dismissing due-course claims because face of complaint showed that plaintiffs had no vested property interest
How later courts described this case
- dismissing due-course claims because face of complaint showed that plaintiffs had no vested property interest
- reviewing agency’s practice of calculating “cutoff date” as improper failure to adopt administrative rule when agency was required to engage in formal rulemaking
- Governor’s decisions within gap between requirements of state law and of federal law unassailable by law
- striking down statute allowing court to determine the public good by preponderance of the evidence
Written by the judges who cited it.
The opinion
ACCEPTED
03-15-00657-CV
7565577
THIRD COURT OF APPEALS
AUSTIN, TEXAS
10/27/2015 4:07:34 PM
JEFFREY D. KYLE
CLERK
No. 03-15-00657-CV
FILED IN
3rd COURT OF APPEALS
In the Court of Appeals AUSTIN, TEXAS
10/27/2015 4:07:34 PM
for the Third Judicial District JEFFREY D. KYLE
Clerk
at Austin, Texas
CHRIS TRAYLOR, AS EXECUTIVE COMMISSIONER OF THE TEXAS HEALTH AND
HUMAN SERVICES COMMISSION, et al.
Appellants,
v.
DIANA D., AS NEXT FRIEND OF KD, A CHILD, et al.
Appellees.
On Appeal from the
200th Judicial District Court of Travis County, Texas
RULE 24.4 MOTION TO VACATE COUNTER-SUPERSEDEAS ORDER
OR, IN THE ALTERNATIVE, INCREASE COUNTER-SUPERSEDEAS BOND
TO THE HONORABLE THIRD COURT OF APPEALS:
The trial court’s grant of counter-supersedeas regarding its injunction, which
prevents the Health and Human Services Commission from using the recently
adopted rates for therapy services, or from adopting new rules using the
Commission’s own methodology. The new rates were adopted pursuant to a budget
rider directing cuts to this specific program. A judicial order precluding the
Commission from giving effect to that rider violates both the Supremacy and
Spending Clauses of the United States Constitution and the separation-of-powers
and business-with-the-United-States provisions of the Texas Constitution. The trial
court’s order—like any injunctive relief related to Medicaid rates for which there is
no express statutory remedy—impermissibly changes the form and substance of
Texas’s Medicaid obligations, usurps a power expressly reserved to the executive
branch of the federal government, and acts as a de facto judicial veto of a budget rider
without any judicial determination of a constitutional defect.
The effect of this order is magnified by the fact that the cuts in question were
triggered by a budget rider requiring cuts to these rates in each year of the upcoming
biennium. Delay in setting the new rate could well result in the Commission having
to cut rates even further to satisfy the Legislature’s instructions for the amount to be
spent in this fiscal year—in effect, the order is a judicial line-item budget veto.
The only remedy contemplated by law for a general complaint about the
setting of Texas Medicaid rates is withholding of Medicaid funding by the United
States Secretary of Health and Human Services, and there is no statutory- or rule-
based right in Texas law broader than the Medicaid Act’s provisions. Accordingly,
it is a violation of both the Texas and United States Constitutions to issue judicial
relief concurrent to—and potentially in conflict with—the executive branch of the
federal government.
2
Alternatively, defendants ask the Court to increase the bond on which the
counter-supersedeas is based from $500 to the $100,000,000 of taxpayer funds that
the budget rider indicates this case could cost if the appellate process is not
completed within two years. Rule 24 does not contemplate a reduced bond amount
based on the plaintiff’s status: counter-supersedeas is available only based on a bond
that will make the party who sought to supersede the judgment from the damages
caused by changing the status quo, then having to change it back. TEX. R. APP. P.
24.2(a)(3). And that damage is real: money will ultimately have to be moved from
other programs, or Medicaid rates will have to be cut even further for these
beneficiaries or across the board, to pay for plaintiffs’ lawsuit.
I. A COUNTER-SUPERSEDEAS ORDER IS SUBJECT TO ATTACK IN THE
COURT OF APPEALS, IF IT COMMITS FUNDAMENTAL ERROR BY
EXERCISING EXTRA-JUDICIAL AUTHORITY.
A supersedeas (or counter-supersedeas) order may be challenged on motion
in the court of appeals on the ground that the underlying judgment or order should
not be suspended. TEX. R. APP. P. 24.4(a)(4); see In re State Bd. for Educator
Certification, 452 S.W.3d 802, 808-09 (Tex. 2014) (pointing out the separation-of-
powers problems implicit in effecting a final judgment through supersedeas). Review
is for abuse of discretion. Devine v. Devine, No. 07-15-00126-CV, 2015 WL 5228254,
at *3 (Tex. App.—Amarillo, Sept. 2, 2015, no pet. h.) (per curiam) (collecting
3
authority). A district court abuses its discretion by entering a legally incorrect order.
E.g., Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (“a trial court has no
‘discretion’ in determining what the law is or applying the law to the facts”).
This motion is limited to fundamental constitutional limitations transgressed
by the trial court’s order and leaves the other jurisdictional bars to plaintiffs’ suit—
such as lack of provider standing, failure to describe an ultra vires claim, and
improperly using § 2001.038 of the APA as a means of judicial review—for briefing
in the combined interlocutory appeal. See McCauley v. Consol. Underwriters, 157 Tex.
421, 477, 304 S.W.2d 265, 266 (1957) (per curiam) (fundamental error includes
orders that transgress public policy determinations made in Constitution). Medicaid
is a Spending Clause program, created as a contract between the United States and
Texas. Absent an unambiguous grant of a private right of action, the only remedy for
the State’s rate-setting actions is withholding of federal funds by the Secretary. 42
U.S.C. § 1396c. The counter-supersedeas order is inconsistent with the Medicaid
Act’s remedial provision regarding rates and, as a result, violates both the United
States and Texas Constitutions by imposing a separate judge-made mechanism for
reviewing Medicaid rates parallel to review by the Secretary.
4
II. THE MEDICAID PROGRAM DOES NOT INCLUDE A JUDICIALLY-
ENFORCEABLE CAUSE OF ACTION BASED ON PLAINTIFFS’ CLAIMS
REGARDING “ACCESS” TO CARE—THE EXCLUSIVE REMEDY IS IN THE
HANDS OF THE UNITED STATES SECRETARY OF HEALTH AND HUMAN
SERVICES.
Medicaid is a Spending Clause program that subsidizes state provision of
medical services to the economically disadvantaged. 42 U.S.C. § 1396-1; see
Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378, 1382 (2015) (Appendix Tab
E). The program functions as a contract: in order to qualify for funding, the federal
government approves a Medicaid “plan,” see 42 U.S.C. § 1396a(a), to be
administered by the State. See Douglas v. Indep. Living Ctr. of S. Calif., 132 S. Ct.
1204, 1210 (2012) (federal agency’s acceptance of Medicaid plan, within its
expertise, precluded any basis for claim in state court). The remedy for the State’s
violation of the plan is the withholding of Medicaid funds by the Secretary of Health
and Human Services. 42 U.S.C. § 1396c (Appendix Tab H).
There is no implicit right to challenge Medicaid rates in court. Armstrong, 125
S. Ct. at 1384 (dismissing Medicaid rate challenge brought under Constitution); Gen.
Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex. 2001) (there is
no implicit right to judicial review of statutory administrative determinations). Any
right to judicial action regarding Medicaid fees must be related to an express grant of
a judicially enforceable right by Congress, Armstrong, 135 S. Ct. at 1385, 1387, or, by
5
extension, a State legislature, id. at 1387-88 (concluding that judicial right of action
must be “unambiguously conferred” in Spending Clause context (quoting Gonzaga
Univ. v. Doe, 536 U.S. 273, 283 (2002)).
One reason it makes sense that rates are not subject to judicial review is that
they must be reset periodically according to the amount appropriated to the program
by Congress and the Legislature. 42 U.S.C. § 1396b (setting amount to be distributed
to states “From the sums appropriated therefor”); e.g., TEX. HUM. RES. CODE
§ 32.028; 1 TEX. ADMIN. CODE § 355.201(c)(4) (requiring consideration of “levels
of appropriated state . . . funds . . . that limit, restrict, or condition the availability of
appropriated funds for medical assistance”). If a court could issue an order imposing
higher rates, it would in effect be countermanding the legislative branch’s budget
determinations. Given that the definition of the statutory rates includes a factor to
account for varying amounts of appropriation—such as the rider decreasing funding
for the treatments at issue in this case—judicially imposed Medicaid rates based on
provider preferences would constantly clash with the separation of powers.
In accepting the federal contract, Texas has not added an additional right to
judicial relief regarding rate setting for these particular services. When a statute or
rule requires such review, the requirement is usually explicit. E.g., 1 TEX. ADMIN.
CODE § 355.8063 (2010) (Tex. Health and Human Servs. Comm’n, Medicaid Health
6
Serv.), repealed by 35 Tex. Reg. 6511, 6513 (2010) (formerly providing administrative
appeal process for hospital inpatient Medicaid reimbursement rates). As explained
below, moreover, while plaintiffs hang their hats on the concept of “access,”
suggesting that judicial intervention is appropriate because these particular patients
might not be able to continue to receive services from these particular providers, the
Medicaid Act defines the term “access” more narrowly. Rates must be:
sufficient to enlist enough providers so that care and services are
available under the plan at least to the extent that such care and services
are available to the general population in the geographic area.
42 U.S.C. § 1396a(30)(A) (Appendix Tab H). The Fifth Circuit, relying on the
precedent applied in Armstrong, has held that this language does not create an
individual right. Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d 697, 701 (5th Cir.
2007) (Appendix Tab F).
To be clear, the Legislature has created an entitlement to bring suit in state
court to the extent it has promulgated standards for the adoption of rules governing
administrative rates and made those rules subject to the judicial-review mechanisms
of the Administrative Procedure Act. See El Paso Hosp. Dist. v. Tex. Health & Human
Servs. Comm’n, 247 S.W.3d 709, 711, 714-15 (Tex. 2008) (reviewing agency’s
practice of calculating “cutoff date” as improper failure to adopt administrative rule
when agency was required to engage in formal rulemaking); see also TEX. HUMAN
7
provides inherent judicial review of agency acts affecting vested property rights,
e.g., SSC Mo. City Operating Co., LP v. Tex. Dep’t of Aging & Disability Servs., No.
03-09-00299-CV, 2009 WL 4725286, at *6 (Tex. App.—Austin 2009, pet. denied)
(mem. op.) (mere expectation of providing services insufficient to trigger providers’
inherent review claim). But, absent an additional requirement created by the
Legislature (which there is not) or a vested right (which plaintiffs do not claim),
there is no remedy related to Medicaid rate setting available to the Texas courts.1
E.g., Little-Tex Insulation Co., 39 S.W.3d at 599.
III. THE TEXAS STATUTES AND RULES DO NOTHING TO CHANGE THE
EXCLUSIVE REMEDIES IMPOSED BY THE MEDICAID REGIME
REGARDING THE AMOUNT OF RATES.
Plaintiffs’ allegations point to nothing in Texas law that adds a substantive
right to the core of the Medicaid contractual arrangement. The Legislature enacted
a rider to the budget requiring $50,000,000 budget savings through rate reductions
for acute care therapy services, including physical, occupational, and speech
therapies, in each fiscal year of the current biennium. 2016-17 General
Appropriations Act, 84th Leg., R.S., 2015 (Article II, Health & Human Servs.
Comm’n), Rider 50(c) (Appendix Tab G) (“Rider 50(c)”). The Commission has been
attempting to adopt new reimbursement rates to account for this decrease since
1
Plaintiffs appear to believe that the ultra vires cause of action implicitly allows judicial review
of actions taken under statute. As explained below, this is untrue. The ultra vires cause of action
does allow judicial review, because it does not apply retroactively and because, per Little-Tex,
there is no common-law right to judicial review. See infra, n.3.
8
Appropriations Act, 84th Leg., R.S., 2015 (Article II, Health & Human Servs.
