Texas Health and Human Services System

Policy Concerns

  • Maintaining continuity of client services during the human services (HHS) transformation
  • Integrating behavioral health services into Medicaid managed care
  • Providing access to services for low-income Texans with mental illness ineligible for Medicaid
  • Ensuring adequacy of reimbursement rates for behavioral health and primary care services
  • Maintaining funding for Medicaid 1115 Transformation Waiver projects and integrating successful projects into Medicaid managed care
  • Enforcing mental health parity standards, as required by the Affordable Care Act and the Mental Health Parity and Addiction Equity Act of 2008
  • Monitoring and ensuring network adequacy in Medicaid managed care

Fast Facts

  • The FY 2016-17 HHSC appropriation was nearly $57 billion and comprised 27 percent of the state’s entire budget.
  • One in seven Texans is enrolled in Medicaid.
  • Children without disabilities account for 67 percent of Medicaid enrollment but only 31 percent of program spending on direct healthcare services.
  • In 2014, Texas spent $12.5 billion on premium payments to Medicaid managed care organizations – or 39 percent of total Medicaid spending.
  • Texas has 72 Federally Qualified Health Centers (FQHCs) that serve over 1 million patients annually at nearly 450 sites statewide.

Organization Chart



Texas Health and Human Services System

Since the reform initiated by HB 2292 in 2003 as directed by the Texas Legislature, the Texas Health and Human Services Commission (HHSC) has been the umbrella agency overseeing Medicaid, the Children’s Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), the Medical Transportation Program, the Disaster Assistance Program, and others, as well as the operation of four major departments:

  • Department of State Health Services (DSHS)
  • Department of Family and Protective Services (DFPS)
  • Department of Aging and Disability Services (DADS)
  • Department of Assistive and Rehabilitative Services (DARS)

Together, HHSC and these departments comprised the Health and Human Services (HHS) “enterprise.”  For service delivery administration, the state is divided into 11 HHS regions, displayed in Figure 12. The HHS enterprise employs over 57,500 full-time employees.

In 2015 the Texas Legislature passed a bill requiring a significant reorganization of the HHS system. Prior to the 84th session, the Texas Sunset Advisory Commission performed a comprehensive review of the system and recommended that the legislature consolidate agencies in order to improve efficiency and service delivery. The 2014 Sunset Commission recommended further consolidation as a step toward achieving the state’s 2003 vision for efficient, streamlined health and human services. According to the 2014 Sunset Commission, further system reorganization was also necessitated by recent developments in Texas healthcare, such as the transition to Medicaid managed care, the integration of behavioral health services into managed care, and the implementation of the federal Affordable Care Act (ACA).

Informed by the commission’s recommendations, the 84th Legislature directed the transfer of behavioral health and regulatory functions previously administered by DSHS and DFPS to HHSC, as well as a complete transfer of services and the ultimate elimination of DADS and DARS as separate entities. This “HHS transformation” process began in 2015 and will take place over multiple years, altering the organizational structure of health and human services delivery in Texas. See the Changing Environment section for more information about the HHS transformation.


Source: Texas Health and Human Services Commission. (2014). Health and human services regions.

Changing Environment

The Health and Human Services Commission and the HHS system are currently undergoing significant reorganization. As stated above, the 84th Texas Legislature directed a reorganization of the entire HHS system, requiring that many programs and services transfer to HHSC from the other four HHS agencies. Implementation began in 2015 and will continue over the course of several years, although the majority of the structural reorganization is expected to be complete by September 1, 2017.

In addition to the transformation, HHSC is implementing many legislative directives passed during the 84th Legislative Session that address a number of policy and program areas such as the Medicaid substance use benefit, network adequacy in Medicaid managed care, and the discontinuation of the NorthSTAR managed care program. The commission also continues to implement directives from the 83rd Legislative Session, such as integrating behavioral health services with Medicaid managed care.

Finally, as part of the transformation plan for health and human services, SB 200 (84th, Nelson/Price) created the new Division of Transformation, Policy and Performance within HHSC. Among other duties, the Policy and Performance Office is responsible for:

  • Evaluating current HHSC (and DSHS) performance measures;
  • Developing “new and refined” measures; and
  • Establishing targeted system-level measures that evaluate and communicate overall system performance.

HHS Transformation: SB 200 (84th, Nelson/Price)

During the 84th Legislative Session, the legislature adopted the Texas Sunset Commission’s recommendation to reorganize the HHS enterprise (SB 200, 84th, Nelson/Price). The HHSC Sunset legislation requires the five HHS agencies to consolidate into three, discontinuing DARS and DADS and maintaining DSHS and DFPS as separate agencies until further legislative review in 2018.


  • SB 200 (84th, Nelson/Price) directs the state to transfer many of the programs and functions currently housed across the four other HHS agencies over to HHSC.
  • Phase one of the transformation, focused on reforming the enterprise’s broader organizational structure, concluded on September 1, 2016.
  • Behavioral health programs at DSHS and DADS, as well as select client services at DARS, were transferred to HHSC; DARS was discontinued as a separate agency on September 1, 2016.
  • DARS general vocational rehabilitation services, vocational rehabilitation for individuals who are blind, Independent Living Services for older individuals who are blind, and Business Enterprises of Texas program were all transferred to the Texas Workforce Commission on September 1, 2016.
  • Phase two will focus on reforming program operations within the new HHS structure.
  • Regulatory functions at DSHS, DADS, and DFPS, as well as operation of the state supported living centers (SSLCs) and the state hospitals, will transfer to HHSC by September 1, 2017.
  • DADS will be discontinued on September 1, 2017.
  • DSHS and DFPS will continue to operate as separate agencies, maintaining their public health and child protective services functions, until further legislative review in 2018.

In July 2016, the commission published a revised version of Health and Human Services System Transition Plan, outlining its plan for carrying out the transformation directives in SB 200 (84th, Nelson/Price).  The timeline for the anticipated changes is shown in Figure 13.


Source: Texas Health and Human Services Commission. (2016). Health and Human Services system transition plan.

The reorganization of the HHS systems is occurring in two phases:

  • Phase One: Completed on September 1, 2016, this phase focused on implementing broad structural changes to the HHS system. During this phase, HHSC facilitated the transfer of the majority of social and medical services into one HHSC division. The goal has been to transfer programs to HHSC in their entirety before attempting intra-program or intra-division organizational reform.
  • Phase Two: During this phase, the agency plans to transfer remaining regulatory and facility operations to HHSC. The transfer of programs and functions to HHSC is expected to be complete by September 1, 2017. During this phase, the agency will begin to pursue reorganization within core functional divisions or specific programs, as necessary.

The two-phase reorganization process is designed to minimize interruptions to client services during the transformation process. While the majority of the structural changes are expected to be complete by September 1, 2017, the agency expects that reorganization within divisions and programs will occur over the course of several years.

By September 1, 2018, the agency must, additionally, submit a report to the Texas Legislative Oversight Committee providing recommendations as to whether DSHS and DFPS should continue to operate as separate agencies or be merged into HHSC. For more information, see the Health and Human Services Transition Plan.

Discontinuation of NorthSTAR: SB 200 (84th, Nelson, Price)

The HHSC Sunset legislation also requires the state to discontinue the NorthSTAR behavioral health demonstration project on December 31, 2016. Since 1999, the NorthSTAR program has provided behavioral health and substance use services to Medicaid-eligible clients in the Dallas area through a capitated payment system to one managed behavioral health care organization.

