Texas health officials are overhauling plans to keep people away from abortions following a ProPublica and CBS news investigation, which found that the state has dumped tens of millions of taxpayers’ dollars into the effort, while providing little oversight for spending.
The money has been flowing to a network of nonprofits that are part of a thriving Texas family that supports parenting and adoption as an alternative to abortion and provides counseling, material assistance and other services. Most groups operate as crisis pregnancy centers or pregnancy resource centers, often similar to medical clinics, but are often criticized for having little or no actual health care and misleading women.
In its 20 years of existence, the funding of the program has grown 40 times – reaching $100 million starting on September 1, making it the most abundant effort of its kind in the country.
Under the new rules set to take effect, organizations in the program must now record all their expenses and will be reimbursed only for expenses related to state-approved services. When they redistribute donated items, they cannot seek reimbursement, which is to prevent taxpayers from going to organize free goods.
Meanwhile, Texas is opening up the management of the program to a competitive selection process rather than automatically renewing the agreement with the contractor, including a contractor overseeing the program for nearly two decades.
These changes addressed the failure of the ProPublica/CBS news investigation a year ago. Due to the current thriving Texas family operations, most providers pay a fixed fee for each service they claim to offer regardless of the actual cost of the service. As a result, multiple stacking fees can be incurred in one customer visit, which greatly increases the amount of public funds spent. In some cases, according to records reviewed by ProPublica and CBS News, the provider bills separately for each item or service given to the client, such as diapers, baby clothes, blankets, wipes, snacks, and even educational brochures.
This arrangement allows organizations to invoice the state rather than actually providing the service costs and keep the difference. A group of Sealy Pregnancy Resource Centers that have increased their assets over three years by stockpiling some reimbursements. Its executive director Patricia Penner acknowledged the practice, saying her goal is to “make sure we have enough of this center that can continue and continue for the years to come.”
Penner added: “There is no guarantee that the funds we receive are enough to keep the center moving forward, and it is my duty as a director to make sure we are receiving any service funds we receive to make sure that we can take care of these young ladies as they come in.”
The other two, the McAllen Pregnancy Center and the coastal curved pregnancy center in Corpus Christi, used reimbursement to fund real estate transactions. McAllen Center has earned almost all the income from the state, which purchased a building that had previously lived in an abortion clinic. The Coastal Bend Center publicly acknowledges the use of state funds to purchase land for new facilities. The center did not answer the question.
In San Antonio, the booming Texas family cut funding for a new generation of pregnancy centers in life after local news outlets reported that it has used taxpayer money on holidays, motorcycles, and funded the tobacco shop business owned by its president and CEO. The center did not respond to a request for comment.
ProPublica and CBS News also found that state health officials have no visibility into the services being provided or whether to attract the people in the most need. In many cases, each time the country distributes donated goods or materials, it will repay the provider $14, regardless of the cost or how it is obtained.
This includes distributing brochures in parenting, fetal development and adoption, which may trigger the same reimbursement as providing a diaper or formula (such as a diaper or formula). The state cannot say exactly how much it spends on these materials because it does not track what is being distributed.
A journalist reviewed state-approved brochures and courses that indicate inaccuracy, such as fetal heartbeat begins 21 days after conception – and portrays the attitude of single mothers as risk and loneliness with marriage or adoption as a better option.
While uniform compensation is sometimes used in government contracts, nonprofit and accounting experts say that the allocation of donated goods (no clear metrics of quantity or value) is very irregular.
Officials overseeing Texas’s booming National Health and Public Service Commission did not say it was what prompted the policy shift, but just followed the guidance of the national auditor-general. The guidance recommends granting state grants as reimbursement for actual expenditures.
The state has long allowed its major contractor, Texas Pregnancy Care Network, to handle most of the program’s oversight. The network told news organizations last year that once state funds pass it to subcontractors, “it’s no longer taxpayer’s money”, and that the groups are free to spend money because they see fit. HHSC delayed the network, saying it still believes it is a taxpayer dollar and is expected to be consistent with state guidelines.
The shift to a cost repayment model seems to make the program more in line with the way public funds are usually distributed among state agencies in Texas.
The Texas Pregnancy Care Network has received nearly 75% of Texas household funds in recent years and distributed it to dozens of crisis pregnancy centers, faith-based groups and other charities as subcontractors, without answering questions about how to deal with this new bond or adapt to stricter compensation rules.
Donna Howard, a Democrat from Austin and a vocal critic of the state’s support for the anti-abortion program, said in an interview that while she opposed taxpayers’ support for the anti-abortion program, she saw the new rules as a step in the right direction.
But with new reimbursement requirements, Howard questioned whether many centers could even take advantage of the funds. Unlike previous plan fee systems, providers now have to track costs, document services and submit receipts to justify their spending. “Who knows they have to show up now, and now if they can really use the funds,” she said.
By requiring pregnancy centers to track customers’ income, education, and employment levels and provide customers with information about public welfare – the state is moving away from the system that allows nonprofits to collect funds without considering who is getting help.
Pregnancy Resource Center and anti-abortion activists lobbied Republican lawmakers to block policy changes in recent legislative sessions, which some publicly condemned.
Rep. Jeff Leach, a Republican from the suburb of North Dallas, urged the agency to “not give veto power” to “give biased media reporters.” Leach did not respond to a request for comment.
In an interview, Texas’s Right to Life president John Seago warned that the new reimbursement model would prevent participation. “Because of all the traditional tape festivals, it’s not worth small providers entering the program,” he said.
In written testimony, Penner’s Sealy begged lawmakers to keep the current model and said her team “focused on serving clients rather than providing staff to handle paperwork in order to make the reimbursement required for the paperwork.
Despite the counterattack, lawmakers did not take action to stop the new rules.
Ge Bai, a professor of accounting and health policy at Johns Hopkins University, said switching to a cost repayment system can help prevent waste by ensuring organizations can only pay for what they actually spend.
But she warned that this model has its own risks. Since providers know they will be repaid, they may be less careful to reduce costs and may even exaggerate their expenses to get more money. She pointed to Medicare, which used to use similar systems but abandoned it after the cost was out of control.
To avoid the same problem, she said the plan will require a lot of public oversight to ensure that organizations do not overspent simply because the state will cover the bill.
A reproductive health policy expert who closely tracks spending in Texas Crisis Pregnancy Center warns that the reforms will not help address the larger gap in the state’s social safety net.
“You really can’t provide Medicaid health insurance to the poor in Texas,” said Laura Dixon, a researcher at Austin-based reproductive health research.
But at least, she said: “Understanding where the money is going is the first step in the program.”
