                                                                                                                                                                      ACCEPTED
                                                                                                                                                                  03-15-00657-CV
                                                                                                                                                                          7738683
                                                                                                                                                       THIRD COURT OF APPEALS
                                                                                                                                                                  AUSTIN, TEXAS
                                                                                                                                                            11/9/2015 10:41:28 AM
                                                                                                                                                                JEFFREY D. KYLE
                                                                                                                                                                           CLERK




                                                                                                                               RECEIVED IN
                                                                                                                         3rd COURT OF APPEALS
                                                                                                                              AUSTIN, TEXAS
Kristofer S. Monson                                                                                                                          (512) 936-1820
ASSISTANT SOLICITOR GENERAL                                                                                              11/9/2015
                                                                                                              KRISTOFER.MONSON     10:41:28 AM
                                                                                                                               @TEXASATTORNEYGENERAL   .GOV
                                                                                                                             JEFFREY D. KYLE
                                                                                                                                  Clerk



                                                                   November 9, 2015




       Jeffrey D. Kyle
       Third Court of Appeals
       P.O. Box 12547
       Austin, Texas 78701

               Re:         03-15-00657-CV Chris Traylor, as Executive Commissioner of the Texas Health
                           and Human Services Commission v. Diana D., as Next Friend of KD, A Child,
                           et al.

       Dear Mr. Kyle:

              Please file this letter on behalf of the Commissioner and Health and Human Services
       Commission in the above-captioned case. Please file-mark the extra copy and return it to
       me for my files. By copy of this letter, opposing counsel is being served. Thank you for
       your assistance in this matter.

       TO THE HONORABLE THIRD COURT OF APPEALS:

               Before the notice of appeal in this case was filed, Appellants filed a motion to modify
       the temporary injunction, which is included in the Clerk’s Record. See CR.674-734. The
       parties have now filed a response and reply, and there has been a hearing, at which the
       district court denied the motion to modify. Appellants have already requested that the
       appellate record be supplemented with the filed documents, and the transcript of the
       hearing has been filed in a supplemental reporter’s record. To ensure that the Court has
       access to the documents while it considers the Rule 24.4 motion, appellants attach official
       copies of each document. See Attachment A (Response to Motion to Modify); Attachment
       B (Reply in Support of Motion to Modify).



                 P os t O f fic e B ox 12548 , Aust in, Texa s 7 8 7 1 1 - 2 5 4 8 • ( 5 1 2 ) 4 6 3 - 2 1 0 0 • ww w. t exa satt or n eygen er a l. gov
         The district court denied the motion to modify. Appellants draw the Court’s
attention to the District Court’s explanation of the scope of the injunction, under which he
envisions that the Commission will ask the plaintiffs permission before implementing new
rates. See Supp. RR at 36:17-38:10. The trial court’s stated view that the only way that the
Commission will be told whether its proposed ratemaking activity violates the injunction is
if (1) the plaintiffs disagree with it and (2) the Court determines post hoc whether to impose
sanctions, is in considerable tension with the standard for temporary injunctive relief. To
be enforceable a temporary injunction—indeed any injunction in the Texas system—must
“describe in reasonable detail . . . the act or acts sought to be restrained.” TEX. R. CIV. P.
683; Tex. Health & Human Servs. Comm’n v. Advocates for Patient Access, Inc., 399 S.W.3d
615, 628-29 (Tex. App.—Austin 2013, no pet.) (vacating portions of temporary injunction
that did not adequately put Commission on notice of its obligations under the injunction).
$500 is an insufficient bond to cover a temporary injunction that requires a judicial
proceeding before the enjoined party knows what it needs to do to comply with the order.

       The Commission is challenging the underlying injunction, in part, based on the
ambiguities created by the district court’s statements on the record. But the issue is also
relevant to the Rule 24 motion. Given that this vague order precludes an exercise of a
government function and interferes with the implementation of a state-federal Spending
Clause arrangement, the court should reevaluate the amount of the bond if it does not
conclude that the injunctive relief is preempted.