In 2014, the Sunset Commission found that NorthSTAR’s behavioral health delivery system was outdated and inconsistent with Texas’ system-wide efforts to integrate behavioral healthcare with other basic physical health services and Medicaid managed care. In its analysis of Senate Bill 200 (84th, Nelson/Price), the Texas House Research Organization reported that dismantling NorthSTAR would:

  • Produce cost savings
  • Facilitate behavioral health integration efforts
  • Enhance access to federal funding

SB 200 adopted the Sunset Commission’s recommendations, removing reference to the NorthSTAR program from statute. Medicaid-eligible NorthSTAR clients will receive their behavioral health care services through the same managed care organization that provides their physical health care. DSHS has established two Behavioral Health Authorities (BHAs) that will provide an alternative model for indigent care (mental health services for those not eligible for Medicaid). LifePath Systems and the North Texas Behavioral Health Authority (NTBHA) have been selected as the two BHAs in the region. These transitions become effective January, 1 2017. See the section on “Behavioral Health Services” section for more information about NorthSTAR.

HHS Advisory Committee Reorganization: SB 200 (84th, Nelson/Price) and SB 277 (84th, Schwertner/Sheffield)

The HHSC Sunset legislation also directs important changes to the advisory committee structure in the HHS enterprise, eliminating 36 existing advisory committees from state statute while enabling the HHSC Executive Commissioner to establish new advisory committees in rule. Advisory committees play an important role in the HHS enterprise, providing the agency with feedback from clients, families, and other stakeholders on specific issues.

In 2015, a cross-agency workgroup evaluated the 133 existing HHS advisory committees. Following a public input process, the workgroup submitted recommendations to the HHS Executive Commissioner on which advisory committees to keep, consolidate, or dismantle. A list of the recreated advisory committees can be found in the transformation plan.

The HHSC Sunset legislation expressly directed HHSC to establish an advisory committee that would address behavioral health issues, and the Behavioral Health Advisory Committee held its inaugural meeting in January 2016. Its role is to provide recommendations to the HHS Executive Commissioner on how to promote cross-agency coordination, ensure access to and integration of services, and promote behavioral health wellness and recovery.

For a full listing of the Commissioner’s final advisory committee recommendations, please see the Health and Human Services Transition Plan.

Network Adequacy in Medicaid Managed Care: SB 760 (84th, Schwertner/Price) and HHSC Rider 81, HB 1, Article II (84th, Otto/Nelson)

As managed care becomes Texas’ primary service delivery model for Medicaid, the legislature has expressed concern about the adequacy of provider networks available to clients enrolled in plans through Medicaid managed care organizations (MCOs). Historically, HHSC has contractually required MCO plans to maintain an adequate network of different provider types, but a number of stakeholders continue to identify network adequacy as an issue for Medicaid patients who experience difficulty finding in-network providers, including behavioral health providers.
Network adequacy for Medicaid behavioral health providers remains a concern and is related to the national and state shortage of behavioral health providers.24 (See The Texas Mental Health Workforce: Continuing Challenges and Sensible Solutions) Maintaining an adequate network of behavioral and mental health care providers among MCOs is increasingly important as these services are integrated into the bundle of services covered by Medicaid managed care (see discussion of behavioral health integration and Senate Bill 58 [83rd, Nelson/Zerwas]).
Among its multiple directives, SB 760 (84th, Schwertner/Price) requires HHSC to:
  • Establish access standards for different provider types in an MCO network;
  • Implement new remedies for MCOs that fail to comply with access standards;
  • Submit reports to the legislature on MCO compliance with network adequacy standards;
  • Ensure that MCOs submit plans for compliance with new access standards;
  • Establish and implement an expedited credentialing process, heightened transparency standards, and an MCO compliance monitoring process; and
  • Expand consumer support resources for clients enrolled in MCO plans.

HHSC conducted a public input process and stakeholder forum in the fall of 2015 to gather feedback on SB 760’s implementation. In February 2016, the agency held a managed care stakeholder meeting to discuss the agency’s draft response to public input. A follow-up forum was held in June 2016.

Relatedly, HHSC Rider 81, HB 1, Article II (84th, Otto/Nelson) directs HHSC to publish a report on network adequacy compliance and the number of disciplinary or corrective actions that the agency has taken against noncompliant MCOs.

Evaluation of Substance Use Treatment Benefit in Medicaid: HHSC Rider 44, HB 1, Article II (84th, Otto/Nelson)

In 2009, the legislature approved a Substance Use Disorder (SUD) benefit for adult Medicaid beneficiaries with the goal of reducing costs in the Medicaid program (SB 1, Article IX, 81st, Ogden/Pitts). The legislation followed the release of Legislative Budget Board (LBB) findings that people with substance use disorders incur twice the medical costs as people without those disorders.

The 2009 legislation required that HHSC discontinue the benefit if the agency finds that providing adult substance use services results in overall growth in Medicaid spending. In 2015, with HHSC Rider 44, HB 1, Article II (84th, Otto/Nelson), the legislature directed HHSC to evaluate the SUD benefit and its effect on overall Medicaid spending and client outcomes. HHSC released a progress report outlining its evaluation methodology in December 2015 and is required to submit either a final report or status update to the Office of the Governor by December 1, 2016.

Integration of Behavioral Health Services With Medicaid Managed Care: SB 58 (83rd, Nelson/Zerwas)

In an effort to optimize health outcomes for Medicaid beneficiaries with mental healthcare needs, in 2013 the legislature approved the integration of behavioral healthcare into the package of services reimbursable under Medicaid managed care.

Prior to the passage of Senate Bill 58 (83rd, Nelson/Zerwas), only local mental health authorities (LMHAs) were eligible to receive Medicaid reimbursement for mental health rehabilitation and targeted case management services. LMHAs provided these services under a fee-for-service payment arrangement with DSHS. Senate Bill 58 directed the agency to widen this provider network and incorporate these services into the package of services covered by Medicaid managed care organizations (MCOs). The bill established a Behavioral Health Integration Advisory Committee to provide recommendations and guidance through two distinct phases of implementation.

During Phase I of implementation, HHSC successfully oversaw the integration of LMHAs into the state’s STAR and STAR+PLUS managed care networks. In September 2014, targeted case management and mental health rehabilitative services became fully reimbursable through the state’s managed care providers. LMHAs statewide are now contracted with MCOs to provide behavioral healthcare services to Texans served in those networks.

While private providers are technically eligible to receive reimbursement for behavioral health services, MCOs continue to contract primarily with LMHAs. This is largely because LMHAs have established capacity to deliver the integrated bundle of mental health services required of rehabilitative service providers. More participation from private providers is expected over time as they build the capacity to offer the integrated services necessary to receive reimbursement.

HHSC expects that achieving full integration will require years of ongoing effort and oversight. The advisory committee released its Phase II recommendations in July 2015, and the agency plans to focus on the following objectives during Phase II of implementation:

  • Broadening the provider base to include private providers;
  • Implementing systems changes recommended by the advisory committee;
  • Conducting outreach and education to ensure that integration is happening at all levels;
  • Defining the behavioral health medical policy benefits; and
  • Developing and implementing two home health pilots.

Programs Transferring From DARS to HHSC and TWC

The mission of the Texas agency formerly known as Department of Assistive and Rehabilitative Services (DARS) was “to ensure that Texans with disabilities and children with developmental delays enjoy the same opportunities as other Texans to live independent and productive lives.” DARS was intended to reduce the need for long-term support from other public programs and services. As of September 1, 2016, all DARS functions and responsibilities were transferred to either the Health and Human Services Commission (HHSC) or the Texas Workforce Commission (TWC) as a result of Sunset legislation. More information on Vocational Rehabilitation Services and other programs transferred to TWC can be found in the TWC section.

