                                                                                          ACCEPTED
                                                                                      03-15-00657-CV
                                                                                            11226023
                                                                           THIRD COURT OF APPEALS
                                                                                      AUSTIN, TEXAS
                                                                                6/20/2016 11:40:07 AM
                                                                                    JEFFREY D. KYLE
                                                                                               CLERK
                            No. 03-15-00657-CV

                   In the Court of Appeals                          FILED IN
                                                             3rd COURT OF APPEALS
                                                                  AUSTIN, TEXAS
                for the Third Judicial District              6/20/2016 11:40:07 AM
                                                                 JEFFREY D. KYLE
                        Austin, Texas                                 Clerk



  Chris Traylor, as Executive Commissioner of the
Texas Health and Human Services Commission, et al.,
                                          Appellants,
                                      v.
    Diana D., as Next Friend of KD, a Child, et al.,
                                             Appellees.

                            On Appeal from the
                200th Judicial District Court, Travis County

       APPELLANTS’ RESPONSE TO APPELLEES’
         “EMERGENCY MOTION FOR WRIT OF
                ENFORCEMENT”


T O T HE H ONORABLE T HIRD C OURT                 OF   A PPEALS :
    As the Commission has repeatedly pointed out, plaintiffs seek to win this

case, and avoid the impact of Medicaid spending cuts mandated by the

Legislature, by drawing out the appellate process and avoiding application of

the statutes until the end of the current biennium. The Commission

challenged the district court’s issuance of a counter-supersedeas order on this

ground, among others. In its opinion rejecting plaintiffs’ legal theory, this

Court declared the Commission’s Rule 24 challenge to counter-supersedeas
to be moot. The Commission has understood that decision to mean that the

temporary injunction is now superseded under the automatic suspension

effected by its notice of appeal. If the Court determines that the vacatur of the

counter-supersedeas did not occur at the time of the issuance of the opinion

and had to wait till the mandate issued, the Commission asks for a ruling to
that effect so that it can immediately file a writ of mandamus on the

supersedeas issue (which is, by rule, independent of the appellate judgment)

in the Texas Supreme Court, so that it can obtain emergency relief and avoid

spending more than approximately $4,167,000 per month that the Legislature

never intended be spent.

                 Summary of the Argument
    There is no basis for a motion to enforce to be filed in either the district
court or this court, because the panel’s opinion put the Commission’s

supersedeas of the temporary injunction order back in place. The proper next

step is for plaintiffs to seek mandamus relief in the Supreme Court regarding

the panel’s vacatur of their counter-supersedeas, when it dismissed the

challenge to the counter-supersedeas as moot.

    Putting aside the supersedeas issues, the motion for “emergency
enforcement” should be denied, because the underlying motion for contempt

was filed in the wrong court. The plain text of the rules, and this Court’s

precedent, contemplate the filing of a motion for contempt in the court of

appeals to trigger a referral request. TEX. R. APP. P. 29.4. Because the motion




                                       2
was filed in the wrong forum, the Court should summarily deny the relief

requested.

    Even assuming the referral request were procedurally sound, it should be

denied because (1) there is no issue of fact and this Court is best suited to

determine the relevant issues of law and (2) the vacatur of the counter-
supersedeas evidenced an intent that the panel’s opinion go into effect

immediately. Denial of the motion is all the more appropriate, because the

district court could not grant plaintiffs the relief they seek without violating

the general standards of law announced in the Court’s opinion, which became

binding as law of the case from the moment the opinion issued.

    Finally, there is no alternative basis for interim relief under Rule 29.3 or

the Court’s inherent powers. Rule 29.3 does not allow for a party to seek relief

it could otherwise have obtained in supersedeas, TEX. R. APP. P. 29.3, which

means that plaintiffs should pursue their remedy under Rule 24.4. And the
Court’s inherent power extends only to the power to preserve appellate

jurisdiction, which would not be impacted by a change to lower

reimbursement rates.

I. Plaintiffs Ask the Court to Place Decisions
   Regarding the Appellate Process in the District
   Court.
    Plaintiffs’ motion asks for several forms of relief, at least one of which is

not mentioned in the prayer. While invoking several appellate rules, however,

plaintiffs fail to cite the text of the rules or the relevant precedent governing




                                       3
interim appellate relief.1 The motion: (1) seeks an order referring enforcement

proceedings to the trial court, under Rule 29.4, Motion at 2; (2) asserts,
without citation, that parties are entitled to “have their rights preserved until

final disposition of the appeal,” Motion at 3; (3) suggests that the temporary

injunction is, necessarily, enforceable until the mandate issues, Motion at 3-4;

(4) seek relief as of right under Rule 29.3, Motion at 4.

     Strikingly, plaintiffs fail even to mention the issue of supersedeas, which

ought to govern the present enforceability of the temporary injunction. At the
time the Court issued its opinion and judgment, the Court dismissed as moot

the Commission’s Rule 24.4 challenge to the trial court’s counter-

supersedeas order. In doing so, the Court implicitly (but necessarily)
determined that the trial court’s counter-supersedeas order was, as of that

moment, no longer in effect. Otherwise, the Commission’s challenge to the

order’s validity would not have been moot.

II. There is No Basis to Enforce the Temporary
    Injunction, Because it is Currently Superseded.
     The Court’s decision dismisses the challenge to the counter-supersedeas

as moot. See Traylor v. Diana D., No. 03-15-00657-CV, 2016 WL 1639871, at

*1 n.1 (Tex. App.—Austin 2016, no pet. h.) (mem. op.). Supersedeas is not


1
 Plaintiffs have suggested that the district court has jurisdiction over its contempt motion
“notwithstanding the appellate rules.” See Cover Letter to District Court Alerting it to this
Filing, Appendix Tab A. Plaintiffs cite no authority for this proposition, because there is
none. This motion should be summarily denied, because it should have been filed pursuant
to a motion for contempt filed in this Court, not a spurious motion for contempt filed in the
district court contrary to the rules of appellate procedure. See infra, Part III.B.1.



