                                                                              ACCEPTED
                                                                          03-15-00325-CV
                                                                                  8285331
                                                               THIRD COURT OF APPEALS
                                                                          AUSTIN, TEXAS
                                                                    12/17/2015 1:52:17 PM
                                                                        JEFFREY D. KYLE
                                                                                   CLERK
                 No. 03-15-00325-CV
         _________________________________
                                                         FILED IN
                    IN THE                        3rd COURT OF APPEALS
                                                       AUSTIN, TEXAS
            THIRD COURT OF APPEALS                12/17/2015 1:52:17 PM
                 AUSTIN, TEXAS                        JEFFREY D. KYLE
         _________________________________                 Clerk


  TEXAS HEALTH AND HUMAN SERVICES COMMISSION,
                                    Appellant,

                           v.

                  JESSICA LUKEFAHR,
                                            Appellee.
         _________________________________

                    On Appeal from
the 345th Judicial District Court of Travis County, Texas
        Trial Court Case No. D-1-GN-14-002158
      The Honorable Stephen Yelenosky, Presiding
         _________________________________

         APPELLEE’S RESPONSE BRIEF
         _________________________________

                         MAUREEN O’CONNELL
                         Texas Bar No. 00795949
                         SOUTHERN DISABILITY LAW CENTER
                         1307 Payne Avenue
                         Austin, Texas 78757
                         T: 512.458.5800
                         F: 512.458.5850
                         moconnell458@gmail.com
                         Attorney for Appellee
                                         TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................i

TABLE OF AUTHORITIES .................................................................................... ii

ARGUMENT ............................................................................................................. 2

    I.     HHSC’s Exceptional Circumstances Rule Does Not Require
           the Submission of “Medical Literature” to Establish Medical
           Necessity for DME........................................................................................ 2

    II.    HHSC’s Explanation for the Agency’s Lack of Criteria for
           Integrated Standers Has No Merit ................................................................. 4

    III. The Parties Agree that Jessica was Not Required to Seek Prior
         Authorization of a Separate Stander as Part of Her Request for
         a Custom Power Wheelchair with Integrated Stander .................................. 6

    IV. HHSC Failed to Refute the Professional Opinion of Jessica’s
        Treating Medical Providers that She Cannot Utilize a Separate
        Stander........................................................................................................... 7

    V. HHSC’s Defense of TMHP’s Denial Notice Does Not Affect
       the District Court’s Decision......................................................................... 8

CONCLUSION AND PRAYER ............................................................................... 9

CERTIFICATE OF COMPLIANCE ....................................................................... 10

CERTIFICATE OF SERVICE ................................................................................ 10




                                                             i
                                      TABLE OF AUTHORITIES

CASES

Koenning v. Janek,
  539 F. App’x 353 (5th Cir. 2013) ......................................................................... 4

Koenning v. Suehs,
  897 F. Supp. 2d 528 (S.D. Tex. 2012) .................................................................. 4

TGS–NOPEC Geophysical Co. v. Combs,
  340 S.W.3d 432 (Tex. 2011) ................................................................................ 2


REGULATIONS

1 TEX. ADMIN. CODE § 354.1039(a)(4)(D) ............................................................ 2, 3

42 C.F.R. § 431.12 ..................................................................................................... 3


STATUTES

42 U.S.C. § 1396a(a)(17) ........................................................................................... 4




                                                            ii
                                   No. 03-15-00325-CV
                         _________________________________

                                     IN THE
                             THIRD COURT OF APPEALS
                                  AUSTIN, TEXAS
                         _________________________________

                 TEXAS HEALTH AND HUMAN SERVICES COMMISSION,
                                                   Appellant,

                                              v.

                                    JESSICA LUKEFAHR,
                                                                  Appellee.
                         _________________________________

                                   On Appeal from
               the 345th Judicial District Court of Travis County, Texas
                       Trial Court Case No. D-1-GN-14-002158
                     The Honorable Stephen Yelenosky, Presiding
                         _________________________________

                          APPELLEE’S RESPONSE BRIEF
                         _________________________________

TO THE HONORABLE COURT OF APPEAL:

       On December 7, 2015, more than 30 days after the filing of Appellee’s Sur

Reply, Appellant Texas Health and Human Services Commission (HHSC) filed a

Response to Appellee’s brief.1 As before, Appellee, Jessica Lukefahr, respectfully

responds to Appellant’s most recent brief to address the matters addressed therein.




1
 To the extent additional briefing is allowed, Tex. R. App. P. 38.6(c) suggests that such briefs
must be filed within 20 days of the preceding brief. As such, HHSC’s Response Brief is untimely.
                                               1
                                            ARGUMENT

I.     HHSC’s Exceptional Circumstances Rule Does Not Require the
       Submission of “Medical Literature” to Establish Medical Necessity for
       DME.

       HHSC claims its denial of Jessica’s wheelchair request “should have been

affirmed” because she “failed to provide evidence-based medical peer-reviewed

literature in support of her exceptional circumstances request.2                      Appellant’s

Response Brief, pp. 2-3. This is incorrect.3 HHSC’s exceptional circumstances rule,

1 TEX. ADMIN. CODE § 354.1039(a)(4)(D), neither mandates nor mentions the

submission of medical literature to establish that a requested item of durable medical

equipment (DME) will meet a “specific medical purpose.”4 As explained by HHSC

at a recent public meeting, this “medical literature” requirement “has not been

previously posted in [agency] policy nor has that process been in Rule.” App. B, p.

2:16-18.