The Early Childhood Intervention (ECI) and Vocational Rehabilitation (VR) programs formerly administered under DARS are of special relevance to the promotion of mental health for Texans. The nurturing of a child’s healthy emotional, behavioral, and social development can help to prevent the future development of mental health conditions. Employment can help adults with mental or behavioral health conditions obtain independence, become integrated into society, and achieve social, emotional, and general well-being.

The figure below illustrates where former DARS programs are now placed.



Source: Texas Health and Human Services Commission. (2016). Health and Human Services System Transition Plan. Page. 22.

Programs Transferring From DADS to HHSC

Prior to the implementation of the HHSC transformation plan, the Texas Department of Aging and Disability Services (DADS) was responsible for providing long-term services and supports (LTSS) for Texans over the age of 60, people with physical disabilities, and people with intellectual and other developmental disabilities (IDD). LTSS (including both residential and community services) help individuals receive needed care and services to remain in their homes and communities of choice. DADS also had responsibility for regulating providers of LTSS and administering the state’s guardianship program. As a result of the HHSC transformation, DADS as a separate agency will be abolished and the programs and services incorporated into the HHSC organizational structure. For more information, see DADS Transformation Recap below.

DADS was under the review of the Sunset Advisory Commission, along with the other Texas Health and Human Services agencies, before the 84th Legislative Session. Sunset staff carefully reviewed DADS’ internal policies, procedures, and service delivery. The Commission ultimately recommended dissolving the agency and moving its functions into the Health and Human Services Commission (HHSC), in an effort to better serve older Texans and individuals with physical, intellectual, and other developmental disabilities (IDD).

The Sunset Commission also tackled the highly controversial issues surrounding the continued operation of the state support living centers (SSLCs). The Commission recommended closing six SSLCs: closing the Austin SSLC by September of 2017 and identifying five additional SSLCs to close by September of 2022. Those recommendations, along with statutory recommendations on other programs within DADS, were solidified in the DADS Sunset bill, SB 204 (Hinojosa/Raymond). The bill passed the Senate with a few changes, but after lengthy discussion on the House floor, House members removed SB 204’s recommendation to close the Austin SSLC and establish the SSLC Restructuring Commission. Members of the conference committee could not reach an agreement on the content of the  DADS Sunset bill, consequently SB 204 died days before the end of the legislative session.

The failure of SB 204 means that every SSLC will remain open until further legislative direction is received. However, many other DADS-related recommendations from the Sunset Commission were adopted in the final HHSC Sunset bill (SB 200), including changes to nursing home requirements and services for individuals with IDD.

The HHSC Sunset bill (SB 200) transfers functions from DADS to HHSC. DADS’ functions will transfer entirely to HHSC by September 1, 2017 and the agency will then be abolished. The majority of the agency’s client services and program functions transferred to HHSC on September 1, 2016. The remaining regulatory functions and operation of the SSLCs will transfer by September 1, 2017, at which point the agency will be discontinued.

The Health and Human Services Transition Plan was released in March 2016 for review by the Transition Legislative Oversight Committee. The proposed plan outlines the future of DADS’ programs and functions. The SSLCs will be placed in the new Facility Operations Division under HHSC, which will operate two types of state-owned facilities: state hospitals and SSLCs. For more information on the HHSC and DSHS Sunset changes, see the Texas Environment section of the guide.

See the Sunset Advisory Commission’s Staff Report of DADS for the final results of the 84th legislative session.

HHSC Funding

HHSC has proposed a FY 2018-19 consolidated budget that includes the funding needed to continue programs and services transitioned from the once separate agencies. DFPS and DSHS will continue to submit individual agency appropriations requests for the operations that are not currently being consolidated. The following paragraphs offer information on the FY 2016-17 budget approved by the 84th legislature as well as the FY 2018-19 budget proposed by HHSC for the new enterprise structure.

According to HB 1 (84th, Otto/Nelson) the 2016-17 HHSC budget of approximately $57 billion, constituted 27 percent of the entire Texas state budget and over 70 percent of the HHS system budget (see Figure 15). This represents a 17 percent increase from the 2014-15 HHSC budget of $49 billion. It should be noted that these figures were prior to the restructuring of the HHS system. Spending on health and human services in Texas is primarily driven by anticipated caseload growth for programs such as Medicaid, CHIP, and foster care. HHSC is requesting $30,906,433,838 General Revenue and $6,013,975,759 in exceptional item requests for FY 2018-19. These amounts cannot be compared to prior years due to the changes in infrastructure and consequent legislative appropriations requests.

The FY 2016-17 HHS system (HHSC, DADS, DARS, DSHS, and DFPS) budget was over $77 billion in combined state and federal funding, representing approximately 37 percent of the entire state budget. Figure 15 shows the percentage of HHS funding that was dedicated to each of the five agencies, and Figure 16 shows funding sources for the 2016-2017 HHS enterprise budget.

The majority of the HHSC budget (92 percent) is dedicated to Medicaid (see Figure 17), which is funded jointly by state General Revenue (GR) and federal matching funds. Federal funding comprises a large percentage (58 percent) of the HHSC budget, in part due to the joint federal-state funding arrangement for Medicaid. According to the July 2016 Coordinated Behavioral Health Expenditures Proposal approximately $1.8 billion is budgeted for mental health services across state agencies. See the Coordinated Statewide Behavioral Health Expenditures Proposal for FY 2017 in the Medical and Social Services Division section.


Note: Excludes system-wide employee benefits, debt service, and interagency contracts, which together comprise 1 percent of the HHS budget.  Source: Hogg Foundation analysis of General Appropriations Act, H.B. 1, Conference Committee Report, 2015 Leg., 84th Reg. Sess., art. II. (Tex. 2015). 


Source: Hogg Foundation analysis of General Appropriations Act, H.B. 1, Conference Committee Report, 2015 Leg., 84th Reg. Sess., art. II. (Tex. 2015).


Note: Excludes allocations for program support, IT support, and the Office of the Inspector General, which together comprise less than 1 percent of the total HHSC budget.
Source: Hogg Foundation analysis of General Appropriations Act, H.B. 1, Conference Committee Report, 2015 Leg., 84th Reg. Sess., art. IX sec. 10.04. (Tex. 2015).

As a result of the HHS system transformation, some programs and divisions were moved out of HHSC and many moved into HHSC. Therefore, the budget trends do not compare apples-to-apples, as the amounts requested for 2018 and 2019 do not align with the same programs and services of previous biennium.


Source:  Data Captured from HHSC Legislative Appropriations Request for FY 2018/19. September 12, 2016.

The figure below depicts the breakdown of the anticipated sources of funding for HHSC FY 2018-19.


Source:  Data captured from HHSC Legislative Appropriations Request for FY 2018-19. September 12, 2016.

Medical and Social Services Division


Under the new HHSC organizational structure, the chief deputy executive commissioner oversees the Medical and Social Services Division and the State Facilities Division. The Medical and Social Services Division will have responsibility for

  • Medicaid and CHIP
  • Community Services, which includes:
    • Health, Developmental & Independence Services; and
    • Intellectual and Development Disabilities & Behavioral Health Services
  • Access and Eligibility Services

According to the HHS System Transition Plan, the Medical and Social Services Division will address historic fragmentation by placing client services including eligibility services, Medicaid activities, and community service programs in one division with a single line of authority.45 Additionally, the Office of Mental Health Coordination now reports to the deputy executive commissioner of the Medical and Social Services Division.