                                             4
part of the judgment, but is challenged through a separate challenge

proceeding, that results in a rule-based mandamus in the Texas Supreme

Court. See TEX. R. APP. P. 24.4. Supersedeas challenges, therefore, cannot be

subject to the requirements of mandate issuance, which applies only to the

“judgment.” TEX. R. APP. P. 18.1. While the dismissal of the Rule 24 motion

on mootness grounds necessarily reflects that the vacatur of the temporary

injunction was intended to take immediate effect, see Edwards Aquifer Auth. v.

Chemical Lime, Ltd., 291 S.W.3d 392, 393-94 (Tex. 2009), the temporary
injunction is not enforceable because of the principles governing supersedeas,

separate and apart from questions regarding the effective date of the judgment

regarding the temporary injunction.
    The default rule is that suits for injunctive relief are superseded by the

State’s notice of appeal. In re State Bd. for Educator Certification, 452 S.W.3d

802, 804 (Tex. 2014) (“the State’s notice of appeal automatically suspends
enforcement of a judgment”). A superseded injunction cannot be enforced.

The supersedeas has been prevented from taking effect only by the counter-

supersedeas order, which the State has challenged under Rule 24, separate

from its appeal of the other interlocutory orders below. Because the Rule 24

challenge was dismissed as moot in the present tense, Diana D., 2016 WL

1639871, at *1 n.1, the only reasonable reading of the panel’s decision is that

the counter-supersedeas was dissolved effective upon the issuance of the

opinion. At that moment, the Commission’s notice of appeal’s automatic




                                       5
supersedeas was reinvigorated. It now supersedes the judgment below, and

there is no basis for enforcing the district court’s order.

    The upshot of the procedural wrangling in this case is that plaintiffs will

win everything they ask for—the continuation of higher Medicaid rates

through the end of the current biennium and the expenditure of millions of
dollars in funds the Legislature did not appropriate—merely through the

technicalities of the appellate process. The rules contemplate a fix for this

solution: mandamus to the Texas Supreme Court regarding vacatur of the

counter-supersedeas order. TEX. R. APP. P. 24.4(a). If plaintiffs wish to

reimpose counter-supersedeas and render the temporary injunction

enforceable again, they should seek relief in the Supreme Court, not the
district court or this Court. In any event, enforcement or non-enforcement of

the temporary injunction will not deprive the courts of appellate jurisdiction

or deprive plaintiffs of their appellate remedies. See infra, Part III.D.
    By the same token, if the Court did not intend for its opinion rejecting

plaintiffs’ claims to have effect during the biennium, but instead intended for

plaintiffs to “win by losing,” the Commission asks that the Court issue an

order denying its Rule 24.4 motion so that the Commission can seek

emergency relief in the Supreme Court and prevent further procedural

roadblocks to implementing the statutorily-mandated cuts to Medicaid rates

for these services. In either event, because interim enforcement of the

temporary injunction turns on supersedeas, the next step is in the Supreme

Court, not this Court or the district court.


                                        6
III. Even   assuming    the    Counter-Supersedeas
     remains In effect despite being moot, there is
     No Basis for Appellate Enforcement of the
     Temporary Injunction, or Any Other Form of
     Temporary Relief.
    Even assuming the counter-supersedeas remains in place, there is no basis

in law for plaintiffs to maintain the effect of the district court’s order pending
appeal, because (1) the Court’s judgment was designed to take effect

immediately, (2) these enforcement motions were wrongly filed in the district

court, rather than this Court, in contravention of Rule 29.4; and (3) plaintiffs

do not qualify for relief under Rule 29.3 or the appellate courts’ inherent

power to protect appellate jurisdiction.

    A. Footnote 1 Makes the Judgment Immediately Enforceable,
       Because it Vacates the Counter-Supersedeas as Moot.
    As explained above, by stating that Rule 24.4 motion was moot at the time
the opinion issued, the panel vacated the countersupersedeas. It also,

necessarily, manifested an intent that the coercive power of the judgment

below be vacated at the time of the opinion. See Chemical Lime, 291 S.W.3d at

393-944. Because the language of footnote 1 presupposes that a change in the

status quo occurred at the time the opinion issued—otherwise, the Rule 24.4

challenge, which is on a completely different track of judicial review, would

not be mooted until the mandate issued. Thus, at least the portion of the

judgment that disallows plaintiffs from maintaining this lawsuit was intended

to go into effect contemporaneously with the opinion. This is a different point
than articulating that the supersedeas went into effect; the judgment was


                                        7
necessarily immediately affected by the opinion, because otherwise footnote 1

would mean nothing.

    This is precisely why Rule 29.4 places the contempt power over

interlocutory appeals in the appellate courts. See TEX. R. APP. P. 29.4. If they

intend their orders to go into effect immediately, the appellate courts are best
suited to resolve questions about the timing by which their legal conclusions

are implemented. Any motion for enforcement pending interlocutory appeal

should have originated in this Court, which is best suited to interpret its own

view of the law.

    B. Plaintiffs Are Not Procedurally or Substantively Entitled to
       Invoke Rule 29.4.
    Plaintiffs treat their motion as a request to have a hearing in the district

court, at which the district court would enforce the temporary injunction in
place of this panel. The current filing is improper, because a Rule 29.4 referral

has to stem from a motion to enforce filed in this Court; the text of the

appellate rules forecloses a motion, like this one, that starts in the district court

and the proceeds to ask the court of appeals to cure the jurisdictional defect of

filing in the wrong forum. See infra, Part III.B.1. Nor would a referral be

substantively appropriate even if the motion to enforce had been filed in the
correct forum. While referral would be permissible in a proceeding where

evidence must heard, see TEX. R. APP. P. 29.4(a), there is no need for district

court proceedings in this case, because there is no dispute issue of fact. See
infra, Part III.B.2.



                                         8
        1.   To obtain a Rule 29.4 referral order form this Court,
             plaintiffs would have had to satisfy the filing requirements
             for contempt before this Court.
    Rule 29.4 contemplates that a party move for contempt in the appellate
court and seek referral to the district court if necessary. E.g., Victory Cheval

Holdings, LLC v. Antolik, No. 03-15-00464-CV, 2015 WL 5315646, at *1 (Tex.