Comm’n), Rider 50(c) (Appendix Tab G) (“Rider 50(c)”). The Commission has
been attempting to adopt new reimbursement rates to account for this decrease since
before the beginning of the fiscal year, although it has withdrawn some of those
proceedings. The current rates became effective on October 1, 2015, but cannot be
applied because of the interlocutory relief in this case. See CR.351-73 (Appendix Tab
C).
Plaintiffs are Medicaid recipients and providers. CR.338-39 (Appendix Tab
B). They claim that the rate reductions at issue in this case will force providers out
of business, violating unspecified “state-mandated access standards.” Id. at 342-43
¶ 24, see also id. ¶ 27 (rates “deny” named plaintiffs “access to providers and
services”). Their legal theory is that the rates could not have been adopted
consistent with certain procedural administrative rules and, therefore, that the rate-
adoption process constitutes the implicit amendment of the governing
administrative rules under the APA and an ultra vires act. CR.345-46 ¶¶ 30-34. They
further argue that the statutory obligation to “maximize” the Medicaid finance
system imposes a separate, judicially enforceable obligation on the Commission.
CR.343-44 ¶ 26, and attempt (but fail) to plead a due-course-of-law claim, CR.344-
9
45 ¶ 28. In short, they imply that Texas law creates a substantive right to challenge
Medicaid rates even though the Medicaid Act does not.
This argument is a mirage, because the relevant administrative rules merely
incorporate the contractual terms of the Medicaid arrangement into Texas law.
There is no right to access services as a general matter, nor to provide them. Rather,
under the federal standard, there is a requirement that rates be set so that there is
similar access to treatment for Medicaid beneficiaries as there is for individuals with
private insurance within a given geographic area. Plaintiffs misread the relevant
Texas statutes and rules when they attempt to derive a judge-made right of “access”
to care that reaches over and beyond the requirements of the Medicaid program.
42 U.S.C. § 1396a(30)(A)
Thus, the relevant administrative rule requiring “reasonable availability and
accessibility of specialists for all covered services requiring specialty care,” 1 TEX.
ADMIN. CODE § 353.411(a)(5), merely incorporates the term “access” from the
federal Medicaid act. Plaintiffs attempt to impute a broader grant of a substantive
right than the Medicaid Act, because there is no geographic limitation in the cherry-
picked language they quote. But that reading ignores context. Section 353.411(a)(5)
is in the standards for provision of Medicaid through a “Managed Care
Organization” or “MCO.” E.g., id. § 353.411(a); see TEX. GOV’T CODE
10
§ 533.001(4), (5). MCOs are limited to particular geographic service areas. TEX.
GOV’T CODE § 533.004(a) (requiring MCOs be regional or tied to particular hospital
district).
The rules on which plaintiffs rely are geographically limited, consistent with
the Medicaid Act.2 As the Fifth Circuit has held, there is no judicially enforceable
individual right to challenge Medicaid rates based on “access,” because rates are
based on the Secretary’s assessment of services available to private insureds, a
matter that is outside of judicial cognizance. Equal Access, 509 F.3d at 701 (discussing
42 U.S.C. § 1396a(30)(A)). Thus, there is no additional “access” right in Texas law
that supersedes the limitations placed on the concept of “access” by the Medicaid
Act, or Texas’s acceptance of the terms of the Medicaid program.
Nor can the “optimization” language of § 531.02113 of the Government Code
create a legal basis for attacking Medicaid rates under Texas law, because it does not
create a judicially enforceable standard for intervening in the contractual
arrangement that is continuously negotiated between the federal and state executive
2 Plaintiffs also cite provisions of the Government Code requiring that the MCOs assure a
“sufficient number of . . . . specialty pediatric providers of home and community-based services”
and provide that “health care services will be accessible through the . . . provider network to a
comparable extent that health care services would be available to recipients [under other methods
of distributing Medicaid funds].” CR.344 ¶27 (invoking TEX. GOV’T CODE § 533.005(a)(21)).
These requirements are, likewise, geographically limited and, therefore, merely track the
requirements of federal law.
11
departments. After all, the total amount of funding available for Medicaid is always
subject to appropriation, 42 U.S.C. § 1396b; 1 TEX. ADMIN. CODE § 355.201(c)(4).
Section 531.02113 cannot be construed as creating a separate right to obtain a judicial
order requiring the Commission to spend more state money than the Legislature
appropriated.3 Such a rule would create a running separation-of-powers problem for
3 Plaintiffs’ procedural argument—which the Commission addresses here only to forestall any
argument that there is a substantive right hidden in the procedural provisions—likewise provides
no substantive Texas-law right to trigger an ability to substitute the Court’s order for that of the
Secretary. Texas law allows challenges to the content of the rules by which rates are set, but not
the rates themselves. Plaintiffs cite the recited list of bases for rate setting to challenge the rates.
See CR.343 ¶ 25 (invoking 1 TEX. ADMIN. CODE §§ 355.8021; 355.8441; 355.8085; see also 1 TEX.
ADMIN. CODE § 355.201(e), (f) (notice requirements for ratemaking). But the causes of action they
invoke would entitle them, at most, to a prospective declaration regarding the underlying rules, not
to undo an already-adopted rate. This result is compelled not only by the existence of an exclusive
federal remedy, but also by two general propositions of Texas administrative law on which plaintiffs
rely. See CR.345-46, ¶¶ 31 & 34. First, § 2001.038 of the Government Code cannot be used to
challenge specific applications of rules, as in rate making or contested-case orders. TEX. GOV’T
CODE § 2001.038(a) (allowing challenge to “applicability”—not application—of administrative
rules). Second, the ultra vires cause of action cannot reach back and undo specific executive acts;
it is prospective only. City of El Paso v. Heinrich, 284 S.W.3d 366, 376 (Tex. 2007). Plaintiffs’
invocation of the Uniform Declaratory Judgments Act is necessarily premised on the ultra vires
claim, because it does not waive immunity for such claims, id. at 369, and it cannot be used parallel
to a § 2001.038 request for declaratory judgment because their claim stems entirely from supposed
amendments to the relevant administrative rules and is therefore an impermissible redundant
remedy, Tex. Dep’t of State Health Services v. Balquinta, 429 S.W.3d 726, 746-47 (Tex. App.—
Austin 2014, pet. dism’d).
Other provisions on which plaintiffs rely do not apply to rate making at all, but are principles
that govern the rules under which rates are calculated. E.g., TEX. GOV’T CODE § 2006.002
(“Adoption of Rules With Adverse Economic Effect” (emphasis added)). As in El Paso Hospital
District, to the extent suit is available regarding the rules, it is created by a separate entitlement to
particular standards of rulemaking—not ratemaking.
In its previous briefing, the Commission relied on a provision that does not apply to this
case, which requires contested-case proceedings to determine certain Medicaid rates. See TEX.
HUM. RES. CODE § 32.0281(e). That statute does not apply to the current rate-setting regime,
which does not take place through contested-case proceedings. See CR.684-89 (affidavit of Pam
12
the hundreds of fee schedules and millions of dollars overseen by the Commission’s
rates department.
* * *
Plaintiffs can point to nothing in Texas law that purports to create greater
substantive rights regarding access or rates in the Medicaid program. Accordingly,
the only appropriate remedy regarding rates is the Secretary’s power to withhold
Medicaid funds. The district court’s actions in contravention of that exclusive
authority constitute fundamental error.
IV. THE TRIAL COURT’S ISSUANCE OF COUNTER-SUPERSEDEAS, LIKE
THE ISSUANCE OF ANY JUDICIAL RELIEF RELATED TO MEDICAID
RATES, VIOLATES THE UNITED STATES AND TEXAS CONSTITUTIONS.
The trial court accepted plaintiffs’ legal characterizations and issued a
temporary injunction, in which it included a counter-supersedeas finding and order.
CR.587-97 (Appendix Tab A). As a basis for plaintiffs’ harm and probable right of
recovery, the district court recited, among other things, that minor children would
“probably be deprived” of critical services, multiple providers (not necessarily the
plaintiff providers) would “probably . . . go out of business/or stop providing
Medicaid services,” the quality of care would “probably decrease,” there
“probably” would be “disincentives for Medicaid providers to use preventive care,”
McDonald) (Appendix Tab D); see also CR.688-89 ¶¶ 14-16 (setting out $5.6 million cost increase
that would be required to handle therapy ratemaking under plaintiffs’ theory).
13
and the new rates would “probably prevent Texas Medicaid beneficiaries from
receiving critical services.” CR.595 ¶ 33. All of these concerns are in the Secretary’s
purview—not that of Texas courts. In short, the district court’s counter-supersedeas
order implements a remedy inconsistent with the Secretary’s authority. That defect
is fundamental error under the United States and Texas Constitutions.
A. The Order Violates the Supremacy Clause and is
Inconsistent with Limitations on Spending Clause
Power.
Because exclusive remedial power over rates and access claims is vested with
the Secretary, the assertion of a judicially enforceable right to change those rates
violates:
1. The Supremacy Clause of the United States
Constitution preempts the district court’s order.
As the United States Supreme Court and the Fifth Circuit have pointed out,
absent an unambiguous grant of judicial power, the Medicaid Act creates an
exclusive remedy regarding rate amounts and access to care: withdrawal of funding
by the Secretary. Armstrong, 135 S. Ct. at 1384; Equal Access, 509 F.3d at 701. Any
additional requirements of a spending program cannot be implemented without
giving the State the ability to decide whether to participate in the program as
constituted. See Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2606 (2012)
(holding that § 1396a would be unconstitutional as applied to withhold funding from
14
states based on failure to comply with newly imposed requirements of the Medicaid
system, absent voluntary state participation). Thus, to the extent that Texas has
signed on to accept Medicaid based on the content of the Medicaid contract—which
does not include exposure to judicial review regarding Medicaid rates—federal law
mandates that there be no judicial interference with the exclusive, executive-
department remedy provided by the Medicaid Act.
The Supremacy Clause makes federal law “the supreme Law of the Land.”
U.S. CONST. art. VI, cl.2. While state obligations under a Spending Clause program
are triggered by accepting federal funds, the requirements of the program remain
binding on the states once adopted. Spending Clause legislation can have preemptive
effect under the Supremacy Clause. See Pharm. Research & Mfrs. of Amer. v. Walsh,
538 U.S. 644, 661-69 (2003) (plurality op.) (Supremacy Clause provisions preempt
state law, although statute in question not preempted); id. at 684-690 (O’Connor, J.,
dissenting on ground that statute was preempted); id. at 675 (Scalia, J., concurring
on ground that exclusive remedy of termination by Secretary preempts contrary
laws); id. at 683 (Thomas, J., concurring, expressing doubt that private parties can
enforce Spending Clause program provision in any circumstance). Justice Scalia’s
view prevailed with regard to rate setting and § 1983 in Armstrong: the only remedy
in federal law for these claims is recourse to the Secretary, and the only legal recourse
15
is that which federal law provides against the Secretary. Nothing in Texas law
changes that allocation of authority.
Such federal grants of exclusive jurisdiction, to the courts or federal executive
entities, preempt contrary state action. E.g., Entergy Gulf States, Inc. v. Pub. Util.
Comm’n, 173 S.W.3d 199, 207 (Tex. App.—Austin 2005, pet. denied) (Texas
agency’s failure to give effect to federal agency’s action was preempted). The
existence of an exclusive federal forum deprives the Texas courts of jurisdiction. See
Mills v. Warner Lambert Co., 157 S.W.3d 424, 427-28 (Tex. 2005). The district
court’s counter-supersedeas order is preempted by federal law because it attempts
to prevent implementation of published Medicaid rates in the absence of
constitutional power to do so.
2. The District Court’s order is likewise incompatible
with Spending Clause precedent.