Medical and Social Services Division – Determines client eligibility serving as the entry point for services and providing information regarding access to services; oversees or provides client services, including aging services, community care, women’s primary and preventative services, awareness and education services, behavioral health services, intellectual disability services, and rehabilitation services and supports; and develops policy, oversees provider and health plan contracts, and submits Medicaid State Plan amendments and waivers to the Center for Medicare and Medicaid Services. (HHS System Transition Plan, July 2016)

Office of Mental Health Coordination 

In recent years, mental health and substance use have become major topics of national dialogue. Recognizing the need to be more strategic in behavioral health service delivery, and funding, the Texas Legislature took steps to increase and improve cross agency planning, coordination, and collaboration.  In 2013, the legislature created the Office of Mental Health Coordination, which it tasked with providing broad oversight for state mental health policy as well as managing cross-agency coordination of behavioral health programs and services. The office was initially housed within HHSC with a vision “to ensure that Texas has a unified approach to the delivery of behavioral health services that allows Texans to have access to care at the right time and place.” Under the new organizational structure, this office reports to the deputy executive commissioner of the Medical and Social Services Division. The office has developed a website to provide consumers, families, and providers up-to-date information on mental health and wellness.  According to the site, it was “developed with the goal of providing information, resources, and direction to Texas residents who may have mental health related needs or who want to support someone who does.”

In 2015, the office documented 54 cross-agency mental health initiatives spanning a total of 14 state agencies.

Also in 2015, as part of the state’s ongoing efforts to coordinate services across agencies and departments (including those outside of the HHS enterprise), the legislature established the Behavioral Health Coordinating Council, which it tasked with establishing a strategic statewide plan for mental health programs and services. The HHSC assistant commissioner who oversees the Office of Mental Health Coordination at HHSC serves as chair of the council.  Eighteen agencies and departments worked together under the direction of the Office of Mental Health Coordination to develop the goals and strategies included in the plan.

In addition to development of the behavioral health strategic plan, the Behavioral Health Coordinating Council was directed to develop a “coordinated statewide expenditure proposal” for mental health services for FY 2017.  The legislative directive required approval of the proposal by the HHSC executive commissioner and the Legislative Budget Board.  FY 2017 appropriations could not be expended until the budget was developed and the required approvals were obtained.

As a result of the legislative directive, the Behavioral Health Coordinating Council developed the Coordinated Statewide Behavioral Health Expenditure Proposal, Fiscal Year 2017.  Figure 20 below, summarizes the proposed budget.

Under the “transformed” HHS System, the Office of Mental Health Coordination reports to the deputy executive commissioner of the Medical and Social Services Division.


Source:  Health and Human Services Commission, (July 2016). Coordinated Statewide Behavioral Health Expenditure Proposal for FY 2017.

Medicaid & CHIP Services



Medicaid is a jointly funded federal and state health care program authorized in Title XIX of the Social Security Act. It was created as a way to provide health care benefits primarily to children in low-income families, pregnant women, and people with disabilities. The Texas Medicaid Program was first established in Texas in 1967. Roughly one in seven Texans (4.1 million out of 27.5 million) rely on Medicaid for acute and long-term services each month. The Texas Medicaid program caseload is projected to exceed 4.6 million by 2017

The federal government defines the mandatory services that state Medicaid programs must provide and populations they must serve. States have the option to expand both the services offered and the populations eligible to receive those services through State Plan Amendments (SPAs) and Medicaid waivers. Medicaid is an entitlement program, meaning that anyone who meets the eligibility criteria has a right to receive needed services and cannot be placed on waiting lists. Neither the federal government nor states can limit the number of eligible persons who enroll in the program. Waiver programs, however, allow state to waive basic federal Medicaid requirements, such as mandated eligibility or required benefits, in order to develop service delivery alternatives that improve cost efficiency or service quality. States can participate in three types of Medicaid waivers:

  • Research and Demonstration 1115 Waivers give the state leniency to experiment with new service delivery models.
  • Freedom of Choice 1915(b) Waivers allow the state to require clients to enroll in managed care plans and use the cost savings to enhance the Medicaid benefits package.
  • Home and Community-based Services 1915(c) Waivers allow the state to provide community-based services to individuals who would otherwise be eligible for institutional care. For more information on 1915(c) Waivers, see the Intellectual and Developmental Disability Services subsection of this guide

State Medicaid Agency

HHSC has been the designated state Medicaid agency since 1993, administering the program and acting as a point of contact between Texas and the federal government on issues related to Medicaid. The federal government establishes most Medicaid guidelines but grants several important tasks to the states, including:

  • Administering the Medicaid State Plan, which functions as the contract between the agency and the federal government
  • Establishing Medicaid policies, rules, and provider reimbursement rates
  • Establishing eligibility beyond the minimum federal eligibility groups

Historically, Medicaid-funded behavioral health services have been provided through multiple HHS agencies. However, the HHS enterprise is currently undergoing reorganization (see Changing Environment). Figure 21 outlines the Medicaid-funded programs that each legacy agency has historically administered that will transition to HHSC.


Sources: Texas Health and Human Services Commission. (2015). Texas Medicaid and CHIP in perspective tenth edition, 2-11. Texas Health and Human Services Commission. (2016). Health and Human Services system transition plan

Medicaid Managed Care

Since the early 1990s, Texas has offered Medicaid coverage through two service models: fee-for-service and managed care. The traditional fee-for-service model, wherein providers receive payment based on the unit of service delivered, is now limited to very few Medicaid participants. Under the Medicaid managed care system, a single provider oversees the care of each client, and the state pays a monthly capitated rate to the provider for each enrollee. With support from the Medicaid 1115 Transformation Waiver, Texas has incrementally expanded its Medicaid managed care system to include more services and populations (see The Texas Environment for more information on the 1115 Waiver). Moreover, under the recent direction of Senate Bill 7 (83rd, Nelson/Raymond), managed care has become the primary platform for delivering Medicaid services in Texas.

In a managed care system, the Medicaid-eligible client selects a health plan (a managed care organization) and identifies a primary care physician from that plan’s provider network. Clients have a choice between two or more health plans in each region. Members have the option to change plans down the line if they are unsatisfied. In addition to contractual requirements and state monitoring, members’ ability to switch plans generates some level of competition between health plans that is expected to result in higher quality services.

STAR (State of Texas Access Reform) is the statewide managed care program that provides Medicaid acute care services to the majority of Medicaid beneficiaries.  STAR+PLUS is the statewide managed care program that provides both acute and long term services and supports to people with disabilities and elderly participants.

Approximately 3.5 million Texas Medicaid clients (86 percent) were enrolled in managed care as of March 2016. This is an increase from 2.8 million in 2013, prior to the implementation of Senate Bill 7 (83rd, Nelson/Raymond), which expanded mandatory participation in the existing STAR+PLUS managed care program.

Senate Bill 7 generated major system delivery changes in Medicaid by expanding STAR+PLUS to serve all areas of the state, as well as transitioning nursing facility services and acute care services for individuals with intellectual or developmental disabilities (IDD) into STAR+PLUS.

