For the first time in nearly 40 years, Austin's Downtown Planned Parenthood clinic has been shut out of federal pass-through funding used to serve thousands of local low-income and uninsured clients.

The clinic was among 12 contractors operating 22 clinics across the state who have been defunded as part of the Legislature's draconian cuts last spring to the state's family planning budget. The Department of State Health Services estimates that the funds allocated for use through the end of year will cover roughly 60,000 clients; last year, the family planning budget served more than 200,000 women.

The DSHS had originally funded family planning contractors for just three months of the new fiscal year, beginning Sept. 1, 2011, in order to give providers – many of them, like Austin's Downtown PP clinic, veteran providers of women's health services – time to "adjust," not only to the severe budget cuts but also to a new funding scheme. Indeed, in addition to slashing two-thirds of the state's roughly $111 million biennial budget to provide to women (and men, though in fewer numbers) access to basic preventative health care (including gynecological exams and screenings for cancers, diabetes, hypertension, and sexually-transmitted infections, as well as access to birth control), lawmakers approved a new matrix for allocating the federal tax dollars returned to the state to provide health care. The matrix was designed specifically to defund PP, which lawmakers disapprove of because the nearly 100-year-old non-profit also provides – though not with tax dollars – legally protected abortion care.

Under the new funding scheme, DSHS is required first to fund “federally-qualified health centers” – one-stop health care shops that aim to give patients a medical home – and public providers (together, "tier 1" providers) who also provide family planning care. After those contractors have been funded, the state is required to allocate remaining funds to other public health clinics ("tier 2" providers) – like Austin's People's Community Clinic, for example; once those agencies have been funded, only then may state health officials fund so-called "tier 3" family planning clinics, including PP clinics.

The problem, of course, is that with just roughly $18 million per year left on the table to provide many thousands of clients with services (there is $37.9 million left of the original budget to cover the entire biennium), there is barely enough to fund even the tier 1 and 2 providers. Indeed, People's Community Clinic, which in 2011 received more than $520,000 to serve Central Texas clients, is among the providers that has been completely defunded. (El Buen Samaritano has also been defunded, meaning all three of Austin's traditional providers of women's health have each lost all of their public funding.) In fact, in Austin, only the CommUnity Health Centers have been given funding to serve local clients; through March 2013, the FQHC has been allocated just $477,642 to handle thousands of local clients in need. (Interestingly, DSHS has also given contract extensions to seven contractors, including PP of Hidalgo County, PP of North Texas, and PP of Central Texas – which does not cover Austin – because no tier 1 or 2 contractors there applied for funds. The contract extensions run through March 31, while DSHS again beats the bushes to see if there are any other providers who might be interested in receiving funds.)

Even the state's largest providers have been hard hit by the budget cuts and reworked funding allocation. Consider Dallas' Parkland Hospital, which in 2010 and 2011 received more than $6 million to serve nearly 33,000 clients; through March 2013, the hospital has been given just $1.4 million. If they're able to serve clients at an average cost of $204 per client – which they did in 2011 – through this funding cycle the hospital district will see just 6,915 clients.

The cuts are dangerous and disappointing, say providers of women's health. According to a 2008 report from the Guttmacher Institute, there are approximately 1.5 million women in Texas in need of these basic health services; before the legislative cuts made in April 2011, the state was on average serving only roughly 15% of those women. "This is such a fundamental shift" in how healthcare is provided to the state's neediest women, says Sarah Wheat, interim co-CEO of Planned Parenthood of the Texas Capital Region, which operates the Downtown clinic. And, frankly, the punitive budget changes are not attached to any prior performance issue, which makes them even more difficult to understand – indeed, says Wheat, if PP were incapable of providing quality services at low cost it would make sense they would be cut out of the loop. As it stands, PP actually provides services at the lowest cost per client of any of the state's providers – roughly $168 per client vs. the roughly $225 per client that it costs FQHCs, according to numbers crunched by Fran Hagerty CEO of the Women's Health and Family Planning Association of Texas. "We've done nothing but exceed the expectations of our partnership" with the state, says Wheat.