App.—Austin 2015) (per curiam). That reading follows from rule’s plain text,

which makes enforcement of interlocutory orders a matter primarily of this

Court’s jurisdiction. TEX. R. APP. P. 29.4 (“only the appellate court in which

the appeal is pending may enforce the order”); TEX. R. CIV. P. 692 (setting

out formal requirements to enforce injunction, which are to be filed “in the

court in which such injunction is pending”); see In re Sheshtawy, 154 S.W.3d

114, 121 (Tex. 2004) (contrasting Court’s enforcement power over

interlocutory appeals with supersedeas regime governing enforcement of

judgments during appeal). It is procedurally improper to first file a motion for

contempt in the trial court, then to seek relief in this Court without first
invoking this Court’s Rule 29.4 motions. See IPSecure, Inc. v. Carrales, No. 04-

16-00005-CV, 2016 WL 3342108, at *3 (Tex. App.—San Antonio June 15,

2016, no pet. h.) (mem. op.) (concluding that district court lacked jurisdiction

to enforce temporary injunction on original motion, pursuant to rules of

appellate procedure 29.4 and 29.5)

    Nor can the “Emergency Motion” now at issue qualify as a constructive

attempt to seek contempt in this Court. See Ex parte Blanchard, 736 S.W.2d

642, 643 (Tex. 1987) (per curiam) (contempt must be preceded by personal



                                       9
service on the alleged contemnor of an appropriate show cause order or legally

equivalent method of notice); see also Ex parte Vetterick, 744 S.W.2d 598, 599

(Tex. 1988) (orig. proceeding).

    Because plaintiffs have not attempted to invoke this Court’s contempt

power, they are not entitled to seek a referral to the district court under the
plain text of Rule 29.4. Their request for relief is an improper attempt to ask

this Court to cure their filing of a contempt motion in the wrong court. The

failure to file in the correct court warrants summary denial of the motion.

        2. It would not be necessary to refer even an appropriately-filed
           contempt proceeding to the district court, because as a matter
           of law the Commission’s alleged actions do not violate the
           temporary injunction.
    Even if plaintiffs’ Rule 29.4 motion were procedurally firm, there is no

reason to refer the contempt issue to the district court, because there are no
facts to be found, only legal analyses to be made. See TEX. R. APP. P. 29.4(a),

(b) (describing district court’s role as being to “hear evidence” and “make

findings”). This Court is entirely capable of determining whether the
Commission’s actions violate the temporary injunction that the panel has

already held was brought by plaintiffs with no standing to sue, based on a non-

viable legal theory. Indeed, the district court could not issue any relief

consistent with the legal principles articulated in the Court’s opinion, because

the Court has foreclosed these plaintiffs from seeking judicial relief generally.

    Further, the Commission’s actions about which plaintiffs complain are

not subject to contempt because they are not clearly and unambiguously



                                       10
within the scope of the temporary injunction. To be enforceable by contempt,

an injunction decree must “set forth the terms of compliance in clear, specific

and unambiguous terms so that the person charged with obeying the decree

will readily know exactly what duties and obligations are imposed upon him.”

Ex parte Acker, 949 S.W.2d 314, 317 (Tex. 1997) (orig. proceeding) (internal
quotation marks and citation omitted). The order may not be susceptible to

more than one interpretation. Ex Parte Glover, 701 S.W.2d 639, 640 (Tex.

1985) (orig. proceeding.

     In their contempt motion before the district court, plaintiffs attached only

a public-notice document related to the submission of new rates to the federal

government. Tab B, Exhibit C; see also Tab B at 4 ¶ 5. The temporary

injunction expressly allow this action. “This Order does not affect HHSC’s

ability to seek CMS’s approval of the State Plan Amendment.” CR.596. 2 Just

as plaintiffs’ improperly-filed motion for contempt fails to articulate a factual
basis for contempt, they could not allege any action falling within the

temporary injunction to this Court.

     Nor is it a foregone conclusion that the (now reversed and vacated)

temporary injunction is currently enforceable, because it is subject to more

than one interpretation and, therefore, inconsistent with Glover. The order

prohibits the Commission from “taking any action to propose or implement


2
  State law requires public notice of the intent to file a rate change with the federal govern-
ment. TEX. HUM. RES. CODE §32.0231. The public notice is, thus, a necessary part of the
filing with CMS contemplated by the temporary injunction.



                                              11
any change in reimbursement rates,” while simultaneously providing that the

Commission may seek federal approval of rates. CR.596. Because the rates

plaintiffs attempt to challenge in this lawsuit have already been deliberated

upon, the first and best reading of the injunction is that the additional step of

filing with the federal agency does not controvert the injunction. But if the
injunction can be read so broadly as to preclude further action on the already

completed ratemaking process, it is susceptible of two meanings and, as a

result, unenforceable.

    C. Rule 29.4 Proceedings in the District Court Would Be
       Useless Because the Court is Currently Bound by the Panel’s
       Conclusions of Law, Which Foreclose this Lawsuit in its
       Entirety.
    When an appellate decision reversing a trial court judgment goes into

effect, it can preclude the lower court’s enforcement of the underlying order

regardless of the mandate. E.g., Flanary v. Wade, 102 Tex. 63, 66-67, 113 S.W.

8, 10 (1908). This need not always be the rule, but it should be when the court

of appeals’s legal analysis forecloses the underlying lawsuit. While the

judgment and mandate are required to enforce the judgment, the court of
appeals’s legal reasoning becomes precedential immediately. See Blair v.

Fletcher, 849 S.W.2d 344, 345 (Tex. 1993) (per curiam) (when law is

determined during scope of appeal, lower court must render its decision in

light of the change in the law).