Not only does Armstrong compel the result that the Secretary has exclusive
jurisdiction to review rates, but there is a potential constitutional defect in allowing
third parties to enforce Spending Clause requirements at all. See Walsh, 538 U.S. at
683 (Thomas, J., concurring). As Justice Thomas pointed out in his Walsh
concurrence, the Secretary’s power to terminate Medicaid funding carries with it
the power to forgive or accept policy outcomes for the purpose of encouraging the
state to perform better in other areas, or as a recognition of the particular health
16
challenges facing individual states. Id. at 680-81 (discussing nature of Secretary’s
discretion and pointing out that Secretary had adopted policy allowing states more
latitude in implementing Medicaid than plaintiffs alleged).
The Medicaid rate system—in which review of rates is in the hands of the
Secretary—is in substance a series of negotiations between the federal and state
executive departments. Because the Medicaid program is in the form of a federal-
state contract, recognizing a Texas cause of action to review rates or stop their
adoption would, as Justice Thomas explained, undermine Medicaid’s contractual
nature deriving from the requirements of the Spending Clause. Armstrong, 135 S. Ct.
at 1387 (Scalia, J.) (plurality op.) (citing Walsh, 538 U.S. at 683 (Thomas, J.,
concurring) (concluding that contractual nature of Medicaid forecloses third-party
beneficiaries of contracts between two governments to sue)). Texas has contracted
to satisfy the Secretary’s view of Medicaid requirements, not the separate
interpretation of the Medicaid Act by the federal and/or state judiciaries.
B. The Order Likewise Violates Article II, § 1 and Article
IV, § 10 of the Texas Constitution.
The Texas Constitution contains cognate provisions that require Texas courts
not to take action to interpret the access provision of the Medicaid Act, and Texas
laws implementing that Act in lieu of the Secretary’s exercise of discretion.
17
1. The District Court’s order violates the separation-
of-power requirement not only by improperly
restraining the executive department, but by, in
effect, vetoing a budget rider without any
constitutional basis for doing so.
The Texas Constitution affirmatively mandates the separation of powers
among the three branches of government. TEX. CONST. art. II, § 1. The Texas
statutes and rules are structured to mirror the requirements of the Medicaid Act,
which, in turn, creates an exclusive remedy in the Secretary. Implying a judicial cause
of action in contravention of the Legislature’s choice not to create one would violate
the separation of powers. E.g., In re Entergy Corp., 142 S.W.3d 316, 321-22 (Tex.
2004) (rejecting separation-of-powers argument regarding executive exercise of
putatively judicial determination on ground that there is no general right to judicial
review of administrative action). Some executive-department actions are
unreviewable by the courts. E.g., Gulf Land Co. v. Atl. Ref. Co., 134 Tex. 59, 73-74,
131 S.W.2d 73, 82 (1939). This is particularly true when a procedure is created by
statute, because a statute that creates rights can place them outside of judicial review.
Houston Mun. Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 157-58 (Tex. 2007).4
4 Similarly, there are constitutional limitations on the Legislature’s power to impose remedies on
the Legislative branch. The suspension of laws provision, TEX. CONST. art. I, § 28, affirmatively
limits the power of the judiciary to exercise policy discretion to avoid executive branch action. E.g.,
Gerst v. Nixon, 411 S.W.2d 350, 354 (Tex. 1966) (striking down statute allowing court to determine
the public good by preponderance of the evidence); see also 1 GEORGE D. BRADEN ET. AL., THE
18
One manifestation of the separation-of-powers clause is the exclusive-
jurisdiction doctrine, under which lawsuits must be dismissed if the subject-matter
or remedy sought is conferred by law on an executive-branch agency. E.g., In re
Entergy Corp., 142 S.W.3d at 321-22. The Secretary’s exclusive power to impose
orders related to the adoption of Medicaid rates is subject to this doctrine.
As explained above, the Texas-law provisions regarding access do not purport
to create greater rights than the Medicaid Act or provide judicial review of
ratemaking. It would violate the separation of powers to ignore this legislative grant
of discretion to the executive department.
There is also a legislative problem. Medicaid rates are subject to the amount
of appropriations. 42 U.S.C. § 1396b; 1 TEX. ADMIN. CODE § 355.201(c)(4). In this
case, the rate cuts have been triggered by a rider requiring particular reductions in
funding in each year of the current biennium. The counter-supersedeas order
effectively renders null a budget provision without any triggering constitutional
determination or statutory grant of authority.5 The courts lack power to change the
CONSTITUTION OF THE STATE OF TEXAS: AN ANNOTATED AND COMPARATIVE ANALYSIS, 93-94
(1977).
5Thus, plaintiffs could bring suit under the Texas constitution if they had established a vested
property interest. Little-Tex, 39 S.W.3d at 599. But plaintiffs allege no property rights that are not
subject to future appropriations and cannot, therefore, asserted a vested right in the current levels
of reimbursement. See Eldercare Properties, Inc. v. Dep’t of Hum. Servs., 63 S.W.3d 551, 556 (Tex.
App.—Austin 2001, pet. denied) (nursing home lacked vested property right in economic impact
19
budget absent a predicate constitutional violation. E.g., Jessen Assocs., Inc. v. Bullock,
531 S.W.2d 593, 601-02 (Tex. 1975) (declining to change effect of constitutionally
valid rider). And plaintiffs’ only asserted constitutional claim, based on due course
of law, is legally defective because none of the plaintiffs has a vested property interest
in a particular level of Medicaid rate, much less a right to rates not subject to
reduction by appropriation.6
2. The District Court’s order ignores the substantive
effect of the Business-With-the-United-States
Clause of the Texas Constitution.
The Texas Constitution requires that the Governor “conduct, in person, or
in such manner as shall be prescribed by law, all intercourse and business of the State
with other States and with the United States.” TEX. CONST. art. IV, § 10. The Texas
Medicaid statutes and rules specify that the business of interfacing with the
Secretary shall be carried out by the Commission. TEX. HUM. RES. CODE § 32.021.
of funding other service providers); see also Pers. Care Prods. v. Hawkins, 635 F.3d 155, 158-59 (5th
Cir. 2011) (providers have no property interest in amount of future rates). And the beneficiaries’
interest in the program are not impacted at all: they are still entitled to receive reimbursed care if
there is a provider in the system who will accept Medicaid as payment.
6 Plaintiffs cite the due-course provision. CR.344-45 ¶ 28. But due course of law does not require
judicial action in all cases; it must be triggered by a vested right. E.g., Klumb v. Houston Mun. Emps.
Pension Sys., 458 S.W.3d 1, 15-16 (Tex. 2015) (dismissing due-course claims because face of
complaint showed that plaintiffs had no vested property interest). Because rates are conditioned
both on executive-department action by the Secretary and appropriation by the Legislature, any
interest in a particular Medicaid rate is contingent on the executive process and cannot be the basis
of a due-course claim. There are no vested rights at issue in this lawsuit. See supra, n. 5.
20
That statutory provision is, necessarily, a delegation of authority to interact with the
United States on the Governor’s behalf. If the Governor or his designee acts within
the scope of federal and state law, the decision is binding on the courts. See, e.g.,
Adams v. Calvert, 396 S.W.2d 948, 950 (Tex. 1965) (Governor’s decisions within gap
between requirements of state law and of federal law unassailable by law); see also 1
BRADEN ET AL, at 318-320.
This is the flip side of the Secretary’s discretion. The Commission, as the
Governor’s designee, has discretion to implement the federal-state contract from the
state side. Any judicial remedy that is not entered pursuant to a statutory grant of
authority or a finding of unconstitutionality is, necessarily, an improper impairment
of gubernatorial authority under Article IV, § 10.
V. IN THE ALTERNATIVE, THE COURT SHOULD REDUCE THE COUNTER-
SUPERSEDEAS BOND.
Even if counter-supersedeas is within the district court’s power, the bond of
$500, CR.596-97 (“$500 . . . shall serve as the security for this Order declining to
permit the Temporary Injunction to be superseded”), fails to take into account
either the total amount by which the rider requires expenditures to be reduced, see
Rider 50(c), or the expense of almost $5.6 million annual cost to the State and the
Commission of potentially having to adopt other rules in the counter-statutory
21
method advanced by plaintiffs, CR.699-89 ¶¶ 14-16. The $500 amount has no
relationship whatsoever to the total fiscal impact of this order on the State of Texas.
Plaintiffs provided no justification for the amount of the $500 bond, apart
from counsel’s preference that the bond be “nominal” to account for plaintiffs’
already-expended litigation costs. 4.RR.264 (basing bond amount on counsel’s
experience and the identity of the parties), 5.RR.7 (“more than a nominal bond
wouldn’t make sense to me”). While plaintiffs’ counsel referred to deposition
testimony that shortfalls in the Medicaid budget are often made up at the end of the
fiscal year, see 5.RR.7, it does not follow that there is no harm to the taxpayers.
Moving $100,000,000 from other programs to Medicaid hurts the public fisc.
Ignoring that fact in setting a supersedeas bond represents an abuse of discretion,
because Rule 24.4 does not contemplate a nominal bond to support counter
supersedeas.
A counter-supersedeas bond must “secure the judgment debtor against any
loss or damage caused by the relief granted the judgment creditor.” TEX. R. APP. P.
24.2(3). The bond should have been set at $100,000,000, the amount that will have
to be moved from other portions of the budget to cover Medicaid expenditures that
the Legislature intended to cut from the budget during the next biennium, on the
face of Rider 50(c). That amount would likely subsume the damage to the state
22
budget from a court requiring the Commission to hire 50.7 new FTEs to comply with
the injunction, then release them again after the Commission prevails on appeal. See
CR.688-89 ¶ 16.
The counter-supersedeas bond is not a down payment on relief; it is a pledge
to make the appellant entirely whole if it ultimately prevails, offsetting the fact that
the bond serves to change, rather than maintain, the status quo. Cf. In re Estate of
Hernandez, No. 04-14-00046-CV, 2014 WL 1713566, at *2 (Tex. App.—San
Antonio 2014, pet. denied) (mem. op.) (purpose of supersedeas is to maintain the
status quo). This point is important: a supersedeas bond covers the risk of maintaining
the status quo, but a counter-supersedeas bond must cover the harm caused by
changing the status quo before litigation concludes. Rule 24 makes no allowance for
litigation costs, nor does it allow the court to take into account the identity of the
parties: to issue counter-supersedeas, the Court must ensure that no harm comes
from changing the status quo during the appeal. $100,000,000 of taxpayer money will
potentially be withheld from other programs because plaintiffs obtained a change in
the status quo.
Put another way, it is improper for a supersedeas order to, in effect, resolve
the core issues in a case prior to appeal. See Hydroscience Techs., Inc. v. Hydroscience,
Inc., 358 S.W.3d 759, 761 (Tex. App.—Dallas 2011) (orig. motion). If this litigation
23
lasts through the biennium, which seems likely, the rider will never have been given
effect. In the event the Court does not vacate the counter-supersedeas order, it
should set the bond at the value of the potential harm to the State if the State prevails
on appeal: $100,000,000, to be applied to any budget shortfall in the biennium.
VI. THE COMMISSION ASKS THE COURT TO ACT QUICKLY TO AVOID THE
POTENTIAL NECESSITY FOR EVEN LARGER CUTS THAT MIGHT, IN
THE END, EXACERBATE THE RATE CUTS ABOUT WHICH PLAINTIFFS
COMPLAIN.
The Court should resolve this issue quickly to preserve public funds and
prevent frustration of the Legislature’s intent.
This case is urgent because the cuts mandated by Rider 50(c) are supposed to
take effect in the current fiscal year. In addition to its obligation to hear this motion
“at the earliest practicable time,” TEX. R. APP. P. 24.4(d), the Court should take into
account the effects a stay will have on the Commission’s ability to comply with the
Rider. If the Commission were forced to comply with the total amount of reduction
required by the rider in less than a fiscal year, it could ultimately be forced to cut
rates even lower than the rates about which plaintiffs complain in order to make up
the requested amount of funding within the present biennium.
