© 2017 The Texas Lawbook.
By Kathy Hutto and Denise Rose of Jackson Walker
(Feb. 7) – When the Texas Legislature convened for the 85th Regular Session Jan. 10, the Texas House of Representatives and the state Senate began the process of tackling both new and old challenges.
While the state’s three top leaders – Governor Greg Abbott, Lieutenant Governor Dan Patrick and House Speaker Joe Straus – remain in office, fresh faces have joined both legislative chambers. In the Texas House, 22 freshman members were sworn in. Three new members joined the Senate.
The House also has eight vacant committee chairmanships, including major committees such as House Appropriations, House Public Education and House Natural Resources. The Lieutenant Governor appointed Senate committees last week with no major changes, and Senate Finance is off to a quick start, taking up their newly filed Senate Bill 1, discussed below.
On Jan. 9, Comptroller Glenn Hegar released the state’s biennial revenue estimate (BRE), which is a constitutionally-required statement showing the state’s financial condition. Total appropriations cannot exceed the amount predicted to be available.
The 2018-2019 BRE is just under $105 billion, which is over $8 billion less than 2016-2017, an almost three percent decrease. Additionally, when the 2015 session began, lawmakers had $7.5 billion left from the previous biennium; this time, they will have only $1.53 billion, and the state is already facing a $1.3 billion Medicaid shortfall.
Senate Bill 1, as filed, comes in over a billion dollars less than the BRE – the House-filed version is $5.3 billion more than SB 1 and almost $4 billion above the BRE. The largest differences are in the health and human services and higher education areas of the budget.
The Senate bill does not address Medicaid caseload growth or fund the aforementioned current Medicaid shortfall, but it does include funding to address community mental health services and a $300 million-plus increase to the Department of Family and Protective Services. In higher education, the Senate version of the budget cuts approximately $800 million.
Added to the challenges of working out the budget differences between the two chambers, the Lieutenant Governor and Speaker each have different priorities for the legislative session. Shortly after the general election in November, Lt. Governor Patrick released his top ten priorities for the session, which include passing a balanced budget, additional property tax reform, school choice, ending sanctuary cities, photo voter identification, the “Women’s Privacy Act” or “bathroom bill,” inappropriate teacher-student relationships, criminalization of buying or selling fetal tissue and banning partial birth abortions, strengthening the state spending cap, and reining in hailstorm lawsuit abuse.
Speaker Joe Straus, on the other hand, has prioritized mental health, continuing to encourage businesses to come to Texas, reforming the public school finance system, and strengthening and reforming the Child Protective Services system. Governor Abbott has also listed Child Protective Services reform as a priority for the session.
On the health care front, the industry faces uncertain times both at the federal and state level as the Trump administration begins the process of issuing executive orders, including his first one, which was to instruct federal agencies to “relieve the burdens of the Affordable Care Act.”
This is an especially precarious time for Texas hospitals and other health care providers as the future of the state’s Medicaid 1115 waiver, which provides over $6 billion in uncompensated care and delivery system reform incentive payments to hospitals, remains in doubt. Some top federal officials, such as House Speaker Paul Ryan, have expressed an interest in allowing states to pursue block grants for their Medicaid programs, which would effectively end the open entitlement nature of Medicaid and limit spending.
It is unclear whether or not the Texas Legislature will need to take any action on hospital financing and the Medicaid waiver during the session. Texas leaders continue to point to Medicaid spending as the biggest cost-driver in the state’s budget.
Still more health care issues will receive attention during the session. As was mentioned, both mental health and Child Protective Services will be priority issues. The House Select Committee on Mental Health held multiple hearings over the interim and recommended focusing on solutions such as early intervention and treatment and ensuring adequate bed capacity. It is not clear what the cost to the state would be to address the recommendations in the report.
In addition, U.S. District Judge Janis Jack, who had previously found the state’s foster care system unconstitutional, has ordered the state to submit plans on how to fix problems in the foster care system based on the nearly 60 recommendations made by court-appointed special masters.
In the fall, Department of Family and Protective Services Commissioner Hank Whitman asked for more state funding to hire over 800 new employees and also for a $12,000 pay raise for each caseworker, which adds up to $144.7 million. He made it clear that this was just a first step in improving the state’s foster care system.
Children’s hospital and pediatric stakeholders are also advocating for reforms from the health care side of foster care, including ensuring that foster care children are seen by a health care provider within three days of being removed from their homes and embedding CPS caseworkers in foster care clinics to ensure better communication and cohesiveness for the children and families.
Freestanding emergency centers, which began to be regulated by the state in 2011, are under scrutiny for perceived “surprise bills” and a perceived contribution to higher health care costs. Telemedicine and telehealth services – how they are paid for by the state and insurance companies, who can use them and what modality by which they can be administered – will all be topics of discussion over the next 140 days.
Finally, 24 state agencies, including 15 health professional licensing boards, are currently undergoing Sunset review. Physicians, nurses, pharmacists, dentists, physical and occupational therapists and a number of behavioral health professionals will all see their licensing boards reexamined during the legislative session. The Sunset Commission is looking at a range of issues affecting these professions, from monitoring prescribing of controlled substances to allowing boards to have fingerprinting authority to authorizing boards to seek court enforcement of administrative subpoenas.
The next five months will be a busy time for lawmakers as they attempt to address the needs of the state and their own districts.
Kathy Hutto is an Austin lobbyist with more than 30 years of experience and specializing in health care and human services delivery system. She works with clients on seeking to influence legislative and agency decisions involving businesses. Denise Rose is a government affairs consultant who specializes in health care and hospital policy.
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