    Likewise, the Court’s opinion makes clear that the rates at issue in this

lawsuit were arrived at consistent with the relevant rules and statutes. Diana


                                       12
D., 2016 WL 1639871, at *9-*11. A temporary injunction cannot be enforced

to preclude an act authorized by law. Villalobos v. Holguin, 146 Tex. 474, 480,

208 S.W.2d 871, 875 (1948) (“the decree must not be so broad as to enjoin a

defendant from activities which are lawful and a proper exercise of his

rights”). Accordingly, because the opinion states legal principles that cannot
be controverted by the district court, there would be no legal basis for a district

court to reach a substantively contrary result. Only this Court has power to

allow the plaintiffs to prevail on the procedural side of the ledger, when it has

conclusively rejected their legal arguments as a matter of law. The rule

requiring that interlocutory orders be enforced by the court currently

exercising appellate jurisdiction, TEX. R. APP. P. 29.4, makes a lot of sense.

    D. Plaintiffs Have No “Right” to a Particular Level of Medicaid
       Funding, and So Cannot Obtain Rule 29.3 Relief.
    Plaintiffs refer to Rule 29.3, at some points, and repeatedly aver that they

are entitled to appellate relief that protects their “rights.” E.g., Motion at 4.

However, as the Commission explained in its appellate briefing and the Court

concluded, there are no “rights” to future levels of reimbursement because

Medicaid rates are always subject to being lowered based on the amount of

funds appropriated.

    Rule 29.3 relief cannot be granted if the same relief could have been

obtained by supersedeas in the trial court. TEX. R. APP. P. 29.3. Plaintiffs

obtained the very remedy they now seek from this Court in the order granting




                                        13
counter-supersedeas relief. They are, therefore, precluded from seeking a

temporary order in this Court.

    But even if plaintiffs had not sought, or could not seek, supersedeas, their

request for Rule 29.3 would still necessarily fail. Rule 29.3 places a burden on

the movant to make a “clear showing” that a present right has been violated.
Falcon v. Bonanza Capital, Ltd., No. 03-12-00132-CV, 2012 WL 1655809, at

*1 (Tex. App.—Austin 2012, no pet.) (per curiam). Thus, for example, the

Court has issued Rule 29.3 relief to prevent a trial in derogation of an

interlocutory appeal regarding an arbitration clause. EnerVest Operating, LLC

v. Molett, No. 03-11-00823-CV, 2012 WL 1647991, at *1 (Tex. App.—Austin

2012, no pet.) (per curiam). The most common use of the Rule has been to

enforce the automatic stay provision that governs most interlocutory appeals.

E.g., Trulock v. City of Duncanville, 277 S.W.3d 920, 923 (Tex. App.—Dallas

2009, no pet.). It has been used to seal documents while an interlocutory

appeal is pending. Monsanto Co. v. Davis, 10 S.W.3d 28, 29 (Tex. App.—Waco

2002, no pet.) (per curiam). It has also been cited, perhaps unnecessarily, as a

basis for issuing injunctive relief to preserve the res of a real-estate dispute.

Lavigne v. Holder, 186 S.W.3d 625, 626 (Tex. App.—Fort Worth 2006, no

pet.).

    But the rule has never been used, as plaintiffs seek to use it in this case, to

bestow on a party the very relief it would obtain if that party ultimately

prevailed in the pending litigation. As the Court correctly noted in Mote

Resources Inc. v. Railroad Commission, there is a difference between the subject


                                       14
matter of the dispute and the legal result of the litigation, 618 S.W.2d 877, 879

(Tex. Civ. App.—Austin 1981, no writ). The property interest at issue in Mote

Resources existed as a matter of law until the court acted. This prohibits relief

requesting that a temporary injunction order be left in place pending appeal.

Lamar Builders, Inc. v. Guardian Sav. & Loan Ass’n, 786 S.W.2d 789, 790-91
(Tex. App.—Houston [1st Dist.] 1990, no writ).

    As the Court has already concluded, plaintiffs have no present right to

retain the same or similar reimbursement rates for Medicaid services in the

future. Diana D., 2016 WL 1639871, at *6 (holding that plaintiffs lack vested

rights). Because Medicaid funding is always contingent on cuts in

appropriations, 42 U.S.C. § 1396b(a); TEX. HUM. RES. CODE § 32.028,

plaintiffs have no presently enforceable right on which to base their request

for Rule 29.3 relief.

    E. Plaintiffs Cannot Invoke the Inherent Power to Protect
       Appellate Jurisdiction, Because a Change in the Rates Will
       Not Moot these Proceedings.
    Plaintiffs suggest that some sort of relief is necessary to protect their

“right . . . to have their rights preserved until final disposition of the appeal.”

Motion at 2. This is a misstatement of the scope of appellate power and the

nature of an appealing party’s rights. Apart from the broader power to issue

temporary relief and enforce unsuperseded temporary orders pending

interlocutory appeals, see TEX. R. APP. P. 29.3, 29.4, the appellate courts have

only inherent authority to issue relief pending interlocutory appeal, and that




                                        15
authority extends only to orders that protect appellate jurisdiction, see TEX.

CONST. art. V § 6(a); e.g., Madison v. Martinez, 42 S.W.2d 84, 86 (Tex. Civ.

App.—Dallas 1931, writ ref’d). A writ of appellate injunction is appropriate,

for example, to prevent the sale of real property to which a party asserts a

present right that will not cease to exist unless and until a court rules on the
substance of the lawsuit. E.g., Mote Resources, 618 S.W.2d at 879 (issuing

appellate injunction for deprivation of title to oil and gas produced under the

rule of capture, because property interest in captured minerals would not be
extinguished, if at all, until final judgment). Anything less than the potential

dissolution of the appeal cannot trigger the Court’s inherent powers.

    This Court’s inherent grant of injunction power is significantly more
constrained than the trial court’s power to issue a temporary injunction

preserving the status quo ante. See Baird v. Sam Houston Elec. Coop, 627

S.W.2d 732, 733-34 (Tex. App.—Houston [1st Dist.] orig. proceeding) (per

curiam). The appellate court lacks authority to issue the writ merely to

preserve the parties from harm pending appeal. Id. The original writ cannot

issue to remedy a situation that would “result only in damages or

inconvenience . . . leaving the subject-matter of the appeal in such a condition

that the judgment of [the court of appeals] could effectively operate thereon.”

Madison, 42 S.W.2d at 86.

