Quality Improvement Payment Program (QIPP); and Network Access Improvement Program (NAIP).

3 TCCRI recommends that lawmakers add an informational rider to the state budget, similar to the current Medicaid Informational Rider (Art. II, Spec. Prov., Sec. 7) that, at the very least, lists each supplemental funding pool or source and its total amount. The various funding pools available to each provider type, especially those that do not appear in the state budget, can be very difficult to locate and almost impossible to total. Such a rider would provide crucial information to budget writers and lawmakers by providing them with a more thorough picture of the current fiscal landscape as they make critical budgetary decisions. This information will be even more important with the addition of billions of dollars in federal COVID-related funding.

2.5- Healthy Texas Women Section 1115 Demonstration Waiver

The Healthy Texas Women (HTW) Program was originally part of the Texas Medicaid program, providing family planning services for eligible women of childbearing age. Under what was then known as the Medicaid Women’s Health Program, Texas prohibited abortion providers from participating in the program. However, when new regulations were enacted to also prohibit the participation of abortion provider affiliates in accordance with state law8 in early 2012, the federal government Texas from drawing down any federal funds to support the program.9

To ensure that low-income women could continue to access these services, then- Governor Rick Perry directed HHSC to stand up a fully state-funded program to provide family planning and other basic health services without the use of abortion providers or their affiliates.10 The program has continued to flourish under the leadership and commitment of Governor Abbott and the Texas Legislature. Today, the Program serves about 335,000 women up to 200% of the federal poverty limit (FPL)11 and provides family planning services; breast and cervical cancer screenings; screening and treatment for blood pressure, high cholesterol, and diabetes; and screening and treatment for postpartum depression.12

Earlier this year Texas received from the federal government to implement an 1115 women’s health demonstration waiver that will essentially carve this program back into Medicaid and allow for about $350 million in federal funding to provide these services.13

As HHSC explains in its announcement of the waiver:14

The waiver upholds Texas’ policy that favors childbirth and family planning services that do not include elective abortions or the promotion of elective abortions within the continuum of care or services and avoids the direct or indirect use of state funds to promote or support elective abortions.

This waiver approval is undoubtedly welcome news. It does not represent the expansion of a government program, nor does it further beholden taxpayers to additional entitlement programs. This will simply allow the state to once again draw down federal funds that should never have been discontinued. However, as the state moves to implement this demonstration program, lawmakers should ensure that Human Resources Code §32.024(c-1), which prohibits the inclusion of abortion providers and affiliates in this program, remains intact. The state must also stand ready to re-establish an independent state program should federal guidance around

4 the inclusion of abortion providers and affiliates change at any point in the future. Texas has already proven that a commitment to women’s health and upholding the sanctity of life should not work at cross-purposes and no amount of federal money is worth such a compromise.

About TCCRI

The Texas Conservative Coalition Research Institute (TCCRI) was founded in 1996 by a group of state leaders determined to implement conservative public policies in state government. TCCRI has distinguished itself as a leading state-based think tank and has been very successful in living up to its mission of shaping public policy through a principled approach to government. Its research reports, Task Forces, and policy summits have been instrumental in generating proposals that are shaping Texas government and influencing a new generation of conservative leadership.

The work of TCCRI is based upon four core principles: Limited Government, Individual Liberty, Free Enterprise and Traditional Values. Together, they form our LIFT principles and underpin all TCCRI Task Forces, conferences, and publications. Each principle guides our Board and Staff.

ENDNOTES

1 See SB 7, 82nd Legislature, 1st Called Special Session, 2011. 2 See Medicaid and CHIP Payment Access Committee website. “Provider Payments.” Available at: https://www.macpac.gov/subtopic/supplemental-payments/. 3 Medicaid and CHIP Payment and Access Committee. “Medicaid UPL Supplemental Payments.” November 2012. Available at: https://www.macpac.gov/wp-content/uploads/2015/01/MACFacts-UPL-Payments_2012-11.pdf. 4 HHSC. “Texas STC 48 Transition Plan.” March 23, 2015. Available at: https://hhs.texas.gov/sites/default/files/documents/laws- regulations/policies-rules/1115-docs/050815/STC-48-Transition-Plan-20150323.pdf. 5 HHSC. “Delivery System Reform Incentive Payment (DSRIP) Transition Plan.” August 27, 2020. Available at: https://hhs.texas.gov/sites/default/files/documents/laws-regulations/policies-rules/Waivers/medicaid-1115-waiver/dsrip- transition-plan.pdf. 6 HHSC. “Medicaid Supplemental and Directed Payment Programs and 1115 Waiver Update.” Presentation to the House Committee on Human Services. November 12, 2019. Available at: https://hhs.texas.gov/sites/default/files/documents/laws-regulations/reports- presentations/2019/leg-presentations/house-human-services-nov-12-2019.pdf. 7 CMS Informational Bulletin. “Delivery System and Provider Payment Initiatives Under Medicaid Managed Care Contracts.” November 2, 2017. Available at: https://www.medicaid.gov/sites/default/files/federal-policy- guidance/downloads/cib11022017.pdf. 8 See Texas Human Resources Code §32.024(c-1). 9 Miller, Debra. “Obama Administration Cuts off Medicaid Funding to Texas for Women’s Health.” Council of State Governments website. March 16, 2012. Available at: https://knowledgecenter.csg.org/kc/content/obama-administration-cuts-medicaid-funding- texas-women%E2%80%99s-health. 10 Ramshaw, Emily and Root, Jay. “Perry: Texas Will Fund Women’s Health Program.” Texas Tribune. March 8, 2012. Available at: https://www.texastribune.org/2012/03/08/perry-blasts-feds-over-abortion-redistricting/. See also KCBD News. “Gov. Perry: Texas stands ready to implement state Women’s Health Program.” October 31, 2012. Available at: https://www.kcbd.com/story/19964379/gov-perry-texas-stands-ready-to-implement-state-womens-health-program/. 11 See HHSC website. Data & Statistics. “Healthy Texas Women Enrollment (September 2014- June 2020). Available at: https://hhs.texas.gov/about-hhs/records-statistics/data-statistics/healthcare-statistics. 12 See Healthy Texas Women website, “HTW: Benefits.” Available at: https://www.healthytexaswomen.org/healthcare- programs/healthy-texas-women/htw-benefits. 13 Texas HHSC Press Release. “Texas Secures Approximately $350 Million in Federal Funding for Women’s Health Services.” January 24, 2020. Available at: https://hhs.texas.gov/about-hhs/communications-events/news/2020/01/texas-secures-approximately-350- million-federal-funding-womens-health-services. 14 Ibid.

5

Request for Information – Response September 25, 2020

TO: Texas House Human Services Committee Courtney DeBower, Assistant Committee Clerk [email protected]

FROM: Lee Johnson, MPA Deputy Director, Texas Council of Community Centers [email protected] 8140 N Mopac Westpark Building 3, Ste. 240 Austin, Texas 78759

RE: Request for Information (RFI) Response for Interim Charge 2.2 & 2.4 – Due September 25th

Interim Charge 2.2 & 2.4. Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including: 2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver; and 2.4) The Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability rule.

Texas Council of Community Centers represents the 39 Community Mental Health and Intellectual Disability Centers (Centers) throughout Texas statutorily authorized to coordinate, provide, and manage community-based services, as alternatives for institutional care, for persons with intellectual and developmental disabilities, serious mental illness, and substance addictions.

Interim Charge 2.2 related to the next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver:

Texas Council 1115 Transition Plan Proposal The 1115 Delivery System Reform Incentive Payment (DSRIP) program has been a game-changer for behavioral health care in Texas, advancing services for persons with serious mental illness (SMI), including people with co-occurring conditions of substance use disorders, intellectual disabilities and other chronic health conditions. The program mobilized communities across Texas in efforts to plan, build and link local systems of care to increase access to behavioral health services – both enhancing services for people already in state funded mental health services and expanding capacity for new people accessing care.

With the current 1115 DSRIP program slated to end in October 2021, Texas must determine how to maintain the access to care afforded by the program, and continue to make progress across our system to ensure that people with SMI, and co-occurring conditions, receive well-coordinated care.

www.txcouncil.com 1 In DSRIP programs operated by the 39 statutorily authorized public Community Mental Health Centers (CMHCs), the nonfederal share of Medicaid is covered through an Intergovernmental Transfer (IGT) financing strategy, funded largely by leveraging state general revenue (GR). In the new financing structure proposed by the Texas Council, the nonfederal share would continue to be covered with state GR, but financed through managed care.

Per direction from the Health and Human Services Commission (HHSC) the Texas Council submitted a transition plan based on three interacting components: • statewide access to Certified Community Behavioral Health Clinics (CCBHC) model of care identified by the Centers for Medicaid and Medicare Service (CMS) as an innovative program1; • an associated value-based directed payment program, identified by the Centers for Medicaid and Medicare Service (CMS) as an acceptable transition strategy2; and, • the creation of a target population of uninsured people with serious mental illness (SMI) who are diagnostically and functionally eligible for state funded mental health services.

All three components of our proposed transition plan are necessary to sustain the access to essential services, made possible by the 1115 DSRIP program, when the program ends.

The importance of a viable 1115 DSRIP transition plan for SMI cannot be overstated. In fiscal year 2020, the DSRIP program generated $333 million in federal funds for the public mental health system, providing enhanced services for more than 100,000 existing clients and expanding access to more than 120,000 clients who did not previously have access to care3. These federal funds represent more than 40 percent of CMHC mental health funding. Without question, failure to have a viable transition plan in place would cause a substantial loss of capacity in the public mental health system.