2
  In fact, the medical literature submitted on Jessica’s behalf collectively reviews more than 40
research studies investigating the medical and functional benefits of supported standing. See
Appellee’s Brief, pp. 24-26. Appellant’s assertion that this literature did not rise to the level of
research required by TMHP’s process is incorrect. Appellant’s Response, p.3.
3
  HHSC’s hearing decision contains no finding concerning this “medical literature” requirement.
4
  Administrative rules must be construed “in the same manner as statutes” and the plain language
of this rule does not include the “medical literature” requirement upon which HHSC relies. See
TGS–NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011) (citation omitted).
                                                 2
       In fact, this provision derives from an internal exceptions process established

by the Texas Medicaid and Healthcare Partnership (TMHP) in October 2012.5 As

part of this process, DME suppliers are informed they must submit:

       a minimum of two articles from evidence-based medical peer-reviewed
       literature that demonstrate validated, uncontested data for use of the
       requested equipment to treat the recipient’s specific medical condition,
       and that the requested equipment has been found to be safe and
       effective.

       TMHP’s “medical literature” requirement is an unreasonable standard for

determining eligibility for DME. This was recently demonstrated when HHSC

failed in its attempt to add this requirement to 1 TEX. ADMIN. CODE §

354.1039(a)(4)(D). In June 2015, HHSC submitted this proposed rule amendment

to the agency’s Medical Care Advisory Committee (MCAC).6 The MCAC flatly

rejected HHSC’s proposed “medical literature” requirement and unanimously voted

to send the rule amendment back to the agency.7 As explained by a MCAC member

and former medical director for HHSC:


5
  HHSC explained this at the public meeting:
       In our Medical policy and Rules, we specifically lay out what DME is available to
       Medicaid clients. There are lots of DME products though, as you can imagine, and
       there not all listed in policies, so for an adult who wants access to a DME, a piece
       of DME that is not currently listed in policy, there is a process that takes place. This
       process has been in place since October of 2012. App. B, p. 2: 3-12.
6
  Pursuant to 42 C.F.R. § 431.12, state Medicaid programs are required to establish such
committees to participate “in policy development and program administration…”
7
  One committee member expressed her concern that this new requirement would be “absolutely
burdensome” and “absolutely have a negative impact on the Medicaid members.” App. B, p. 7:
20-23. Another member voiced similar concerns:
       I, too am quite concerned about this, coming from a university environment to find
       uncontested data or - - you know, you can always find something to counter one
                                              3
       In the meantime, I would like HHSC to explore a way to kind of back
       off from what seems to me on the face of it to be a very inappropriate
       standard of proof … So how you could put that standard of proof on
       these items is sort of beyond me…and also, if I understand correctly,
       the process we’re talking about here applies to adults, correct? So it
       doesn’t apply to EPSDT [Children’s Medicaid Services]. So somebody
       who is 20 years old and six months could get the exact same piece of
       requested equipment without having this standard applied to them - - or
       this process applied to getting this piece of equipment.

App. B, p. 18:5-8; 13-20 (Statement of Dr. John Hellerstedt)

       This requirement violates the Medicaid Act’s reasonable standards provision,

42 U.S.C. § 1396a(a)(17), and is contrary to the plain language of the agency’s

exceptional circumstances rule.8 As such, this “very inappropriate standard of

proof” provides no basis for reversing the district court’s decision.

II.    HHSC’s Explanation for the Agency’s Lack of Criteria for Integrated
       Standers Has No Merit.

       HHSC’s purported rationale for the agency’s lack of clinical criteria for

determining whether a wheelchair standing feature will serve a specific medical



        study [with] another… But the other thing I have heard that causes me concern is
        that one, I’ve never heard - - when you have a physician and a PT and an OT saying
        that this is going to be useful, I’ve never heard of the client having to go and
        research and find these - - you know, proof and find these studies. You know, many
        clients can’t do that. Many providers can’t do that… So I really have some
        problems with this and will have to vote against it because I think it is unreasonable
        to expect, you know, the providers and the clients to go do this scientific research.
App. B, p. 8: 9-12; 17-22, p. 9:7-10.
8
  Prior to 2012, HHSC did not allow exceptional circumstance appeals for wheelchairs with
integrated standing features. Following the district court’s decision in Koenning v. Suehs, 897 F.
Supp. 2d 528, 552-53 (S.D. Tex. 2012) vacated sub nom. Koenning v. Janek, 539 F. App’x 353
(5th Cir. 2013), HHSC made this review available to Medicaid beneficiaries seeking this item of
DME, but allowed TMHP to add its “medical literature” requirement to the process.
                                                4
purpose does not support reversal of the district court’s decision. To the contrary,

this argument further demonstrates that the district court correctly found the

agency’s decision to be arbitrary and capricious. CR 226.

      HHSC’s hearing decision clearly stated that the agency’s Office of Medical

Director “determined that the client’s condition did not meet the clinical criteria for

the Exceptional Circumstances provision for a Permobil C500 VS power wheelchair

with integrated standing feature.” (emphasis added). Appellant’s Brief, App. B, AR

571, Finding of Fact No. 9; App. C, AR 589, Finding of Fact No. 9. Faced with the

fact that HHSC’s witnesses could not identify a single clinical criterion applied to

requests for wheelchairs with integrated standers or to name a single medical

purpose that could justify approval of an integrated stander, the agency now argues

that “no set clinical criteria” exists so that the agency can consider these requests on

an “individual case basis.” Appellant’s Response Brief, p. 3. This rationale does not

explain the apparent contradiction between the agency's specific finding of fact on

this point and its argument on appeal. Nor does it explain why HHSC’s witnesses

could not identify the criteria applied “on an individual case basis” to Jessica’s

specific request. At the fair hearing, HHSC's inability to provide this information led

to the agency’s concession that “a standing program [for Jessica] is important to

address the concerns that have been presented today. All of that documentation

justifies standing . . .” HR 1:26:55-1:27:12. See Appellee’s Brief, p.19. HHSC's


                                           5
argument does not support its contention that the hearing decision “should have been

affirmed” Appellant’s Response Brief. p.4.

III.   The Parties Agree that Jessica was Not Required to Seek Prior
       Authorization of a Separate Stander as Part of Her Request for a Custom
       Power Wheelchair with Integrated Stander.

