Texas says Medicaid cuts still coming, surprising opponents

AUSTIN - Texas health officials are postponing a $350 million cut in Medicaid payments to therapists after being pushed to the brink of legal action in state court.

The Texas Health and Human Services Commission told a judge Wednesday that the agency now plans to start over and consider new rates. The about-face comes less than a week before the cuts were scheduled to take effect and after increasing bipartisan pressure.

Opponents say the cuts would have drastically reduced access to speech, physical and occupational therapists for more than 240,000 poor Texas residents. The cuts would have also targeted a program that provides speech therapy to children born prematurely.

The Republican-controlled Legislature ordered the rate reductions this year amid lawmaker concerns of excess spending.

The cuts would have saved the state $150 million on Medicaid spending over the next two years, but would also cause the state to lose $200 million in federal dollars, reducing total funding for the Medicaid Acute Care Therapy Program by more than half.

Many Democrats spoke out against the proposal, and a number of Republicans asked the HHSC not to implement the changes until further studies are done on the impact it could have.

The Health and Human Services Commission released a statement Wednesday afternoon to KPRC 2 News that read, "The Health and Human Services Commission plans to move forward with implementing the full Medicaid therapy rate reductions – a directive that was passed by the legislature. HHSC attempted to reach a settlement with the plaintiffs that would have required Legislative Budget Board approval. Those attempts were rejected by the plaintiffs. We will now re-start the process to set reimbursement rates to achieve the full savings as mandated by the legislature. We are working to schedule a public hearing where we will propose new rates and receive feedback."

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