Transition Plan Implementation Strategies:

1 State Medicaid Director (SMD) Letter, #18—011, Opportunities to Design Innovative Service Delivery Systems for Adults with a Serious Mental Illness or Children with a Serious Emotional Disturbance. https://www.medicaid.gov/federal-policy-guidance/downloads/smd18011.pdf 2 Under 42 C.F.R. SS 438.6(c)(2), CMS will approve the directed payment when the arrangement: (1) Is based on the utilization and delivery of services; (2) Directs expenditures equally, and using the same terms of performance for a class of providers providing the service under the contract; (3) Expects to advance at least one of the goals and objectives in the quality strategy in SS 438.340; (4) Has an evaluation plan that measures the degree to which the arrangement advances at least one of the goals and objectives in the quality strategy; (5) Does not condition network provider participation in the model on the network provider entering into or adhering to intergovernmental transfer agreements; and (6) May not be renewed automatically. 3 Data Source: Information for valuation on 1115 was found at https://hhs.texas.gov/laws-regulations/policies- rules/waivers/medicaid-1115-waiver under recent updates Total Payments to Date for DY1-10(Excel)

Detailed information on payments was retrieved from https://hhs.texas.gov/laws-regulations/policies- rules/waivers/1115-medicaid-waiver-tools-guidelines-regional-healthcare-partnership-participants under DSRIP Project Payment Summaries which has the detailed files from each DSRIP payment since the waiver started.

www.txcouncil.com 2 • Build on the STAR+PLUS framework. Establish Certified Community Behavioral Health Clinics (CCBHC) as a class of providers and creating a directed payment strategy through managed care to pay for CCBHC services. CCBHCs are a service delivery model that provide comprehensive integrated services including primary care, mental health and substance use disorder services. HHSC has certified 18 of 39 public CMHCs as CCBHCs and is on track to achieve the goal of certifying the remaining CMHCs by July 2021. • Promote Access to Care for SMI Target Population under the STAR+PLUS managed care program. Create a target population of adults with SMI who meet financial and diagnostic eligibility criteria that would be assessed annually. Under CMS rules, Texas has the flexibility to identify a target population and put controls in place t to provide budget certainty for the state.

• Establish an Integrated Capacity Building Initiative. Maximize local and federal funding through the waiver, establishing a mechanism to take integrated care for individuals with SMI to scale. This funding will allow the system to increase access to integrated primary, mental health and substance addiction services, as well as address social determinants of health, in ways that make the most sense in communities across Texas. To fund this initiative, CMHCs will continue to provide match to draw down federal funds.

By creating a target population for adults with SMI, and establishing statewide access to Certified Community Behavioral Health Centers (CCBHCs), Texas will experience decreases in uncompensated care, inappropriate use of the emergency department, inpatient utilization, potentially preventable readmissions, and inappropriate use of jails.

One-Year DSRIP Extension (Request) COVID-19 has impacted provider systems across the state, requiring an immediate shift in service delivery from in-person care, to telehealth/telemedicine and audio only service delivery modalities. The scale of this significant and swift change was necessary to ensure continued access to care for people with serious mental illness, substance use disorders and intellectual and developmental disabilities.

HHSC efforts to develop the required 1115 Transition Plan have also been delayed due to the demands of COVID-19. The Texas Council of Community Centers joined with other health care and hospital associations to seek a one year extension of the current Delivery System Reform Incentive Payment (DSRIP) program.

A one year extension is needed to ensure provider systems can thoughtfully transition DSRIP services to a new model of care that provides the best possible opportunity to sustain the progress made for Texans through DSRIP initiatives.

If a one year extension of DSRIP is approved by CMS, action must be taken by the 87th legislature (through appropriations) to ensure the CCBHC directed payment strategy and SMI target population begin in FY 2023 (2nd year of the FY22/23 biennium).

If a one year extension of DSRIP is not approved by CMS, action must be taken by the 87th legislature (through appropriations) to ensure the CCBHC directed payment strategy and SMI target population begin in FY2022 (1st year of the FY22/23 biennium).

www.txcouncil.com 3 Without an extension and/or implementation of a viable 1115 Transition Plan, as proposed by the Texas Council, the public mental health system will lose $333 million a year in federal funds now supporting access to expanded and enhanced mental health and substance addiction services.

Interim Charge 2.4 related to the Medicaid Fiscal Accountability Rule (MFAR):

Proposed MFAR Withdrawn By CMS In a policy announcement released September 14, 2020 on Twitter, Seema Verma, Administrator for the Centers for Medicare and Medicaid Services (CMS), announced withdrawal of the Medicaid Fiscal Accountability Rule (MFAR) from the regulatory agenda. The following summary of comments submitted by the Texas Council to CMS in response to the proposed MFAR is provided in the event CMS reverses its most recent announcement and moves forward with the rule or similar regulatory requirements.

Overview of Potential MFAR Impact on Community Centers As a system of care, Community Centers provide vital, transformative services for more than 600,000 people across all of Texas – people who are among the most complex individuals supported anywhere in the healthcare system. The state of Texas, in collaboration with state and local governmental entities, has long relied on allowable intergovernmental transfers (IGTs) and certified public expenditures (CPEs). Additionally, the state utilizes allowable health care-related taxes. These arrangements demonstrate the longstanding flexibility states require in order to finance programs to meet specific needs of their most vulnerable populations.

Given the vast scope of state activities that would be affected by the proposed changes—and the lack of detail in key parts of the regulation outlining how CMS plans to address the impact on states’ long-term financial planning and beneficiaries’ access to services—we strongly urged CMS to withdraw the proposed rule and seek further input from stakeholders before promulgating any additional rulemaking. We were pleased to see Administrator Verma’s announcement on September 14, 2020.

Among our concerns with the proposed rule are four areas that would particularly devastate the state’s ability to administer the Medicaid program: 1. the proposed change to the definition of “public funds” fails to account for the complexities of states’ delivery systems and introduces unnecessary subjectivity; 2. the “totality of the circumstances” and “net effect” standards for evaluating health care- related taxes are impermissibly vague and could lead to inconsistent enforcement; 3. the proposed sunsetting of financing mechanisms after three years creates significant administrative burden and challenges for states to engage in long-term planning; and 4. proposed rule will result in a loss of resources and commensurate reductions in access to services.

www.txcouncil.com 4

September 28, 2020

The Honorable James Frank Chair, House Committee on Human Services Texas House of Representatives P.O. Box 2910 Austin, Texas 78768

RE: Interim Charge 2.2-2.5

Dear Chairman Frank and Honorable Committee Members,

The Texas Healthcare and Bioscience Institute (THBI) is the Texas public policy voice for the healthcare and bioscience industry. Our membership consists of biopharmaceutical companies, research institutions, medical device companies, economic development entities and service companies providing unparalleled networking and synergy to effectively address the public policy needs of Texas’ growing life sciences community.

The Texas life sciences industry is committed to expanding the boundaries of science by discovering, developing and delivering innovative and needed medications to patients. It is the patient that is the ultimate beneficiary of such advances. The membership of THBI is dedicated to creating an environment where such discoveries flourish and thrive.

Our industry is working around the clock, racing for treatments and vaccines to stamp out the spread of COVID-19. At the same time, we are also are helping lead the way, with groundbreaking, rapidly developing research that has allowed us to hold out collective hope for an end to this pandemic.

Now more than ever, we must advocate for the sound funding and policy of essential programs to ensure all patients have access to the care they need. THBI supports vital state health programs, like Medicaid and the 1115 Healthcare Transformation waiver, that provide timely access to healthcare for the most vulnerable Texans. Medicaid patients frequently have chronic health conditions that often require a broad range of medications and treatments. Our healthcare system needs to evolve and pay for treatments based on their value to patients, the system, and our society. It’s the biopharmaceuticals industry’s mission to find treatments and it is also our responsibility to help patients access them. We applaud the State’s efforts to partner with the industry on creating innovative programs and solutions to meet the needs of all Texans.

We extend our sincerest gratitude for the opportunity to provide feedback and look forward to partnering with you during the 87th Legislative Session. It is critical that all Texans have access to needed medicines and treatments that allow patients to live longer, healthier, and more productive lives. If you have any questions or need additional information, please contact me directly at 512-708-8424 or at [email protected].

Sincerely,

Tom Kowalski President & CEO

Texas Hospital Association Response to House Human Services Committee Request for Information Sept. 25, 2020

Interim Charge 2.2 - 2.5: Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including: 2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver; 2.3) Texas’ Targeted Opioid Response Grant; 2.4) The Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability rule; and 2.5) The Healthy Texas Women Section 1115 Demonstration Waiver.

Response to House Human Services Committee Request for Information Response to Interim Charge 2.2 2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver

1115 Healthcare Transformation and Quality Improvement Program Waiver

Initially approved by the Centers for Medicare & Medicaid Services in 2011, Texas’ 1115 Waiver has been key to health care delivery reform in the state. Texas hospitals strongly support the waiver and its ability to protect the health care safety net and improve health care delivery and outcomes for Texans. Hospitals that serve vulnerable, uninsured individuals rely on the funding to maintain financial vitality and stability. Without it, critical health care access could be severely compromised.

The waiver allows statewide implementation of managed care for Medicaid beneficiaries and, through two funding pools, has provided more than $40 billion in supplemental payments to Texas hospitals and other health care providers. Most Texas hospitals receive funds from the waiver, which comprise more than a third of all Medicaid hospital payments. A “one-size fits all” approach doesn’t work for a state as large and diverse as Texas, but the flexibility inherent in the waiver has afforded the state the authority to test innovative solutions to improve Medicaid service delivery and contain costs.