       In its initial brief, HHSC stated that “no prior authorization request for a static

stander has been submitted to Texas Medicaid.”9 Appellant’s Brief, p.9. In response,

Jessica noted that:

       HHSC suggests there is some significance to the fact that “no prior
       authorization request for a static stander has been submitted to Texas
       Medicaid.” HHSC Brief p.9. While this fact is true, it is also irrelevant.
       There also was no prior authorization request for a postural walker as
       Jessica’s medical professionals determined that both of these items of
       DME will not meet her medical and functional need to stand. And as
       the district court correctly noted, this point was not identified as a
       reason for the denial in TMHP’s notice to Jessica. CR 222, HHSC App.
       G, p. 2, n. 3.

Appellee’s Brief, p. 20, n. 20.

       HHSC replied by again suggesting that the absence of a prior authorization

request for a separate stander had some bearing on the outcome of the hearing.

According to the agency, “[a]lthough Ms. Lukefahr claims that failure to request a

static stander was not provided as a reason for denial, this is contradicted by the

record.” Appellant’s Reply Brief, pp. 8-9. Whatever point HHSC intended by these


9
 HHSC’s alternative contention that Jessica failed to show what alternative DME had been ruled
out by her medical providers is patently erroneous, as previously explained in Appellee’s Brief,
pp. 8, 13, 20-28, 31-32 and Appellee’s Sur-Reply, pp. 12-18.
                                               6
earlier statements, HHSC now agrees there is no “requirement that alternative DME

must be requested for prior authorization prior to submitting an exceptional

circumstances request, and no such requirement exists in law or policy.” Appellant’s

Response Brief, p. 5. There is no dispute on this point. Nor is there any basis for

reversing the district court’s decision.

IV.   HHSC Failed to Refute the Professional Opinion of Jessica’s Treating
      Medical Providers that She Cannot Utilize a Separate Stander.

      Jessica’s exceptional circumstances review presented two questions: (1) does

she have a medical need for supported standing, and if so (2) is there an equally

effective alternative item of DME that will meet this medical need. As to the first

question, the district court correctly noted that “there is no evidence to contradict

[Jessica’s] treating physician’s assessment that she ‘has a medical need to standing

numerous times throughout the day to avoid the secondary conditions that result

from prolonged sitting.’” CR 224. In addressing the second question, the court

determined that “[t]here is no evidence rebutting her treating physician’s statement

that she would need assistance from a care provider to use a static stander or the fact

that she does not have a care provider throughout the day.” CR 224.

       Jessica does not “conflate” these two issues as HHSC now claims. Once

HHSC’s witness conceded Jessica’s medical need to stand, the agency had the

burden to refute the professional opinion of Jessica's medical providers that a



                                           7
separate stander will not meet her needs.10 CR 222. As previously explained, HHSC

failed to prove that a separate stander will suffice.11 Appellee's Brief, pp. 13-14, 19-

27; Appellee’s Sur-Reply, pp. 6-13. Jessica properly addressed both questions, as

did the district court. CR 222-224.

V.     HHSC’s Defense of TMHP’s Denial Notice Does Not Affect the District
       Court’s Decision.

       HHSC’s final argument in defense of TMHP’s denial notice notes that this

letter identified the agency’s exceptional circumstances rule as the legal basis for its

decision. In fact, this notice included 7 citations to federal and state Medicaid

provisions, none of which supported the agency’s identified reasons for denial. Due

process requires specific reasons for denial, which are supported by specific rules

or policy. Once identified, these reasons “constrain” HHSC at every stage of review.

CR 221. HHSC cannot come behind the notice and offer new reasons for the denial

at the hearing, in the district court, or on appeal. As before, HHSC offers no credible

argument supporting reversal of the district court’s decision.

10
    HHSC’s revival of its initial claim that the “main reason for requesting a standing power
wheelchair was to help [Jessica] progress at work” and “not for the treatment of [her] medical
condition is illogical in light of the agency’s clear concession that she has a medical need to stand.
See AR59; Appellant’s Response Brief, p. 6. As previously explained, the uncontroverted evidence
established that Jessica’s medical need to stand can occur at any time, in any location. Appellee’s
Brief, pp. 12-13, 20-24; Appellee’s Sur-Reply, pp. 6-12.
11
   Contrary to HHSC’s assertion, Jessica has not ignored Ms. Claey’s claim the documentation did
not “speak” to the need for the stander to be part of the wheelchair. HHSC’s Response Brief, p.
5. Having twice quoted this testimony in Appellee’s Brief, pp 11 and 20, Jessica has demonstrated
it is erroneous and unsupported by any probative evidence in the administrative record. Certainly,
HHSC’s hearing decision did not identify any evidence provided by the agency on this critical
issue. Appellant’s Brief, App. B and C.
                                                  8
                         CONCLUSION AND PRAYER

      For the reasons described in Appellee’s Brief, Sur-Reply and above, Jessica

Lukefahr respectfully requests this Court to affirm the decision of the district court

so that she can obtain the custom power wheelchair recommended by her treating

medical professionals more than two years ago.


                                       Respectfully submitted,


                                         /s/ Maureen O’Connell
                                       MAUREEN O’CONNELL
                                       Texas Bar No. 00795949
                                       SOUTHERN DISABILITY LAW CENTER
                                       1307 Payne Avenue
                                       Austin, Texas 78757
                                       (512) 458-4800 (Phone)
                                       (512) 458-5850 (Fax)
                                       moconnell458@gmail.com

                                       Attorney for Appellee




                                          9
                      CERTIFICATE OF COMPLIANCE

      1.    This brief complies with the type-volume limitation of Tex. R. App. P.

9.4(i)(2)(B) because it contains 2,214 words, excluding the parts of the brief

exempted by Tex. R. App. P. 9.4(i)(1).

      2.    This brief complies with the typeface requirements of Tex. R. App. P.

9.4(e) because it has been prepared in a proportionally spaced typeface using

Microsoft Word in 14 point Times New Roman.