The Commission has gone to great lengths to expedite this process and
implement Rider 50(c) as quickly as possible. To that end, it has waived the
automatic stay of proceedings that would otherwise have been triggered by its
24
interlocutory appeal of its plea to the jurisdiction, and is moving towards the earliest
possible trial setting. CR.735-36. Its goal is to put the matter before the appellate
courts in time to obtain meaningful relief from the trial court’s unconstitutional
order. The Commission asks that the Court hear this motion as early as possible, as
required by rule, and give it relief from the improper counter-supersedeas order, so
that it can put Rider 50(c) into effect as soon as possible and avoid a judicially
mandated budget increase.
* * *
The counter-supersedeas order constitutes an impairment of the rate making
process that is completely inconsistent with the Secretary’s exclusive jurisdiction to
determine whether state Medicaid rates comport with public policy. Under both the
Texas and United States Constitutions, the entry of counter-supersedeas constitutes
fundamental error. The order is, in fact, even more intrusive than it might be,
because it makes it impossible to comply with a budget rider and could ultimately
result in greater rate decreases in order to comply with state law. Moreover, the
amount of the counter-supersedeas bond is wholly unrelated to the facial value of the
cuts contemplated by the rider and the expense to the State of proceeding under the
apparent limitations of the temporary injunction. Consistent with Rule 24.4, the
25
Court should vacate the counter-supersedeas order and allow the Commission’s
automatic supersedeas to go into effect.
PRAYER
The Court should vacate the counter-supersedeas order or, in the alternative,
order the bond amount necessary to comply with Rule 24’s requirement that the
party who is denied supersedeas be made entirely whole for any harm caused by
changing the status quo—$100,000,000 to cover both the amount of general revenue
Rider 50(c) was intended to remove from the Medicaid program and the cost of
hiring 50 new employees to comply with the injunction’s requirements.
26
Respectfully submitted.
KEN PAXTON
Attorney General of Texas
CHARLES E. ROY
First Assistant Attorney General
SCOTT A. KELLER
Solicitor General
/s/ Kristofer Monson
KRISTOFER S. MONSON
Assistant Solicitor General
State Bar No. 24037129
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1700
Fax: (512) 474-2697
kristofer.monson@texasattorneygeneral.gov
COUNSEL FOR APPELLANTS
27
CERTIFICATE OF CONFERENCE
I certify that on October 26, 2015, and again on October 27, 2015 I contacted
opposing counsel by electronic mail. Counsel opposes this motion.
CERTIFICATE OF SERVICE
On October 27, 2015 this document was served via File&Serve Xpress on:
Ben Hathaway Kristofer S. Monson
Dan Richards Office of the Attorney General
Richards Rodriguez & Skeith P.O. Box 12548 (MC 059)
816 Congress Avenue Austin, Texas 78701
Suite 1200 kristofer.monson@texasattorneygeneral.gov
drichards@rrsfirm.com
bhathaway@rrsfirm.com
COUNSEL FOR APPELLEES COUNSEL FOR APPELLANT
/s/ Kristofer S. Monson
28
APPENDIX
TABLE OF CONTENTS
Tab
CR.587-97 Order Granting Temporary Injunction and Denying
Supersedeas ..........................................................................................A
CR.338-39 Plaintiffs’ Second Amended Original Petition ............................ B
CR.351-73 Tex. Health & Human Servs. Comm’n Rate Analysis Dep’t:
Notice of Proposed Adjustments ..........................................................C
CR.684-89 Affidavit of Pam McDonald ........................................................D
Armstrong v. Exception Child Ctr., Inc., 135 S. Ct. 1382 (2015) .................. E
Equal Access for El Paso, Inc. v. Hawkins, 509 F.3d 697 (2007).................. F
2016-17 General Appropriations Act, 84th Leg., R.S., 2015 (Article II,
Health Human Services Comm’n), Rider 50(c) ............................................ G
Relevant Federal Statutes............................................................................... H
A
DC BK15274 PG1420
CAUSE NO. D-1-GN-15-003263
DIANA D., as next of friend of KD, a child, § IN THE DISTRICT COURT
KAREN G., as next friend of TG and ZM, §
children, GUADALUPE P., as next of friend §
of LP, a child, SALLY L., as next of friend of §
CH, DENA D., as next friend of BD, a child, § Filed in The Distiict Court
of Travis County, Texas
OCI ACQUISITION, LLC d/b/a §
CARE OPTIONS FOR KIDS, §
CONNECTCARE SOLUTIONS, LLC § SEP2~
d/b/a CONNECTCARE THERAPY FOR § At 'lfi!_f M.
Velva L. Price, District Clerk
KIDS, ATLAS PEDIATRIC THERAPY §
CONSULTANTS LLC, and PATHFINDER §
PEDIATRIC HOME CARE, INC., §
§ 200th JUDICIAL DISTRICT OF
Plaintiffs, §
§
v. §
§
CHRIS TRAYLOR, as EXECUTIVE §
COMMISSIONER of TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, and TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, §
§
Defendants. § TRAVIS COUNTY, TEXAS
ORDER GRANTING TEMPORARY INJUNCTION AND DENYING SUPERSEDEAS
On the 21 51 and 22"d days of September, 2015 the Court held a hearing on Plaintiffs'
application for temporary injunction in the above entitled and numbered cause. The Court has
considered the testimony, documentary evidence, pleadings, briefs, and arguments of counsel
and GRANTS the Temporary Injunction based on the following:
General History:
1) Plaintiffs include the parents as next friends of several minor children who suffer from
severe and disabling conditions, including seizure disorders, delayed development, autism,
speech developmental delays, epilepsy, cerebral palsy, and other conditions. These Plaintiffs and
II Page
1~~m~m~m~Mnrn~~~m~m~~~~
004236981 587
DC BK15274 PG1421
many other minor children suffering from similar conditions across the State of Texas can
exhibit a wide variety of disabling symptoms, including:
a. nonverbal
b. non-ambulatory
c. difficulty with speech
d. uncontrolled behavioral outbursts
e. difficulty with motor control over their limbs
f. difficulty with mental processing of information.
2) Because of these disabling conditions and symptoms, these children depend on home-
health providers for physical, occupational, and speech therapy services under the Texas
Medicaid program to develop basic skills such as walking, talking, dressing themselves, feeding
themselves, understanding simple communications, and maintaining control over their own
behavior. The Plaintiffs include several home health service providers who deliver physical,
occupational, and speech therapy services under the Texas Medicaid program to the children of
Texas who depend on such services.
3) Texas Health and Human Services Commission ("HHSC") and Chris Traylor, as
Executive Commissioner of HHSC ("Commissioner Traylor") have developed proposed
decreases to the reimbursement rates for physical, occupational, and speech therapy services that
will probably result in a decrease, or complete elimination, of available home health services for
Medicaid-dependent children across Texas.
Proposed Rate Changes:
4) On or about July 20, 2015, HHSC and Commissioner Traylor held a hearing regarding
new proposed reimbursement rates to be implemented on September 1, 2015 for physical,
21Page
588
DC BK15274 PG1422
occupational, and speech therapy services under the Texas Medicaid program (the "July 20, 2015
Proposed Rates"). A copy of the July 20, 2015 Proposed Rates is attached hereto as Exhibit A.
5) Following the commencement of this lawsuit, on or about August 20, 2015, HHSC and
Commissioner Traylor produced a different set of new proposed reimbursement rates to be
implemented on September 1, 2015 for physical, occupational, and speech therapy services
under the Texas Medicaid program (the "August 20, 2015 Proposed Rates"). A copy of the
August 20, 2015 Proposed Rates is attached hereto as Exhibit A-I.
6) Prior to a temporary injunction hearing at which Plaintiffs sought to enjoin HHSC and
Commissioner Traylor from implementing either the July 20, 2015 Proposed Rates or the August
20, 2015 Proposed Rates, HHSC and Commissioner Traylor withdrew both sets of rates and
advised the Court that they would start over with a new rate proposal.
7) Nine days later, on September 4, 2015, HHSC and Commissioner Traylor proposed new
rates to be implemented on October 1, 2015 for physical, occupational, and speech therapy
services under the Texas Medicaid program (the "September 4, 2015 Proposed Rates"). A copy
of the September 4, 2015 Proposed Rates is attached hereto as Exhibit A-2.
8) Defendants have exhibited a pattern of behavior attempting to impose new rates, and
have withdrawn the rates or taken other steps, resulting in Plaintiffs' challenge to the rates
arguably becoming moot. This issue is appropriate for the Court to adjudicate, however, based
on the "capable of repetition yet evading review" exception to the mootness doctrine. Davis v.
Burnam, 137 S.W.3d 325, 333 (Tex. App.-Austin 2004, no pet.). Defendants' actions
withdrawing the proposed rates demonstrate that the action is too short in duration to be litigated
fully before the action ceases or expires. Id. Defendants' choice to withdraw the rates and
propose similar ones as soon as a hearing has passed creates a reasonable expectation that the
31Page
589
DC BK15274 PG1423
same complaining parties will be subjected to the same action again should the Defendants
withdraw the currently pending rates and assert that this case is moot. Id.
9) Pursuant to 1 TAC §355.8021(a)(2)(A), reimbursement rates must be based on:
a. an analysis of the Centers for Medicare and Medicaid Services fees for similar
services;
b. Medicaid fees paid by other states;
c. a survey of costs reported by Medicaid home health agencies;
d. the Medicare Low Utilization Payment Adjustment (LUPA) fees;
e. previous Medicaid payments for Medicaid-reimbursable therapy, nursing, and aide
services; or
f. some combination thereof.
10) Pursuant to 1 TAC §355.802l(a)(2)(B), periodic rate reviews conducted by HHSC must
include, but will not be limited to, consideration of the payments for, as well as all costs
associated with, providing these Medicaid-reimbursable therapy services.
11) Any proposed reimbursement rates that modify or disregard the key components of the
methodology set forth in 1 TAC §355.8021(a)(2) could constitute a rule change. Accord, El Paso
Hosp. Dist. v. Tex. HHS Comm 'n, 247 S.W.3d 709, 714-15 (Tex. 2008). To be valid, rates
resulting from a rule change must be adopted through proper rule-making procedures. Id. at 715.
12) Those rule-making procedures include:
a. Determining whether a rule may affect a local economy before proposing the rule for
adoption. If so, preparing a local employment impact statement for the proposed rule.
TEX. Gov'T CODE§ 2001.022(a).
b. Providing at least 30 days' notice of the intention to adopt the new rule. TEX. Gov'T
CODE § 2001.023(a). The notice must comply with section 2001.024 of the Texas
Government Code. This includes, among other things, a note about the public benefits
and costs associated with the new rule. TEX. Gov'T CODE § 2001.024(a)(5).
c. Preparing, for rules that may have an adverse economic impact on small businesses,:
4JPage
590
DC BK15274 PG1424
i. an economic impact statement that estimates the number of small
businesses subject to the proposed rule, projects the economic impact of
the rule on small businesses, and describes alternative methods of
achieving the purpose of the proposed rule; and
u. a regulatory flexibility analysis that includes the agency's consideration of
alternative methods of achieving the purpose of the proposed rule.
TEX. Gov'T CooE § 2006.002( c).
The September 4, 2015 Proposed Rates:
13) The September 4, 2015 Proposed Rates affect at least one local economy.
14) The September 4, 2015 Proposed Rates may have an adverse impact on small businesses.
15) The September 4, 2015 Proposed Rates were probably not determined in compliance with
1 TAC §355.802l(a)(2)(A).
16) The September 4, 2015 Proposed Rates are the result of a periodic rate review under 1
TAC §355.802l(a)(2)(B) that was probably not in compliance with adequate or appropriate
consideration of payments for, as well as the costs associated with, providing these Medicaid-
reimbursable therapy services.
17) Defendants probably did not adequately or appropriately consider the impact that the
September 4, 2015 Proposed Rates would have on access to care if implemented.