Under the terms and conditions of the current waiver, one of the two pools of funding, the Delivery System Reform Incentive Payment pool, is phasing out and will be eliminated by 2022. The other pool of funding — uncompensated care pool — is subject to a different methodology governing its size and distribution. UC funding is scheduled to expire in September 2022.

The DSRIP program seeks to transform health care delivery systems, improve individual and population health and lower health care costs through efficiencies and innovations. Since 2012, DSRIP has provided over $19 billion to incentivize providers to collaborate regionally to innovate health care delivery. Through 20 regional health care partnerships across the state, providers have collaborated to identify and meet community needs. From 2014-2017, the DSRIP program served more than 11 million individuals, 40% of whom were uninsured.

The Texas Health and Human Services Commission has submitted a transition plan to pave the way for future programs that may replace funding lost when DSRIP is eliminated. However, the COVID-19 pandemic has stalled progress toward the transition for both the agency and providers. HHSC recently notified providers of its request and CMS’ approval to extend the deadlines for five of the ten milestones that will guide the agency’s work to establish new programs for the phaseout of DSRIP funding through September 2021 and beyond. Most notably, HHSC is extending from Sept. 30 to Dec. 31 the deadline for it to identify and submit to CMS any proposals for new programs to sustain DSRIP initiative areas in 2022, the last year or the waiver. Following HHSC’s submission of new proposals in December and CMS’ approval, providers will have limited time to plan for and implement new programs before DSRIP ends.

THA has joined other hospital and health care provider groups to request that HHSC ask CMS to extend the DSRIP program for at least one more year. With the ongoing COVID-19 pandemic, now is not the time to require the development of new programs nor the loss of essential DSRIP funding. In response to the pandemic, Texas health care providers have pivoted to provide emergent and ongoing care to tens of thousands of Texans and have provided millions of COVID-19 tests. As such, providers have lacked the bandwidth, resources and staff to devote to transformation activities and have had to reconfigure the way they provide care to mitigate risk of disease spread. An extension would allow hospitals and other providers to continue transforming health care delivery — as envisioned through the DSRIP program— when the system stabilizes following the pandemic. It would also allow providers to build on lessons learned from COVID-19 response, including related to telehealth and others, and to continue those innovations post-DSRIP. Ultimately, the transition of funding streams during the current COVID-19 crisis will further destabilize the health care safety net. Access to physical and behavioral health care is critical during the pandemic, and the loss of DSRIP funding will jeopardize access to care for vulnerable Texans.

Regardless of when DSRIP funding phases out, a strong, clear transition is critical for the future of the health care safety net in Texas. Texas hospitals’ priorities for the DSRIP transition include:  Ensuring access to care for the uninsured.  Building DSRIP successes into existing Medicaid managed care structures.  Preserving and maximizing federal payments for hospitals and other providers.  Rewarding collaboration and partnerships among local providers.

With the current waiver set to expire Sept. 30, 2022, state leaders and providers will need to determine the best path forward to ensure sustainability for our health care safety net. A long- standing requirement of 1115 waivers is that they must be “budget neutral” to the federal government, meaning Texas can’t spend more federal Medicaid dollars with the waiver than it would without the waiver. CMS is seeking to change the way it calculates budget neutrality for the next waiver renewal, which could potentially result in fewer dollars available for supplemental payments. THA encourages HHSC and state leadership to share budget neutrality analyses with providers to allow stakeholders ample time to determine the impact of these changes going forward.

Leading the nation in the number of uninsured residents, Texas remains one of 13 states choosing not to increase access to coverage under the Affordable Care Act. Even before COVID- 19, Texas had both the largest uninsured population (5 million) and the highest uninsured rate (18 percent). COVID-19-related job-losses have pushed Texas’ unemployment rate to 12.8 percent, the worst on record and up from 3.5 percent in January and February. For many Texans, losing a job or having hours cut also means losing job-based health insurance. Before COVID-19, 13 million Texans had job-based health insurance. As job losses mount, so will the number of uninsured Texans.

Two recent reports — one from the Kaiser Family Foundation and another from the Urban Institute — have started to shed light on the scope of health insurance losses in Texas: • 1.6 million Texans have already lost job-based health insurance because of a job loss in the family between March 1 and May 2 (KFF). • The Urban Institute projects that if Texas hits a 20 percent unemployment rate, 2.3 million Texans will lose job-based insurance. At 25 percent unemployment, 3 million will lose job-based insurance.

Regardless of the future of the 1115 waiver, Texas needs a comprehensive plan to increase health care coverage to Texans.

Response to House Human Services Committee Request for Information Response to Interim Charge 2.4 2.4) The Centers for Medicare and Medicaid Services proposed Medicaid Fiscal Accountability rule

Medicaid Fiscal Accountability Rule

In November 2019, CMS proposed the Medicaid Fiscal Accountability Rule, which would have limited states' ability to draw down federal Medicaid funding, jeopardizing approximately $11 billion in Texas hospitals’ annual supplemental Medicaid payments. Although the President's Office of Information and Regulatory Affairs added MFAR to its regulatory agenda in July, CMS Administrator Seema Verma announced in September that the agency would withdraw it from the agenda to better understand its impact on providers. Texas hospitals remain concerned about the potential for MFAR to reemerge.

Texas hospitals worked closely with state and federal leaders to share concerns about the rule and its detrimental impact on health care in state. In addition to written comments to CMS, THA wrote letters to Gov. Greg Abbott and the Texas Congressional delegation and brief state and federal leaders through ongoing discussions. In March, all 36 members of the Texas Congressional delegation signed onto the bipartisan letter, expressing concern to CMS about the expected impact of the rule on providers, patients and the Texas economy. Since the COVID-19 pandemic, members of the Texas Congressional delegation have filed legislation and taken other action to delay implementation of the rule. The state’s leadership was similarly engaged in discussions at the federal level about the impact of the rule to Texas.

The proposed rule would have restricted the ability to finance the state share of Medicaid supplemental payments through intergovernmental transfers, health care-related assessments,

such as local provider participation funds, and provider-based donations. Texas, like other states, has worked closely with CMS over the years to identify acceptable methods of financing the non-federal share of Medicaid payments. Shifting rules at this stage undermines the stability and flexibility states need to sustain Medicaid programs and ensure access to care for the growing number of Texans who depend on it. The rule would have increased state and local taxes, eroded the state’s control the Medicaid program and devastated the state's health care infrastructure.

The end of DSRIP and several other complex policy variables are coming together to create a difficult and uncertain time for Texas hospitals. This instability and unpredictability threaten hospitals’ ability to plan appropriately and, if unresolved, could seriously impact the delivery of health care throughout the state with service reductions and the closure of hospitals, particularly in already hard-hit rural areas. THA encourages the Texas Legislature to support efforts to ensure sustainability of the health care safety net.

John Hawkins Texas Hospital Association 1108 Lavaca St., Ste. 700 Austin, TX 78701 [email protected] 512-465-1505

Sept. 25, 2020 The Honorable James Frank, Chair House Committee on Human Services

Submitted to Courtney DeBower, assistant committee clerk: [email protected]

Dear Chairman Frank and Committee Members,

On behalf of the Texas Medical Association, Texas Academy of Family Physicians, Texas Pediatric Society, Texas Association of Obstetricians and Gynecologists, American College of Obstetricians and Gynecologists District IX (Texas Chapter), and American College of Physicians Services, Texas Chapter, thank you for the opportunity to provide input on the House Committee on Human Services’ Request for Information regarding:

How Texas is preparing for state and federal budgetary changes that impact the state's health programs, including: 2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver; and 2.5) The Healthy Texas Women Section 1115 Demonstration Waiver.

Thank you very much for the opportunity to comment. Should you have any questions, please contact Helen Kent Davis, associate vice president, Texas Medical Association, at [email protected] or (512) 415-8048; or Michelle Romero, associate director, TMA Legislative Affairs, at [email protected] or (512) 743-8665; mailing address: 401 W. 15th St., Austin, TX 78701

Interim Charge 2.2: 1115 Healthcare Transformation and Quality Improvement Program Waiver Our organizations have strongly supported Texas’ Medicaid 1115 transformation waiver since its inception. We continue to do so. Undoubtedly, thousands of Medicaid enrollees and low-income, uninsured Texans have benefited from it. Among its benefits, the waiver has: • Improved access to health and dental care services for low-income, uninsured Texans; • Stabilized financial solvency for safety-net hospitals, particularly rural hospitals; • Expanded availability of behavioral health care; and • Allowed Texas to test innovative health care delivery models to determine what models will work or not, such as medical home programs designed to increase use of prenatal care or to better serve children and adolescents with special health care needs.

Barring renewal, in two years the waiver will expire, eliminating vital funding that undergirds Texas’ entire health care system as well as the ability to test new health care delivery models. Per the terms of the current waiver, the Delivery System Reform Incentive Payment (DSRIP) program will be phased out first, ending Sept. 30, 2021. Yet, it is DSRIP dollars that provide the means for communities to enhance capacity, especially for low-income, uninsured Texans. Withdrawing funding now will harm the state’s ability to care for patients, COVID-19-related or not, particularly given the continued financial strain the pandemic has caused for DSRIP-participating physicians, hospitals, and behavioral health clinics. As 1

such, we join with the Texas Hospital Association, Teaching Hospitals of Texas, and other associations urging Texas to pursue a one-year extension of DSRIP funding.

