Texas Rule Change Loses Family Planning Funding

CMS recently notified Texas Medicaid officials that the state’s Women’s Health Program (WHP) waiver will not be renewed because the state’s new rules violate federal law. In a March 15, 2012 letter, Cindy Mann, Director of the Center for Medicaid and CHIP Services, explained, for the second time, that federal law does not allow the state to limit patients’ choice of family planning providers.

Texas Governor Rick Perry blames the Obama administration for cutting off essential care to women. In a letter to President Obama last week, Perry said  the federal government is violating Texas’ constitutional right to choose its own providers. According to the Governor, Texans send a lot of tax money to Washington,  and it’s “unacceptable” that Texas cannot use that money to fund WHP because of the administration’s ” pro-abortion agenda”.

Texas accepted $34 million from the federal governments in 2011 for the WHP.  What changed?  Texas law. The state decided that a provider who is affiliated with an entity that performs abortions may not receive receive Medicaid funds. So even though Planned Parenthood clinics  in Texas don’t perform abortions, they can’t be paid with WHP funds to perform pap smears, breast exams or pregnancy tests, let alone provide birth control.

Perhaps Texas officials aren’t quite clear on the concept of demonstration project waivers. If so, they’re not alone, as we saw recently with Florida’s proposed cost sharing waiver.  Section 1115 of the Social Security Act allows HHS to waive requirements of section 1902  for demonstration projects that would further the objectives of the law.

The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) amended section 1115 to require that waivers that would have an  impact on eligibility, enrollment, benefits, cost-sharing, or financing be justified with an explanation of the purposes to be served. HHS was directed to issue regulations to govern the process. A Final rule was published February 27, 2012 that requires detailed explanations of the hypothesis to be tested, the research methodology and the contribution of the research to new knowledge and policy development. Granted, that regulation is not yet effective, but the Proposed rule was published back in September 2010. State officials should have been on notice, then, that section 1115 waivers could not be a vehicle to sidestep federal laws they don’t like.

Is the Texas request consistent with the objectives  of the Medicaid law?  There are two reasons CMS thinks not.

First, the law puts a high priority both on access to family planning services and on the free choice of provider of those services.  This is reflected, for example,  in the exception of family planning services from any cost sharing requirements.  Texas requested a waiver of the provision  barring the Secretary from approving a limit on patients’ choice of family planning provider even when HHS is waiving other free choice requirements.  In fact, family planning is so important that the federal government pays 90 percent of the cost.

Second, the Texas plan would eliminate the provider of nearly half the services furnished under the WHP. The program served  130,000 women each year. It doesn’t take a demonstration project to figure out that the remaining clinics and practitioners won’t  make up the difference.  Apparently, the choice of provider belongs to the Texas Medicaid agency, not the patient.

CMS has given Texas a month to prepare a plan to shut down the demonstration.  The state agency will need to examine each case to see whether the woman would be eligible for Medicaid under another category and prefer to refer the patients who used Planner Parenthood to any other providers they can find.  Until the termination plan is submitted and approved,  the state must  keep serving patients with their existing providers.