Failure to Comply with Rule 355.802l(a)(2):
18) The Proposed Rates are probably not adequately or appropriately based on the formula
set forth in 1 TAC §355.802l(a)(2)(A); therefore, they may constitute a rule change, which must
be adopted through proper rule-making procedures.
19) The September 4, 2015 Proposed Rates are also not based on any identifiable
documented criteria. The Truven Data is not data representing Medicaid fees paid by other states,
so even if the September 4, 2015 Proposed Rates are based on Truven Data, the September 4,
5 JP a g I.'
591
DC BK15274 PG1425
2015 Proposed Rates are based on something other than the key components of the formula set
forth in 1 TAC §355.8021(a)(2)(A).
20) Should it be determined that any of the Proposed Rates comply with the methodology and
formula in 1 TAC §355.8021(a)(2)(A), those Proposed Rates could still amount to a rule change
because they are probably the result of a periodic rate re:view that failed to adequately or
appropriately consider payments for, as well as all costs associated with, providing these
Medicaid-reimbursable therapy services. 1 TAC §355.8021(a)(2)(B).
21) The margins analysis conducted by Texas A&M University is seriously flawed and not
sufficient to meet the requirements of 1 TAC §355.8021(a)(2)(B). Defendants appear to have
performed no other competent cost analysis. Defendants' own purported analysis fails to include
overhead, administrative, benefits, employer taxes, therapy materials, testing kits and other costs
of providing these Medicaid-reimbursable therapy services.
22) In proposing to promulgate each set of Proposed Rates, Defendants did not follow proper
rule-making procedures. Defendants did not:
a. determine whether the rule would affect a local economy or prepare a local
employment impact statement;
b. provide at least 30 days' proper notice of the intention to adopt the new rule. The
notice provided did not comply with section 2001.024 of the Texas Government
Code;
c. prepare an economic impact statement or a regulatory flexibility analysis.
23) The September 4, 2015 Proposed Rates are likely a rule that HHSC did not properly
promulgate. They may be invalid and may be enjoined. El Paso Hosp. Dist., 247 S.W.3d at 715.
Access to Care:
24) In addition to the above violations of the rule-making process, Texas law requires that
HHSC provide Medicaid recipients with proper access to care. Pursuant to the provisions of 1
61Page
592
DC BK15274 PG1426
TAC 353.41 l(a)(S), 1 TAC 353.413(a), and 1 TAC 353.413(d), Texas law requires: that service
providers ensure the reasonable availability and accessibility of speech, occupational, and
physical therapist specialists for all Medicaid service recipients; that service providers must
provide comprehensive and timely speech, occupational and physical therapy services for all
Medicaid service recipients; and that HHSC will not delegate its responsibility to deliver speech,
occupational, and physical therapy services to all eligible children.
25) HHSC likely neither conducted nor received an adequate, appropriate, or reliable study or
analysis on the impact of any of the Proposed Rates on access to care as required by the above
regulations.
26) The implementation of the Proposed Rates will likely result in service providers being
unable to deliver speech, occupational, and physical therapy services to all eligible children.
Because HHSC only provides services to eligible children through service providers, the
implementation of either of the proposed rates will probably render service providers unable to
comply with 1 TAC 353.41 l(a)(S), and/or 1 TAC 353.413(a), and will probably result in HHSC
failing to comply with its responsibility to deliver speech, occupational, and physical therapy
services to all eligible children.
27) Any proposed change to reimbursement rates for physical, occupational, and speech
therapy services under the Texas Medicaid program during the pendency of this lawsuit would
constitute a periodic rate review pursuant to 1 TAC §355.802l(a)(2)(B) and which will include a
review of payments for providing Medicaid-reimbursable therapy services and which will
include a review of costs associated with providing Medicaid-reimbursable therapy services.
71Page
593
DC BK15274 PG1427
Additional Violations:
28) In addition to the above violations of the rule-making process, each set of Proposed Rates
will likely violate Defendants' statutory duty to maximize the Medicaid finance system. TEX.
Gov'T CODE §531.02113.
29) HHSC must optimize the Medicaid finance system to:
a. maximize the state's receipt of federal funds;
b. create incentives for providers to use preventive care;
c. increase and retain providers in the system to maintain an adequate provider network;
d. more accurately reflect the costs borne by providers; and
e. encourage the improvement of the quality of care.
Id.
30) If implemented, the Proposed Rates will likely not create incentives for providers to use
preventive care, dramatically decrease the number of providers in the system, fail to accurately
reflect the costs borne by the providers, and not encourage the improvement of the quality of
care.
31) The September 4, 2015 Proposed Rates are probably based on arbitrary criteria that lack
adequate or appropriate consideration for the impact on service providers or recipients, and
probably lack adequate or appropriate consideration for the legal obligations of Commissioner
Traylor and HHSC with regard to the adoption of reimbursement rates. Therefore the September
4, 2015 Proposed Rates are likely in violation of the due course of law provision of the Texas
Constitution Art. I, § 19.
Need for Temporary Injunction:
32) Plaintiffs have shown a probable right to recovery on their claim for all the above
reasons.
81Page
594
DC BK15274 PG1428
33) If a temporary injunction is not granted, Plaintiffs will probably suffer irreparable injury
because:
a. the minor children represented in this lawsuit, plus thousands of other Texas children
receiving pediatric services under the Texas Medicaid program, will probably be
deprived of those critical services;
b. Defendants' actions will probably cause multiple Texas Medicaid providers to go out
of business and/or stop providing Medicaid services;
c. Defendants' actions will probably create disincentives for Medicaid providers to use
preventive care;
d. Defendants' actions will probably decrease the quality of care provided to Medicaid
recipients in Texas; and
e. Defendants' actions will probably prevent Texas Medicaid beneficiaries from
receiving critical services.
34) The probable harm is imminent because the Septembt::r 4, 2015 Proposed Rates are set to
take effect on October 1, 2015, likely immediately cutting off care for Medicaid beneficiaries.
The adoption or implementation of any of the Proposed Rates may be ultra vires violations of
Texas law. Therefore the issuance of a temporary injunction causes less prejudice or harm to the
State of Texas, Commissioner Traylor, or HHSC, and the balance of the equities weighs in favor
of granting a temporary injunction.
Temporary Injunction:
Accordingly, it is hereby ORDERED, ADJUDGED and DECREED that a Temporary
Injunction is GRANTED to Plaintiffs, and that Commissioner Traylor and HHSC are
commanded forthwith to desist and refrain from taking any action to implement the
reimbursement rates described in Exhibit A-2 from the date of entry of this Order until final trial
in this lawsuit or until further order of this Court.
IT IS FURTHER ORDERED, ADJUDGED and DECREED that a Temporary Injunction
is GRANTED to Plaintiffs, and that Commissioner Traylor and HHSC are commanded forthwith
9 JP a gt'
595
DC BK15274 PG1429
to desist and refrain from taking any action to propose or implement any change in
reimbursement rates for physical, occupational, and speech therapy services under the Texas
Medicaid program without conducting a review of payments for providing Medicaid-
reimbursable therapy services and conducting a review of costs associated with providing
Medicaid-reimbursable therapy services as required by 1 TAC §355.8021(a)(2)(B) from the date
of entry of this Order until final trial in this lawsuit or until fu1ther order of this Court.
This Order does not affect HHSC's ability to seek CMS's approval of the State Plan
Amendment.
It is further ORDERED that trial on the merits of this cause is set for January 18, 2016.
The Court GRANTS Plaintiffs leave to deposit a check with the trial court clerk in lieu of
bond. Five hundred of the $1000.00 deposited by Plaintiffs into the Court's registry on
September 23, 2015 shall satisfy the bond requirement to make this Temporary Injunction
effective.
It is the Court's understanding that the Defendants intend to file a Notice of Appeal and
may assert that pursuant to Civil Practice & Remedies Code §6.001 and Texas Rules of
Appellate Procedure 24.1 and 25.1, the filing of a Notice of Appeal constitutes automatic
supersedeas of this Court's Temporary Injunction. See, Jn re State Bd. for Educator
Certification, 452 S.W.3d 802, 804 (Tex. 2014). The Plaintiffs have requested that the Court
decline to permit the Temporary Injunction to be superseded. The Court finds and concludes that
permitting the Defendants to supersede the Temporary Injunction would render any relief in this
matter ineffective. In re State Bd. for Educator Certification, 452 S.W.3d 802, 808 (Tex. 2014).
Accordingly, it is ORDERED, ADJUDGED and DECREED that pursuant to Texas Rule of
Appellate Procedure 24.2(a)(3), the Court DECLINES to permit the Temporary Injunction to be
superseded. Pursuant to Texas Rule of Appellate Procedure 24.2(a)(3), the additional $500.00
IO IP age
596
DC BK15274 PG1430
paid in the above-described deposited check in the amount of $1,000.00 shall serve as the
security for this Order declining to permit the Temporary Injunction to be superseded.
The clerk of the above-entitled Court shall forthwith, on the filing by Plaintiffs of the
bond required, and on approving the same according to the law, issue a Temporary Injunction in
conformity with the law and the terms of this Order.
.f~
SIGNED on this day ZS of September, 2015. °"..{- <-f-1.1 S-- r· M,
Ill Page
597
B
9/8/2015 2:49:47 PM
Velva L. Price
District Clerk
Travis County
CAUSE NO. D-1-GN-15-003263 D-1-GN-15-003263
Shaun Glasson
DIANA D., as next of friend of KD, a child, § IN THE DISTRICT COURT
KAREN G., as next friend of TG and ZM, §
children, GUADALUPE P., as next of friend §
of LP, a child, SALLY L., as next of friend of §
CH, DENA D., as next friend of BD, a child, §
OCI ACQUISITION, LLC d/b/a §
CARE OPTIONS FOR KIDS, §
CONNECTCARE SOLUTIONS, LLC §
d/b/a CONNECTCARE THERAPY FOR §
KIDS, ATLAS PEDIATRIC THERAPY §
CONSULTANTS LLC, and PATHFINDER §
PEDIATRIC HOME CARE, INC., §
§ 200TH JUDICIAL DISTRICT OF
Plaintiffs, §
§
v. §
§
CHRIS TRAYLOR, as EXECUTIVE §
COMMISSIONER of TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, and TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, §
§
Defendants. § TRAVIS COUNTY, TEXAS
PLAINTIFFS' SECOND AMENDED ORIGINAL PETITION AND
APPLICATION FOR INJUNCTIVE RELIEF
TO THE HONORABLE JUDGE OF SAID COURT:
Although entrusted with the responsibility of operating the Texas Medicaid system in
accordance with applicable Texas and federal law, Defendants Chris Traylor, as Executive
Commissioner of the Texas Health and Human Services Commission, and the Texas Health and
Human Services Commission promulgated and then abruptly withdrew, in the face of a
temporary injunction hearing requested by Plaintiffs, two illegal sets of cuts to the
reimbursement rates for providers of physical, occupational, and speech therapy services to
1826.002
435836 " g (' 11
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Texas Medicaid beneficiaries. Nine days after withdrawing the first two sets of illegal rate cuts,
Defendants continued their inexplicable rush to implement destructive cuts to critical Medicaid
rates by publishing a third set of illegal cuts, to be effective October 1, 2015. As with the first
two sets of rates proposed by Defendants, this newest set of rates violates Article I, § 19 of the
Texas Constitution and numerous Texas statutes and regulations. If implemented, the newest cuts
will force Texas Medicaid providers to cease providing services critical to the health and
development of Texas' most vulnerable residents, its children. Plaintiffs Diana D., Karen G.,
Guadalupe P., Sally L., and Dena D. are the mothers and next friends of children receiving
speech, occupational, and therapy services from home health agencies under the Texas Medicaid
program. Plaintiffs OCI Acquisition, LLC d/b/a Care Options for Kids, ConnectCare Solutions,
LLC d/b/a ConnectCare Therapy for Kids, Atlas Pediatric Therapy Consultants LLC, and
Pathfinder Pediatric Home Care, Inc. are duly licensed home health agencies providing pediatric
speech, occupational, and physical therapy services under the Texas Medicaid program. Because
Defendants' actions are unlawful and will cause immediate and irreparable injury to the children
whose mothers are bringing this suit, to thousands of other Texas children receiving services
under the Texas Medicaid program, and to Texas Medicaid providers, Plaintiffs are requesting
that the Court grant a declaratory judgment that the proposed rates are void and injunctive relief
preventing the implementation of those rates.
