John Holcomb, MD: Delay Merging DSHS and DFPS into HHSC

Testimony by John Holcomb, MD

Joint Testimony on HHSC and OIG Sunset Legislation
Senate Health and Human Services Committee
Senate Bill 200 and Senate Bill 207

Monday, March 23, 2015

Submitted on behalf of: Texas Medical Association, Texas Pediatric Society, Texas Academy of Family Physicians, Texas Association of Obstetricians and Gynecologists, American Congress of Obstetricians and Gynecologists-Texas Chapter, and Federation of Texas Psychiatry

On behalf of the above-named medical societies, thank you for the opportunity to provide input on legislation relating to the sunset of the Health and Human Service Commission (HHSC) and the HHSC Office of Inspector General (OIG).

Over the past 18 months, the Sunset Advisory Commission performed a remarkably thorough review of these agencies. The Sunset Commission’s report to the legislature included numerous recommendations championed by our organizations, including proposals to streamline the Medicaid application and credentialing processes; undertake new initiatives to improve health care quality; consolidate HHSC and OIG audits of Medicaid managed care plans to reduce duplication and administrative costs on health plans and physicians in their networks; increase due process protections for physicians investigated for Medicaid fraud and abuse, including reducing the timeframe for completing investigations; and ensure OIG distinguishes between actual fraud or abuse versus billing errors or technical mistakes.

Comments on Committee Substitute Senate Bill 200

During the sunset review process, our organizations remained neutral on the proposal to further consolidate the five health and human services agencies. As such, our testimony is ON Senate Bill 200. That being said, we strongly support language to not complete the merger of the Department of State Health Services (DSHS) and the Department of Family and Protective Services (DFPS) into the Health and Human Services system until 2019. By its very nature, consolidation is a disruptive process. DSHS and DFPS perform unique functions within the current HHS enterprise. Having more time to integrate these agencies into the new overall structure will ensure there is sufficient stakeholder input into reforms while also avoiding unintended harm to the state’s public health system and the state’s child and adult protective service operations. 

We also strongly support several provisions within the bill, among them:   

  • Section 2.09, Sec. 531.02118, Streamlining Medicaid Provider Enrollment and Credentialing Processes, which reflects our call to reduce Medicaid’s administrative complexity and costs for physicians and other providers; 
  • Section 2.12, specifying that OIG shall consult with the HHSC executive commissioner on its jurisdiction over and frequency of audits of Medicaid HMOs and coordinate its activities with HHSC so as to reduce duplication of activities; and
  • Section 2.13, Sec. 531.1032, Office of the Inspector General, Criminal History Record Information Check, prohibiting OIG from conducting criminal history checks on physicians who it has confirmed are in good standing with the Texas Medical Board. 

To further strengthen CSSB 200, we suggest the following amendments:

Relating to the timeframe for OIG to make a determination regarding whether an application will be excluded

Our concern is that the bill provides 10 days for OIG to determine whether an applicant will be excluded from Medicaid rather than a determination of whether the applicant will be excluded or granted full or limited participation status. We recommend the following: 

Sec. 531.1034.  TIME TO DETERMINE PROVIDER ELIGIBILITY; PERFORMANCE METRICS. (a) Not later than the 10th day after the date the office receives the complete application of a health care professional seeking to participate in the Medicaid program, the office shall inform the commission or the health care professional, as appropriate, of the office’s determination regarding whether the health care professional should be excluded from participating in the Medicaid program or granted full or limited participation status in the Medicaid program based on: (1) information concerning the licensing status of the health care professional obtained as described by Section 531.1032(a); (2) information contained in the criminal history record information check that is evaluated in accordance with guidelines adopted under Section 531.1032(c); (3) a review of federal databases under Section 531.1033; (4) the pendency of an open investigation by the office; or (5) any other reason the office determines.

Relating to the composition of the Drug Utilization Review (DUR) Board.   

State Medicaid programs are required to establish a DUR Board with a roughly equal number of physicians and pharmacists with expertise in prescribing or dispensing outpatient drugs and utilization review. Federal regulations do not stipulate the types of specialties that should be included on the board. CSSB 200 directs the HHSC executive commissioner to appoint the board in compliance with federal law and to include two representatives of Medicaid HMOs. We do not quibble with the addition of Medicaid HMO representatives, which we believe will provide valuable perspective to the DUR Board, given that some 80 percent of Medicaid enrollees are now enrolled in managed care. However, it is critically important that the legislature establish guidelines to ensure the DUR Board includes physicians that represent the Medicaid program’s diverse populations and health care needs. The vast majority of Medicaid enrollees are women and children. All Medicaid HMOs enrollees must select a primary care physician to coordinate their care. As such, we ask that HHSC be directed to specifically include on the board physicians representing pediatrics, obstetrics and gynecology, and primary care. Also, given the prevalence of mental illness and substance abuse within the overall Medicaid population, we strongly support inclusion of a pediatric and an adult psychiatrist on the board. 