                                        /s/ Maureen O’Connell
                                       MAUREEN O’CONNELL


                         CERTIFICATE OF SERVICE


      I hereby certify that on this 17th day of December, 2015, a true and correct

copy of the foregoing document was electronically filed, and that a true and correct

copy of the foregoing document was served by electronic mail on the same date to:

      Kara Holsinger
      Assistant Attorney General
      Office of the Attorney General
      P.O. Box 12548
      Austin, Texas 78711


                                        /s/ Maureen O’Connell
                                       MAUREEN O’CONNELL




                                         10
                                                                    INTEGRITY
                                                                    legal support solutions




                                               TRANSCRIPTION OF ELECTRONIC RECORDING

                                               HEALTH AND HUMAN SERVICES COMMISSION

                                           MEDICAL CARE ADVISORY COMMITTEE (MCAC)

                                                                              JUNE 9, 2015

                                                      PARTIAL TRANSCRIPT OF MEETING

                                  ITEM #20 : EXCEPTIONAL CIRCUMSTANCES, CHAPTER 354

                            LAURIE VANHOOSE, DIRECTOR, POLICY DEVELOPMENT, HHSC



                MEMBERS PRESENT:

                Gilbert Handal, MD, Chair
                Colleen Horton, Vice Chair
                Edgar Walsh, R. Ph
                Mary Helen Tieken, RN
                George Smith, DO
                Donna Smith, PT
                Michele Bibby
                John Hellerstedt, MD
                Elvia Rios
                Doug Svien
                William Galinsky, HPAC Representative


                MEMBERS ABSENT:

                Joane Baumer, MD, PP AC Representative




                                                              ORIGINAL
                     Austin                              Dallas                             Houston                          San Antonio
                  tel l512 l320 8690                  tel l972 l364 9777                  tel l281 l471 8500                 tel 1210 1277 6200


                                                                                                                   APPENDIX B
                  In 1512 1320 8692                   lu 1972 1364 9778                   In 1281 1471 8504                  In 1210 1211 6232




3100 West Slaughter Lane   I   Suite 101   I   Austin, Texas 78748     I   loll free 877 720 8690   I   loll free fax 866 720 8692   I   www.inlegrily·lexas.com
                                              A d i o Transcription -    6 / 9 / 2 0 15
                                                                                  2
 1         ( Partial transcript begins at 2 : 1 0 : 35 p.m . )

 2              DR . HANDAL :    Item Number 2 0 .

 3              MS. VANHOOSE :     Okay .   So Item Number 2 0 is related

 4   to Durable Medical Equipment .         In our Medical Policy and

 5   Rules , we specifically lay out what DME is available to

 6 Medicaid clients .      There are lots of DME products though , as

 7   you can imagine , and they're not all listed in policies , so

 8   for an adult who wants access to a DME -- a piece of DME

 9   that is not currently listed in policy , there is a process

10   that takes place .

11              This process has been in place since October of

12   2012 and what we were trying to do with the intent of these

13   Rules is to ensure that that process that is taking place

14   for a provider to request a piece of DME that is not spelled

15   out i n medical policy for a client , that that process they

16   go through is in Rule and is outward facing .          It has not

17   been previously posted in our policy , nor has that process

18   been in Rule .

19              So the intent of these Rules is to put that

20   process in Rule .

21              We have heard from some stakeholders that there

22   are concerns with the process , and you'll hear some comments

23   today .

24              Specifically the issue is that if a provider wants

25   to request additional DME or DME that ' s exceptional , they


                      Integrity Legal Support Solutions APPENDIX B
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                                             Audio Transcription -       6/9/2015

                                                                              3
 1   have to provide a minimum of two articles .         You ' ll see that

 2   in Section -- Subsection (d ) ( 6 ) of the Rule .     There ' s

 3   concerns with that being part of the process .

 4              What those two peer reviewed evidence based pieces

 5   of literature are used , are to ensure that the device is

 6   safe and effective for the client .         It is the process that

 7   is currentl y being used at TMHP and with our office and

 8   Medical Director to review these requests.

 9              We met with a stakeholder yesterday and we

10   heard the concerns , and you ' ll hear more concerns toda y , and

11   what I ' ve coromitted t o do is to look at other States to see

12   if there are any other best practices and what those

13   processes are as we move for ward with these Rules .          The

14   intent , though , is to ens u re whatever that process is , that

15   we have it in Rule .

16              So we ' ll continue to wo rk with stakeholders to

17   have a conversation arou nd the issues they have with this

18   piece of the process .

19              And j u st to clarify , this is mostly for adults ,

20   children , under EPSDT .     If they need a device , they can

21   submit a form -- a prior authorization form .         It goes

22   through the same process as any other DME and it ' s

23   reviewed for medical necessity .

24              MS . BIBBY :    I have a question .

25              DR . HANDAL:     Yes .   Mi chele?


                   Integrity Legal Support Solutions   APPENDIX B
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                                                Audio Transcription -       6/9/2015

                                                                                 4
 1                MS . BIBBY :   So you said that you met with " a "

 2   stakeholder yesterday?

 3                MS . VANHOOSE :   Yeah .     We sent the Rules out and we

 4   had a comment , an email .      We received an email that a

 5   stakeholder was concerned and so we sat down and met with

 6   her to hear about her concerns .           It ' s always

 7                MS . BIBBY :   So when you sent the Rule out , how

 8   long was that window for comrnents to be received?

 9                MS. VANHOOSE :    So this is         it ' ll officially be

10   posted in the Register , but what we're trying to do in my

11   area , what I encourage my staff is , when they ' re working on

12   Rules or Policies , that they send that out to stakeholders

13   that they ' re aware may have concerns or issues ,           so we know

14   what the issues are before we come to MCAC so that we can

15   try and address them before they even get posted in the

16   Register .

17                MS . BIBBY:    So did your staff receive any response

18   from stakeholders?

19                MS. VANHOOSE :    Yeah , on a regular basis with our

20   Rules and Policie s.

21                MS . BIBBY :   I mean ,    I ' m trying to understand , was

22   it not until yesterday that you were aware -- excuse me ,              I

23   have a cold -- that there were concerns?