Just as important, Texas should seek a one-year extension of the waiver, pushing the expiration to Sept. 30, 2023, to give the state more time to plan Texas’ waiver renewal in close collaboration with stakeholders. In late 2019, the Texas Health and Human Services Commission (HHSC) and waiver stakeholders began those discussions, but they ceased in March when HHSC and waiver stakeholders moved swiftly to respond to COVID-19 – a response that is ongoing. As it stands, physicians, hospitals, community-behavioral health clinics, public health systems, and other vital waiver stakeholders lack the bandwidth to maintain pandemic preparedness while also engaging in the robust dialogue, research, and evaluation needed to reimagine Texas’ health care delivery system. Moreover, CMS has clearly articulated its expectation that the state’s Medicaid managed care architecture become the framework for any future waiver. However, the transition will not be fast or easy because waiver initiatives do not neatly crosswalk to managed care. Considerably more discussion is needed about how to successfully achieve this goal.

While HHSC has recently resumed stakeholder meetings, it has nonetheless lost valuable time to plan for a health care landscape expected to be realized in two years. Even in the best of times, Texas would have been hard pressed to develop a waiver framework in such an abbreviated timeframe.

The next waiver must be redesigned tip to tail. Despite our support for the existing waiver, it also is fundamentally flawed, having been built on a hospital-centric model of care rather than a community one, cleaving local health care delivery systems into the waiver “haves” and “have nots” and erasing the nascent pre-waiver initiatives designed to address exigent local health care issues. Yet, one thing the pandemic has taught a cross-section of health care leaders is that the ability to rethink ossified health care delivery systems and foster collaboration contributed to survival. Texas must build on this renewed imperative.

As such, our organizations strongly advocate establishment of a community-based accountable care organization (ACO) that will foster responsive, accountable, high-quality, and cost-effective care for low- income Texans and harness the resources and capacity of the entire spectrum of physician practices – independent, employed, and safety-net practices - hospitals, clinics, and managed care organizations committed to caring for people living in marginalized and low-wealth communities.

Our aim is not to exclude any existing waiver provider from participating in a future model, but to build capacity while also promoting greater transparency and accountability relating to waiver governance, delivery system design, performance measurement, and funding. Under a community-based ACO, waiver dollars would be distributed fairly across the health care delivery system, including to community-based physicians and clinics unaffiliated with hospitals or academic health systems.

The pandemic has revealed deep structural problems with the design and funding of our health care delivery system. All sectors saw steep declines in patient revenue, resulting in layoffs, furloughs or even temporary closures. Yet some are better positioned to weather the changes. Hospitals, for example, have access to supplemental Medicaid funding. Community-based physicians do not. Yet, without help, the upheaval could become an “extinction-level event” as practices close, merge with hospital systems, or sell to private equity firms, resulting in higher costs and less innovation – just the opposite of Texas Medicaid’s leading-edge efforts to promote more accountable care. The deterioration of the states’ Medicaid physician network will harm all patients, not just Medicaid beneficiaries. Moreover, current DSRIP providers cannot possibly make up the lost capacity.

Any funding from a new waiver should be invested into pragmatic initiatives that will enhance physician and provider capacity and availability while also accelerating use of value-driven care, including funding to support adoption of data analytic tools; expand use of patient navigators and care coordination, particularly for high-risk or medically complex patients; and establish mechanisms to share actionable

2

data across medical, social, and behavioral health networks in order to improve management of medical and nonmedical factors

To achieve a genuine community-based approach, Texas will need the active engagement of not only those who provide medical care and social services but also those who obtain it and organize it. Under the current waiver, the state uses Regional Healthcare Partnerships (RHPs) to facilitate dialogue and collaboration among DSRIP providers. RHPs potentially could be restructured, with the goal of promoting community-based governance. Other states, such as Washington, Oregon, and Colorado, have similar initiatives from which Texas can learn. To guide the community-based ACO, we believe the state should incorporate the following key principles to ensure the ACO:

• Is built on a robust primary care foundation; • Maintains an inclusive network of physicians and providers with an interest in serving the population; • Actively seeks to reduce health disparities and engage the community; • Links medical and nonmedical sectors to better address social drivers of health; • Promotes accountable, sustainable, and equitable payment strategies that reward improved patient outcomes; • Promotes collaborative value-based initiatives with Medicaid managed care plans; • Establishes a robust and meaningful health information exchange for both clinical and social service information; • Ensures care coordination as a core function; and • Engages physicians and providers regardless of their degree of practice transformation. Given the geographic diversity and scale of Texas, we recommend that Texas pilot a community-based ACO model in at least one rural and one urban region.

In addition to supporting a fairer, more accountable waiver, TMA advocates using any new waiver to achieve several other vital goals: (1) reduce the number of Texans without health insurance; 2) reinvigorate the Medicaid physician network; and (3) implement innovative strategies to address the nonmedical factors that impact health care outcomes and costs. Regarding the former, of critical importance to our members is that our patients can obtain timely access to health care services, a goal we know you share. Yet for many Texans, this is becoming increasingly difficult to do. In September, the U.S. Census Bureau published 2019 estimates for the uninsured, finding that Texans who lack health care coverage increased for the fourth year in a row, rising from 16% in 2016 to 18.4% in 2019, for a total of 5.2 million uninsured Texans. Of these, nearly one million Texas children (12.7) lack coverage -- one in five uninsured children in the country live. Among Texas women, 25% lack health care coverage, contributing to poor maternal and infant health outcomes. Those figures do not include the estimated 1.6 million Texans who lost health insurance when they lost their jobs due to the pandemic. While the job market has bounced back somewhat, and some of the newly uninsured might be able to obtain coverage elsewhere, Texas can no longer ignore the profound human, social, and economic impact of having more than 20% of our people uninsured. Health care coverage matters, resulting in healthier constituents and more economically prosperous communities.1 “It is both mistaken and dangerous to assume that the persistence of a sizable uninsured population in the U.S. harms only those who are uninsured.”2 As organizations dedicated to improving the health of all Texans, our members find these numbers especially alarming and troublesome. Decades of research show the lack of health care coverage poses serious health consequences, contributes to higher health care costs, and hurts job growth.

Ultimately, all Texans benefit when their neighbors, colleagues, family, and friends have health care coverage. Insured children are healthier children, missing less school and contributing to their future socioeconomic success. Insured parents miss less work, increasing economic productivity, a win for employers and the state economy. Insured women have healthier pregnancies and maternal and infant

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health outcomes, reducing Medicaid costs. And more insured Texans contribute to lower health care premiums for everyone.

Using federal Medicaid dollars,3 together with other state and federal policy solutions, Texas can and must sharply reduce its number of uninsured. To date, 39 other states, including Indiana, Ohio, and Utah, have navigated paths forward. Texas must develop a plan for Texans too. We recommend that the state: Develop a meaningful, statewide health care coverage initiative, including pursuing federal dollars to: • Extend Medicaid coverage to low-income, uninsured working-age adults, and • Establish a state-administered reinsurance program to reduce premiums for people enrolled in marketplace plans; • Provide 12-month comprehensive coverage for women who lose Medicaid 60 days postpartum; and • Establish 12-month continuous coverage for children enrolled in Medicaid, the same benefit provided to children enrolled in the Children’s Health Insurance Program.

Improving access to health care must be paired with addressing the nonmedical factors that also affect health, commonly known as social determinants of health (SDOH) – the places where people live, work, and play. Texans of color have been disproportionately affected by COVID-194 and SDOH have been fuel to the pandemic’s disproportionate impact. Black and Latinx populations face a higher risk of infection and death due to inherent inequities in SDOH. These include discrimination; health care access and utilization; occupation; educational, income, and wealth gaps; and housing.

Susceptibility to chronic disease is closely tied to socioeconomic status, and as unemployment and uninsured rates increase, there is less access to health services and early treatment for preventable disease. Fundamental to a Community ACO strategy is incorporating market-based SDOH interventions into day- to-day operations so as to reduce unnecessary costs for Medicaid and low-income populations, while also improving patient health and the health of the community. Because of SDOH, people of color are more likely to have underlying medical conditions that put individuals at a higher risk of severe COVID-19 illness and death. According to the Texas Department of State Health Service’s COVID-19 case dashboard, in Texas, Hispanics account for almost 40% of confirmed COVID-19 cases and more than 55% of confirmed COVID-19 deaths, compared with whites, who accounted for 28.5% of confirmed COVID-19 cases and 30.4% of confirmed COVID-19 deaths (as of Aug. 31, 2020).

Interim Charge 2.5: The Healthy Texas Women Section 1115 Demonstration Waiver In January, the Centers for Medicare & Medicaid Services approved Texas’ five-year Healthy Texas Women (HTW) Medicaid 1115 Demonstration Waiver, converting HTW from a state-funded-only program to a federal-state initiative with nine-to-one federal Medicaid matching funds. The infusion of federal dollars will certainly benefit state coffers at a time when they are much needed. Yet, Texas also must ensure that conversion of HTW into a Medicaid program will not inadvertently undermine key programmatic policy objectives, particularly ensuring continuity of care for women transitioning from pregnancy-related Medicaid to HTW.