    Plaintiffs do not assert that a change in rates would destroy jurisdiction

over this appeal. Indeed, the very structure of the Medicaid system is that

rates go into effect, may be rejected by the federal government or the courts,


                                      16
and are then put back in place for future services provided or used. See Diana

D, 2016 WL 1639871, at *9. Because the rate making process contemplates

exactly this type of change, there is no potential basis for issuing an appellate

injunction.

                    Conclusion and Prayer

    The Court should deny the relief requested because:

       • the order on which plaintiffs rely was superseded by the
         Court’s opinion when that opinion issued;

       • plaintiffs have filed contempt proceedings in the wrong
         court, in contravention of rule 29.4; and

       • the underlying temporary injunction cannot support the
         relief plaintiffs previously obtained through supersedeas
         proceedings and now seek to reinstate.
There is no alternative basis for providing relief because:

       • plaintiffs cannot qualify for temporary relief under Rule
         29.3 because they already received similar relief under the
         counter-supersedeas order, and their appropriate remedy is
         to file a mandamus in the Supreme Court; and

       • the Court’s inherent power to grant injunctive relief does
         not extend to these plaintiffs because a change in the rates
         will not moot the proceedings.

Accordingly, the Court should summarily deny the motion.




                                       17
                                    Respectfully submitted.

Ken Paxton                          Scott A. Keller
Attorney General of Texas           Solicitor General

Jeffrey C. Mateer                   Kristofer S. Monson
First Assistant Attorney General    Assistant Solicitor General
                                    State Bar No. 24037129
Office of the Attorney General      kristofer.monson@
P.O. Box 12548 (MC 059)              texasattorneygeneral.gov
Austin, Texas 78711-2548
Tel.: (512) 936-1700
Fax: (512) 474-2697                 /s/ Kristofer S. Monson
                                    Kristofer S. Monson
                                    Assistant Solicitor General
                                    State Bar No. 24037129
                                    kristofer.monson@texasattorneygen-
                                    eral.gov

                                    Counsel For Appellants




                                   18
              Certificate of Service
On June 20, 2016, this document was served electronically on:


Daniel R. Richards
Benjamin H. Hathaway
Richards Rodriguez & Skeith LLP
816 Congress Avenue
Suite 1200
Austin, Texas 78701
drichards@rrsfirm.com
bhathaway@rrsfirm.com




                                  /s/ Kristofer S. Monson
                                  Kristofer S. Monson




                                19
                                         No. 03-15-00657-CV

                              In the Court of Appeals
                           for the Third Judicial District
                                   Austin, Texas
         CHRIS TRAYLOR, AS EXECUTIVE COMMISSIONER OF THE TEXAS HEALTH AND
                         HUMAN SERVICES COMMISSION, ET AL.,
                                            Appellants,
                                                     v.
              Diana D., as Next Friend of KD, a child, et al.,
                                       Appellees.

                                        On Appeal from the
                            200th Judicial District Court, Travis County

                                             APPENDIX

                                                                                                    Tab
1. Cover Letter to District Court Alerting it to this Filing ......................................... A
2. Motion for Contempt Improperly Filed in District Court ...................................... B
Tab A: Cover Letter to District Court
       Alerting it to this Filing
                                                                                            CHASE C. HAMILTON
                                                                                            Direct Line: (512) 391-8262
                                                                                               chamilton@rrsfirm.com

                                                    June 16, 2016


The Honorable Tim Sulak                                 Via Email Megan.Johnson@traviscountytx.gov
353rd Civil District Court
1000 Guadalupe, 5th Floor
Austin, Texas 78701

         Re:      Cause No. D-1-GN-15-003263 Diana D., as next of friend of KD, a child, et al. v.
                  Chris Traylor, as Executive Commissioner of Texas Health and Human Services
                  and Texas Health and Human Services Commission; In the 200th District Court of
                  Travis County, Texas.

Dear Judge Sulak:

        As opposing counsel informed the court yesterday, Plaintiffs filed the attached motion for
emergency relief in the court of appeals. While there is case law to support the proposition that a
trial court has inherent power to enforce its orders, and that Plaintiffs’ motion for contempt is
properly before the trial court notwithstanding the rules of appellate procedure, the enforcement
of orders on appeal may begin with the court of appeals.

        Therefore, out of an abundance of caution and to simplify the issues that will be before
the trial court, Plaintiffs have asked the court of appeals to formally authorize the trial court to
conduct a hearing on their motion for contempt, and to otherwise enforce the trial court’s order,
which remains in effect until the appeal is finally resolved and mandate issues. We have advised
the court of appeals that this Court is holding a June 22 hearing date, and ask that the Court keep
the June 22 setting available until such time as the court of appeals acts on Plaintiffs’ motion.

                                                                 Sincerely,
                                                                 RICHARDS RODRIGUEZ & SKEITH, LLP




                                                                 Chase C. Hamilton


cc:      All Parties of Record




816 Congress Avenue, Suite 1200, Austin, Texas 78701 | Phone: (512) 476-0005 | Fax: (512) 476-1513 | Web: www.rrsfirm.com
Tab B: Motion for Contempt Improperly
        Filed in District Court
                              CAUSE NO. D-l-GN-15-003263


DIANA D., as next of friend of KD, a child, §                  IN THE DISTRICT COURT
KAREN G., as next friend of TG and ZM, §
children, GUADALUPE P., as next of friend §
of LP, a child, SALLY L., as next of friend of §
CH, DENA D., as next friend of BD, a child, §
LESLIE M., as next friend of CM, a child §
OCI ACQUISITION, LLC d/b/a §
CARE OPTIONS FOR KIDS, §
CONNECTCARE SOLUTIONS, LLC §
d/b/a CONNECTCARE THERAPY FOR §
KIDS, ATLAS PEDIATRIC THERAPY §
CONSULTANTS LLC, and PATHFINDER §
PEDIATRIC HOME CARE, INC., §
                                                         200TH JUDICIAL DISTMCT OF
       Plaintiffs,

V.