Many of the changes instituted by SB 7 address coverage for individuals with IDD, who are three times more likely to experience a mental health condition. The bill directed the design and implementation of a system of acute care and long-term services and supports for adults and children with IDD. Texans who receive services through the Medicaid 1915(c) Waiver programs now receive acute care services through STAR+PLUS, and Texans with SSI not enrolled in a 1915(c) IDD waiver program receive both acute and long-term care services through STAR+PLUS. In addition to expanding care in STAR+PLUS, Senate Bill 7 established a new managed care program for children with disabilities called STAR Kids, expected to launch in November 2016. HHSC and DADS are also working together to create a capitation pilot for the delivery of long-term services and supports for people with IDD receiving waiver services, as required by Senate Bill 7.

Figure 22 describes the five Texas Medicaid and CHIP managed care programs. These programs include STAR (State of Texas Access Reform), STAR+PLUS, STAR Health, CHIP, and STAR Kids.


Institute for Child Health Policy at the University of Florida. (2015). Texas Medicaid managed care and Children’s Health Insurance Program, external quality review organization summary of activity and trends in healthcare quality, Contract Year 2014.
Texas Department of Family and Protective Services. (n.d.). STAR Health – a guide to medical services at CPS.
Texas Health and Human Services Commission. (n.d.). Overview of STAR+PLUS.
Texas Health and Human Services Commission. (n.d.) STAR+PLUS expansion.
Texas Health and Human Services Commission. (n.d.). Medicaid Managed Care quality strategy 2012-2016.
Texas Healthcare Learning Collaborative, Institute for Child Health Policy. (2016). Texas Medicaid quality of care reporting.
Texas Health and Human Services Commission. (2016). Texas CHIP Behavioral and Mental Health Utilization CY 2014 [xls file]. Retrieved from data request to agency.
Traylor, C. & Ghahremani, K. (August, 2014). Presentation to the Senate Health and Human Services Committee: SB 7 implementationTexas Health and Human Services Commission.
US Department of Health and Human Services, Centers for Medicare and Medicaid Services. (2016). 1915(c) Waivers by State.

Medicaid Funding

The Texas Medicaid program is jointly funded by the state and the federal government. Nationally, Medicaid is the largest source of public funding for mental health services nationwide, comprising a quarter of all public behavioral health expenditures. The Substance Abuse and Mental Health Services Administration (SAMHSA) projects that by 2020 Medicaid will comprise 30 percent of all mental health expenditures nationally. In Texas, Medicaid represents 29 percent ($61 billion) of the state budget for 2016-2017.

The federal share of the Medicaid program, known as the federal medical assistance percentage (FMAP), is determined on an annual basis and is dependent primarily on the average state per capita income compared to the U.S. average. Texas’ matching rates for 2016 and 2017 are 56.18 percent and 57.13 percent; that is, the state must pay 44 percent and 43 percent of all costs, respectively.

Small changes in the FMAP can result in millions of dollars of funding fluctuations. Texas’ rate of federal participation has been steadily declining over the last decade, as the state’s average per capita income has increased relative to the national average. This decline was mitigated by three years of enhanced federal funds due to the American Reinvestment and Recovery Act, but those funds are no longer in place. To illustrate Texas’ trend of declining federal Medicaid funding, in 2004 Texas’ FMAP was 63.17 percent. Figure 23 below shows Texas’ declining FMAP from 2004 to 2017.


Source: The Henry J. Kaiser Family Foundation, State Health Facts. (2016). Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier (Timeframe: FY 2004-2017) [CSV data download].


Source: Data Captured from HHSC Legislative Appropriations Request for FY 2018/19. September 12, 2016.

Medicaid Eligibility and Services

Medicaid was originally only available to recipients of cash assistance programs such as Temporary Assistance for Needy Families (TANF) and Supplemental Security Income (SSI). However, during the late 1980s and early 1990s, the federal government expanded the program to meet the needs of a broader population, including pregnant women, older adults, and people with disabilities, delinking Medicaid eligibility from receipt of cash assistance.

In determining program eligibility, Texas considers a variety of factors such as income and family size, age, disability, pregnancy status, citizenship, and state residency requirements. In Texas, to be eligible for Medicaid, an individual must meet income and categorical requirements. Categorical eligibility requires that beneficiaries be part of specific population group.

There are multiple Medicaid eligibility categories in Texas. Some of the primary categories include:

  • Children age 18 and under
  • Pregnant women and infants
  • Families receiving Temporary Assistance for Needy Families (TANF)
  • Parents and caretaker relatives
  • Individuals receiving Supplemental Security Income (SSI)
  • Adults over age 65 and people with disabilities
  • Children and pregnant women who qualify as medically needy

In 2014, under the Affordable Care Act, the federal government granted states the option to expand eligibility for Medicaid to all adults with incomes at or below 133 percent of the Federal Poverty Level (FPL), regardless of age, parental status, or disability status. Texas has elected not to participate in the expansion to date. The decision not to expand Medicaid eligibility means that Texas eligibility rules will continue to exclude many individuals with mental illness from coverage, including childless adults and some working low-income parents.

Currently in Texas, low-income parents are eligible to receive Medicaid only if their household income is below $251 a month (for a two-parent household); that is approximately 15 percent of FPL. Childless adults who are below age 66 and do not have a disability are currently ineligible for Medicaid. SAMHSA estimated that 6 percent of the population eligible for Medicaid expansion has a serious mental illness (SMI), 11 percent experience severe psychological distress, and 11 percent have a substance use disorder. According to these data, approximately 130,000 uninsured Texas adults with serious mental illness and 255,000 with severe psychological distress could be served in an expanded Medicaid environment.67 Figure 25 shows the income eligibility requirements for each Medicaid category while Figure 26 shows the accompanying Federal Poverty Levels for 2016.


Source: Texas Health and Human Services Commission. (2015). Texas Medicaid and CHIP in perspective tenth edition, 5-1 to 5-9.


Source: US Department of Health and Human Services. (2016). U.S. federal guidelines used to determine financial eligibility for certain federal programs

Medicaid recipients, both adults and children, have access to the mental health and substance use services included in the Medicaid State Plan, such as psychiatric services, counseling, medication, and medication management. Medicaid also funds rehabilitative and targeted case management services by approved providers, primarily the Local Mental Health Authorities (LMHAs) operating under DSHS. DADS, in addition, administers several Medicaid-funded waiver programs that offer behavioral health or long-term services and supports to specialized populations. These services and eligibility criteria are further described in the DSHS and DADS sections of this guide. Figure 27 contains a list of behavioral health services covered by Medicaid.


Source: Texas Health and Human Services Commission. (2015). Texas Medicaid and CHIP in perspective tenth edition, 6-20 and 6-23.

Demographics of Medicaid Recipients

Women and children account for the majority of the individuals receiving Medicaid benefits. In 2013, 55 percent of the Medicaid population was female and 77 percent was under the age of 21. Children without disabilities comprise nearly 67 percent of all Medicaid recipients but represent only 31 percent of spending on direct health care services. In contrast, individuals who are elderly or have a disability only account for 26 percent of the Medicaid population but represent over 60 percent of total estimated expenditures. Figure 28 displays the population of Medicaid enrollees and program expenditures by age and disability status.

For more information regarding Medicaid, consult HHSC’s latest edition of Texas Medicaid and CHIP in Perspective, commonly known as the “Pink Book.”


Source: HHSC presentation to House Appropriations Subcommittee on Article II:  Medicaid Long Term Services and Supports. April 6, 2016. 