                                              Sincerely,

                                              /s/ Kristofer S. Monson

                                              Kristofer S. Monson
                                              Assistant Solicitor General

KSM\hld
A
                                CAUSE NO. D-1-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,       §
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 DISTRICT 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


RESPONSE TO DEFENDANTS’ MOTION TO MODIFY TEMPORARY INJUNCTION


TO THE HONORABLE JUDGE OF SAID COURT:

       1.      This Court should deny Defendants’ Motion to Modify Temporary Injunction (the

“Motion”) because it fails to establish any fundamental error or changed circumstances since the

Court issued its injunction. Further, Defendants have appealed the Court’s order, ensuring that it

will be reviewed by a higher court. Revisiting the order at the trial level — which will inevitably

lead to another appeal to be combined with Defendants’ first appeal — is at best a needless

duplication of judicial resources, and at worst an inappropriate contrivance to avoid the rules

controlling the review of interlocutory orders. But most fundamentally, this Court has already

                                                                                          1|P a g e
considered Defendants’ arguments and found them to have no merit. For all of these reasons, the

Court should deny the Motion.

          I.     NO FUNDAMENTAL ERROR OR CHANGED CIRCUMSTANCES

         2.       “A trial court may modify a temporary injunction because of fundamental error or

changed circumstances but has no duty to reconsider the grant of a temporary injunction if the

movant fails to present new evidence showing fundamental error or changed conditions.”

Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 580 (Tex. App.—Austin 2000, no

pet.). “Fundamental error exists when ‘the record shows the court lacked jurisdiction or that the

public interest is directly and adversely affected as that interest is declared in the statutes or the

Constitution of Texas.’” Id. (quoting Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex. 1982)).

“‘Changed circumstances are conditions that altered the status quo existing after the temporary

injunction was granted or that made the temporary injunction unnecessary or improper.’” Id.

(quoting Henke v. Peoples State Bank, 6 S.W.3d 717, 721 (Tex. App.—Corpus Christi 1999, pet.

dism’d w.o.j.)). The trial court has no duty to reconsider the grant of the injunction if the motion

does not allege fundamental error or changed conditions. Cellular Mktg., Inc. v. Hous. Cellular

Tel. Co., 784 S.W.2d 734, 735 (Tex. App.—Houston [14th Dist.] 1990, no pet.). “The purpose of

the motion to dissolve is to provide a means to show that changed circumstances or changes in

the law require the modification or dissolution of the injunction; the purpose is not to give an

unsuccessful party an opportunity to relitigate the propriety of the original grant.” Tober v.

Turner of Tex., 668 S.W.2d 831, 836 (Tex. App.—Austin 1984, no writ).1


1
  The Tober Court stated: “From a practical standpoint, if a litigant could, by motion to dissolve, force
reconsideration of the original grant, without a showing of changed conditions, then there is an incentive for him to
do so at least once, or more often, in hope that he will be able to wear down the resistance of the original trial judge,
or in hope that he will be able to secure a hearing before a different trial judge who may be more sympathetic. Such
actions needlessly add to the judicial caseload, both at the trial and appellate level. Recognition of the principle that
the trial court has no duty to reconsider the validity of the original grant of temporary injunction upon motion to
dissolve enables the trial court to dispose of motions to dissolve solely upon the pleadings when the motion to
dissolve, on its face, shows that the litigant offers no new evidence.” Id. at 835.
                                                                                                              2|P a g e
A.         No Fundamental Error

           3.    Defendants make no allegation of fundamental error.2 And though Defendants

have repackaged their unpersuasive arguments in the Motion, they do not allege any changes to

conditions that have altered the status quo existing after the injunction was granted or that now

make the temporary injunction improper. See Cellular Mktg., 784 S.W.2d at 735. Rather,

Defendants are attempting to relitigate the propriety of the original grant by presenting

hypertechnical arguments that a) contradict their own previous statements and representations;

and b) this Court already found unpersuasive.


B.         No Changed Circumstances

           4.    Defendants’ only “new” evidence is an affidavit of Pam McDonald, who has

already given her deposition twice and testified twice at the temporary injunction hearing.3 Her

affidavit contains no information obtained since the original hearing, or any indication that

anything has changed since the temporary injunction. It is just a document thrown together “in

hope that [Defendants] will be able to wear down the resistance of the original trial judge, or in

hope that [they] will be able to secure a hearing before a different trial judge who may be more

sympathetic.” Tober, 668 S.W.2d at 835. As in Tober, this Motion needlessly adds to the judicial

caseload, both at the trial and potentially the appellate level. Id. The Court should dispose of

Defendants’ Motion solely upon the pleadings because the motion, on its face, shows that the

Defendants offer no new evidence. Id.

