Senator Eliot Shapleigh - El Paso, Texas

The Health and Human Services Commission has maintained a consistent approach toward spending the money allocated by lawmakers last year to settle the 15-year-old Frew v. Hawkins lawsuit.

That approach was almost a mantra at yesterday’s meeting of an advisory committee set up to help implement the Frew settlement: the state says it is not looking for the fastest way to spend the settlement money but the best way.

That deliberate approach has been met, though, with increasing impatience by the plaintiffs’ lead attorney Susan Zinn. Zinn has a seat on the advisory committee and repeatedly emphasized at yesterday’s meeting the need to spend as much of the $150 million this biennium.

Talking to QR during a break in the proceedings, Zinn said that the money is supposed to provide services that help vulnerable populations across the state. “If the money is just sitting there collecting dust, it’s not doing what it’s supposed to do.”

She said yesterday that while it was not her preferred option, she left open the possibility of going back to the court for further relief if the state doesn’t make good progress. “The plaintiffs are examining the options available,” she said.

HHSC spokeswoman Stephanie Goodman said, “It would be irresponsible to use a process that makes spending the money as fast as possible a higher priority than funding well designed projects.”

HHSC sources tell QR that the agency has allocated $58 million so far this biennium for projects that either have already been started or are close to implementation. The biennium will be halfway completed at month’s end.

That $58 million is likely to change, though, as more projects make it through the review process. The agency has created a multi-step process for approving the dispersal of the Frew settlement money. Ultimately, the Legislative Budget Board and Governor’s Office must approve all expenditures made from the settlement fund.

The logic underlying the approach is certainly understandable. HHSC has a large pot of money -- $150 million – to spend on several initiatives to improve health care for the Medicaid children who make up the plaintiffs in the Frew case. Spending too quickly could well lead to wasteful spending on projects that don’t get the results that the plaintiffs sued for.

That said, it appears that the state would be hard pressed to use the entire Frew appropriation this biennium. Goodman indicated that spending the entire allotment shouldn’t be the main focus. “We're not OK with spending taxpayer dollars just because we have them,” she said. “We need to spend the money wisely for projects that can reasonably be expected to increase the percentage of children who get regular checkups.”

In addition, the state needs to address why many children on Medicaid don’t regularly see a doctor. “So why don't more families use that coverage to make sure their children get regular checkups?” she said. “That's the question the strategic initiatives need to address.”

Zinn said yesterday that she was placing a priority on increasing payment rates for pediatricians who have a further specialization in fields such as neurology or urology. The state is experiencing a severe shortage of these pediatric sub-specialists and the thinking is that increasing those payment rates would induce more of them to take more Medicaid clients.

From Zinn’s perspective, the targeted rate increases would have the added advantage of dispersing a larger share of the Frew settlement money than other approaches being considered. The advisory committee considered holding a meeting next month to specifically address the targeted rate increases but decided instead to discuss the matter at the regular October meeting after being told that another committee that must also evaluate a rate increase would not meet before October or November.

The committee was also told that HHSC was planning to designate Frew spending in the next biennium as an exceptional budget item, meaning that the agency does not plan to roll expenditures to fund the Frew settlement into its baseline budget.

It was not clear, though, whether some Frew initiatives that have been implemented, such as creating a first dental home for children to receive primary dental care, might be included in the agency’s baseline budget request. The committee was told that remains a “gray area.”