Senators Approve Partial Consolidation of Health Agencies

The Texas Senate on Wednesday tentatively approved a measure to partially consolidate the state’s massive health and human services system.

Under Senate Bill 200 by Jane Nelson, R-Flower Mound, three of the state’s five health and human services agencies — the Health and Human Services Commission, the Department of Aging and Disability Services and the Department of Assistive and Rehabilitative Services — would be merged into one “mega-agency” next year.

A recommendation to consolidate the other two agencies — the Department of State Health Services and the Department of Family and Protective Services — would, under the bill, be left to a committee of four senators, four House members and three public citizens.

That proposal represents “a much more graduated approach to reorganization,” said Nelson, who stressed that the current agency structure was a “broken system that no longer reflects the reality of how we deliver services.”

The bill sailed out of the Senate with a unanimous vote. But Democrats took the opportunity to debate a more contentious topic with an amendment that would have expanded Medicaid under the federal Affordable Care Act to provide health insurance to low-income Texans. That amendment, by Sen. Rodney Ellis, D-Houston, failed with a vote split along party lines, 20-11.

The debate over how to consolidate the health and human services agencies will now go to the House.

SB 200 comes amid controversy at the Health and Human Services Commission over how the agency awarded a $20 million contract to a private company outside of the competitive bidding process.

The bill has gone through several rounds of changes since it was filed this year — a chain of events started last year when the Sunset Advisory Commission recommended that all five agencies be consolidated in the hopes of making them more efficient.

But as the scandal developed at the health commission, lawmakers slowed down their approach to the ambitious recommendations amid enhanced scrutiny of the executive management of the Health and Human Services Commission.

Senators on the Health and Human Services Committee voted to pump the brakes on consolidation after two reports published in recent weeks — one commissioned by Gov. Greg Abbott, and the other by the state auditor’s office — found the Health and Human Service Commission’s management had made serious missteps in its handling of a private contract for fraud detection software.

“It is now more clear than ever that the Texas Health and Human Services Commission has been riddled with operational, managerial, structural and procedural problems that go far beyond any individual or contract,” Abbott said in a statement at the time. “That is unacceptable.”

The five agencies within the HHSC system have about 54,000 employees and a budget of about $34.5 billion, according to the Sunset Advisory Commission.

Before the Senate voted, state Sen. Don Huffines, R-Dallas, questioned how much money the agency consolidation would save, particularly from laying off state employees.

“Of course taxpayers are liable not only for the salaries for the tens of thousands of employees, but also for their benefits,” he said. “What’s the reduction?”

Nelson said she could not supply an exact figure. The original Sunset report for five-agency consolidated predicted 32 full-time employees would lose their jobs.

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.