CMS approved Texas’ waiver two months before HHSC and stakeholders shifted focus to COVID-19 preparedness and response, understandably leaving little time for robust stakeholder engagement. HHSC subsequently announced policy changes our organizations believe will contribute to fewer women enrolling in HTW, impacting not only their health but also the projected savings from HTW. We understand Texas’ HTW eligibility determination processes and requirements do not align neatly with federal Medicaid requirements, including use of the modified adjusted gross income methodology. But there is still time for the state to reconsider these actions or seek federal approval for a better alternative, as noted below. Gaps in coverage contribute to poorer health outcomes for mothers and babies, increased uncompensated care costs for participating physicians and providers, and potentially higher state costs. Specifically, we recommend the state revisit or explore alternatives to the following decisions:

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• Elimination of HTW auto-enrollment. Beginning in 2016, Texas began automatically enrolling adult women into HTW when they lost pregnancy-related Medicaid 60 days postpartum. The policy helped prevent gaps in coverage, a best practice to promote better postpartum outcomes for women, babies, and families by ensuring new mothers retain access to preventive and basic primary care. Unfortunately, this policy will cease when Texas fully converts HTW to a Medicaid program. In its place, HHSC intends to conduct electronic administrative reviews prior to the mother’s anticipated due date to verify if a new mother will be eligible for HTW. In principle, we support electronic verification because it will minimize the need for exhausted new mothers to complete more paperwork in the weeks following their baby’s arrival. However, in practice the data sources Texas uses for administrative renewals have proven unreliable, as evidenced by the number of families who receive requests for additional information to maintain their child’s Medicaid coverage. In fact, the Kaiser Family Foundation reported Texas ranks low for successful administrative renewals, renewing less than 25%. Thus, if an electronic database cannot confirm a woman’s income, the agency will need to seek verification directly from her. If she fails to return requested documentation before her pregnancy-related Medicaid eligibility ends, she will not be transitioned to HTW, leaving a gap in care. In 2019, more than 80,000 new mothers were automatically enrolled into HTW. If the administrative renewal is accurate only 25% of the time, then 60,000 women could experience a gap in coverage.

Solution: To prevent gaps in coverage, enroll all adult women losing pregnancy-related Medicaid into HTW, but complete income verification post-enrollment or allow women to self-attest.

• Elimination of adjunctive eligibility for women applying for HTW Since the creation of HTW (and its predecessor program), adjunctive eligibility has been used to expedite enrollment of new women into HTW, allowing women whose families participate in programs like the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, or the Women, Infants, and Children nutrition program to enroll in HTW without once again verifying income. Federal rules allow such policies to minimize duplicative paperwork for families and the states; thus it is unclear why HHSC elected to discontinue this policy.

Solution: Seek CMS approval to reinstate adjunctive eligibility for women applying for HTW.

• Elimination of the simplified HTW application form (Form H1867) Currently, women applying for HTW complete a one-page application, allowing them to apply quickly. However, HHSC’s waiver application noted that Texas will not use the simplified application, even though CMS has allowed simplified application forms to be used as part of similar, previous demonstrations, including Texas’ previous family planning demonstration.

Solution: Seek CMS approval to continue using the simplified application form.

Thank you for your consideration.

Sincerely,

Diana L. Fite, MD, President Texas Medical Association

1 The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review, KFF, March 17, 2020 2 A Shared Destiny: Community Effects of Uninsurance (2003), National Academies of Sciences, Engineering and Medicine 3 How Many Uninsured Adults Could Be Reached If All States Expanded Medicaid?, (KFF), June 25, 2020

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University of Texas at Austin 305 E. 23rd Street, Stop G1800 Austin, Texas 78712-1699 http://liberalarts.utexas.edu/txpep September 25, 2020 Courtney DeBower Assistant Committee Clerk Human Services Committee Texas House of Representatives Sent Via Email: [email protected]

RE: Comments in Response to Request for Information – Interim Charges 2.2 – 2.5

Dear Members of the Human Services Committee: As a group of academic researchers with the Texas Policy Evaluation Project, we appreciate the opportunity to provide information and recommendations on how Texas is preparing for state and federal budgetary changes that impact the state’s health programs. Our comments below, submitted in response to the Notice of Formal Request for Information posted on Friday, August 14, 2020, relate to the Healthy Texas Women (HTW) Section 1115 Demonstration Waiver and funding for other state family planning programs.

The Texas Policy Evaluation Project is a multidisciplinary group of researchers who conduct methodologically principled research evaluating the impact of reproductive health policies and programs in the state of Texas. We have assessed the many changes that Texas had made to family planning programs over the last decade and the impact that these have had on patients’ access to care. We encourage the Texas Legislature to work with women’s health providers, the Health and Human Services Commission (HHSC) and other key stakeholders regarding the implementation of changes to the HTW program. We also encourage the Legislature to maintain funding levels for HTW and the Family Planning Program to ensure low-income Texas can obtain essential health services. These safety net programs are particularly important given the ongoing pandemic and growing numbers of Texans who are facing unemployment, losing insurance and have few alternatives to get the reproductive healthcare they need.

Implementation of changes to the Healthy Texas Women Section 1115 Demonstration Waiver HHSC received approval from the Centers for Medicare and Medicaid Services (CMS) for the HTW Section 1115 Demonstration Waiver on January 22, 2020 and began drawing down federal funds on February 18, 2020. In July 2020, HHSC submitted an implementation plan to CMS and reviewed key aspects of the plan in a post- award public forum.1 Although the details of the implementation plan were not shared at the forum, HHSC noted several changes to the HTW demonstration program that related to eligibility and enrollment policies and

1 Texas Health and Human Services Commission. (2020, July 16). Healthy Texas Women 1115 Waiver Public Forum. Texas Health and Human Services. https://hhs.texas.gov/sites/default/files/documents/laws-regulations/policies-rules/1115-waiver/HTW/htw-1115- waiver-public-forum-slides.pdf.

practices. HHSC cited the waiver’s requirement to comply with federal Medicaid eligibility, application, verification, and demonstration regulations as the reasons for these changes. Based on a study we conducted with low-income postpartum women in Texas, we are concerned that the following changes will adversely affect women’s enrollment and utilization of HTW services: • Eligible women whose Medicaid for pregnant women coverage period is ending will no longer be automatically enrolled into Healthy Texas Women; and • Women eligible for WIC, SNAP, or who have a child eligible for Medicaid will no longer be automatically financially eligible (adjunctively eligible) for Healthy Texas Women.

Autoenrollment. Our study recruited 1,700 women who delivered a healthy infant at 8 Texas hospitals and were covered by public insurance (or had no insurance) at delivery.2 Women were enrolled in the study before Texas had implemented the autoenrollment policy. At 3 months following delivery, 76% of women were uninsured and most remain uninsured for the entire year after having their baby. Moreover, HHSC’s reports demonstrate that there was a considerable increase in HTW enrollment and utilization when the autoenrollment policy was implemented.3 In fiscal year 2019, a total of 83,805 women were automatically enrolled in HTW from Pregnant Women’s Medicaid.

Adjunctive eligibility. Since the beginning of the HTW program, and even in its predecessor programs, HHSC has used adjunctive eligibility to accurately confirm whether a woman is income eligible for the program. If a woman applying for or renewing her enrollment in HTW receives assistance from the Supplemental Nutrition Program for Women, Infants and Children (WIC), has a child enrolled in Medicaid, or is in a household that receives Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF), she is not required to prove her income again for HTW. This minimizes the burdens on women, clinics, and agency employees. Our survey of postpartum Texas women found that 91% of women lived in a household that received assistance from SNAP, WIC and/or TANF at 3 months following delivery. This suggests that many low- income women in Texas would benefit from adjunctive eligibility in the absence of autoenrollment.

Together, this information points to a large number of women who would potentially lose coverage while they are collecting necessary documentation to prove eligibility and navigating the additional challenges of caring for their newborn and families’ health. Women’s loss of coverage would blunt the gains that the state is hoping to make in reductions to maternal morbidity and mortality by including additional postpartum benefits for women enrolled in HTW. Women will not be able to avail themselves of these services if they face difficulties gaining coverage through the program. To reduce the impact of the policy ending autoenrollment and adjunctive eligibility, we recommend the following: • Improve the administrative renewal process, which HHSC proposes to use in lieu of auto- enrollment. The success rate of Texas’s policies and systems for performing administrative renewals for Modified Adjusted Gross Income (MAGI)-based eligibility groups is far lower than other states in achieving renewals, according to a 50- state survey from the Kaiser Family Foundation.4 We refer the Committee to Every Texan’s specific recommendations to improve administrative renewals. • Use post-enrollment verification in addition to the administrative renewal process. Post-enrollment verification allows enrollees to submit pay stubs or other required paperwork during a temporary period

2 J.E. Potter, K. Coleman-Minahan, K. White, et al. “Contraception after delivery among publicly insured women in Texas: Use compared with preference.” Obstetrics & Gynecology 2017; 130(2): 393-402; K. Coleman-Minahan, C. Dillaway, C. Canfield, et al. “Low-income Texas women’s experiences accessing their desired contraceptive method at their first postpartum visit.” Perspectives on Sexual & Reproductive Health 2018; 50(4): 189-198. 3 Health and Human Services Commission. Texas Women’s Health Program Report, Fiscal Year 2019. May 2020. https://hhs.texas.gov/sites/default/files/documents/laws-regulations/reports-presentations/2020/tx-womens-health-programs-report-fy-2019.pdf 4 Brooks, T., Roygardner, L. Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2020: Findings from a 50-State Survey. March 2020. Kaiser Family Foundation. https://www.kff.org/coronavirus-covid-19/report/medicaid-andchip- eligibility-enrollment-and-cost-sharing-policies-as-of-january-2020-findings-from-a-50-state-survey/ 2

(90-day window) following enrollment and is already used in Texas Medicaid for Pregnant Women program. Post-enrollment verification would facilitate the transition to HTW for new mothers and does not require a waiver from CMS. HHSC could work with CMS to utilize post-enrollment verification in HTW without expanding this to all Medicaid populations. • Maintain funding to support enrollment and eligibility staff. At the direction of state leaders, HHSC has proposed funding cuts that would eliminate positions for eligibility and enrollment staff in anticipation of budget shortfalls. These positions are critical at this time given both the potential for increasing enrollment following the onset of the pandemic and increased complexity of client enrollment to comply with MAGI-based eligibility. • Negotiate the use of adjunctive eligibility with CMS. CMS has long allowed adjunctive eligibility for certain eligibility groups. For example, “express lane eligibility” is used for Children’s Medicaid and allows the state to identify, enroll, and recertify children by relying on eligibility information from other programs, like SNAP or WIC. CMS also has granted time-limited waivers to allow adjunctive eligibility for certain adult eligibility groups.

