U.S. officials warn of further disability provider closures in Texas

Up to one-quarter of the nonprofit providers who offer speech, physical and occupational therapy to the state's neediest children may drop out of the program as they face budget cuts passed by Texas lawmakers in 2015, a federal agency has warned.

As state lawmakers pursue a $350 million cut to the Medicaid budget for children’s therapy services, Texas Health and Human Services Commission officials are scrambling to maintain a robust network of providers to ensure children have access to the medically necessary services.

The U.S. Department of Education told U.S. Rep. Lloyd Doggett, D-Austin, in a Dec. 9 letter that up to 12 of the 47 providers in the state’s Early Childhood Intervention program could stop offering services because of financial uncertainty. Texas health officials originally told the federal government about the number of providers at risk on Dec. 2, according to the letter, which was obtained by The Texas Tribune on Thursday.

Advocates for children said the federal government’s warning should be a “wake-up call.”

“If these groups do pull out of the program, it will be devastating for kids with autism, speech delays, Down syndrome, and other disabilities and delays,” Stephanie Rubin, chief executive of the advocacy group Texans Care for Children, said in an email. “We know that these groups want to keep serving children and we know staff at [the Texas Health and Human Services Commission] is working hard on this, but the Legislature needs to make sure the funding is in place."

Federal disability law requires states to ensure that eligible children are able to receive early intervention services. The $350 million cut originally ordered in 2015 went into effect on Thursday after being tied up in court for nearly a year.

Federal education officials said in the letter that the agency was working with state health officials to “ensure that early intervention services are made available to all eligible infants and toddlers with disabilities and their families.”

Carrie Williams, a spokeswoman for the Texas Health and Human Services Commission, declined to comment on the specifics of the agency's discussions with the federal government.

She said they discussed the program's future and how other states are managing "challenges" with Early Childhood Intervention.

"It wouldn't be appropriate to comment publicly on rumors about providers," Williams said in an email. "Providers are required to give us 120 days' notice before terminating, and we have not received any such recent notice" other than one impending closure in North Texas.

Since last year, child welfare advocates have warned that the Medicaid cuts would jeopardize vulnerable children’s ability to access health care because it would cause providers to close their doors. A group of in-home therapy providers and families who received their services filed suit seeking to block the cuts, but an appeals court eventually threw out the case.

Early Childhood Intervention, which in Texas serves approximately 50,000 children under three years old each year, has its own dedicated stream of federal and state funding separate from the Medicaid program. But nonprofit providers say they must bill Medicaid to pay for the bulk of services.

Despite growing enrollment, state lawmakers declined to allocate more funding for Early Childhood Intervention in 2015, which providers say has left them with fewer dollars to spend on each child. Many nonprofit providers have warned they will likely have to lay off workers when the Medicaid funding is reduced.

In light of the outcry, House Speaker Joe Straus announced Nov. 29 that he would try to restore the funding through a supplemental budget when lawmakers reconvene in 2017. State Rep. John Zerwas, R-Richmond, said at a Texas Tribune event Thursday that the money saved “becomes insignificant” if the therapy services prevent children from being hospitalized or undergoing surgeries.

On Oct. 1, an Early Childhood Intervention provider in East Texas dropped out of the program after telling state officials the budget cuts were unsustainable. The Tyler-based nonprofit Andrews Center had warned state officials for several months that it would be forced to withdraw from the program. It shuttered its Early Childhood Intervention program on Oct. 1, and for a month, state officials struggled to plug the gap in services. On Nov. 1, the Sabine Valley Regional MHMR Center signed a contract to serve the area in the Andrews Center's stead.

Disability Rights Texas filed a complaint against the Andrews Center and the Health and Human Services Commission, arguing that the gap in services was a violation of the federal Individuals with Disabilities Education Act.

Read more of our coverage:

• In a wide-ranging interview with The Texas Tribune's Evan Smith, House Speaker Joe Straus shed light on his priorities for state lawmakers.
• Cuts in the state's payments to therapy providers who see children with disabilities remain tied up in court, but Texas officials said last week that they have made about $58 million in cuts from other parts of the health care budget.
• Comments by high-ranking Texas Republicans indicate that the state’s long-running tug-of-war with the federal government over Medicaid expansion is unlikely to change course.