     II.    CIRCUMVENTION OF RULES AND WASTE OF JUDICIAL RESOURCES

           5.    “A motion to dissolve may not be used as a means of evading or expanding the

rules applicable to appealing interlocutory orders. A statute authorizing an appeal from an
2
  Footnote 1 to Defendants’ Motion incorporates Defendants’ previous jurisdictional objections and procedural
objections, but this Court considered and rejected those arguments before issuing its temporary injunction, and
Defendants do not appear to re-urge them here.
3
  Defs.’ Motion to Modify Temporary Injunction at Ex. 1.
                                                                                                     3|P a g e
interlocutory order must be given a strict construction since the statute is in derogation of the

general rule that only final judgments and orders are appealable.” Tober, 668 S.W.2d at 835.

Defendants have already appealed the Court’s temporary injunction. 4 The record has been

prepared, and the court of appeals will review the temporary injunction as part of Defendants’

accelerated interlocutory appeal. Since these arguments are based on no new facts, they will be

available to Defendants at the court of appeals, just as they were available to Defendants at the

temporary injunction hearing. Defendants’ request that the Court reconsider them again is a

needless waste of judicial resources, and this court need not indulge the request. See id. (“the

trial court will not be deemed to have abused its discretion by refusing to reverse a prior grant of

temporary injunction, absent pleading and proof of changed conditions . . . or perhaps upon

pleading and proof of fundamental (i.e. jurisdictional) error . . .”) (internal citations omitted).

                             III.     NO BASIS FOR MODIFICATION

         6.       Should the Court nevertheless be inclined to consider Defendants’ Motion, it will

see that each point raised is without merit. Defendants appear to have re-articulated five different

arguments in support of modifying the injunction. First, they claim that their own rule requiring

cost studies to be performed does not apply to this rate change because Defendants have decided

not to use the word “periodic” in their arguments anymore.5 Next, Defendants argue that a

different provision of their rule allows them to dodge cost studies in the name of adjusting rates

“within available funding.”6 Alternatively, Defendants claim that section 531.021 of the Texas

Government Code gives them an alternative basis to adjust rates outside of their own rules. 7 And

though they do not mention it specifically in their Motion, Defendants have inserted a legal

argument into Ms. McDonald’s affidavit, suggesting that the temporary injunction improperly

4
  Defs.’ Notice of Appeal, Oct. 15, 2015.
5
  Defs.’ Motion at ¶1–2, 7–8.
6
  Id. at ¶3.
7
  Id. at ¶17–18.
                                                                                              4|P a g e
relies on chapter 353 of the Texas Administrative Code, which only applies to Medicaid

Managed Care.8 Finally, also unmentioned in Defendants’ Motion but shoehorned into Ms.

McDonald’s affidavit is a claim that the injunction may hamper Defendants’ ability to participate

in various other initiatives and programs related to Medicaid coding, and that performing the cost

studies required by their own rules will be expensive.9 These arguments are not new, nor do they

have merit.


A.      “Periodic” Rate Reviews

        7.      Defendants claim that the rate adjustments this Court has enjoined are the result

of a legislative directive, are not “periodic,” and therefore fall outside the scope of Rule

355.8021(a)(2)(B). This argument is too clever by half.

        8.      Rule 355.8021(a)(2)(B) reads:

        HHSC may conduct periodic rate reviews that will include, but not be limited to,
        payments for as well as the costs associated with providing these Medicaid-
        reimbursable therapy, nursing, and aide services. HHSC may seek input from
        contracted home health services providers and other interested parties in performing
        this review.

1 TEX. ADMIN. CODE § 355.8021(a)(2)(B) (emphasis added).

        9.      “Periodic” means:

        1. Recurring at intervalsJ of time; 2. Occurring or appearing at regular intervals; 3.
        repeated at irregular intervals; intermittent; . . .10

        10.     Thus, a rate review done at the direction of the legislature is still a periodic rate

review because it is “repeated at irregular intervals, intermittent . . .” HHSC may have discretion

as to when and how often to perform a rate review, but any rate review is by definition a periodic

rate review.