Children’s Health Insurance Program

The federal government created the Children’s Health Insurance Program (CHIP) in 1997 under Title XXI of the Social Security Act. As with Medicaid, CHIP is jointly funded by state and federal governments. State participation in CHIP requires that the state develop, and that the Centers for Medicare and Medicaid Services (CMS) approve, a state CHIP Plan. While CMS allows states to combine their Medicaid and CHIP programs under a single administrative umbrella, Texas administers these programs separately.

CHIP Eligibility

The federal government developed CHIP to provide a health insurance coverage option for children whose families had too much income or too many assets to qualify for Medicaid, but not enough to afford private insurance, either through employment or purchasing on the individual market. CHIP is available to children ages 0–18 who are ineligible for Medicaid and who are living in households with an income of up to 201 percent of the FPL (annual income of approximately $48,600 for a family of four). For these children, CHIP provides access to health care, including inpatient and outpatient mental health and substance use services. In contrast to Medicaid, CHIP requires cost sharing through enrollment fees and co-payments that are based on a family’s income. Families may pay up to a $50 enrollment fee for a 12-month period. Texas has also opted to administer a CHIP perinatal program which covers perinatal services, including labor, delivery, and post-partum care for women and their unborn child with household incomes of up to 201 percent of the FPL.

CHIP Funding

The figure below provides trends of past funding and projections for the coming biennium.


Source:  Data captured from HHSC Legislative Appropriations Request for FY 2018-19. September 12, 2016.


The majority of CHIP clients are over age 5, with 61 percent between the ages of 6 and 14, and 22 percent between the ages of 15 and 18. Monthly CHIP enrollment levels increased steadily in the decade leading up to 2014, reaching more than 600,000 members per month in 2013 (see Figure 30). In 2014, however, the program experienced a decline in enrollment. In October 2015, just under 400,000 children were enrolled in CHIP. This drop in enrollment is consistent with the expected effects of a 2014 ACA requirement directing states to expand Medicaid eligibility from 100 percent to 133 percent of the FPL for children up to age 19. In 2014, therefore, Texas and 21 other states transferred all CHIP enrollees with household incomes between 100 percent and 133 percent of the FPL into Medicaid.

CHIP has experienced sporadic spending growth in the last decade. However, the 2016-2017 budget appropriated approximately $1.8 billion to CHIP, an 11 percent reduction from the 2014 budget. HHSC estimates that 70 percent of the CHIP budget is spent on inpatient and outpatient hospital services and physician services, 15 percent on prescription drugs, and the remaining 15 percent on administration.


Note: Data are from October of each year. Source: Texas Health and Human Services Commission. (2015). Statewide CHIP Enrollment, Renewals, Attempted Renewals, and Disenrollment by Month (XLS) [data file]. 

Quality of Care Performance

Texas contracts with the University of Florida Institute for Child Health Policy to perform the external quality review for the Texas Medicaid Managed Care programs. The annual quality of care evaluation compares Texas’ performance to the national Healthcare Effectiveness Data and Information Set (HEDIS) standards, or alternatively to benchmarks that HHSC establishes. The national HEDIS standards are used across the country to measure performance in important areas of health care, including behavioral health services.

Figure 31 presents Texas’ performance statistics for select Medicaid and CHIP behavioral health quality of care measures. A check mark in the “benchmark” column indicates that Texas’ 2014 performance on the measure exceeded the HEDIS 50th percentile nationally – in other words, showing where Texas is performing at or above average compared to the rest of the country. No check mark indicates an area where Texas lags behind most other states on a given performance indicator.


Institute for Child Health Policy at the University of Florida. (2015).
Texas Medicaid managed care and Children’s Health Insurance Program, external quality review organization summary of activity and trends in healthcare quality, Contract Year 2014. Institute for Child Health Policy at the University of Florida. (2014).
Texas Medicaid managed care and Children’s Health Insurance Program, external quality review organization summary of activity and trends in healthcare quality, Contract Year 2013.
Texas Healthcare Learning Collaborative, Institute for Child Health Policy. (2016). Texas Medicaid quality of care reporting.

Community Services


Source: Texas Health and Human Services Commission. (August 2016). A Report to the Legislature: Health and Human Services System Transition Plan.

The Community Services Section of the Medical and Social Services Division is comprised of over 70 programs delivering a wide range of services. The programs in this section are organized into the following two major departments:

  • Intellectual and Developmental Disabilities and Behavioral Health Services
  • Health, Developmental, and Independence Services

The programs and services included in this division were previously spread throughout HHSC, DADS, DARS, and DSHS. All four of the units under these two departments offer some type of behavioral health services in addition to other services and supports for people with disabilities and mental health conditions. For the purposes of this guide, we will focus on the service and program areas that offer some level of behavioral health treatment, services, or supports.

Intellectual and Developmental Disabilities & Behavioral Health Services

The Intellectual and Developmental Disabilities & Behavioral Health Services Department combines responsibility for community services for individuals with intellectual/developmental disabilities and those living with mental health conditions under one associate commissioner authority. This Department is responsible for:

  • Behavioral Health Services; and
  • Intellectual & Developmental Disability Services

Information on these units is provided in this section.

Behavioral Health Services (formerly provided through the Department of State Health Services)

Policy Concerns

  • Ensuring access to quality community-based behavioral health services through integrated service delivery and managed care models that emphasize prevention and continuity of care.
  • Addressing the critical shortage of mental health professionals, particularly in rural areas.
  • Expanding peer specialist, recovery coach, and family partner support services.
  • Successfully implementing the statewide expansion of YES waiver services to better support children with complex needs and keep them in their communities whenever possible.
  • Repairing and replacing the physical infrastructure of the aging state hospital system.
  • Improving client outcome performance measures to focus more on behavioral outcomes and patient-centered recovery, and less on easy-to-measure outputs (e.g., enrollment numbers).
  • Reducing the time people spend incarcerated while waiting for competency restoration services.
  • Ensuring that state hospital prescription drug formularies align with jail formularies so that individuals are able to retain progress and maintain continuity of care between both settings.

Fast Facts

  • The population growth in Texas between 2010 and 2015 (9.2 percent) was double the national average and the highest of all 50 states, increasing demand for DSHS services.
  • As of July 2015, 81 percent of counties in Texas (206 out of 254) were designated as full or partial Mental Health Professional Shortage Areas.
  • As of June 2016, Texas has 846 people trained as certified peer specialists and 526 individuals with active peer specialist certifications, enabling them to use their lived experiences with behavioral health issues to help recipients of DSHS-funded services.
  • NorthSTAR — a managed care pilot program providing DSHS-funded behavioral health services for seven counties around Dallas — will be discontinued on January 1, 2017.
  • There is an increasing number of individuals on waiting lists for forensic inpatient beds — 414 people as of February 2016, more than four times as many as there were in 2013.
  • In FY 2014, there were 240,088 adults with serious and persistent mental illness living below 200 percent of the Federal Poverty Level (FPL) in Texas. Of these, only 72 percent received DSHS-funded services through community mental health centers or NorthSTAR.
  • Similarly, only 38 percent of the 126,052 children with a serious emotional disturbance living below 200 percent of FPL received DSHS-funded mental health services in FY 2014.


Public behavioral health services are mainly comprised of community mental health, substance use, and inpatient hospital services. These services are provided to residents through the 39 local mental health authority (LMHA) regions and 20 regional healthcare partnerships (RHPs) in all of Texas’ 254 counties. The Medical and Social Services Division (MSSD) will have oversight responsibility for community behavioral health services while the State Facilities Division (SFD) will have oversight of inpatient services.