24                MS . VANHOOSE :   Yes .    Me personally ,    yes.

25                MS . BIBBY :   And you weren ' t    aware of that until


                     Integrity Legal Support Solutions      APPENDIX B
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                                               Audio Transcription -          6 /9/ 2 0 15

                                                                                      5
 1   yesterday?

 2                MS . VANHOOSE :    Yes , yes .

 3                MS . BIBBY :   Okay.

 4                MS . VANHOO SE :   Oh , I mean , we met yesterday .     I

 5   received the concern a week or so ago .

 6                MS . BIBBY:    Okay.    And you ' re planning -- your

 7   plan is to meet with other stakeholders?

 8                MS . VANHOOSE :    Yeah , any stakeholders that have

 9   concerns with the Rules , yes , we will definitely meet with

10   them .

11                MS . BIBBY :   Okay .   And this two - step process , is

12   that consistent with CMS guidance?

13                MS . VANHOOS E :   So it is a process that the State

14   has put in place for a service that is not currently a

15   defined s ervice.      So we have the authority to review

16   requests for services that are not defined in policy in our

17   State plan in the process that we've established .           So this

18   process that was established was that the provider submit

19   this information that ' s required in the Rule to TMHP .           TMHP

20   Medical Directors review the information that ' s provided ,

21   and then it goes to our office of Medical Director and the

22   Medicaid Medical Director makes the final determination on

23   whether or not we will allow for that DME .

24                MS . BIBBY :   Okay .   I'm understanding what you ' re

25   saying .   I ' m a former employee of the HHSC Office of the


                     Integrity Legal Support Solutions   APPENDIX B
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                                            Audio Transcription -        6 / 9 / 2 0 15

                                                                                  6

 1 Ombudsman .      And we received tons of complaints about

 2 Medicaid members , who had requests for Durable Medical

 3   Equipment that was endorsed by their physician , denied .

 4                So the question that I ' m asking is :     Is there some

 5   guidance from CMS that is different from this two - step

 6 process that you're saying that the State is entitled to

 7   rightfully put in place?

 8                MS. VANHOOSE:     What we can do is :    Like I

 9 committed to the stakeholder yesterday , is we ' ll look at

1 0 other States' best practices and we can see what is there ,

11   but this is a process for -- we do not have to have

12   permission from CMS to offer benefits outside of our State

13   plan .   We have the authority over determining what those

14   benefits are , and this was the process .       CMS does not review

15   our processes, they re v iew what we're offering.         So this is

16   the process that was put in place , but I understand there

17   are concerns related to it .       So I ' ve committed to go back

18   and work to see if this is the right process or not.

19                MS . BIBBY :   Well, I'm not so much concerned about

20   processes.     I'm concerned about what is in the best interest

21   of Medicaid members , and so , I would hope that if it is the

22   best practice of many other States , that the State of Texas

23   Medicaid Program would look at following the lead of perhaps

24   those more forward - thinking States in terms of what is in

25   the best interest of Medicaid members .

                     Integrity Legal Support Solutions    APPENDIX B
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                                                Audio Transcription -   6/9 / 2015

                                                                               7
 1              MS . VANHOOSE :     I agree .

 2              MR . JESSEE:      Can I just ask for clarification?

 3              DR . HANDAL:      Yes .

 4              MR . JESSEE:      So Michele , what -- the issue that

 5   you have specifically is,          is it that somebody's determining

 6   medical necessity outside the physician ' s recommendation and

 7   that there ' s utilizaLion management associated with the

 8   request , or -- and I understand your previous role in the

 9   Office of the Ombudsman , and you ' re right , but I guess the

10   point I ' m making is :    Physicians make recommendations about

11   benefits today that are reviewed through MCO ' s utilization

12   management or through TMHP through utilization management.

13              So I guess the question I have for you is:          I just

14   want to be clear what you ' re asking .        Are you thinking that

15   the processes being put in place by the Medicaid Division is

16   going to be burdensome ,

17              MS . BIBBY :    Yes .

18              MR. JESSEE :      -- or potentially impact the member

19   negatively?

20              MS. BIBBY:      Absolutely burdensome --

21              MR . JESSEE :     Okay .

22              MS. BIBBY :     -- and absolutely have a negative

23   impact on the Medicaid members .

24              MS . VANHOOSE :     And we ' ve heard --

25              MR . JESSEE:      Okay .


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                                                Audio Transcription -   6/9/2015

                                                                              8
 1               MS . VANHOOS E :     Yeah , and we have heard that

 2   concern and this wa s a process that was developed in 2012

 3   and the intent of this Rule i s to make sure it ' s transparent

 4 what process is and what we ' re hearing is there ' s concerns

 5 and questions about the process .

 6               DR . HANDAL :      Yeah .

 7               MS . HORTON :      Hi , Laurie .

 8               MS . VANHOO SE :     Hi .

 9               MS . HORTON :      I , too , am quite concerned about this

10   coming from a unive rsit y environment to find uncontested

11   data or      you know , you can always find something to

12   counter one study in another .

13               So -- and with the way that our world is moving in

14   technology , you know , something good might really become

15   a v ailable and there may not have been an extraordinary

16   amount of research done on it y et .

17               But the other thing that I have heard that causes

18   me concern is that , one , I ' ve neve r heard -- when you have a

19   physician and a PT and a n OT sa ying that this is going to be

20   useful , I ' ve never heard of the client having to go and

21   research and find these -- you know , proof and find the

22   studies .   You know , many clients can ' t do that .     Many

23   providers can't do that .         That takes a lot of time .

24               And you know , if you can't find a study that

25   pertains to exactly this disability in this age group and

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                                                 Audio Transcription -      6/9/2015

                                                                                 9
 1   I ' ve heard it , you know , these studies are being rejected

 2   because , you know , oh , well yeah , they had the same

 3   disability , but it was a different age group , or that they

 4   were the same age group , but they had a different

 5   disability , even though their need -- functional need was

 6   the sa_ e .