Implementation and funding for HTW Plus On September 1, 2020, HHSC announced that it would launch an enhanced postpartum care services package for eligible women enrolled in HTW, called HTW Plus. The program will cover services such as blood pressure monitoring and treatment, diabetes management, asthma medications, and support and treatment for postpartum depression. This program responds to the directive in Senate Bill 750, 86th Legislature, Regular Session, 2019. We believe these enhanced services will be beneficial to those enrolled in HTW. Our study of postpartum women found that 7% reported chronic conditions and 9% were experiencing symptoms that may indicate undiagnosed physical or mental health conditions in the months following delivery. Among women who wished to have a health concern checked during the year after having their baby, only 53% were able to do so.

SB 750 also directed HHSC to seek an 1115 Waiver Amendment to draw down federal funds for the postpartum care services package. HHSC has stated that it plans submit the waiver amendment to CMS in December 2020, following a public comment period, and request an effective date of April 1, 2021 for federal funding for these services. If HHSC does not receive a response to its waiver amendment during the 87th Legislative Session, general revenue may be required to support continued delivery of HTW Plus services for the 2022-2023 biennium. While these enhanced services would be beneficial, we believe it would be counterproductive to reduce general revenue funding for other critical women’s health programs, including HTW and the Family Planning Program.

We are grateful for the opportunity to submit comments on the Interim Charges 2.2-2.5. We hope that the Committee will consider our suggestions, which will provide necessary support for low-income Texans needing essential reproductive healthcare services and improve their overall health.

Sincerely,

Kari White, PhD MPH Elizabeth J. Ela, PhD Anitra Beasley, MD, MPH Associate Professor Postdoctoral Fellow Associate Professor University of Texas at Austin University of Texas at Austin Baylor College of Medicine Principal Investigator [email protected] [email protected] [email protected]

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Committee: Human Services Re: Interim Charges 2.2-2.5, 4, 5 and other topics

Honorable James B. Frank and Committee Members,

The Texas Silver-Haired Legislature (TSHL) at the 2020 Legislative Session, held July 27 – 29, passed the attached resolution. It calls for the Texas Legislature to offer the citizens of Texas the chance to vote to expand Medicaid. This resolution was also voted by the TSHL membership as #7 of our top ten resolutions out of the 54 resolutions passed during our legislative session.

Texas has the highest uninsured rate at 17.3 percent and the highest number of uninsured persons in the country at 4.8 million, according to the Kaiser family foundation. Thousands of these uninsured are low income Texans age 60 – 65. Indeed, the Center on Budget and Policy Priorities estimates 15,600 Texans age 55 - 64 have died prematurely between 2014 and 2019 because of the state’s decision not to expand Medicaid.

Medicaid expansion would provide nearly 1.3 million Texans with access to healthcare; bring in roughly $100 billion in federal funding to the state, and save local taxpayers $4.3 billion dollars across Texas on uncompensated care. The influx of federal dollars and the tax savings will benefit Texas older adults, as programs for our older adults are experiencing budget cuts and, in some cases, elimination.

In the past few years 19 rural hospitals have closed in Texas, affecting our older adults living in these areas.

More than one million Texans without health insurance experienced mental illness or a substance abuse disorder. Again, this impacts Texas older adults, who may be living with, or caring for, these individuals. These are just some of the millions of Texans whose lives would change forever if we expand Medicaid in Texas."

To date, 36 states and the District of Columbia have expanded Medicaid. Just last year, voters in Idaho, Nebraska, and Utah voted to expand Medicaid in those states. States that have expanded Medicaid have seen a net budget savings.

Rep. John Bucy assisted the authors in writing this resolution, and, indeed, introduced legislation in the last session calling for a citizen vote on Medicaid expansion. To quote Rep Bucy:

"Expanding Medicaid is something we can do right now that would fundamentally transform the lives of our fellow Texans and their families,” It’s time to bring our tax dollars back to Texas, stop leaving billions of dollars in federal funding on the table, and ensure every man, woman, and child is able to access the healthcare they need."

Whether one supports or opposes the expansion of Medicaid, this resolution simply calls for the Legislature to offer the citizens of Texas an opportunity to vote on the expansion of Medicaid to influence the issue of health and mortality rates of older Texans.

Respectfully submitted by: Paul Stempko Chair, Legislative Action Committee Texas Silver-Haired Legislature 8405 Sea Ash Circle Round Rock, TX 78681 512-585-4123

By: Paul Stempko, Linda Parrish, Ted Hubert, No. R045 Irene Andrews and Barbara Aydlett

Committee: Health & Human Resources

Offer the Citizens of Texas the Opportunity to Vote on the Expansion of Medicaid

A RESOLUTION TO: Offer Texans the opportunity to vote on the federal option to expand Medicaid in Texas.

WHEREAS, Texas remains one of only 14 U.S. States that has not chosen to expand Medicaid, allowing our portion of the federal Medicaid dollars ($114.2 billion to date) to be given to the participating 36 states who have opted to expand Medicaid services; and

WHEREAS, Texas has the highest numbers of uninsured people (4.7 million) in the country, with 1.2 million more who could be covered if our state determined to expand Medicaid (Kaiser Foundation), and moreover, 15,600 Older Texans (ages 55-64) have died prematurely (2014-2019) because of our state’s decision not to expand Medicaid (Center on Budget and Policy Priorities, Nov. 6, 2019); and,

WHEREAS, Texas has had 19 rural hospitals close since 2014, the first year of Medicaid expansion, due, in no small part, to the missed opportunity of uncompensated treatment that could have been funded by Medicaid Expansion, thus saving both rural hospitals, communities, and lives of older Texans, and Texas was given a D- grade and ranked 36th out of 47 states for mortality, quality of life and healthcare (Texas Tech Hall Institute for Rural and Community Health, and also given a D- by Rural Health Quarterly for the state’s rural healthcare; now, therefore, be it

RESOLVED, That the 18th Texas Silver-Haired Legislature recommends that the 87th Texas Legislature passes legislation to offer the citizens of Texas the opportunity to vote on the expansion of Medicaid to influence the issue of health and mortality rates of older Texans.

PASSED AND APPROVED on April 30, 2020, by the Health & Human Resources committee. Sue Wilson, Chair

PASSED AND APPROVED on July 28, 2020 , by the Texas Silver-Haired Legislature.

Rhonda Rogers, Speaker ATTEST: , Secretary Submitter name: Evelyn Delgado Organization or entity: Texas Women’s Healthcare Coalition Mailing address: 2300 W Commerce St. San Antonio, TX 78207 Email: [email protected] Telephone number: 210-223-4589 House Human Services Texas Women’s Healthcare Coalition Submission on Interim Charge #2.2-2.5

The Texas Women’s Healthcare Coalition (TWHC) and its 87 healthcare, faith, and community-based member organizations are dedicated to improving the health and well-being of Texas women, babies, and families by ensuring access to preventive healthcare for all Texas women.

Access to preventive care – including health screenings and contraception – means healthy, planned pregnancies and the early detection of cancers and other treatable conditions. The state’s women’s health programs, Healthy Texas Women (HTW) and the Family Planning Program (FPP), provide these services to those without access to other forms of healthcare coverage.

TWHC thanks our legislators for their commitment to women’s healthcare. Continuing the investment in the women’s health programs has been crucial in rebuilding our state’s family planning network and providing vital services to clients across the state.

I. 1115 Healthy Texas Women Demonstration Waiver Implementation and Program Policy Changes In January 2020, Texas received approval from federal Centers for Medicare and Medicaid Services (CMS) to implement the 1115 Healthy Texas Women Demonstration Waiver. The waiver allows Texas to receive federal Medicaid funds to support HTW. Since approval, the Texas Health and Human Services Commission (HHSC) has held only one public forum announcing the proposed changes to HTW under the waiver. Through its HTW waiver implementation plan, HHSC intends to terminate three crucial policies: (1) Auto-enrollment of new mothers from Pregnant Women’s Medicaid into HTW. Since 2016, new mothers have automatically transitioned into HTW when coverage under the Medicaid for Pregnant Women program ends -- a policy that ensures continuity of care and improves health outcomes. While HTW’s benefits are significantly more limited than Medicaid’s, it covers family planning, preventive and primary care screenings with some basic treatment, which postpartum mothers need to stay healthy. HHSC states that under their new proposed process, it will replace the auto-enrollment system with the agency’s current administrative renewal process. Under this process, clients are only contacted if HHSC cannot verify their eligibility criteria through electronic data sources; however, the process works poorly today and requires the client to provide documentation in the majority of cases. According to a recent report from the Kaiser Family Foundation, Texas ranks low for successful administrative renewals, with a renewal rate of less than 25%i. In other words, in more than 75% of renewals, the agency requires the client to submit additional information on a tight timeline. When this process is applied to women losing Medicaid for Pregnant Women, new moms with a four-week- old baby are very likely to be asked to submit proof of income or other documentation within a short timeframe to be transferred into HTW. In 2019, over 80,000 new mothers were auto-enrolled into HTW. If less than a quarter of these clients successfully transition through the administrative renewal process, that means over 60,000 clients will face obstacles to transfer to HTW, causing delayed or no access to vital postpartum services. Eliminating auto- enrollment will reduce projected cost savings, and add significant red tape for mothers, health care providers, and the state agency.

