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brought the estimated deficit for 1991 to more than double what it was when the Legislature had left town in June. The DHS had been right all along when it projected the big deficit in January. To human services advocates, this updown-up pattern was suspicious because it indicated that someone had deliberately fudged the figures. They figured that Mosbacher had pressured the staff to lower its estimates in order to avoid having to call for new revenues to bail out an action which would probably seriously damage his campaign for lieutenant governor. Intensifying the politically charged atmosphere, by March, the Legislature was back in town for a series of special sessions. Though they were called primarily to devise a schoolfinance plan, the Legislature ultimately was forced to deal with the DHS crisis as well. As the sessions dragged on, DHS’s estimates of its budget deficit kept changing from week to week. As the gravity of the situation became apparent, key senators began to realize that if they didn’t address the deficit immediately, they would be facing a revenue catastrophe when they returned in January 1991. So legislators no longer had an interest in going along with the department’s inaccurate pressed the agency to help them find a solution. Some DHS staffers believe, with some justice, that the Democratic senators on the Senate Finance and Health and Human Services Committees, who interrogated the DHS leadership, were eager to help Bob Bullock’s election chances \(and curry favor with the They could aid Bullock by making Mosbacher call for a tax increase, or at least making him present a deficit figure so high that new revenue would be needed. Mosbacher, meanwhile, wanted to avoid such political embarrassment. But he and Lindsey both were trapped by Governor Clements’s stubborn and repeated pledge to sign no new tax bill. Having agreed to a $5.7 billion tax bill in 1987, Clements resolved to end his second term without signing another. \(In fact, one rumor making the rounds at the time, which can’t be confirmed, had Mosbacher going in to Clements’s office, pleading with the Governor to get him, Mosbacher, off the clothesline upon which he had been hung out to dry, and Clements replying, “Rob, in politics, the only friend however, at the end of April, scrape together $8 million from his office’s contingency fund and give it to DHS to ease immediate shortfalls. Whatever the reason, virtually no one outside the department believed the sudden drop in caseloads projected in March. “During the special session,” recalled Pederson, “a wide range of knowledgeable people, both from groups with a financial interest and public interest groups, were calling their [DHS’s] numbers into question.” A memorandum from NHIC, the private insurance company contracted by DHS to pay for Medicaid patients, recounts DHS’s pattern of denial. “In May 1990, however, it became apparent that the DHS, for whatever reason, was not seeking sufficient funding from the Legislature to cover the increased costs in the Medicaid program for fiscal year 1990.” NHIC lobbyists even met with Hobby and Senate leaders and persuaded them to increase the payments over DHS objections. Then, according to Pederson, after the department and senators had agreed on a figure, DHS claiming that the number had changed yet again frantically requested an additional $16 million in the bailout package, to meet current obligations just days after insisting no bailout would be needed. “The smoking gun is what the department lead ership told the Legislature. You have to conclude somebody’s lying or incompetent.” Legislators groused that the estimates of costs, caseloads, and needs were changing almost daily. “During the last two months, [DHS officials] have testified that they need $32 million, $22 million, and $10 million,” complained Senate Health and Human Services Chairman Chet Brooks. And Greta Rymal, budget examiner for the Legislative Budget Board \(which analyzes agency budget asked to justify their projections, “They didn’t satisfy us with the answers. They gave us answers, some of which we didn’t understand or believe,” she said. “It was strange. They couldn’t explain why the numbers in the [Medicaid] program had changed. I’d never seen anything like it before.” Rymal has worked on DHS budgets for eight years. With the numbers constantly changing, it was impossible for lawmakers to get consistent, reliable numbers upon which to base an appropriation. “DHS Medicaid forecasting has been a problem for a long time,” conceded Pederson. “But the smoking gun is what the department leadership told the Legislature. You have to conclude somebody’s lying or incompetent.” Senate Finance Committee chairman Kent Caperton picks the first choice. “We were suspicious at the time that they were playing with the numbers,” Caperton said. But DHS officials steadfastly deny that the estimates they submitted were manipulated for political purposes. “Fallible we are,” conceded Lindsey. “Playing games, we’re not.” Lindsey, DHS forecasting chief Steve Scarborough, acute services director Steve Svadlenak, and Raiford all deny that anyone from the board or the leadership was pressuring them to change their projections. “If anyone asked me to do that,” said Scarborough, “I’d tell ’em what trolley to get off.” What had happened to cause the department to lower the Medicaid estimate? “I really can’t give you an answer to that,” said Lindsey. “[In January,] all we had was our questionable number $95. In May, based on second quarter figures, it was costing less than we predicted. Whoever turned in their bills earlier must have had lower costs [than those who turned theirs in after the second quarter]. In retrospect, we all wish now we’d stuck to our original figure. It was one of those situations where we made very good projections [in January]. If we’d just left them alone, it would have been a lot better.” Scarborough agreed with Lindsey, that simultaneous, multiple changes in Medicaid rules caused the problems. “We’ve had so many changes in the [Medicaid] program, it’s everything we can do just to keep up with them,” Scarborough said. He and Svadlenak, who also participated in negotiating the premium rate with NHIC, point to “lag patterns” as one culprit in the illusory caseload drop. For example, providers have 90 days from the time treatment is rendered to present DHS with the bill for treating someone eligible for Medicaid reimbursement. Then there are “dual-eligibles,” people who get both Medicare and Medicaid reimbursement. It can take months for a claim to wend its way through the two federal bureaucracies before it gets to DHS. These delays, according to agency officials, can skew the first numbers that come in, especially on a new program. “Given the unknowns we’re dealing with and the changes we’ve experienced, those fluctuations don’t surprise me at all,” said Svadlenak. “We’ve seen more changes both in federal and state legislation in 1990 than we’ve seen in years, and I’ve worked at DHS for 15 years. It plays havoc with our data base.” Nevertheless, even Hobby, who avoids personal attacks \(and refused to engage in cused Mosbacher of telling agency officials to lowball or falsify the caseload estimates, and of deliberately misleading the Legislature the previous year. “The DHS board, even when it was established that they would need more money, would not come forward and request additional appropriations from the Legislature,” complained Hobby at the time. Mosbacher responded that the legislative leadership had known of and acquiesced to the conservative estimates, and accused Hobby of playing politics. It was this failure to come forward and ask THE TEXAS OBSERVER 7