     (c) The executive commissioner shall determine the composition of the board, which must: 

     (1) comply with applicable federal law, including 42 C.F.R. Section 456.716; and  

     (2) include physicians and pharmacists who:  

          (i)  represent different specialties and provide services to all segments of the Medicaid program’s diverse population, and shall include at least one of each of the following

             (1) Pediatrician

             (2) Primary care physician

             (3) Obstetrician and gynecologist

             (4) Child and adolescent psychiatrist;

             (5) Adult psychiatrist; and

          (ii)  have experience in either developing or practicing under a preferred drug list; and

         (iii)  do not have contractual relationships, ownership interests, or other conflicts of interest with a pharmaceutical manufacturer or labeler or with an entity engaged by the commission to assist in the development of the preferred drug lists or the administration of the prior authorization system; and

      (3) include two representatives of managed care organizations as nonvoting members, one of whom must be a physician and one of whom must be a pharmacist.  

Comments on Senate Bill 207

Our organizations strongly support Senate Bill 207. It embodies recommendations organized medicine has long championed to ensure accountability at OIG as well as fair, impartial rules and processes for physicians accused of waste, fraud, or abuse. We appreciate and support the measures in SB 207 to strengthen due process protections and promote resolution of Medicaid fraud and abuse investigations. Importantly, the bill specifies that unintended billing errors or coding mistakes are decidedly not fraud.  

We offer the following comments and questions for consideration in Committee Substitute SB 207:  

  • We recommend ensuring the informal resolution meetings (IRMs) are confidential and not subject to disclosure. This would promote open discussion and communication and facilitate settlements outside the administrative appeals process. We recommend that SB 207 clarify that an IRM relating to a payment hold (Tex. Gov’t Code §531.102[g][6]) or overpayment (Tex. Gov’t Code § 531.120[b]) is confidential and the information discussed during such meetings will not be disclosed to other entities or third parties. Without such confidentiality protections, our concern is that the IRM will not serve as an effective forum for discussion and settlement purposes.

  • We recommend allowing IRMs to be recorded only when requested by the provider requesting the IRM. Currently, Tex. Gov’t Code §531.1202 says that the commission shall, at no expense to the provider who requested the meeting, provide for IRMs to be recorded and shall make a recording available to the provider. However, we recommend clarifying that the meetings are not required to be recorded unless the provider makes a request. As stated above, any recording of such meetings should be confidential and not disclosed to third parties.

  • We recommend ensuring that providers have adequate time to respond to notice of payment hold or overpayment. We appreciate the intent to expedite the resolution process; however, we also believe the statute should provide sufficient time to review the notice and the allegations contained therein, obtain counsel (if necessary), and prepare a response. We recommend giving providers 30 days to respond to a notice under sections 531.102(g)(3) (payment hold appeal), 531.102(g)(6) (payment hold IRM), 531.120(b) (overpayment IRM), and 531.1201(a) (overpayment appeal).

  • We request clarification regarding the difference in seeking an IRM for a payment hold and for overpayment. Specifically, SB 207 revises Sec. 531.102(g)(6) to state that “on receipt of a timely request [for a payment hold IRM], the office shall decide whether to grant the provider’s request for an initial informal resolution meeting, and if the office decides to grant the request, the office shall schedule the initial informal resolution meeting.” Note that a request for an IRM for an overpayment under Sec. 531.120(b) provides that “a provider may request an informal resolution meeting under this section, and on receipt of the request, the office shall schedule the informal resolution meeting.” Absent reasons to the contrary, we recommend SB 207 be revised so that providers’ ability to seek an IRM related to a payment hold is consistent with requests an IRM for overpayment.

  • We request clarification on the standard to uphold a payment hold based on a credible allegation of fraud. Under Tex. Gov’t Code §531.102(g)(3)(C) in SB 207, that provision states, “The office is required to show probable cause that the credible allegation of fraud that is the basis of the payment hold has an indicia of reliability and that continuing to pay the provider presents an ongoing significant financial risk to the state and a threat to the integrity of the Medicaid program.” We note that under state and federal law credible allegations of fraud — by definition — must have indicia of reliability. Does the standard under Sec. 531.102(g)(3)(C), as drafted in SB 207, require probable cause that there is indicia of reliability, probable cause that fraud has occurred or is occurring, or an alternative threshold?    

As you consider legislation to enact the Sunset Commission’s proposed reforms, we respectfully ask that you consider the comments and proposed amendments. Thank you for your consideration.

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