CHRIS TRAYLOR, as EXECUTIVE
COMMISSIONER of TEXAS
HEALTH AND HUMAN SERVICES
COMMISSION, and TEXAS
HEALTH AND HUMAN SERVICES
COMMISSION,

       Defendants.                                             TRAVIS COUNTY, TEXAS




                       PLAINTIFFS9 MOTION FOR CONTEMPT


TO THE HONORABLE TIM SULAK:

1. On September 25, 2015, this Court signed an Order Granting Temporary Injunction and


Denying Supersedeas (the "Temporary Injunction") in the above entitled and numbered cause.


The Temporary Injunction orders Defendants to desist and refrain from taking any action to


propose or implement any change in reimbursement rates for physical, occupational, and speech


therapy services under the Texas Medicaid program without conducting a review of payments
for providing Medicaid-reimbursable therapy services and conducting a review of costs


associated with providing Medicaid-reimbursable therapy services. Defendants filed a notice of


appeal and on April 21, 2016, the Third Court of Appeals issued its opinion and judgment

reversing this Court's Temporary Injunction and dismissing the case for lack of jurisdiction.


However, the Third Court of Appeals has not issued mandate.


2. On May 31, 2016, Plaintiffs filed an unopposed motion for extension of time to file a


petition for review in the Texas Supreme Court.1 On June 1, 2016, the Texas Supreme Court


granted the motion for extension of time setting the date for filing of a petition for review on July


6, 2016. On May 25, 2016, Defendants issued a notice of a proposed change in Medicaid


reimbursement rates that includes a change in the reimbursement rates for physical, occupational,


and speech therapy services. This notice was first made public on June 3, 2016 by publication


in the Texas Register. Upon information and belief, Defendants have neither conducted a review


of payments for providing Medicaid-reimbursable therapy services nor have they conducted a


review of costs associated with providing Medicaid-reimbursable therapy services as provided


for in the Temporary Injunction.


3. The Temporary Iniunction remains in effect until mandate is issued. Texas Rule of


Appellate Procedure 18.6 provides:


         The appellate court's judgment on an appeal from an interlocutory order takes
         effect when the mandate is issued. The court may issue the mandate with its
         judgment or delay the mandate until the appeal is finally disposed of. If the
         mandate is issued, any further proceeding in the trial court must conform to the
         mandate.




1 A true and correct copy of the motion is attached hereto as Exhibit A.
2 A ti"ue and correct copy of the notice is attached hereto as Exhibit B.
3
  A true and correct copy of the notice is attached hereto as Exhibit C. The notice was published at:
http://\vww.sos.state.tx.us/texreg/archive/June32016/In%20Addition/In%20Addition.html#186.
The pending appeal is an appeal of an interlocutory order, therefore T.R.A.P. 18.6 applies.


Accordingly, the judgment of the Third Court of Appeals only takes effect when mandate issues.


Mandate has not issued, therefore the judgment of the Third Court of Appeals has not taken


effect and the Temporary Injunction remains in effect. Under the Texas Rule of Appellate


Procedure 18.1(a)(2), the clerk of the Third Court of Appeals does not issue mandate until the


resolution of the petition for review. Because mandate has not issued and because mandate will


not issue so long as the petition for review is pending, the Temporary Injunction remains in


effect.


4. The Trial Court retains iurisdiction and may enter an order of contempt. Texas Rule of


Appellate Procedure 29.5 provides:


          While an appeal from an interlocutory order is pending, the trial court retains
          jurisdiction of the case and unless prohibited by statute may make further orders,
          including one dissolving the order complained of on appeal. If permitted by law,
          the trial court may proceed with a trial on the merits. But the court must not make
          an order that:
          (a) is inconsistent with any appellate court temporary order; or
          (b) interferes with or impairs the jurisdiction of the appellate court or
          effectiveness of any relief sought or that may be granted on appeal.


T.R.A.P. 29.5 confers continuing jurisdiction on the trial court during the period between the


judgment of the Court of Appeals and the issuance of mandate. In re KY, 273 S.W.3d 703, 707-


08 (Tex. App.-Houston [14th Dist.] 2008, no pet.) (Trial court had jurisdiction to proceed to trial

on the merits between issuance of judgment and mandate by Court of Appeals.) The pending


appeal is an appeal of an interlocutory order, therefore this Court retains jurisdiction of the case


and may make further orders. A contempt order enforcing the Temporary Injunction is not


inconsistent with any appellate court temporary order because no temporary order has been


granted. A contempt order does not interfere with or impair the jurisdiction of the appellate


court or the effectiveness of any relief sought or that may be granted on appeal.
5. Defendants have violated the Temporary Injunction. The notice issued by Defendants is


an act to propose or implement a change in reimbursement rates for physical, occupational, and


speech therapy services. Upon information and belief, Defendants have neither conducted a


review of payments nor have they conducted a review of costs associated with providing


Medicaid-reimbursable therapy services as provided for in the Temporary Injunction.


Accordingly, the actions of the Defendants violate the Temporary Injunction.


6. Relief Requested. Plaintiffs request that the Court hold a hearing and enter an order


holding Defendants in contempt for violation of the Temporary Injunction. Plaintiffs request that


the Court issue an order that, until mandate is issued by the Texas Supreme Court or the Third


Court of Appeals, any act by Defendants to propose or implement a change in reimbursement


rates for physical, occupational, and speech therapy services without complying with the


Temporary Injunction is void and of no effect.