 7                 So I really have some problems with this and will

 8   have to vote against it because I think it's unreasonable to

 9   expect , you know,     the providers and the clients to go do

10   this scientific research .

11                 MS . TIEKEN:     I would like to comment as a home

12   health provider .      I find it unsettling that the

13   organizations that represent home health industries in our

14   State were not consulted about this and if they were ,           I

15   apologize for that , but I don ' t         think they were .

16                 And if we , as providers , are not able to give you

17   feedback and information and our perspectives on this

18   particular issue and others , then I don ' t think you've done

19   a service to our State , our -- the patients we serve and the

20   providers who have to try to do that.

21                 I can hardly get skilled nursing visits approved ,

22   much less go through this rigmarole to get somebody some

23   DME.   I just -- I couldn't support this as it is .

24                 DR . HANDAL :    I hear --

25                 MS. VANHOOSE :     I understand.     I'm not sure what


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                                                   Audio Transcription -      6/9/2015

                                                                                  10
 1   process was used when this was developed .              This was under

 2   our Office of Medical Director and I appreciate your concern

 3   about input.       This is to

 4                  DR . HANDAL:      I have

 5                  MS. VANHOOSE :      -- process to make sure that it ' s

 6       you at least know what it is we're doing .

 7                  DR . HANDAL:      Laurie , Gary can verify that I have

 8   the same concern.         I ' ve seen people needing sometimes basic

 9   stuff and not getting approved.              So you know , I understood

10   this was a way to streamline and help , but it really is not .

11   It ' s not .    That ' s my concern.        It's really not helping.

12                  MR . JESSEE :     Yeah ,   I think the Rule was intended

13   to provide some transparency and perhaps the transparency is

14   where it ' s creating some additional concerns .            So I mean , I

15   think we ' re committed to going back and looking at that .

16                  I guess a question I had for you , Laurie , and you

17   may not know this is , because the original policy that's

18   been in place since 2012 is unclear, has that resulted in

19   just across the board denials of these DME -- of these needs

20   or is the concern that because it was unclear , there was

21   more approvals that people anticipate will no longer be

22   approved or do you have any data on what the amount of

23   denials?

24                  MS . VANHOOSE :     I have the data , but I think you ' ve

25   raised a good point .          There's probably providers that don ' t


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                                                  Audio Transcription -          6/9/2015

                                                                                     11
 1   even know the process exists since it ' s not published , but I

 2   think there's definitely stakeholders here that can speak to

 3   concerns they have heard regarding how the process has

 4   worked in practice .

 5                 MR . JESSEE :     So we have the -- so I guess the

 6   answer is :     There is the ability to go back and visit some

 7   more about the policy and maybe even consider , you know ,

 8   what ' s the appeal -- I mean , there is an appeals process and

 9   all of that , but I agree .         I mean , it seems -- it would seem

10   difficult for one provider may have the expertise or ability

11   to push forward some support or research , but another

12   provider may not and in the end , one member may benefit and

13   one may not .

14                 MS . VANHOOSE :     Yeah .   No ,   I think we can review

15   it .   There needs to be a standard .             You know , we ' re just

16   trying to put a standard in place to ensure that we are

17   appropriately providing services that are safe and effective

18   and what I've heard from many people is this may not be that

19   standard .

20                 DR . HANDAL :     Dr. Walsh?

21                 DR . WALSH :    I just wanted to ask , do we have

22   testimony by anyone?

23                 DR . HANDAL :     Yeah , we have two testimonies -- we

24   have three testimonies actually .

25                 So if you don't mind ,       let me hear the testimony


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                                                 Audio Transcription -    6/9/2015

                                                                               12
 1   first , you know.

 2                Ms . Maureen O'Connell?

 3                !VIS . 0 CONNELL :
                         I               Good morning .   My name is Maureen

 4 O'Connell , and I think I ' m also known as the " a "

 5   stakeholder , because I was the one that met with HHSC

 6   yesterday.

 7                I thank you for the opportunity to talk today

 8   about this .    As ypu know, this process has actually been in

 9 effect since October of 2012 .             During that time , our office,

10   the Southern Disability Law Center , has represented nine

11   individuals who were caught up in this special exceptional

12   circumstances process .           And it is our opposition to the Rule

13   is based on the experience of these clients.

14                To answer a question about the data , I did a

15   Public Record request on the data between October 12th

16   October 2012 and March 2015.            There were nine requests for

17   exceptional circumstances review on items of DME .             Seven of

18   them were denied .      One of them that was approved was

19   actually one of the Plaintiffs in the Federal lawsuit , so --

20   and she was the first to go , so she actually got approved .

21   One other person , we don't know exactly what that was about ,

22   but apparently they were approved , too .

23                There's good reason not to move forward with this ,

24   and I put that in my comments, is we are at the point where

25   CMS is just ready to issue their final DME Rules .             We know


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                                           Audio Transcription -       6 / 9 / 2 01 5

                                                                               13
 1   these Rules are going to c h ange e v erything because for t h e

 2   first time since 1965 , we are going to have a Federal

 3   definition of DME that all States must comply with .        Right

 4   now every State can define it anyway they wish .      That will

 5   no longer be the case .

 6               Because the Federal definition of DME will change

 7   the scope of the benefit , it ' ll be clearl y defined scope of

 8   benefit .   We cannot move forward with creating an exceptions

 9   process when we don ' t have the scope fully outlined .      It

10   doesn ' t make any sense.

11               We also know that this -- the way it ' s set up

12   right now is a two - step process .   You have to go through a

13   prior authorization process .    You have to get denied .     You

14   have t o ha v e your DME pro v ider request exceptional

15   circumstances appeal and then you'll get denied there .

16               I have talked about the fact that this is

17   extremely time consuming .    One client -- the exceptional

18   circumstances process alone -- not the prior authorization ,

19   just the exceptional circumstances process took six months .