Despite limited funding over the past decade, staff at DSHS and HHSC has worked with legislators and made consistent efforts to implement innovations in behavioral health service delivery through major initiatives. Figure 32 shows a timeline of key events and reforms that reflect DSHS’ general shift toward a more modern system that emphasizes mental health services that are:

  • Person-centered;
  • Rooted in recovery and resilience;
  • Focused on alternatives to institutionalization; and
  • Comprised of services on the full continuum of care.


The HHS system prioritizes access to treatment for serious mental health conditions for individuals who are eligible for Medicaid, determined to be indigent, or who fall under the priority populations criteria. Resources, eligibility for services, and service delivery systems are the primary determinants of the accessibility and quality of services. Texas continues to seek ways to improve access so that individuals with mental health conditions can receive the level of care and support that are clinically appropriate for their level of need. Prior to its transition to the consolidated HHS system, DSHS developed the website, which aims to improve access to information by acting as a central database where individuals can input their zip code and find available behavioral health services in their area.

Sunset and Transformation Highlights

In an effort to improve the efficient coordination and quality of state health services, the 84th Legislature followed recommendations from the Sunset Commission and passed SB 200 (84th, Nelson/Price). This legislation reorganized and restructured how state agencies and state-funded programs deliver behavioral, physical, and public health services.89 In regards to DSHS specifically, SB 200 redirected DSHS toward its mission of public health by refocusing it on issues such as infectious disease (e.g., immunizations), public health (e.g., food safety and emergency health response) and community public health services (e.g., maternal and child health programs).

As of September 1, 2016, all of DSHS’ community behavioral health programs were transferred to the new HHSC Medical and Social Services Division, with state hospitals scheduled to move to the new State Facilities Division within HHSC by September 1, 2017. In addition to client services, DSHS has also historically managed more than a dozen programs that license and regulate health-related businesses, facilities, and occupations. By September 1, 2017, all of DSHS’ regulatory and licensing programs will be transferred to the Texas Medical Board, the Texas Department of Licensing and Regulation (TDLR), or the newly created Regulatory Services Division within the new HHS system. Following the September 1, 2017 deadline, DSHS will focus more narrowly on public health issues and be split into three distinct departments: Public Health Operations, Infectious Disease, and Community Health (see Figure 81: DSHS Organizational Structure After September 1, 2017).

DSHS and the HHS system as a whole aim to maintain seamless operation of public health and behavioral health services during the system-wide transformation of health services. For more detailed information on the entire transformation plan, see the Texas Environment section.

Changing Environment

The 84th Legislative Session brought significant changes to the delivery and management of the state’s behavioral healthcare system. Additionally, changes directed in the 83rd Legislative Session are continuing to be implemented and require ongoing monitoring.

Discontinuation of the NorthSTAR Program

The Texas Legislature created the NorthSTAR program in 1999 in an attempt to use a managed care model to integrate substance use and mental health services for Medicaid clients and individuals with very low income who are not eligible for Medicaid. In FY 2015, NorthSTAR provided services for 71,913 individuals in a seven-county region in North Texas — Dallas, Collin, Ellis, Hunt, Kaufman, Navarro, and Rockwall. As a result of recommendations from the Sunset Advisory Commission and subsequent legislation passed by the 84th Legislature (SB 200, 84th, Nelson/Price), funding for NorthSTAR will be discontinued on January 1, 2017. Rider 85 in HB 1 (84th, Otto/Nelson) assumes the discontinuation of NorthSTAR and reallocates funds to the successor agencies that will take responsibility for NorthSTAR’s clients by 2017.

There are plans in place to transfer NorthSTAR’s responsibilities for providing mental health and substance use services to other local providers; North Texas Behavioral Health Authority (NTBHA) will become the behavioral health provider for individuals in Dallas, Ellis, Navarro, Kaufman, Hunt, and Rockwall counties while LifePath Systems will take over NorthSTAR’s LMHA responsibilities in Collin County. As of spring 2016, both NTBHA and LifePath Systems had met required benchmarks for the transition and were on schedule to take over NorthSTAR’s responsibilities by January 2017. During this transition period, professionals from DSHS and HHSC have helped NTBHA and LifePath Systems to develop their IT infrastructure, diversify local funding streams, and strengthen their networks of behavioral health providers.

Forensic Director Position

In 2015, legislators passed SB 1507 (84th, Garcia/Naishtat) requiring DSHS to appoint a statewide forensic director in order to improve the coordination and oversight of forensic mental health services in Texas. The first state forensic director for mental health was appointed in February 2016. The director’s responsibilities include:

  • Coordinating and overseeing forensic services, including competency exams, competency restoration services, and mental health services provided in the community or at DSHS facilities;
  • Facilitating the transition of forensic patients from inpatient settings to outpatient services or community-based programs;
  • Managing forensic monitoring in the community;
  • Coordinating forensic research and training; and
  • Addressing issues concerning the delivery of forensic services, including the increased involvement of people with mental illness in the criminal justice system.

The bill requires the forensic director to work with a group of experts and stakeholders to develop recommendations for improved forensic service coordination. This workgroup, the Joint Committee on Access and Forensic Services, includes more than a dozen different organizations, including representatives from HHSC, DSHS, Texas Department of Criminal Justice (TDCJ), Texas Juvenile Justice Department (TJJD), Texas Correctional Office on Offenders with Medical or Mental Impairments (TCOOMMI), local mental health authorities (LMHAs), Sheriff ’s Association of Texas, Texas Hospital Association, Disability Rights Texas, and other agencies involved in the social, health, and legal aspects of forensic services. Get the most up-to-date information on the progress of the Joint Committee on Access and Forensic Services workgroup.

SB 1507 also included two other provisions tangentially related to the new forensic director role:

  • DSHS, the forensic director, and the Court of Criminal Appeals are required to develop a mental health-related training curriculum for judges and attorneys in Texas. The training must include information on alternatives to inpatient state hospitalization for forensic patients who are eligible for diversion and court ordered to receive mental health services.
  • SB 1507 also requires DSHS to reconvene an advisory panel created by HB 3793 (83rd, Coleman/Hinojosa) to work with stakeholders to divide the state into distinct bed-allotment regions and adopt an allocation methodology for state-funded psychiatric beds and a bed utilization review protocol. The newly created Joint Committee on Access and Forensic Services took on this function.

Ongoing Jail-Based Competency Restoration Pilot Program

SB 1475 (83rd, Duncan/Zerwas) authorized DSHS to provide competency restoration services through a jail-based competency restoration (JBCR) pilot program for individuals who otherwise would be committed to a mental health facility or residential care facility for competency restoration services. SB 1475 also established a workgroup in 2013 to set rules for the pilot program that would be developed through a contract with a private contractor or local mental health authority (LMHA). DSHS received only one proposal in response to its initial request for proposals to implement and operate the JBCR pilot, and the contract was awarded to Liberty Healthcare Corporation (LHC). LHC runs a jail-based competency restoration program in California similar to the one proposed in Texas. That program includes:

  • Daily group meetings
  • Twice daily 1:1 sessions with a staff member
  • Weekly follow-up sessions with a psychiatrist
  • Weekly case reviews
  • Psychological assessments.