(2) Adjunctive eligibility for women applying for HTW that are already enrolled in WIC, have a child in Medicaid, or in a household that receives SNAP or TANF HHSC has used adjunctive eligibility to accurately confirm whether a woman is income eligible for the program while minimizing burdens on women, clinics, and agency employees. If at application or renewal a woman is enrolled in the Women’s Infants and Children’s Program (WIC) has a child enrolled in Medicaid or is in a household that receives Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF), she is not required to prove her income again for HTW. CMS has long allowed adjunctive eligibility for certain eligibility groups. HHSC intends to eliminate adjunctive eligibility - an unexpected departure from historical program norms. The removal of adjunctive eligibility will certainly lead to a decrease in HTW enrollment, compromise women’s access to timely, preventive healthcare and increase administrative costs to the agency, women, and healthcare providers. (3) Simplified HTW Application Form (Form H1867) HHSC currently uses a simplified, one-page Healthy Texas Women Application Form (Form H1867) to determine eligibility. CMS has allowed the use of simplified application forms for a number of family planning demonstrations, including Texas's previous family planning demonstration. The availability of the simplified HTW application, including the online application that launched in 2013, has allowed women to easily apply for HTW benefits on the same day they visit a clinic for services. However, HHSC intends to discontinue the one-page application and require women to complete the Texas Health Coverage Application (Form 1205). This departure from previous program policy will lead to increased burdens on women and clinics -- and will likely result in decreased HTW enrollment.

Impact to Cost Savings Constructing barriers and disrupting the efficiency of these current policies will result in fewer women served, increasing unintended pregnancies -- thereby increasing Medicaid costs to the state. Medicaid pays for more than half of Texas births, costing $3.5 billion in 2016 for birth and delivery-related services for mothers and infants in the first year of life. In the most recent women’s health programs report, HHSC estimated that services provided by HTW in 2019 will save the state $96.8 million in General Revenue. A growing client base and committed investment in HTW has resulted in increased cost savings for the state. It is in the state’s best fiscal interest to remove barriers to enrollment in HTW. Eliminating policies that streamline the enrollment and eligibility processes - - especially when a mother has a 1-month old newborn -- would undermine the goal of healthier moms and state cost savings. Notably, Texas must maintain budget neutrality as part of the 1115 HTW Demonstration Waiver, meaning that the demonstration project does not result in Medicaid costs to the federal government that are greater than what the federal government’s Medicaid costs would likely have been absent the demonstration. HTW is expected to achieve this goal by increasing access to women’s health and family planning services, which in turn will reduce the number of unintended pregnancies, improve birth spacing, and reduce the number of premature deliveries and low-birth weight infants funded through Medicaid. Eliminating the above three policies could drastically decrease enrollment in HTW and access to women’s preventive care -- which presents a serious risk to Texas’ ability to achieve the budget neutrality expenditure targets included in the Standard Terms and Conditions (STC) of the approved waiver and ensure continued federal funding.

Proposed Solutions

We understand there are limitations under the modified adjusted gross income (MAGI) methodologies used for Medicaid eligibility under federal law; however, to minimize the added burden on new mothers, women, providers, and the agency, we recommend the following strategies that can be achieved while following MAGI methodologies:  Improve the administrative renewal process before using it to replace auto-enrollment HHSC should allow the use of Texas Workforce Commission (TWC) quarterly wage data from the two quarters prior to the current quarter and remove use of the new hire data report. Current system design requires that the electronic data must be no more than 60 days old, which means HHSC is unable to verify earned income using TWC in at least eight months out of the year. This is not required by federal or state law, making it a simple and effective improvement for HHSC to implement. Using the New Hire data is problematic because the system will request verification from a client unless the employer name and start date in the report match exactly with the employer name and date included in TIERS. Exact matches of employer names could be fraught with errors. Furthermore, the agency checks New Hire reports through a monthly process; checking it at renewal is redundant. Once these fixes are made the agency should continue to monitor the renewal process to identify barriers to successful renewal and continuity of care.  Post enrollment verification This policy allows a better transition for new moms, who could submit pay stubs or other required paperwork during a temporary period (90-day window) after she is enrolled. Post enrollment verification is already used in Texas Medicaid for Pregnant Women and does not require a waiver from CMS.  HHSC should immediately request a waiver amendment to continue adjunctive eligibility CMS has allowed adjunctive eligibility for certain MAGI-based eligibility groups. For example, CMS allows express lane eligibility for children’s Medicaid when they are enrolled in SNAP or WIC. HHSC should immediately request an amendment to the HTW waiver from CMS to continue adjunctive eligibility to help maintain enrollment in HTW.  Maintain a streamlined HTW application and maintain HTW Cost Reimbursement funding We recommend HHSC keep an HTW streamlined application, modifying it as little as possible to collect the necessary MAGI eligibility requirements and hold technical assistance and training for HTW providers on the new application components. To maintain HTW enrollment numbers, providers will need continued cost reimbursement funding to subsidize staff for community outreach and enrollment assistance services, as the application process will be much more cumbersome and time consuming.

II. HTW Plus In addition to the HTW changes the 1115 demonstration waiver implementation proposes, as of Sept. 1, 2020, HTW has a new program component, HTW Plus. HTW Plus is an additional benefit package, specifically for postpartum clients as directed by Senate Bill 750. However, given that auto-enrollment will be replaced by the flawed administrative renewal process, the same concerns exist for decreased or delayed enrollment for the postpartum population the legislation and program were designed to serve. Making it harder for new moms to get enrolled will disrupt continuity of care and render HTW Plus far less effective.

In order for HTW Plus to be effective, there needs to be a provider network in place to provide the additional varied benefits such as cardiologists for the cardiovascular benefits, and psychotherapists or other mental health professionals for the postpartum depression and mental health benefits. Current provider recruitment is limited to reaching out to health plans, but a successful recruitment strategy will need to be more robust and include partnering with provider associations at a minimum. Building a strong provider network is essential to proper service delivery and should start with existing HTW providers. Clear communication to existing HTW providers should be improved as there are many questions and much confusion in response to the press release announcing the rollout. Designing HTW Plus to be as effective as possible will help when HHSC submits an amendment to the 1115 HTW demonstration waiver to CMS to draw down federal funds for the new program component. In the meantime, ensuring HTW Plus has a robust network of HTW certified providers to serve new moms will help efficiently utilize general revenue and promote cost savings for the state.

III. Comprehensive Health Coverage Initiatives In Texas, three out of ten women are low income and one in five are uninsured. ii Updated census data released this month from 2019 shows that Texas remains the state with the highest number of uninsured residents with 5.2 million or 18.4% of Texans without insurance,iii and we know the pandemic will only exasperate these rates. These numbers are alarming because facing a public health emergency of this magnitude has shown how important healthcare is in keeping whole communities safe. The numbers also highlight the challenges Texas moms face to have healthy pregnancies and babies, and manage postpartum issues, with inconsistent or unavailable healthcare coverage. Texas’ family planning programs provide vital, but very limited health services. These programs are not a substitute for health coverage that can facilitate access to the full range of healthcare services women need. For all these reasons, we support implementation of comprehensive health care coverage solutions such as:  12 months Medicaid postpartum coverage for mothers Maternal death and pregnancy related complications remain a serious concern. Not only are Texas’ high maternal deaths alarming, but pregnancy complications put mothers at risk for significant, ongoing health issues. The Maternal Mortality and Morbidity Review Committee (MMMRC) found that the majority of maternal deaths occurred more than 60-days postpartum and that many of them were preventable.iv We know one of the best strategies to reverse these trends is to ensure women have access to healthcare before, during, and after pregnancy.v Recognizing the need for a program like HTW Plus is encouraging; however, it does not provide the same level of coverage a client receives on Pregnant Women's Medicaid. We recommend extending the Medicaid postpartum coverage from 60 days to 12 months to better address and treat postpartum conditions.  Drawing down federal Medicaid funds to cover low-income working Texans As stated above the MMMRC recommends women have access to healthcare before, during, and after pregnancy. A woman working a low-wage job in Texas who is not pregnant, has few if any options for insurance, especially if it is not offered by her employer. Since March, more than 3 million Texans have filed for jobless benefits.vi Jobless Texans will need medical care – COVID-19-related or not – but more will lack the means to pay for it. Reopening the economy, as conditions warrant, will undoubtedly help. Yet the pandemic also is reshaping the economy in profound and unpredictable ways, making the job market more uncertain. As such, employer-sponsored health insurance likely will be slow to rebound. For these reasons, we strongly support implementation of a comprehensive health care coverage

solution to meet Texan’s needs and ensure that women can get access to the care they need before, during, and after pregnancy.