20   She got denied and then went to a fair hearing .      Before it

21   wa s all over with the fair hearing , one year had passed

22   since the first request for this particular wheelchair .

23               The untimeliness of it is a huge problem for the

24   clients.    It ' s also very , very burdensome in that they have

25   to go for so long only to be told no at the end .

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                                                 Audio Transcription -         6/9/2015

                                                                                   14
 1                 In particular, the problem -- and you -all have

 2   addressed it         is this requirement for research.            And I

 3   gave an opinion -- I gave an example in one of my -- of one

 4   of my cases in my notes .

 5                 Oh , I'm up.     Anyway , should I stop?

 6                 DR . HANDAL :    I think it's clear now .      Really ,

 7   we've heard so much .         There is other witnesses .      If you

 8   don 't mind , if we have time later on , we 'll give you more

 9   time.

10                 Susan Murphree?

11                 I thank you so much for taking your time .

12                 MS . O ' CONNELL :   Okay .   Thank you .

13                 MS . MURPHREE:       Good afternoon.    I'm Susan

14   Murphree .     I'm representing Disability Rights Texas .            Thank

15   you for the opportunity to provide comments on t h is item .

16                 I just want to start off and end up with a request

17   to delay any action on this .           In terms of a balanced

18   approach, it is good to move toward a more transparent ,

19   understandable system, but it is not g ood necessarily to

20   make it more complex, create a delay for important ser v ices,

21   or just rely heavily either on research or what other States

22   are doing .     Sometimes we might be the leader i n what is best

23   for people .

24                 I think we can be instructed by that, but to have

25   the whole Medicaid policy based on evidence based and not ,

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                                                                          15
 1   you know , ba _ancing that with the consideration of a

 2   treating physician or other healthcare provider , who

 3   actually has first - hand knowledge of the individual and can

 4   reall y understand what the need is .

 5             So the timing is really poor .     It's just three

 6 months from now to where the CMS guidance will be available .

 7   It's already been proposed , already received comments.

 8 We're just waiting for the -final outcome .

 9             So it is a bit mysterious and curious as to why we

10   need to rush through with these rules .     So while we support

11   having transparency , we also are concerned about the

12   stakeholder input .

13             I participated at the invitation of HHSC, I think

14   it was a year ago or maybe a little less , on a workgroup

15   where they were looking at how the Medicaid Office would

16   determine Medicaid policy .     Evidence base was one of the

17   criteria , so research e v idence base , but several of us on

18   the committee did express concern with relying way heavily

19   on that and not relying on the medical necessity needs of

20   the Medicaid participant .

21             So you know, we really didn ' t understand what

22   " uncontested " research meant and this is not a Legislative

23   mandate , as you ' ve had with some of the other Agenda items

24   or informational items .     So the timeline is really sort of

25   up to this State in terms of when to come out with an actual

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                                           Audio Transcription -      6 / 9 / 20 _ 5
                                                                              16
 1   Rule and we ask that you de _ay -- ask that that be delayed

 2   so you can get the Federal guidance , and then we can come

 3   out with a Rule and all of the concerns that you - all have

 4 mentioned , we share as well.

 5              So thank you for the opportunity to comment .

 6              DR . HANDAL:    Thank you , Ms . Murphree.   We

 7   appreciate you.

 8             Ms . Hammon , Rachel Hammon?

 9             MS . HAMMON :    Good morning .    My name is Rachel

10   Hammon.   I'm the Executive Director for the Texas

11   Association for Home Care and     Hosp~ce.


12              In order to try and keep my comments brief , I do

13   want to say I concur with all of the previous comments that

14   were made and to support some of the points that have been

15   made up on the dias toda y .

16             We found out about the Rule yesterday when the

17   links went live .   So we didn't know that this was happening ,

18   but we do want reiterate that we d o appreciate the attempts

19   at transparency , as well .

20              But again,     I concur with all the concerns that

21   we ' ve heard today about this particular Rule and really

22   would like to ask your support and reiterating that

23   stakeholder input could be very valuable in shaping this

24   Rule and a better Rule in the future.         You know , certainly

25   input would have been ver y valuable in the formulation of


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                                                         Audio Transcription -      6 / 9 / 2015

                                                                                          17
      1   this Rule i n terms of the timing .              Maybe it would have been

      2   reconsidered in terms of the timing and then some of the

      3   i nformation related to this two -s tep process , as well , which

      4   has been very over - burdensome .             You know , it's s omewhat

      5   unclear as to why if on e pro v i der submits good evidence

      6   ba se d research, why that would be kind of kept in the hole

      7   and not really then se t as the standard for maybe another

      8   person that has the same issue .

      9               So I mean , there is a lot of comments that we

     10   could have made really in working with HHSC and would

     11   appreciate that opportunity in the future and would

     12   appreciate holding back on these Rule s.
~-
     13               DR . HANDAL :       Thank you so much .

     14               MR . HELLERSTEDT :        Well ,    I didn 't have a que sti on

     15   for you .

     16               MS . HA..l'1MON :   Yes , sir .

     17               MR . HELLERSTEDT :        I just want to sort of want to

     18   make some general points and maybe ask Ms . VanHoose -- am I

     19   pronouncing the name right? -- to comment a little bit .

     20               First of all , the idea that CMS ha s not defined

     21   DME makes complete se n se to me to wa it for that to happen

     22   before adopting any kind of Rule .               Having been a Medic aid

     23   Med i cal Directo r at one point in my career , this is a very

     24   knotty problem , and I think having -- waiting to have that

     25   clarity ser ves everybody ' s interest , and then once that


                          Integrity Legal Support Solutions         APPENDIX B
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                                              Audio   Transcript~on   -   6/9/2015

                                                                                 18
 1   defin~tion    comes out , I' m sure it'll be crystal clear and

 2   there will be no     con~roversy    at all .