I. DISCOVERY CONTROL PLAN
1. Plaintiffs intend to conduct discovery under Level 3 of Texas Rule of Civil
Procedure 190 .4 and will seek a Court Order in accordance with the requirements of such Rule.
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II. PARTIES
2. Plaintiff Diana D. is the mother and next friend of KD, who is nine years old.
Both are residents of Travis County, Texas.
3. Plaintiff Karen G. is the mother and next friend of TG, who is fifteen years old,
and ZM, who is thirteen years old. All are residents of Williamson County, Texas.
4. Plaintiff Guadalupe P. is the mother and next friend of LP, who is two years old.
Both are residents of Travis County, Texas.
5. Plaintiff Sally L. is the mother and next friend of CH, who is four years old. Both
are residents of Travis County, Texas.
6. Plaintiff Dena D. is the mother and next friend of BD, who is eight years old.
Both are residents of Hays County, Texas.
7. Plaintiffs OCI Acquisition, LLC d/b/a Care Options for Kids and ConnectCare
Solutions LLC d/b/a ConnectCare Therapy for Kids (collectively "Care Options for Kids" or
"COFK"), are affiliated entities and duly licensed Texas pediatric home health agencies that
provide speech, occupational, and physical therapy services to children across the State of Texas,
including in Travis County, Texas. COFK's headquarters and principal place of business is in
Dallas, Dallas County, Texas.
8. Plaintiff Atlas Pediatric Therapy Consultants LLC ("Atlas") is a duly licensed
Texas pediatric home health agency that provides speech, occupational, and physical therapy
services to children in North Texas. Its headquarters and principal place of business is in
Arlington, Tarrant County, Texas.
9. Plaintiff Pathfinder Pediatric Home Care, Inc. ("Pathfinder") is a duly licensed,
family-owned Texas pediatric home health agency that provides speech, occupational, and
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physical therapy services to children in 115 Texas counties, primarily in East Texas. Pathfinder's
headquarters and principal place of business in The Woodlands, Montgomery County, Texas.
10. Care Options for Kids, Atlas, and Pathfinder are referred to collectively as
"Provider Plaintiffs".
11. Defendant Chris Traylor, as Executive Commissioner of the Texas Health and
Human Services Commission ("Commissioner Traylor") has appeared and answered.
12. Defendant Texas Health and Human Services Commission ("HHSC") 1s an
agency of the State of Texas, and has appeared and answered.
III. JURISDICTION AND VENUE
13. Jurisdiction and venue are appropriate in this Court under TEX. Crv. PRAC. &
REM. CODE §37.002(b) and TEX. Gov'T CODE §2001.038(b).
IV. FACTUALBACKGROUND
14. Medicaid is a health insurance program, jointly operated and funded by the
federal and state governments, for the medical care of low-income and other eligible persons.
While federal law establishes Medicaid's basic parameters, each state, including Texas, decides
the types and ranges of services, payment levels for services, and administrative services it will
provide. Specifically, each state, including Texas, prepares a written plan ("State Plan")
describing the nature and scope of its Medicaid program. Once the State Plan is approved by the
U.S. Secretary of Health and Human Services, the state is responsible for operating the program
to conform to that plan.
15. Although recently described by the governor of Texas as "riddled with
operational, managerial, structural and procedural problems," HHSC is the agency responsible
for the Texas Medicaid program. HHSC arranges for the delivery of most Medicaid services
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through contracts with managed care organizations ("MCOs") licensed by the Texas Department
of Insurance. MCOs contract directly with doctors and other health care providers to create
provider networks for Medicaid beneficiaries. HHSC pays each MCO a monthly amount to
coordinate and deliver health services for the Medicaid members enrolled in the MCO's health
plan. The MCOs are required to provide to their members all medically necessary services
mandated by the Texas State Plan, including pediatric occupational, speech, and physical therapy
services ("Pediatric Services").
16. Diana D. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. KD, her nine year old daughter, suffers from Rett
syndrome, delayed development, and a seizure disorder. KD is nonverbal, non-ambulatory,
suffers from swallowing seizures, and has difficulty using her hands and feet. Due to her
condition, KD is unable to receive therapy outside her home. Because Diana D. is unable to
afford the rates of a commercial provider, the Texas Medicaid program is the only source of the
Pediatric Services her daughter requires.
17. Karen G. is the mother and next friend of two children currently rece1vmg
Pediatric Services from Care Options for Kids. TG, her fifteen year old son, was born with a
brain injury and suffers from autism and speech developmental delay. ZM, her thirteen year old
son, suffers from multiple issues, including seizure disorder, mesial temporal sclerosis disorder,
and autism. Due to their conditions, TG and ZM are unable to receive therapy outside their
home. Because Karen G. is unable to afford the rates of a commercial provider, the Texas
Medicaid program is the only source of the Pediatric Services her sons require.
18. Guadalupe P. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. LP, her two year old daughter, is diagnosed with Williams
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syndrome and subglottic stenosis, and as a result, has developmental delays, aortic stenosis, and
a heart murmur. Due to these conditions, LP is unable to receive therapy outside her home.
Because Guadalupe P. is unable to afford the rates of a commercial provider, the Texas Medicaid
program is the only source of the Pediatric Services her daughter requires.
19. Sally L. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. CH, her four year old son, is diagnosed with moderate
autism and, as a result, has challenges with speech, applied behavior, outbursts, transitions, and
following directions. Due to these conditions, CH is unable to receive therapy outside his home.
Because Sally L. is unable to afford the rates of a commercial provider, the Texas Medicaid
program is the only source of the Pediatric Services her son requires.
20. Dena D. is the mother and next friend of a child currently receiving Pediatric
Services. BD, her eight year old daughter, is diagnosed with Cerebral Palsy and post-traumatic
epilepsy. Due to these conditions, BD is unable to receive therapy outside her home. Because
Dena D. is unable to afford the rates of a commercial provider, the Texas Medicaid program is
the only source of the Pediatric Services her daughter requires.
21. Care Options for Kids is a duly-licensed Texas pediatric home health agency that
provides Pediatric Services to Texas children from birth through twenty-one years of age in the
children's homes. It is the largest pediatric home health organization in the state of Texas; of all
children who receive therapy services in a home environment, approximately nine percent of
them receive their services from Care Options for Kids. COFK has over 400 employees, and all
of its revenues are generated from services provided to children under the Medicaid program.
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22. Atlas and Pathfinder are also duly-licensed Texas pediatric home health agencies
providing Pediatric Services to Texas children. Pathfinder is a family-owned business. Atlas is a
small business under the definition in Tex. Govt. Code 2006.001.
23. Provider Plaintiffs deliver a wide range of critical services to the children served
by the Texas Medicaid program, including required Pediatric Services. The Provider Plaintiffs'
pediatric physical therapists assist children with mild to severe defects in gross motor skills,
specializing in the treatment and management of a variety of congenital, developmental,
neuromuscular, skeletal, and acquired disorders and diseases. The therapists' goals are to
promote overall wellness and independence for the children and their families. The Provider
Plaintiffs' speech language pathologists focus on helping their patients with language
development, articulation skills, and oral/motor feeding challenges, working to remediate
communication disorders that interfere with or impede the child's effective communication. The
goals of those professionals are to increase the child's communication skills to an age-
appropriate or functional ability level. The Provider Plaintiffs' pediatric occupational therapists
are trained to assist children with their individual physical and development issues, and work
with the children to teach them how to perform daily activities, interact socially, and become
functional and independent adults.
24. Defendants have promulgated new proposed reimbursement rates to be
implemented October 1, 2015 for physical, occupational, and speech therapy services, including
Pediatric Services, under the Texas Medicaid program ("the Rates"). A copy of the Rates is
attached as Exhibit A. The Rates, which are the third set of rates that Defendants have
promulgated in less than sixty days, will impose severe cuts to the current Medicaid
reimbursement rates for speech, occupational, and physical therapy services. If the Rates are
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allowed to take effect, numerous Medicaid providers, including the Provider Plaintiffs, will be
unable to continue providing Medicaid services. Many providers will be forced to cease
operations entirely. The forced closure of multiple Medicaid providers, particularly those
providing services to children, will make it impossible for Texas to comply with state-mandated
access standards. Such closures will deny needed services to children, including KD, TG, ZM,
LP, CH, and BD, who are now served by the Texas Medicaid program. Accordingly, the Rates, if
implemented, will cause imminent and irreparable harm to the children of Texas, the most
vulnerable of Medicaid beneficiaries.
25. Defendants have promulgated the Rates without complying with, and in direct
violation of, multiple Texas statutes and regulations. First, Defendants have promulgated the
Rates in violation of 1 TAC §§355.8021, 355.8441, and 355.8085. Second, Defendants have
promulgated the Rates without conducting the economic impact analysis or regulatory flexibility
analysis required by TEX. Gov'T CODE §2006.002. Third, Defendants have not prepared the local
employment impact statement required by TEX. Gov'T CODE §2001.022(a). Fourth, Defendants
have not published the notice required by 1 TAC §355.201(e) and (f). In addition, Defendants
have not complied with TEX. Gov'T CODE §2001.023(a), which requires that a state agency
promulgating a new rule must provide information about the costs and benefits of the new rule,
as well as all other statements required by law.
26. Defendants' actions also violate their statutory duty to maximize the Medicaid
finance system. TEX. Gov'T CODE §531.02113 requires Defendants to maximize the Medicaid
finance system by, among other things: a) creating incentives for providers to use preventive
care; b) increasing and retaining providers to maintain an adequate provider network; c)
encouraging the improvement of the quality of care; and d) insuring that the system accurately
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reflects the costs borne by the providers. If implemented, the Rates will have exactly the opposite
impact on the Texas Medicaid system because they will create disincentives for preventive care,
dramatically decrease the number of providers, impair the quality of care, and fail to accurately
reflect the costs borne by the providers. If allowed to go into effect, the promulgated Rates, or
other Pediatric Services rates implemented in violation of applicable law, will cause immediate
and irreparable damage to each of the Plaintiffs, other children receiving Pediatric Services under
the Texas Medicaid program, and other Texas Medicaid providers.
27. Defendants' actions additionally deny KD, TG, ZM, LP, CH, BD, and other
Texas Medicaid beneficiaries the access to providers and services required by applicable Texas
statutes and regulations. HHSC's regulations require that each MCO must "ensure the
reasonable availability of specialists for all covered services requiring specialty care." 1 TAC
§353.411(a)(5). Furthermore, each contract between an MCO and the state must provide for a
"sufficient number of. .. specialty pediatric providers of home and community-based services"
and provide that "health care services will be accessible to recipients through the [MCO's]
provider network to a comparable extent that health care services would be available to
recipients under a fee-for-service or primary care case management model of Medicaid managed
care." TEX. Gov'T CODE §533.005(a)(21). The Rates will eliminate the sole provider of
Medicaid Pediatric Services available to KD, TG, ZM, LP, CH, and BD, as well as numerous
other Medicaid providers, thus denying those children and thousands of other children access to
critical Medicaid services mandated by state law. Accordingly, the proposed Rates will prevent
the access to services and providers required by Texas law.