8
  Id. at Ex. 1, ¶10.
9
  Id. at Ex. 1, ¶12–16.
10
     Periodic. (n.d.). Dictionary.com Unabridged. Retrieved   October   22,   2015,   from   Dictionary.com
website: http://dictionary.reference.com/browse/periodic.
                                                                                                  5|P a g e
        11.      In making this argument, Defendants have outsmarted themselves. The Court

need look no further than the July 20, 2015 Proposed Rates for proof. In HHSC’s summary of its

proposal, it notes that “HHSC reviews the Medicaid reimbursement rates for all acute care

services every two years. These biennial reviews result in rates that are increased, decreased, or

remain the same.”11 HHSC goes on to announce that “The specific administrative rules that

govern the establishment of the fees in this proposal include these rules in 1 TAC:

§355.8021 . . .”12 Defendants’ admission that the disputed rates are the result of a review

undertaken every two years destroys their argument that the rates are not part of a periodic rate

review. The Court should ignore Defendants’ imagined distinction between this set of rates and

any other rates HHSC proposes.


B.      Funding Is Available

        12.      Though they spend little time on it, Defendants apparently claim Rule

355.8021(a)(3), which instructs HHSC to adjust payments within available funding, allows

Defendants to ignore the requirements of Rule 355.8021(a)(2). The Court can disregard this

argument based on the evidence of HHSC’s own Richard Allgeyer, Director of HHSC’s Center

for Strategic Decision Support. The Court will recall Mr. Allgeyer’s testimony at the temporary

injunction hearing, during which he stated that there are no consequences to HHSC’s exceeding

its budget. “[B]ecause Medicaid is an entitlement, if we run out of our appropriation, they will

give us a supplemental appropriation next session. They won’t like it, but they will, and they

almost always do because this is a lot of money.”13 HHSC will simply obtain supplemental

funding if necessary.


11
   “Background” section of the July 20, 2015 Proposed Rates, which are attached as Ex. A to the Court’s September
25, 2015 Order Granting Temporary Injunction and Denying Supersedeas (emphasis added).
12
   Id.
13
   Hr’g on Defendants’ Mot. for Plea to the Jurisdiction and Pls.’ Mot. for Temporary Inj., 4 R. R. at 240:7–11.
                                                                                                       6|P a g e
         13.      But more directly, Rule 355.8021(a)(3) is not an alternative                             to Rule

355.8021(a)(2). It is a further condition. Sections (a)(1), (a)(2), and (a)(3) must all be followed

when HHSC adjusts its rates. This argument is a non-starter.


C.       Texas Government Code § 531.021 Applies to Rules, Not Rates

         14.      Defendants would next dodge Rule 355.8021 by claiming that Texas Government

Code § 531.021 provides HHSC with a choice of paths to take when adjusting rates, only one of

which is Rule 355.8021. Section 531.021, however, does not give Defendants a way to determine

fees, charges, and rates for Medicaid payments, but rather specifies the ways for Defendants to

“adopt reasonable rules and standards” for such determinations. TEX. GOV’T CODE § 531.021(b-

1).

         15.      As part of that rule adoption process, Section 531.021(e) clarifies that the

commission, “[n]otwithstanding any other provision” of certain statutes and regulations, may

adjust fees “in a manner consistent with the considerations described by Subsection (d).” Id. at §

531.021(e). Subsection (d) describes four such considerations:

         (1) formulas, procedures, or methodologies prescribed by the commission’s rules;
         (2) applicable state or federal law, policies, rules, regulations, or guidelines;
         (3) economic conditions that substantially and materially affect provider
         participation in Medicaid, as determined by the executive commissioner; or
         (4) available levels of appropriated state and federal funds.

Id. at § 531.021(d).