IV. Five Percent Budget Reduction Mandate We applaud the efforts legislators have taken to support preserving women’s health funding from the five percent budget cuts, and the work HHSC put into averting direct cuts to client services in their revised plan. Protecting the women’s health programs budget is a step in the right direction, but especially now during a global health pandemic, where so many have lost or at risk of losing healthcare coverage through their employers, safety net programs will be even more crucial. The state's top elected leaders are still directing HHSC and other state agencies to propose significant cuts. As a result, the new proposal, like the original one, makes cuts that call for reduced or delayed hiring of 742 eligibility and enrollment staff positions. As HHSC notes, cutting enrollment services will harm clients, quite possibly leading to delays in enrolling pregnant women, enrolling HTW applicants, and transferring new moms to HTW when auto-enrollment ends. These cuts would be a bad idea at any time, but they would be particularly harmful now as the state's worst-in-the-nation uninsured rate climbs even higher. We recommend instead, exploring available revenue solutions.

V. Protect the Family Planning Program While working to preserve the positive and effective components of HTW under the demonstration, TWHC urges the Legislature to preserve and protect a cornerstone of Texas’ women’s health safety net, the Family Planning Program. The FPP is a vital program for Texans who do not qualify for health coverage options or HTW. Unlike HTW, this program serves men and women, and due to its eligibility criteria, generally has a wider potential client population when compared to HTW. As discussed, investing in family planning ultimately leads to cost savings for the state. Based on the number of women served in Fiscal Year 2019 alone, it is estimated that FPP will save $42.9 million in general revenue and $6.6 million in net savings. In conversations with providers throughout the state, services through the FPP are consistently in high demand and program funds routinely run out before the end of the funding cycle. We recommend that any general revenue funds saved from implementing the HTW 1115 waiver and drawing down federal funds be used to supplement FPP.

The TWHC represents various organizations providing direct healthcare, advocacy, or other community- based services across Texas. We are eager to work with you on these issues. We are happy to provide any additional information and welcome the opportunity to schedule follow-up conversations on the women’s health budget and other topics relating to women’s health. Thank you for taking our concerns and recommendations into consideration.

i Brooks T, Roygardner L, Artiga S, Pham O, Dolan R. Medicaid and CHIP Eligibility, Enrollment, and Cost Sharing Policies as of January 2020: Findings from a 50-State Survey. Kaiser Family Foundation Report. 2020 Mar; Available from: https://www.kff.org/medicaid/report/medicaid-and-chip-eligibility- enrollment-and-cost-sharing-policies-as-of-january-2020-findings-from-a-50-state-survey/ ii Hamel, L., Wu, B., Brodie, M. Sim, S., & Marks, E. (2018). Views and Experiences Related to Women’s Health in Texas, Selected findings from the Kaiser Family Foundation/Episcopal Health Foundation 2018 Texas Health Policy Survey. iii Katherine Keisler-Starkey and Lisa N. Bunch U.S. Census Bureau Current Population Reports, P60-271, Health Insurance Coverage in the United States: 2019, U.S. Government Publishing Office, Washington, DC, 2020. iv Texas Department of State Health Services. “Maternal Mortality and Morbidity Task Force and Department of State Health Services Joint Biennial Report.” September 2018. v Ibid vi More than 3.2 million Texans have filed for unemployment relief since mid-March, Anna Novak and Mitchell Ferman, The Texas Tribune, Aug. 21, 2020.

Texas House of Representatives Responses to Human Services Committee Requests for Information

Interim Charge 2.2 - 2.5: Review how Texas is preparing for state and federal budgetary changes that impact the state's health programs, including:

2.2) The next phase of the 1115 Healthcare Transformation and Quality Improvement Program Waiver;

UTRGV respectfully requests that the legislature and Texas Health and Human Services Commission continue the Delivery System Reform Incentive Payment (DSRIP) program under the 1115 Medicaid Waiver for at least one additional year as the state works on a transition plan. DSRIP has been instrumental in UTRGV’s ability to establish the 16 residency and fellowship programs that its School of Medicine currently has with regional hospitals. Through our residency programs and new clinical sites, UTRGV’s School of Medicine has been able to expand and improve care to underserved areas in the state.

The last funding cycle is set for FY21 and without these programs, there will be a significant funding gap for FY22 and beyond. As the state considers the DSRIP transition, we would strongly advocate for a model that sustains initiatives for both the Medicaid and the large uninsured and low-income population in the Rio Grande Valley, as many individuals served by UTRGV are not eligible for current Medicaid services.

A continuation of this program will allow safety-net providers to sustain key initiatives. DSRIP has provided essential funding for non-hospital provider groups (such as UTRGV’s practice plan) and allows for further growth and positive impact to the quality of clinical care in the Rio Grande Valley, a region that is medically underserved and that is growing access to healthcare with the addition of the UTRGV School of Medicine and its practice plan, UT Health RGV.

Submitter: Veronica Gonzales, Vice-President of Governmental & Community Relations Organization: The University of Texas Rio Grande Valley Mailing Address: 1201 W. University Dr., Edinburg, Texas, 78539 Email: [email protected] Telephone: 956-665-2128

September 24, 2020

Courtney DeBower Assistant Committee Clerk Human Services Committee Texas House of Representatives Via Email: [email protected]

RE: Comments in Response to Request for Information – Interim Charges 2.2 – 2.5

Dear Members of the Human Services Committee:

Women’s and Men’s Health Services of the Coastal Bend (WAMHS) appreciates the opportunity to provide information about changes that impact the state’s health program, including the Healthy Texas Women Section 1115 Demonstration Waiver, in response to the Notice of Formal Request for Information posted on Friday, August 14, 2020. WAMHS is an independent nonprofit health care agency located in Nueces and Kleberg counties providing safety net services to 16,000 unduplicated women in South Texas each year. WAMHS participates in Texas Medicaid and the state-funded women’s health programs administered by the Texas Health and Human Services Commission (HHSC), including Healthy Texas Women and the Family Planning Program. In 2019, WAMHS helped over 9,500 women complete and submit HTW applications and supporting documents, and provided medical services to the 7,000 unduplicated women who qualified for HTW care. Healthy Texas Women Section 1115 Demonstration Waiver Implementation HHSC received approval for the Healthy Texas Women Section 1115 Demonstration Waiver on January 22, 2020 and began drawing down federal funds on February 18, 2020. HHSC submitted an implementation plan to the Centers for Medicare and Medicaid Services (CMS) in July 2020 and reviewed key aspects of the plan in a post-award public forum on July 16, 2020. The following changes to eligibility were of particular concern to stakeholders: • The one page eligibility application to qualify women for the limited HTW benefit is being replaced with the detailed Form H1205 which is used to apply for regular Medicaid and CHIP benefits. • Eligible women whose Medicaid for pregnant women coverage period is ending will no longer be automatically enrolled into Healthy Texas Women; and • Women eligible for WIC, SNAP, or who have a child eligible for Medicaid will no longer be automatically financially eligible (adjunctively eligible) for Healthy Texas Women. We believe these changes will significantly impact women’s ability to enroll in HTW and project a 75% to 80% drop in enrollment. Stakeholders have urged HHSC to consider a number of solutions to limit the impact of proposed changes to Healthy Texas Women enrollment, including:

• Re-entering negotiations with CMS over the decision to eliminate the current H1867 application form which has been the single most important key to the success of Texas HTW program and resulted in reducing the costs of Medicaid birth costs. • Improving the administrative renewal process, which HHSC proposes to use in lieu of auto-enrollment. Currently, Texas’s policies and systems for performing administrative renewals for MAGI-based eligibility groups have a very low success rate in achieving renewals compared to other states. According to a 50- state survey from the Kaiser Family Foundationi, Texas is one of only eight states with an administrative renewal rate of less than 25% (Note: Stakeholders understand that Texas’s success rate is actually significantly below 25% and is one of the lowest in the country). • Re-entering negotiations with CMS over the use of adjunctive eligibility. Since the beginning of Healthy Texas Women and its predecessor programs in 2007, HHSC has used adjunctive eligibility to accurately confirm whether a woman is income eligible for the program while minimizing burdens on women, clinics, and agency employees. If at application or renewal a woman is enrolled in the Women, Infants, and Children (WIC) Program, has a child enrolled in Medicaid, or is in a household that receives SNAP or TANF, she is not required to prove her income again for Healthy Texas Women. CMS has long allowed adjunctive eligibility for certain eligibility groups. For example, CMS allows what is known as “express lane eligibility” for Children’s Medicaid. Express lane eligibility allows the state to identify, enroll, and recertify children by relying on eligibility information from other programs, like SNAP or WIC. CMS also has allowed adjunctive eligibility for certain adult eligibility groups through time-limited waivers. To date, HHSC has not shared the Healthy Texas Women Section 1115 Demonstration Waiver implementation plan with stakeholders; as a result, the foregoing recommendations were developed based on limited information provided by HHSC. We urge legislators to continue monitoring implementation of the Healthy Texas Women Section 1115 Demonstration Waiver during the 87th Legislature and, if needed, to direct HHSC to implement eligibility and enrollment policies and practices—including those that may require a waiver amendment and/or systems changes—to limit the impact of proposed changes to Healthy Texas Women enrollment. We encourage HHSC to elicit feedback from direct care providers on the impact of proposed changes. Women’s and Men’s Health Services appreciates the opportunity to provide these comments. If you require additional information about the issues raised in this letter, please contact me using the information provided in my cover email.

Sincerely,

Amanda Stukenberg, CEO, Women’s and Men’s Health Services 3536 Holly Road, Corpus Christi, Texas 78411 361 855-9107 [email protected]