                                                    Respectfully Submitted,

                                                    RICfHARDS RODRIGUEZ & SKEITH
                                                    816j Congress A^venue, Suite 1200
                                                    Austin, Texas ^8701
                                                    Telebhone: 51^-476-0005
                                                    FapsiWe: 51^-476-1(513

                                             By: [\,
                                                    DANIEL R. RICHARDS
                                                    State Bar No. 00791520
                                                    drichards(a),rrsfirm.com
                                                    BENJAMIN H. HATHAWAY
                                                    State Bar No. 09224500
                                                    bhathaway@jTsfirm.com
                                                    CLARK RICHARDS
                                                    State Bar No. 90001613
                                                    crichards@rrsfirm.com
                                                    CHASE C. HAMILTON
                                                    State Bar No. 24059881
                                                    chamiltQn@jTsfirm.com
                                                    ATTORNEYS FOR PLAINTIFFS
                                  CERTIFICATE OF SERVICE

       I hereby certify that the foregoing document has been delivered to the following counsel
of records on this, the 8 day of June 2016 by electronic notification and/or e-mail:


Esteban Soto
Melissa Holman
Sara Casey
Eugene A. Claybom
Andrew Lutostanski
Assistant Attorney General
Office of the Attorney General of Texas
P.O. Box 12548, Capitol Station
Austin, Texas 78711-2548


Kristofer S. Monson
Assistant Solicitor General
Office of the Attorney General of Texas
P.O. Box 12548, (MC 059)
Austin, Texas 78711-2548



                                                     DANIEL R. RICHARDS
            Exhibit A to Plaintiffs' Motion for Contempt   FILED
                             Page 1 of 5                   16-0405
                                                           5/31/2016 4:42:54 PM
                                                           tex-10899377
                                                           SUPREME COURT OF TEXAS

                            16-0405
                     No. ___________________
                                                           BLAKE A. HAWTHORNE, CLERK




                 IN THE SUPREME COURT OF TEXAS


  DIANA D., AS NEXT OF FRIEND OF KD, A CHILD; KAREN G., AS
 NEXT OF FRIEND OF TG AND ZM, CHILDREN; GUADALUPE P., AS
 NEXT OF FRIEND OF LP, A CHILD; SALLY L., AS NEXT OF FRIEND
   OF CH; DENA D., AS NEXT OF FRIEND OF BD, A CHILD; OCI
      ACQUISITIONS, LLC D/B/A CARE OPTIONS FOR KIDS;
   CONNECTIONCARE SOLUTIONS, LLC D/B/A CONNECTCARE
THERAPY FOR KIDS; ATLAS PEDIATRIC THERAPY CONSULTANTS,
     LLC; and PATHFINDER PEDIATRIC HOME CARE, INC.,

                                         Petitioners,


                                   v.

CHRIS TRAYLOR, EXECUTIVE COMMISSIONER OF TEXAS HEALTH
 AND HUMAN SERVICES COMMISSION; and THE TEXAS HEALTH
           AND HUMAN SERVICES COMMISSION,

                                        Respondents.


                     On Petition for Review from the
                 Third Court of Appeals at Austin, Texas
                         No. 03-15-00657-CV


     UNOPPOSED FIRST MOTION FOR EXTENSION OF TIME
             TO FILE PETITION FOR REVIEW
                   Exhibit A to Plaintiffs' Motion for Contempt
                                    Page 2 of 5



      Petitioners respectfully file this unopposed first motion for extension of time

to file their petition for review. The current filing deadline is June 6, 2016.

Petitioners request a 30-day extension, for a new deadline of July 6, 2016.

      The reasons for this extension are as follows: Our law firm, Alexander

Dubose Jefferson & Townsend LLP, was only recently retained to assist with

petition for review proceedings to this Court. The firm’s counsel require an

extension to master the record, research the law, and develop the arguments

necessary to allow for meaningful review by this Court.

      Petitioners’ counsel is also tasked with preparation of Appellee’s Brief in No.

03-15-00728-CV; Westlake Ethylene Pipeline Corporation v. Railroad Commission

of Texas and Eastman Chemical Company, in the Third Court of Appeals at Austin,

due May 31, 2016; preparation of Appellees’ Brief in No. 10-15-00066-CV,

McDonald’s Restaurants of Texas, Inc., et al v. Crisp, et al, in the Tenth Court of

Appeals at Waco, due June 1, 2016; and preparation of a Brief on the Merits in No.

15-0732, University of the Incarnate Word v. Redus, et al, in the Supreme Court of

Texas, due June 1; and preparation of Petitioner’s Brief on the Merits in Loya v.

Loya, No. 15-0763, in the Supreme Court of Texas, due June 27.

      This extension is unopposed and is not sought for delay. No party will be

prejudiced if it is granted. No prior extension has been sought for this filing.
                   Exhibit A to Plaintiffs' Motion for Contempt
                                    Page 3 of 5



      As set forth in the Certificate of Conference, Respondents do not oppose the

relief sought in this motion.

      Petitioners respectfully request that the Court grant this unopposed first

motion for extension of time to file their petition for review, for a new deadline of

July 6, 2016.
Exhibit A to Plaintiffs' Motion for Contempt
                 Page 4 of 5



                     Respectfully submitted,

                     /s/ Wallace B. Jefferson
                     Wallace B. Jefferson
                     State Bar No. 00000019
                     wjefferson@adjtlaw.com
                     Rachel A. Ekery
                     State Bar No. 00787424
                     rekery@adjtlaw.com
                     Amy Warr
                     State Bar No. 00795708
                     awarr@adjtlaw.com
                     ALEXANDER DUBOSE JEFFERSON &
                     TOWNSEND LLP
                     515 Congress Avenue, Suite 2350
                     Austin, Texas 78701-3562
                     Telephone: (512) 482-9300
                     Facsimile: (512) 482-9303

                     Daniel R. Richards
                     State Bar No. 00791520
                     drichards@rrsfirm.com
                     Benjamin H. Hathaway
                     State Bar No. 09224500
                     bhathaway@rrsfirm.com
                     Clark Richards
                     State Bar No. 90001613
                     crichards@rrsfirm.com
                     Chase C. Hamilton
                     State Bar No. 24059881
                     chamilton@rrsfirm.com
                     RICHARDS RODRIGUEZ & SKEITH LLP
                     816 Congress Avenue, Ste. 1200
                     Austin, TX 78701
                     Telephone: (512) 476-0005
                     Facsimile: (512) 476-1513

                     ATTORNEYS FOR PETITIONERS
                   Exhibit A to Plaintiffs' Motion for Contempt
                                    Page 5 of 5



                          CERTIFICATE OF CONFERENCE
      I certify that on May 31, 2016, I conferred with Kristofer S. Monson, counsel

for Respondents, and he stated that his clients do not oppose the relief sought in this

motion for extension of time.

