Families of Disabled Children Sue Texas Over Medicaid Cuts

Relatives of children with disabilities are joining therapy providers in a lawsuit against the Texas Health and Human Services Commission, weeks before the agency is scheduled to slash payments to a therapy program for the poor.

The families and therapy providers have asked a Travis County judge to stop the state from implementing the budget cuts on Sept. 1, alleging they will cause "immediate and irreparable injury" to thousands of kids in the state's Medicaid program.

"Those rates will force Texas Medicaid providers to cease providing services critical to the health and development of Texas' most vulnerable residents, its children," the suit reads.

Home health agencies have rallied support against the cuts with an aggressive public relations campaign, saying their industry will face an average 20 percent reduction in revenue. That, they say, will lead businesses to close — and could leave as many as 60,000 severely disabled children without access to medically necessary services in their homes.

They say an earlier lawsuit the state settled in 2005 compels Texas to provide "all medically necessary services" to Medicaid enrollees, including speech, physical and occupational therapy.

District Judge Suzanne Covington scheduled a hearing for Aug. 24 for the state to make its case in justifying the proposed cuts, which were ordered this year by the Legislature.

The state budget crafted by lawmakers directs Medicaid, the state’s insurance program for the poor and disabled, to cut roughly $260 million in payments to the therapy program over the next two years and to find another $130 million in savings from “medical policy reductions.” Combined, that’s a 28 percent reduction to the therapy program’s current two-year budget of about $1.4 billion.

The number of Medicaid beneficiaries who got speech, physical or occupational therapy services from a home health provider grew from about 16,000 in 2009 to 47,000 in 2013, according to the health commission.