         16.      Defendants presumably would point to consideration (3), arguing that the

executive commissioner can adjust rates if he determines — by no defined means or rationale —

that economic conditions warrant them, and the Court should modify the temporary injunction to

allow him to make such arbitrary decisions ignoring HHSC’s own rules.14 But, of course, Section


14
  Plaintiffs presume that Defendants would rely on condition (3) to support the arbitrary rate cuts they ask the Court
to carve out of its injunction because there can be no doubt that such cuts without a cost study would not be in
                                                                                                           7|P a g e
531.021 permits no such thing. The four factors in Subsection (d) are considerations the

executive commissioner may take “in adopting rules and standards required by Subsection (b-

1).” Id. Subsection (b-1) instructs the executive commissioner to “adopt reasonable standards

governing the determination of fees, charges, and rates for Medicaid payments.” Id. at §

531.021(b-1). So Section 531.021 describes the executive commissioner’s power to adopt rules,

such as Rule 355.8021, to be used to set rates.15 Section 531.021 has nothing to do with setting

rates themselves.

         17.      That Section 531.021 authorizes Defendants to adopt a new rule in accordance

with specified considerations does not change Defendants’ obligation to follow their own

existing rules, or the fact that failing to do so constitutes a de facto promulgation of a new rule.

It certainly should not cause this court to modify its injunction preventing further violations of

Rule 355.8021.


D.       Texas Administrative Code Chapter 353 is a Red Herring

         18.      In her affidavit, Ms. McDonald suggests that the temporary injunction improperly

relies on chapter 353 of the Texas Administrative Code, which only applies to Medicaid

Managed Care.16 While it is true that the rules in chapter 353 of the Texas Administrative Code

apply only to Medicaid Managed Care, there is no such limitation on chapter 355, which is

where Rule 355.8021 resides. This statement, while true, does not impact the Court’s prior

application of the law to the facts of this case.




accordance with: (1) the commission’s rules (e.g. Rule 355.8021); (2) applicable state rules (again, Rule 355.8021);
or (4) available levels of appropriated state and federal funds (see Section IV.B., supra).
15
   And, as Defendants have tirelessly trumpeted, rates are not rules. See, e.g., Defs.’ Br. in Support of Plea to the
Jurisidiction at §II; Defs.’ First Am. Br. in Support of Plea to the Jurisidiction at §II.
16
   Defs.’ Motion at Ex. 1, ¶10.
                                                                                                           8|P a g e
E.       Code Maintenance and Unsubstantiated Cost Increases Do Not Excuse Defendants
         from Following their Rules

         19.      Finally, Ms. McDonald lists four tasks or projects currently underway in her

department that she claims the injunction will “hamper and obstruct,” apparently because she has

concluded that it will take 24 months to implement a full cost report procedure to comply with

Rule 355.8021.17

         20.      As a preliminary matter, Plaintiffs note that Ms. McDonald’s affidavit does not

state that any required changes to HCPCS billing codes or NCCI codes implicate the

reimbursement rates for physical, occupational, and speech therapy services that are the subject

of the Court’s injunction. Plaintiffs do not believe that those rates are implicated, and the Court

certainly has been provided no evidence of any such implication.

         21.      In addition, setting aside that Ms. McDonald points to no statute or rule requiring

her to complete these projects — and certainly not one authorizing her to ignore other

commission rules to do so — if the absence of a cost study required by Rule 355.8021 prevents

Ms. McDonald from completing these tasks or projects, it is all the more reason for Defendants

to bring themselves in compliance with Rule 355.8021.18

                                              IV.     PRAYER

         22.      For the above reasons, Plaintiffs ask the Court to deny Defendants’ Motion to

Modify Temporary Injunction solely upon the pleadings because the motion, on its face, shows

that the Defendants offer no new evidence of changed circumstances or fundamental error.

Alternatively, Plaintiffs ask the Court to deny Defendants’ motion because any new evidence



17
  Id. at Ex. 1, ¶12–16.
18
  Moreover, there is little information in Ms. McDonald’s affidavit to support her claim that, if a “full cost report
procedure, with audits required,” is actually necessary under Rule 355.8021, it will cost anywhere near what Ms.
McDonald’s estimates.

                                                                                                          9|P a g e
Defendants have offered fails to warrant a revision to the temporary injunction, and for such


other and further relief to which Plaintiffs may show themselves entitled.