                                              /s/ Wallace B. Jefferson
                                              Wallace B. Jefferson


                             CERTIFICATE OF SERVICE
      I hereby certify that on May 31, 2016, this motion was served via electronic

service through eFile.TXCourts.gov on Respondents through counsel of record,

listed below:

 Kristofer S. Monson
 Assistant Solicitor General
 State Bar No. 24037129
 Kristofer.monson@texasattorneygeneral.gov
 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
 Office of the Attorney General of Texas
 P.O. Box 12548, (MC 059)
 Austin, Texas 78711-2548
 Telephone: (512) 936-1700
 Facsimile: (512) 474-2697



                                              /s/ Wallace B. Jefferson
                                              Wallace B. Jefferson
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 1 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MS. RACHEL ANNE EKERY
                         ALEXANDER DUBOSE JEFFERSON & TOWNSEND
                         LLP
                         515 CONGRESS AVENUE, SUITE 2350
                         AUSTIN, TX 78701-3562
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 2 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MS. VELVA L. PRICE
                         TRAVIS COUNTY DISTRICT CLERK
                         P. O. BOX 1748
                         AUSTIN, TX 78767-1748
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 3 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. BENJAMIN H. HATHAWAY
                         RICHARDS RODRIGUEZ & SKEITH
                         816 CONGRESS AVE., SUITE 1200
                         AUSTIN, TX 78701
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 4 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. CLARK RICHARDS
                         RICHARDS RODRIGUEZ & SKEITH, L.L.P.
                         816 CONGRESS, SUITE 1200
                         AUSTIN, TX 78701
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 5 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MS. AMY WARR
                         ALEXANDER DUBOSE JEFFERSON & TOWNSEND
                         LLP
                         515 CONGRESS AVE., SUITE 2350
                         AUSTIN, TX 78701-3562
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 6 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. JEFFREY D. KYLE
                         CLERK, THIRD COURT OF APPEALS
                         209 WEST 14TH STREET, ROOM 101
                         AUSTIN, TX 78701
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 7 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. CHASE HAMILTON
                         RICHARDS RODRIGUEZ & SKEITH
                         816 CONGRESS AVENUE, SUITE 1200
                         AUSTIN, TX 78701
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 8 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. DANIEL R. RICHARDS
                         RICHARDS RODRIGUEZ & SKEITH, L.L.P.
                         816 CONGRESS, SUITE 1200
                         AUSTIN, TX 78701
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                           Page 9 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. KRISTOFER S. MONSON
                         ASSISTANT SOLICITOR GENERAL
                         P.O. BOX 12548 (MC 059)
                         AUSTIN, TX 78711-2548
                         * DELIVERED VIA E-MAIL *
           Exhibit B to Plaintiffs' Motion for Contempt FILE COPY
                          Page 10 of 10
       RE: Case No. 16-0405                         DATE: 6/1/2016
       COA #: 03-15-00657-CV                 TC#: D-1-GN-15-003263
STYLE: DIANA D. v. TRAYLOR

      Today the Supreme Court of Texas granted the motion for
extension of time to file petition for review under TEX. R.
APP. P. 53.7(f) in the above-referenced case. The petition
for review is due to be filed no later than July 6, 2016.




                         MR. WALLACE B. JEFFERSON
                         ALEXANDER DUBOSE JEFFERSON & TOWNSEND
                         LLP
                         515 CONGRESS AVENUE, SUITE 2350
                         AUSTIN, TX 78701-3562
                         * DELIVERED VIA E-MAIL *
                      Exhibit C to Plaintiffs' Motion for Contempt
                                       Page 1 of 2


Texas Health and Human Services Commission

Public Notice

The Texas Health and Human Services Commission (HHSC) announces its intent to submit an
amendment to the Texas State Plan for Medical Assistance under Title XIX of the Social
Security Act. The proposed amendment is effective July 15, 2016.

The purpose of this amendment is to update the fee schedules in the current state plan by
adjusting fees, rates or charges for physical, occupational, and speech therapy for:

Early and Periodic Screening, Diagnosis, and Treatment Services (EPSDT);

Physicians and Other Practitioners; and

Home Health Services.

These rate actions comply with applicable adjustments in response to direction from the 2016-
2017 General Appropriations Act (House Bill 1, 84th Leg., R.S., art. II, Rider 50, at II-96 to II-
98 (Health and Human Services section, Health and Human Services)). Proposed rate
adjustments were calculated based on an analysis of Medicaid fees paid by other states and
previous Texas Medicaid payments for Medicaid-reimbursable therapy services. Where current
Texas Medicaid rates exceed 150 percent of the median of other states' rates for the same service,
a percentage reduction is applied in most cases. A small percentage reduction is also applied to
Texas Medicaid rates that do not exceed 150 percent of the median of other states' rates for the
same service and in cases where information on other states' rates is not available. All of the
proposed adjustments are being made in accordance with 1 TAC §355.201.

The proposed amendment is estimated to result in an annual savings of $30,683,785 for federal
fiscal year (FFY) 2016, consisting of $17,529,646 in federal funds and $13,154,139 in state
general revenue. For FFY 2017, the estimated annual savings is $129,880,683 consisting of
$72,966,968 in federal funds and $56,913,715 in state general revenue. For FFY 2018, the
estimated annual savings is $135,171,008 consisting of $75,939,072 in federal funds and
$59,231,936 in state general revenue.

To obtain copies of the proposed amendment or to submit or view written comments, interested
parties may contact Dan Huggins, Director of Rate Analysis for Acute Care Services, by mail at
the Rate Analysis Department, Texas Health and Human Services Commission, P.O. Box
149030, H-400, Austin, Texas 78714-9030; by telephone at (512) 707-6071; by facsimile at
(512) 730-7475; or by e-mail at dan.huggins@hhsc.state.tx.us. Copies of the proposal will also
be made available for public review at the local offices of the Texas Department of Aging and
Disability Services.

TRD-201602645

Karen Ray
                      Exhibit C to Plaintiffs' Motion for Contempt
                                       Page 2 of 2


Chief Counsel

Texas Health and Human Services Commission

Filed: May 25, 2016