28. Finally, Defendants' efforts to implement the Rates violate the due course of law
provision of the Texas Constitution Art. I, §19. If implemented, the Rates will deprive KD, TG,
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ZM, LP, CH, and BD of mandated and necessary services and destroy the economic viability of
the Provider Plaintiffs. The Rates are arbitrary, capricious, and not based on fact. The Rates
cannot arguably be rationally related to a legitimate governmental interest. When considered as a
whole, the actual, real-world effect of the Rates as applied to Plaintiffs cannot arguably be
rationally related to a government interest. Finally, the Rates are so burdensome as to be
oppressive in light of any governmental interest. The Rates therefore deny Plaintiffs, citizens of
Texas, the right not to be deprived "of life, liberty, property, privileges or immunities ... except by
the due course of the law of the land." Tex. Const. art. I, § 19.
V. CLAIMS AGAINST DEFENDANTS
A. Declaratory Relief
29. Plaintiffs reallege and incorporate herein by reference paragraphs 1-28 above.
30. Plaintiffs' legal rights, status, and legal relations are affected by the Rates and
Defendants' actions in promulgating the Rates. Pursuant to Chapter 37 of the Texas Civil
Practice & Remedies Code, Plaintiffs seek a judgment declaring that the Rates are invalid, void,
and of no force or effect because (1) Defendants have promulgated the Rates in violation of
applicable Texas law, (2) Commissioner Traylor's actions in promulgating the rates are ultra
vires, and (3) the Rates violate the due course oflaw provision of the Texas Constitution.
31. In addition, the Rates and their threatened application interfere with or impair, or
threaten to interfere with or impair, Plaintiffs' legal rights or privileges. Plaintiffs therefore seek
a declaratory judgment pursuant to TEX. Gov'T CODE §2001.038 declaring that the Rates are
invalid, void, and of no force or effect because (1) Defendants have promulgated the Rates in
violation of applicable Texas law, (2) Commissioner Traylor's actions in promulgating the Rates
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are ultra vires, and (3) the Rates violate the due course of law prov1s10n of the Texas
Constitution.
32. Plaintiffs request that the Court award them their reasonable and necessary
attorneys' fees and costs incurred herein as allowed by TEX. Crv. PRAC. & REM. CODE §37.009
and other applicable law.
B. Request for Temporary and Permanent Injunctive Relief
33. Plaintiffs reallege and incorporate herein by reference paragraphs 1-32 above.
34. As set forth above, the actions of Commissioner Traylor are ultra vires in that his
actions taken in promulgating the Rates are outside his statutory and legal authority, and HHSC's
actions are in violation of applicable Texas law. Because Defendants have acted and are acting
without legal authority, this Court can and must enjoin Commissioner Traylor and HHSC from
taking any further actions to implement the Rates. Plaintiffs believe, moreover, that Defendants,
if they are prevented from implementing the Rates, intend to implement new reimbursement
rates for Pediatric Services and other physical, occupational, and speech therapy services under
the Texas Medicaid program without complying with the requirements of applicable statutes and
regulations, including without limitation, TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21),
2001.022(a), 2001.023(a), and 2006.002, and 1 TAC§§ 353.41 l(a)(5), 355.201(e), (f), 355.8021,
355.8085, and 355.8441.
35. Plaintiffs will suffer imminent, irreparable harm without court intervention and
have no adequate remedy at law if Defendants are not immediately enjoined from (1) taking any
action to implement the Rates and (2) taking any action to implement any other new
reimbursement rates for physical, occupational, or speech therapy services under the Texas
Medicaid program without complying with the requirements of applicable Texas statutes and
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regulations, including without limitation TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21),
2001.022(a), 2001.023(a), and 2006.002, and 1 TAC§§ 353.411(a)(5), 355.201(e), (f), 355.8021,
355.8085, and 355.8441.
36. If not so enjoined, Commissioner Traylor will continue to take actions outside his
legal authority, and HHSC will continue to take actions in violation of applicable Texas law. If
Defendants are not enjoined as requested, KD, TG, ZM, LP, CH, BD, and thousands of other
Texas children receiving Pediatric Services under the Texas Medicaid program will be deprived
of those critical services. Defendants' actions will cause multiple Texas Medicaid providers to
go out of business and/or stop providing Medicaid services. Those actions will, in addition,
create disincentives for Medicaid providers to use preventive care, decrease the quality of care
provided to Medicaid recipients in Texas, and prevent Texas Medicaid beneficiaries from
receiving critical services. If allowed to go into effect, the Rates, or other reimbursement rates
for physical, occupational, or speech therapy services under the Texas Medicaid program
implemented without complying with Texas law, will cause immediate and irreparable damage
to each of the Plaintiffs, other children receiving Pediatric Services under the Texas Medicaid
program, and other Texas Medicaid providers.
37. Plaintiffs are willing to post the necessary reasonable bond to facilitate the
injunctive relief requested. Plaintiffs believe that a bond in a nominal amount would be
appropriate.
38. The only adequate, effective and complete relief for Plaintiffs is for the Court to
grant injunctive relief immediately restraining and prohibiting Commissioner Traylor and HHSC
and their agents, servants, employees, independent contractors, attorneys, representatives, and
those persons or entities in active concert or participation with them from (1) taking any action to
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implement the Rates and (2) taking any action to implement any other reimbursement rates for
physical, occupational, and speech therapy services under the Texas Medicaid program without
complying with the requirements of applicable statutes and regulations, including without
limitation TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21), 2001.022(a), 2001.023(a), and
2006.002, and 1 TAC §§ 353.411(a)(5), 355.201(e), (f), 355.8021, 355.8085, and 355.8441 (the
"Injunctive Relief).
39. Pursuant to Texas Rules of Civil Procedure 680 et. seq., and Texas Civil Practice
and Remedies Code §65.001 et. seq., and in order to preserve the status quo during the pendency
of this action, Plaintiffs request (1) a temporary restraining order granting the requested
Injunctive Relief, (2) alternatively, a temporary injunction hearing and an order requiring
Defendants to appear at such hearing and show cause why a temporary injunction should not be
issued, (3) upon hearing, a temporary injunction granting the requested Injunctive Relief, and (4)
upon final hearing, a permanent injunction granting the requested Injunctive Relief.
40. Plaintiffs are willing to post the necessary reasonable bond to facilitate the
injunctive relief requested. Plaintiffs believe that a bond in a nominal amount would be
appropriate.
41. Plaintiffs incorporate herein by reference the affidavits of Diana D., Karen G.,
Guadalupe P., and Sally L. attached as Exhibits B through E, respectively to Plaintiffs' Original
Petition and Application for Injunctive Relief previously filed herein, 1 and the affidavits of
Michael Reiswig on behalf of Care Options for Kids, Joshua Adams on behalf of Atlas, and J.
1
To protect the privacy of the children named as Plaintiffs, the original affidavits of their next friends attached to
such petition and filed in the records of the Court were redacted to eliminate identifying information, such as the
next friends' last names and addresses. Non-redacted copies of such affidavits are available and will be provided to
the Court and Defendants if deemed appropriate by the Court.
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Adam Wilcox on behalf of Pathfinder, attached as Exhibits A-1 through A-3, respectively, to this
Petition.
VI. CONCLUSION & PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that they be
granted:
(a) the declaratory relief as set forth above;
(b) the injunctive relief as set forth above;
(c) their reasonable and necessary attorneys' fees and expenses; and
(d) all other relief to which they may be justly entitled.
Respectfully submitted,
By:
ATTORNEYS FOR PLAINTIFFS
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CERTIFICATE OF SERVICE
I hereby certify that the foregoing document has been delivered to the following counsel
ofrecords on this, the 81h day of September 2015 by fax and e-mail:
Eugene A. Clayborn
Andrew Lutostanski
Assistant Attorney General
Office of the Attorney General of Texas
P.O. Box 12548, Capitol Station
Austin, Texas 78711-2548
Facsimile: (512) 457-4614
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C
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
RATE ANALYSIS DEPARTMENT
Notice of Proposed Adjustments to Fees, Rates or Charges
for Physical, Occupational, and Speech Therapy provided by
Comprehensive Outpatient Rehabilitation
Facilities/Outpatient Rehabilitation Facilities {CORF/ORF),
Home Health Agencies {HHA), and Independent Therapists
Adjustments are proposed to be effective
October 1, 2015
Public Rate Hearing September 18, 2015 Page 1
351
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
SUMMARY OF PROPOSED ADJUSTMENTS
To Be Effective October 1, 2015
Included in this document is information relating to the proposed adjustments to
Medicaid payment rates for Physical, Occupational, and Speech Therapy provided by
Comprehensive Outpatient Rehabilitation Facilities/Outpatient Rehabilitation Facilities
(CORF/ORF), Home Health Agencies (HHA), and Independent Therapists. The rates
are proposed to be effective October 1, 2015.
Hearing
The Health and Human Services Commission (HHSC) will conduct a public hearing to
receive comments regarding the proposed adjustments to Medicaid rates detailed in this
document on September 18, 2015, at 9:00 a.m. in the Public Hearing Room of the John
H. Winters Building at 701 West 51 st Street, Austin, Texas. Entry is through security at
the main entrance of the building facing West 51 st Street. HHSC will consider concerns
expressed at the hearing prior to final rate approval. This public hearing is held in
compliance with the provisions of Human Resources Code §32.0282 and the Texas
Administrative Code, Title 1 (1 TAC), §355.201, which require a public hearing on
proposed payment rate adjustments. Should you have any questions regarding the
information in this document, please contact:
Megan Wolfe, Rate Analysis for Acute Care Services
Texas Health and Human Services Commission
(512) 730-7456; FAX: (512) 730-7475
E-mail: megan .wolfe@hhsc.state.tx.us
Background
HHSC is responsible for the reimbursement determination functions for the Texas
Medicaid Program. The proposed rate adjustments presented in this document are
based on direction provided by the 2016-2017 General Appropriations Act, 34th
Legislature, Regular Session, Article II, Rider 50, at pages 11-96 through 11-98 (Health
and Human Services Section, Health and Human Services Commission).
Methodology
The specific administrative rules that govern the establishment of the fees in this
proposal include these rules in 1 TAC:
• §355.201 (d)(1 )(A) and (D), which authorize HHSC to adjust rates for medical
assistance if state law is enacted requiring a rate reduction or restricting the
availability of appropriated funds.
Public Rate Hearing September 18, 2015 Page 2
352
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
• §355.8021, which addresses the reimbursement methodology for home health
services and durable medical equipment, prosthetics, orthotics, and supplies;
• §355.8085, which addresses the reimbursement methodology for physicians and
other practitioners;
• §355.8441, which addresses the reimbursement methodology for Early and
Periodic Screening, Diagnosis, and Treatment (EPSDT) services (known in
Texas as Texas Health Steps).
Proposed Rate Adjustments
As indicated above, the proposed rate adjustments are based on direction provided by
the 2016-2017 General Appropriations Act, 84th Legislature, Regular Session, Article II,
Rider 50, at pages 11-96 through 11-98.
Proposed rate adjustments were calculated based on an analysis of Medicaid fees paid
by other states and previous Texas Medicaid payments for Medicaid-reimbursable
therapy services. Where current Texas Medicaid rates exceed 150 percent of the
median of other states' rates for the same service, a percentage reduction is applied.
An alternative percentage reduction is applied to Texas Medicaid rates that do not
exceed 150 percent of the median of other states' rates for the same service and in
cases where information on other states' rates is not available.
Specific proposed payment rate adjustments are listed in the attachments outlined
below:
Att 1 - CORFORF Therapies
Att 2 - HHA Therapies
Att 3 - Independent Therapists
Written Comments
Written comments regarding the proposed payment rate adjustments may be submitted
in lieu of, or in addition to, oral testimony until 5 p.m. the day of the hearing. Written
comments may be sent by U.S. mail to the Texas Health and Human Services
Commission, Attention: Rate Analysis, Mail Code H-400, P.O. Box 149030, Austin,
Texas 78714-9030; by fax to Rate Analysis at (512) 730-7475; or by e-mail to
RADAcuteCare@hhsc.state.tx.us. In addition, written comments may be sent by
overnight mail or hand delivered to Texas Health and Human Services Commission,
Attention: Rate Analysis, Mail Code H-400, Brown-Heatly Building, 4900 North Lamar,
Austin, Texas 78751.