                                                     Respectfully submitted,


                                                     RICHARDS RODRIGUEZ & SKEITH
                                                     816^3ongress Avenue, Suite 1200
                                                     A^tin, Texas 78701
                                                     T^lephon^: 512-476-0005
                                                     Facsimile   512-476-1513



                                              By:
                                                     DANIEL R. RICHARDS
                                                     State Bar No. 00791520
                                                     drichards(a)jrsfirm.com
                                                     BENJAMIN H. HATHAWAY
                                                     State Bar No. 09224500
                                                     bhathaway(a),rrsfirm.com
                                                     CLARK RICHARDS
                                                     State Bar No. 90001613
                                                     crichards(a)/rrsfirm.com
                                                     CHASE C. HAMILTON
                                                     State Bar No. 24059881
                                                     chamiltonf^rrsfirm.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 2 day of November 2015 by electronic notification and e-mail:


Marc Rietvelt
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




                                                    Dan^tR^'Richards


                                                                                        10 I P a g e
B
                                                                        11/4/2015 8:24:56 AM
                                                                                            Velva L. Price
                                                                                           District Clerk
                                                                                           Travis County
                               CAUSE NO. D-l-GN-15-003263                               D-1-GN-15-003263
                                                                                          Tamara Franklin

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, 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 DISTRICT 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



                        DEFENDANTS’ REPLY IN SUPPORT OF
                     MOTION TO MODIFY TEMPORARY INJUNCTION



       Defendants file this reply in support of their Motion to Modify Temporary

Injunction:

       1.       Defendants allege fundamental error in the Temporary Injunction signed

on September 25, 2015, which directly and adversely affects the public interest as that

interest is declared in a statute or the Texas Constitution.

       2.       Here, as in the Motion to Modify, the statutes at issue include:
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               a)        Rider 50 of the General Appropriations Act; and

               b)        Texas Government Code § 531.021.

      3.       In particular, Rider 50 provides the appropriated level of state funds, and

Government Code Section 531.021(e) provides that “[n]otwithstanding any other

provision of . . . this Chapter,” HHSC may adjust the fees, charges, and rates as

necessary to achieve the objectives of Medicaid consistent with, among other things:

               (2)       applicable state or federal law, policies, rules, regulations, or
                         guidelines; [or]
                                                      ...

               (4)       available levels of appropriated state and federal funds.

See TEX. GOV’T CODE § 531.021(d), (e); see also 1 TEX. ADMIN. CODE § 355.201(d).

      4.       The Temporary Injunction, at page 10, effects mandatory injunctive relief

that HHSC must conduct a review of payments and review of costs associated with the

reimbursement methodology for home health services in Section 355.8021(a)(2)(B),

before it takes “any action to propose or implement any change” in reimbursement rates

for physical, occupational, and speech therapy services under the Texas Medicaid

program. Therefore, the order as written is overbroad, enjoins lawful acts, and has

directly and adversely affected a public interest in the appropriation and use of public

funds as declared in Rider 50 and state law.

      5.       Accordingly, Defendants respectfully request this Court grant their Motion

and make the specific modifications to the Temporary Injunction as requested.

                                              Respectfully Submitted,

                                              KEN PAXTON
                                              Attorney General of Texas

                                              CHARLES E. ROY
                                              First Assistant Attorney General
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                JAMES E. DAVIS
                Deputy Attorney General for Civil Litigation

                ANGELA V. COLMENERO
                Chief, General Litigation Division



                  /s/ Marc Rietvelt
                MARC RIETVELT
                Texas Bar No. 24043892
                EUGENE A. CLAYBORN
                Texas Bar No. 00785767
                ANDREW LUTOSTANSKI
                Texas Bar No. 24072217
                Office of the Texas Attorney General
                P.O. Box 12548, Capitol Station
                Austin, Texas 78711-2548
                (512) 463-2120
                (512) 320-0667 (Fax)

                ATTORNEYS FOR DEFENDANTS
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                              CERTIFICATE OF SERVICE

        I hereby certify that a true and correct copy of the foregoing document has been
sent by email, and to the electronic filing service provider, providing service of same on
this the 4th day of November 2015, to the following:

Daniel Richards
drichards@rrsfirm.com
Benjamin H. Hathaway
bhathaway@rrsfirm.com
Chase Hamilton
chamilton@rrsfirm.com
RICHARDS RODRIGUEZ & SKEITH
816 Congress Avenue, Suite 1200
Austin, Texas 78701
Attorneys for Plaintiffs

                                           /s/ Marc Rietvelt
                                          MARC RIETVELT
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