 3        (Laughter . )

 4                MR . HELLERSTEDT :    Then you can involve the

 5   stakeholders an additional - - in additional discussions .             In

 6   the meantime , I would like HHSC to explore a way to kind of

 7   back off from what seems to me on the face of it to be a

 8   very inappropriate standard of proof to             and stop me if

 9   I'm wrong , but when we're talking about DME , we ' re not

10   talking abo ut FDA- approved drugs or medical devices , things

11   that have to go through a rigorous kind of proof of safety

12   and efficacy .

13                So how you could put that standard on these items

14   is sort of beyond me , so if there's a -- and also, if I

15   understand correctly, the process we're talking about h ere

16   applies to adults , correct?        So it doesn ' t apply to EPSDT .

17   So somebody who is 2 0 years old and six months could get the

18   exact same piece of requested equipment without having this

19   standard applied to them -- or this process applied to

20   getting that identical piece of equipment .

21                And I realize that ' s the way the Federal law

22   works , but that kind of doesn ' t make sense to me , as someone

23   who would want this to be medically reasonably based .

24                So t ho se are my comments and I think we should

25   I think we should postpone recommending this Rule for those


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                                                  Audio Tra _ scription -   6/9/2015

                                                                                 19
 1   rea s ons .

 2                 MS. VANHOOSE :      Thank you for those comments .

 3                 I   think one of our concerns is CMS has been

 4   telling us these Rules are going to come out forever .              So we

 5   are very hopeful they do come out and when those Rules do

 6   come out , we ' re going to have to look at all of our DME

 7   Policies and Rules , so that makes sense .

 8                 But just to clarify, it ' s the process today .          So

 9   these Rules          stuck in these Rules , the process is there .

10   We ' re going to have to work -- it ' s two - step -- another

11   two - step basically .

12                 DR . HANDAL :     Yes .

13                 MS . VANHOOSE :     This is the process today .    With

14   our vendor there ' s contract agreements , requirements around

15   it , so stopping this Rule doesn ' t mean tomorrow that the

16   process isn ' t still taking place , but we ' ll have to go back

17   and look at the process , so .

18                 MR . HELLERSTEDT :        Another comment I would have --

19   agaln , correct me if I ' m wrong , but this is -- we're talking

20   about -- we ' re not talking about even managed care , so none

21   of this even applies to managed care .

22                 MS . VANHOOSE :     Right , correct .   We've met with our

23   managed care staff , Gary ' s staff , to figure out how or what

24   should be taking place in the managed care side .

25                 MS - TIEKEN :     That gives me even more concern .


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                                                    Audio Transcription -      6/9/2015

                                                                                   20
 1                 MS . VAN HOOSE : ·   Yeah .

 2                 DR. HANDAL :     Wait.        I mean , Gary wants to say

 3   something .

 4                 MR. JESSEE:      Well, I mean , I was just going to say

 5   really what Laurie has already said and that is :               It sounds

 6   like , based on some of the testimony already today ,              th~t


 7   people aren't happy with the current process .

 8                 And I know , Maureen , you talked about some of the

 9   individuals that you ' v e represented .

10                 So there is somet hing that needs to be done

11   because obviously there ' s a Rule in place we were trying to

12   make a little more clear .           Of course , clarity is not alwa y s

13   the best thing .

14                 But you know , as I was saying to Dr . Hellerstedt

15   here and I said to La uri e , I think if you give us an

16   opportunity to take a look at the proposed language, maybe

17   one of the solutions is the ability to request that sort of

18   information if there is some reason that nobody can get to

19   the place where it believes it's medically necessary .                   So

2 0 maybe the exception would be that sort of information , as

21   opposed to just right up front .

22                 But I think we do need some time to visit

23   internally to figure out the best next step , but it ' s been

24   made v ery clear that what we ' re trying to propose as some

25   clarification , we need to do a little more work on , so .


                       Integrity Legal Support Solutions      APPENDIX B
                            www . integrity-texas . com
                                                    Audio Transcription -    6/9/2015

                                                                                 21
 1                  DR . HANDAL :     I need a motion to send it back .

 2                  MS . DEWALSH :      ( Indiscernible ) .

 3                  DR . HANDAL :     DeWalsh make the motion .

 4                  Second?

 5                  Mr . Smith?

 6                  MR . SMITH :     What motion        which motion· is that?

 7                  DR . HANDAL :     The motion is to not accept the

 8   publication , but send it back for further study .

 9                  MR . SMITH :     Okay .   I was going to table it , but if

10   we already have a motion.

11                  DR . HANDAL :     So all in favor?

12                  MS . BIBBY :     I move        do you still need?

13                  DR . HANDAL :     Moved by DeWalsh , second by

14   Mr . Smith .

15                  MS. BIBBY :      Oh , okay .

16                  DR . HANDAL :     So all in favor ,       say " aye ."

17                  ALL :   Aye .

18                  DR . HANDAL :     We ' ll send it back and motion denied .

19         (End of partial transcript at 2 : 36p . m. )

20

21

22

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24

25                                       * * * * *

                       Integrity Legal Support Solutions         APPENDIX B
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                                         Audio Transcription -     6 / 9/2015

                                                                        22

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                                                                 Audio Tr a nscription -             6/9/2015

                                                                                                         23
 1   STATE OF TEXAS

 2   COUNTY OF TRAVIS

 3                                                    NOTARY PAGE

 4           Before me ,   51-ev~   ~dv                     E.
                                                    on this day         ,
     p ers onally appeared Mary Henry , known to me to be the
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     instrument and acknowledged to me that they executed
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     expressed .
 7           Given under my hand and seal of off i ce this    )f+J-
     day of                    A~ust ,             2o15 .
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10       lft:~~                STEVEN B. WHEB.ER
         f'~.J"(_.,§ MY COMMISSION EXPIRES                                       FOR
                . .. ·*"··""
         '-;:!';''~'~\'·          July 18 2017
                                        I
11                                                      THE STATE OF TEXAS
                                                        COMMISSION EXPIRES :   JCt ~y   IJ-r 2t1J7
12

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