Persons with disabilities who wish to attend the hearing and require auxiliary aids or
services should contact Rate Analysis at (512) 730-7401 at least 72 hours in advance,
Public Rate Hearing September 18, 2015 Page 3
353
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
so appropriate arrangements can be made.
Public Rate Hearing September 18, 2015 Page 4
354
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 92507 ** 0-20 $39.78 $39.78 $28.67 $28.67
1 92507 ** 21-999 $39.78 $39.78 $28.67 $28.67
1 92508 ** 0-20 $19.90 $19.90 $14.93 $14.93
1 92508 ** 21-999 $19.90 $19.90 $14.93 $14.93
1 92521 ** 0-20 $140.62 $140.62 $105.47 $105.47
1 92521 ** 21-999 $140.62 $140.62 $105.47 $105.47
1 92522 ** 0-20 $175.77 $175.77 $131.83 $131.83
1 92522 ** 21-999 $175.77 $175.77 $131.83 $131.83
1 92523 ** 0-20 $234.36 $234.36 $175.77 $175.77
1 92523 ** 21-999 $234.36 $234.36 $175.77 $175.77
1 92524 ** 0-20 $117.18 $117.18 $87.89 $87.89
1 92524 ** 21-999 $117.18 $117.18 $87.89 $87.89
1 92526 ** 0-999 $39.78 $39.78 $38.41 $38.41
1 92610 ** 0-999 $234.36 $234.36 $226.27 $226.27
1 97001 ** 0-20 $167.40 $167.40 $125.55 $125.55
1 97001 ** 21-999 $167.40 $167.40 $125.55 $125.55
1 97002 ** 0-20 $150.66 $150.66 $113.00 $113.00
1 97002 ** 21-999 $150.66 $150.66 $113.00 $113.00
1 97003 ** 0-20 $167.40 $167.40 $125.55 $125.55
1 97003 ** 21-999 $167.40 $167.40 $125.55 $125.55
1 97004 ** 0-20 $150.66 $150.66 $113.00 $113.00
1 97004 ** 21-999 $150.66 $150.66 $113.00 $113.00
1 97012 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97012 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97014 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97014 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97016 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97016 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97018 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97018 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97022 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97022 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97024 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97024 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97026 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97026 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97028 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97028 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97032 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97032 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97033 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97033 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97034 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97034 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97035 ** 0-20 $39.78 $39.78 $38.41 $38.41
355
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97035 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97036 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97036 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97039 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97039 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97110 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97110 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97112 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97112 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97113 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97113 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97116 ** 0-20 $39.78 $39.78 $30.08 $30.08
1 97116 ** 21-999 $39.78 $39.78 $30.08 $30.08
1 97124 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97124 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97139 ** 0-20 $39.78 $39.78 $39.00 $39.00
1 97139 ** 21-999 $39.78 $39.78 $39.00 $39.00
1 97140 ** 0-20 $39.78 $39.78 $30.84 $30.84
1 97140 ** 21-999 $39.78 $39.78 $30.84 $30.84
1 97150 ** 0-20 $19.90 $19.90 $19.21 $19.21
1 97150 ** 21-999 $19.90 $19.90 $19.21 $19.21
1 97530 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97530 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97535 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97537 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97542 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97750 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97750 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97760 ** 0-20 $39.78 $39.78 $38.87 $38.87
1 97761 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97762 ** 0-20 $40.36 $40.36 $35.09 $35.09
1 97799 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97799 ** 21-999 $39.78 $39.78 $38.41 $38.41
Physical or manipulative
therapy performed for
maintenance rather than
1 S8990 restoration 0-999 $52.33 $52.33 $39.00 $39.00
1 S9152 Speech therapy, re-evaluation 0-999 $210.92 $210.92 $203.64 $203.64
*Type of Service (TOS)
1 Medical Services
**Required Notice: The five-character code included in this notice is obtained from the Current Procedural Terminology (CPT®),
356
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
copyright 2015 by the American Medical Association (AMA). CPT is developed by the AMA as a listing of descriptive terms and five
character identifying codes and modifiers for reporting medical services and procedures performed by physicians. The responsibility for
the content of this notice is with HHSC and no endorsement by the AMA is intended or should be implied. The AMA disclaims
responsibility for any consequences or liability attributable or related to any use, nonuse or interpretation of information contained in this
notice. Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part ofCPT,
and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The
AMA assumes no liability for data contained or not contained.
357
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 92507 ** 0-20 $135.14 $135.14 $100.34 $100.34
1 92507 ** 21-999 $115.46 $115.46 $100.34 $100.34
1 92508 ** 0-20 $67.57 $67.57 $50.68 $50.68
1 92508 ** 21-999 $67.57 $67.57 $50.68 $50.68
1 92521 ** 0-20 $120.00 $120.00 $90.00 $90.00
1 92521 ** 21-999 $70.33 $70.33 $67.90 $67.90
1 92522 ** 0-20 $150.00 $150.00 $112.50 $112.50
1 92522 ** 21-999 $87.92 $87.92 $84.89 $84.89
1 92523 ** 0-20 $200.00 $200.00 $150.00 $150.00
1 92523 ** 21-999 $117.22 $117.22 $113.18 $113.18
1 92524 ** 0-20 $100.00 $100.00 $75.00 $75.00
1 92524 ** 21-999 $58.61 $58.61 $56.59 $56.59
1 92526 ** 0-20 $135.14 $135.14 $130.48 $130.48
1 92526 ** 21-999 $115.46 $115.46 $111.48 $111.48
1 92610 ** 0-20 $200.00 $200.00 $193.10 $193.10
1 92610 ** 21-999 $117.22 $117.22 $113.18 $113.18
1 97001 ** 0-20 $137.20 $137.20 $102.90 $102.90
1 97001 ** 21-999 $114.03 $114.03 $85.52 $85.52
1 97001 AT ** 0-20 $114.03 $114.03 $85.52 $85.52
1 97001 AT ** 21-999 $114.03 $114.03 $85.52 $85.52
c 97001 ** 0-20 $114.03 $114.03 $85.52 $85.52
c 97001 ** 21-999 $114.03 $114.03 $85.52 $85.52
1 97002 ** 0-20 $123.48 $123.48 $92.61 $92.61
1 97002 ** 21-999 $102.63 $102.63 $76.97 $76.97
1 97002 AT ** 0-20 $102.63 $102.63 $76.97 $76.97
1 97002 AT ** 21-999 $102.63 $102.63 $76.97 $76.97
c 97002 ** 0-20 $102.63 $102.63 $76.97 $76.97
c 97002 ** 21-999 $102.63 $102.63 $76.97 $76.97
1 97003 ** 0-20 $137.20 $137.20 $102.90 $102.90
1 97003 ** 21-999 $116.25 $116.25 $89.21 $89.21
1 97003 AT ** 0-20 $116.25 $116.25 $89.21 $89.21
1 97003 AT ** 21-999 $116.25 $116.25 $89.21 $89.21
c 97003 ** 0-20 $116.25 $116.25 $89.21 $89.21
c 97003 ** 21-999 $116.25 $116.25 $89.21 $89.21
1 97004 ** 0-20 $123.48 $123.48 $92.61 $92.61
1 97004 ** 21-999 $104.63 $104.63 $78.47 $78.47
1 97004 AT ** 0-20 $104.63 $104.63 $78.47 $78.47
1 97004 AT ** 21-999 $104.63 $104.63 $78.47 $78.47
c 97004 ** 0-20 $104.63 $104.63 $78.47 $78.47
c 97004 ** 21-999 $104.63 $104.63 $78.47 $78.47
1 97012 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97012 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97012 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97012 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97012 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97012 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
358
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97012 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97012 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97012 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97012 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97012 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97012 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97012 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97012 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97012 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97012 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97012 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97014 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97014 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97014 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97014 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97014 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97014 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97014 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97014 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97014 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97014 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97014 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97014 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97014 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97014 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97014 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97014 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97014 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97016 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97016 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97016 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97016 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97016 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97016 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97016 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97016 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97016 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97016 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97016 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97016 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97016 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97016 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97016 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97016 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97016 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97018 ** 21-999 $113.05 $113.05 $91.08 $91.08
359
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97018 AT ** 0-20 $113.05 $113.05 $91.08 $91.08
1 97018 AT ** 21-999 $113.05 $113.05 $91.08 $91.08
1 97018 AT GO ** 0-20 $114.51 $114.51 $91.08 $91.08
1 97018 AT GO ** 21-999 $114.51 $114.51 $91.08 $91.08
1 97018 AT GP ** 0-20 $112.32 $112.32 $91.08 $91.08
1 97018 AT GP ** 21-999 $112.32 $112.32 $91.08 $91.08
1 97018 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97018 GO ** 21-999 $114.51 $114.51 $91.08 $91.08
1 97018 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97018 GP ** 21-999 $112.32 $112.32 $91.08 $91.08
c 97018 ** 0-20 $113.05 $113.05 $91.08 $91.08
c 97018 ** 21-999 $113.05 $113.05 $91.08 $91.08
c 97018 GO ** 0-20 $114.51 $114.51 $91.08 $91.08
c 97018 GO ** 21-999 $114.51 $114.51 $91.08 $91.08
c 97018 GP ** 0-20 $112.32 $112.32 $91.08 $91.08
c 97018 GP ** 21-999 $112.32 $112.32 $91.08 $91.08
1 97022 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97022 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97022 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97022 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97022 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97022 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97022 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97022 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97022 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97022 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97022 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97022 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97022 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97022 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97022 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97022 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97022 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97024 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97024 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97024 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97024 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97024 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97024 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97024 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97024 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97024 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97024 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97024 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97024 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97024 ** 21-999 $113.05 $113.05 $84.79 $84.79
360
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
c 97024 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97024 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97024 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97024 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97026 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97026 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97026 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97026 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97026 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97026 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97026 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97026 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97026 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97026 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97026 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97026 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97026 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97026 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97026 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97026 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97026 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97028 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97028 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97028 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97028 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97028 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97028 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97028 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97028 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97028 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97028 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97028 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97028 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97028 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97028 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97028 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97028 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97028 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97032 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97032 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97032 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97032 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97032 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97032 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97032 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97032 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
361
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97032 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97032 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97032 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97032 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97032 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97032 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97032 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97032 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97032 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97033 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97033 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97033 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97033 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97033 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97033 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97033 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97033 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97033 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97033 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97033 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97033 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97033 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97033 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97033 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97033 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97033 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97034 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97034 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97034 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97034 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97035 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97035 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97035 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97035 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97035 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97035 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97035 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97035 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97035 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97035 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97035 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97035 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97035 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97035 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97035 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97035 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
362
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
c 97035 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97036 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97036 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97036 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97036 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97039 ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97039 AT ** 0-20 $112.32 $112.32 $90.00 $90.00
1 97039 AT ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97039 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97039 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
c 97039 ** 0-20 $112.32 $112.32 $90.00 $90.00
c 97039 ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97110 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97110 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97110 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97110 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97110 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97110 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97110 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97110 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97110 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97110 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97110 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97110 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97110 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97110 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97110 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97110 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97110 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97112 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97112 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97112 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97112 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97112 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97112 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97112 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97112 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97112 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97112 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97112 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97112 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97112 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97112 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97112 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97112 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97112 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
363
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97116 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97116 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97116 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97116 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97116 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97116 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97116 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97116 GO ** 0-20 $135.14 $135.14 $120.30 $120.30
1 97116 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97116 GP ** 0-20 $135.14 $135.14 $120.30 $120.30
1 97116 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97116 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97116 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97116 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97116 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97116 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97116 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97124 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97124 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97124 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97124 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97124 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97124 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97124 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97124 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97124 GO **
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