State Blackmail Over Health Care Funding?

For Fran Hagerty, CEO of the Women's Health and Family Planning Association of Texas, which earlier this year won the right to grant millions in federal family planning funding, there have been both good and not so good consequences of winning access to those Title X funds – funds that had previously been granted directly to the state for allocation.

First, there's the good news: Clinics shuttered as a result of the devastating budget cuts of 2011 are, slowly but surely, beginning to reopen. In Hays and Bell Counties, and in the Valley, clinics that lost funding as a result of the cuts – meant to push Planned Parenthood clinics out of business, but that instead hurt so many more – will soon reopen to serve some of the more than 100,000 women who lost services as a result of the cuts that left roughly just $18 million per year of a fund that previously averaged about $50 million a year.

In all, 60 providers shuttered operations – and while three clinics reopening is a modest start, it's still a start, says Hagerty. "It's turning the corner and going in the right direction."

But there’s also the bad – or, worrying – news: Hagerty says that some of the more than three dozen providers who initially signed on to her network have pulled out of the group. The problem, she says she's been told by more than one provider, is that the state of Texas has informed providers that if they choose to work with Hagerty to avail themselves of the Title X funds, they might jeopardize their eligibility for any funding from the state, specifically funds put back into the 2013 state budget to support reproductive health and family planning services. The federal funds amount to roughly $13.5 million this year (also a reduction thanks to federal cuts) – the only federal money earmarked specifically for family-planning services – but the Department of State Health Services, which previously administered Title X funds, is apparently warning providers there might be consequences for accepting the new Title X funding from the WHFPT.

At issue in part is a decision from the federal government to allow DSHS to continue to grant Title X funding left over from its final funding cycle – $2.3 million, or more than 12% of the total amount of funds it was in charge of spending over the last year. DSHS has consistently had difficulty spending all of its Title X allotment during a given contracting period, in large part because the agency has been directed by legislators to spend the funds in a specific way – and not necessarily the most efficient way.

Indeed, pursuant to a pair of budget riders (dating back to 2005), DSHS is directed first to take a slice of available funding for granting to federally qualified health centers and beyond that to let the funds to other providers based on a tiered system. Family planning clinics, traditionally the system's highest-volume and most cost-efficient providers, were put in the last tier, for which there have been few funds available, leading to the unprecedented number of clinic closures.

The tiered system was devised primarily to undermine Planned Parenthood, though some lawmakers insisted that the move was about trying to provide low-income and uninsured women with a medical home: a one-stop medical shop provided by FQHCs, which which provide more general services in addition to reproductive health. Unfortunately, the FQHCs have generally been unable to use all the funds they've been given, and in some cases clinics have not even applied for funding, leaving a pot of money at DSHS unspent, and women in need unserved.

Thus the feds have allowed DSHS until the end of the fiscal year, Aug. 31, to spend the money it has left over. According to Hagerty, that set up a conflict for some providers who'd joined the WHFPT Network when the group applied late last year to accept all Title X funding. By eliminating the politically motivated tiering system, the Network proposed that it could use all the money granted and serve a far larger number of women than DSHS had been able to do: Up to 190,000 estimated for the first year versus 75,160 that DSHS-granted funds served in all of 2012. (Prior to the cuts, the program since 2005 served an average of roughly 244,000 women each year.)

Hagerty said she's been told by a number of providers that DSHS officials have told them that they have a choice: Continue contracting with DSHS for Title X funds through August and be eligible for other funds – like from the more than $100 million lawmakers are pumping into the state's Primary Health Care Services Program – or go with WHFPT and possibly lose out on access to primary care or other state-granted funding opportunities.

As a result, says Hagerty, eight providers have decided to leave WHFPT. As a result, the WHFPT Network now has 29 contractors statewide operating roughly 110 clinics, she said. "What's happened … is a lot of manipulation with our network," she said. "They let people know that if they stay with our Title X network they won't be eligible for any other funding."

DSHS spokeswoman Christine Mann wrote in an email that due to "limited funding" the state chose to expend its final Title X funds on providers who weren't receiving those funds via WHFPT "based solely on the need to ensure that these agencies had the ability to continue seeing family planning clients," she wrote. Moreover, she wrote that the agency "encourages all entities interested in the expanded Primary Health Care program to apply for funding, including Title X recipients." There is no move to restrict access to that funding – including, presumably, as a means to entice clients away from the WHFPT. Mann did not respond to a question about why, if that's the case, that providers would be saying they've been told otherwise.

Dr. Peggy Smith, director of the Baylor University-affiliated Teen Clinic, said she was told that there can "only be one Title X provider" and so with DSHS still technically in the game – if only for a limited time – providers were told they had to choose. "We had to make a choice," Smith said. "We're aligned with the state of Texas." Her program has been working with the state for funding since 1974 and the state is doing a good job of trying to replace money stripped from the budget in 2011, she said, including the millions being put into the primary care program for expanded services for women. In short, she said, she doesn't "have a good reason to change" alliances now.

Asked about the choice to go with the state when it only has Title X funding for another couple of months, versus WHFPT, which has the contract for the next two years, Smith did not elaborate. Title X is the only funding source that requires confidential services for teens without mandated parental notification. Asked whether the decision to shift from federal to state funding would jeopardize the ability to provide confidential services via the Teen Clinic, Smith said that while the decision is not hers, the rules are still being worked out. (A draft of new rules for the program is slated for publication in the Texas Register on June 21; the drafted rules contain no language related to providing services to anyone under 18. State law requires parental notification for adolescents seeking family planning services.) "There's a lot of benefit to being affiliated with the state of Texas," she said.

Hagerty does not doubt that working with the state would benefit Texas women in need of services and says she's suggested finding ways to work together – for example, by extending some Title X funding to as many grantees as possible, the agencies would be able to continue to provide confidential services to teens and would be assured to have access to the bulk pricing benefit for contraceptives that is a major benefit of Title X. In an email, Mann wrote that the state "strives to expand access to family planning services whenever possible." To date, however, Hagerty says she hasn't gotten any concrete indication that the state is interested in collaboration with WHFPT to broaden access. She’s hopeful that will change. "At this time it doesn't seem possible, but I'm hopeful for the future. It has to happen," to get women the services they need, she said.