Editor's note: This story has been updated to note that House Bill 25 received final approval in the Texas House.

The Texas House gave tentative approval Thursday to a measure that would partially reverse a controversial cut to disabled children’s therapy services that was ordered by the 2015 Legislature. 

House Bill 25, authored by state Rep. Sarah Davis, R-West University Place, passed unanimously, 138-0. Once it receives final approval, it will head across the hall to the Senate. (Update, Aug. 4: The House on Friday morning voted 141-0 to give the bill final approval. An amendment proposed by Rep. Byron Cook, R-Corsicana, that would have funded the measure with money from the Rainy Day Fund instead of the Disaster Relief Fund, failed. HB 25 now goes to the Senate.)

“By restoring the [Medicaid reimbursement] rates today, we’re doing the right thing for Texas children while remaining fiscally conservative,” Davis said.

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Despite the strong approval from the House, significant hurdles remain for the measure. Among others, the issue of funding for therapy services for disabled children was not explicitly included among the 20 issues on Gov. Greg Abbott's official agenda for the special session. Several lawmakers including state Rep. Matt Krause, R-Fort Worth, a member of the conservative House Freedom Caucus, have urged Abbott to add the issue to the session's agenda.

In a message posted to Twitter on Thursday, House Speaker Joe Straus said, "Today we showed that further restoring children's therapy services should be part of what we accomplish this special session."

The cut reduced the rate at which speech, physical and occupational therapists are reimbursed by Medicaid, the federal-state health insurance program for the poor and disabled, when they treat children with disabilities. It was approved by the 2015 Legislature after a study found Texas’ Medicaid program pays therapists more generously than programs in other states. The study's findings were refuted by lawmakers Thursday.

“This was simply not a valid or complete study," Davis said. “We made the wrong decision in the 84th legislative session, and now we have the opportunity to correct that.”

The $350 million funding cut outraged therapy providers and the families of children who receive their services, and a group of concerned Texans quickly filed a lawsuit seeking to block the cuts. They lost, but the legal maneuvering tied up the budget cuts in court for more than a year.

Davis' bill would restore $160 million of that funding. Before the House passed Davis's bill, it approved an amendment from Krause that changed where some of its funding came from.

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Davis had originally called for appropriating over $93 million from federal funds and $70 million from the state's Rainy Day Fund. The use of that state savings account, which is fed largely by production taxes on oil and gas development and has a balance of roughly $10 billion, has been a source of intense debate in the Capitol in recent years. Some Republicans, including Lt. Gov. Dan Patrick who oversees the Senate, argue the fund should only be tapped for one-time expenses such as natural disasters.

Krause successfully convinced House members to support his amendment to tap disaster relief funding in the governor's office over the Rainy Day Fund. He argued that such a move would improve the chances of the measure passing the Senate and reaching Abbott's desk.

“I think most people would agree that the Rainy Day Fund is for rainy days,” Krause said.

The bill's passage is the latest step in a prolonged back-and-forth over the measure between the House and the Senate. 

In November, a few weeks before the start of this year's regular legislative session, Straus said he intended to restore some of the funding to disabled children's therapy programs. Though House lawmakers tried to do just that, the Senate was not on board. The compromise measure the two chambers agreed to restored only 25 percent of the funding.

 “I just don’t have any ammunition left,” State Rep. John Zerwas, R-Richmond, told House colleagues at the time.  

Read related Tribune coverage:

  • Earlier this year, the House grudgingly voted to accept the Senate's supplemental budget proposal that only partially restored funding for disabled children's therapy services. [Full story]

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