The pilot program was projected to provide 20 beds for jail-based restoration services. The JBCR pilot program has faced significant barriers to implementation and did not begin on schedule (during the 2014-2015 biennium). Upon initial release of the pilot program’s draft rules, advocates raised concerns that jails have not traditionally been therapeutic environments, and that the most effective competency restoration programs require staffing ratios and other resources only present in therapeutic environments. It was also determined during public discussion of the initial draft rules that the Texas JBCR pilot needed to focus on providing services and programming during regular business hours and required more consistency and overlap with JBCR models in other states. In response to these concerns, DSHS issued revised draft rules for the jail-based competency restoration program in 2015.

During the 84th Legislature, Rider 70 in the DSHS section of Article II appropriated $1.74 million annually to fund the jail-based competency restoration pilot for FY 2016 and 2017. DSHS stated that the goals of the JBCR pilot are:

  • To reduce the number of individuals on the State Mental Health Program waiting list who are determined to be incompetent to stand trial (IST) due to behavioral health issues;
  • To provide access to competency restoration services for individuals who do not qualify for outpatient competency restoration (OCR) services;
  • To develop a cost-effective alternative to providing restoration services in state hospitals;
  • To minimize the stress of incarceration for individuals enrolled in the JBCR pilot; and
  • To collect data on the clinical and financial effectiveness of the JBCR pilot.

DSHS distributed a new Request for Proposals in January 2016. Among other changes, the updated 2015 rules increased staffing standards by requiring that “the day shift has services that are more substantial and the JCBR program providers will be responsible for collaborating with jail staff to ensure the safety and welfare of participants in the evening, night, and weekend hours.” JBCR proposals that met the new program requirements were due on March 4, 2016 but because DSHS did not award the contract to any of the proposals they received, the future of the JBCR pilot is uncertain.

Continued Expansion of Peer Support Services

Another initiative that has increased opportunities for recovery from behavioral health conditions is the use of certified peer support specialists and certified recovery coaches. Peer support programs allow individuals who have both lived experience and relevant training to aid in the recovery of others experiencing mental health conditions by focusing on recovery, wellness, self-direction, responsibility, and independent living. Peer support services have been deemed an evidence-based practice by the Centers for Medicare and Medicaid Services (CMS) and reimbursed by Medicaid since 2007, and the Substance Abuse and Mental Health Services Administration (SAMHSA) now lists several peer support interventions in their database of evidence-based programs. Peer support specialists are a cost-efficient and effective intervention that can reduce the need for other more intensive and expensive services, resulting in lower costs and improved outcomes for both the individual and the healthcare system as a whole.

DSHS, Via Hope, and the Hogg Foundation developed the initial certification requirements for mental health peer specialists in Texas. As of June 2016, ViaHope has trained over 846 certified peer specialists (526 active certifications) and 183 family partners (127 active certifications). ViaHope has also provided 889 specialized trainings (e.g., “Trauma Informed Peer Support” and “Co-occurring Disorders”) for certified peer specialists and family partners. In 2016, HHSC Associate Commissioner for Mental Health Services Sonja Gaines called peer services “one of the single most effective things we have done.”

During the 84th Legislative session, SB 578 (84th, Hinojosa/Rodriguez) improved access to peer services by requiring peer support specialists to be included in the county-specific resource packets that are now mandated to be given to individuals when they are discharged from TDCJ facilities. Also passed in 2015, Rider 73 in the DSHS section of HB 1 appropriated $1 million for the 2016-17 biennium for DSHS to design and implement a peer support pilot program for individuals with mental illness who are re-entering the community after incarceration. DSHS estimated that this reentry peer support program will serve 96 individuals in FY 2016 and 648 individuals in FY 2017. For a more detailed description of the reentry peer support pilot, see the TDCJ section.

There is also an ongoing effort at the federal level to expand coverage of peer support services under Medicaid and Medicare. In Texas, HB 1541 (84th, Burkett/Perry) failed to pass; HB 1541 would have required HHSC to define in rule mental health peer support and recovery specialist services, certification requirements, and supervision requirements, and it would have expanded Medicaid reimbursement to include mental health peer and recovery specialist services. For a more thorough discussion of the benefits of peer support services, see the Texas Environment section.

Implementation of the Statewide Expansion of the YES Waiver

Youth Empowerment Services (YES) is a Medicaid 1915(c) home and community-based waiver program for children ages 3 to 19 years old intended to reduce Medicaid psychiatric hospital expenses, voluntary parental relinquishments to obtain care, and out-of-home placement for children with serious emotional disturbance. A full range of Medicaid services, non-traditional services and family supports are available to create an intensive, comprehensive, and individualized child and family plan of care. As with other 1915(c) waivers, YES waivers do not take into account family income to determine eligibility.

The YES waiver program offers an alternative to inpatient treatment by providing community-based coordinated care for youth with particularly complex or severe behavioral health needs. These services are particularly effective for youth who do not respond well to traditional outpatient services and might have better success through innovative treatments, such as intensive in-home support or specialized therapies. Services under the YES waiver are initially authorized for an 18-month period but can be extended if there is still clinical need for the services provided. As with traditional Medicaid, YES waiver services are jointly funded by states and the federal government.

HHSC contracts with local mental health authorities (LMHAs) to manage YES waiver services in each of their respective service regions. LMHAs then contract with community service providers to ensure all required YES waiver services are available. Services offered through the YES waiver program include:

  • Comprehensive case management
  • Adaptive aids and supports
  • Community living supports
  • Family supports
  • Minor home modifications
  • Non-medical transportation
  • Professional and paraprofessional services
  • Respite
  • Supportive family-based alternatives
  • Transitional services

The YES waiver program was approved for statewide expansion during the 84th legislative session (Rider 60). By September 2015, every LMHA in Texas had started providing YES waiver services to individuals across the state, and funding for the program changed from general revenue to Medicaid dollars in April 2016. Figure 33 shows that enrollment in YES waivers has increased steadily over the past six years:


Source: Lauren Lacefield Lewis & Gary Jessee. (March 22, 2016). Presentation to the Select Committee on Mental Health: Children’s Mental Health Services. Texas Department of State Health Services.

The expansion of the YES waiver should allow even more youth with serious emotional disturbance (SED) to access intensive community behavioral health services and decrease the number of children who receive inpatient care and/or are relinquished to the Department of Family and Protective Services (DFPS) solely because of an inability to access needed mental health services. In February 2016, DSHS began requiring that children at “imminent risk” of being relinquished to the state be prioritized for YES Waiver Services. HHSC is also in the process of approving a YES Waiver amendment (Amendment #9) that would make children who are in state conservatorship eligible to receive YES Waiver services. Access up-to-date information on the status of this amendment.

In addition to the waiver statewide expansion, the 84th Legislature also appropriated $4.8 million to create an additional 20 beds (30 total, as funding for 10 beds was appropriated during the 83rd Legislative Session) at residential treatment centers (RTCs). These 30 beds are specially allocated for the prevention of parental relinquishment of children with serious emotional disturbance (SED) solely to obtain mental health services. Between January 2014 and the beginning of 2016, 61 children were served by these specially-allocated RTC beds — 25 of those children successfully discharged back into their home from the RTC and 54 of them (89 percent) remained in their parent’s custody after meeting program criteria. Thirteen children were able to avoid an RTC stay altogether as a result of receiving outpatient services through the YES Waiver or at their local LMHA.

YES Waiver updates and information are available online.

Improvement of Client Outcome and Performance Measures

DSHS has been involved in an ongoing process to improve and update the outcomes and measures used to evaluate client progress and the effectiveness of DSHS services. Rider 58 (83rd Legislature), required DSHS to improve the uniform measurement and collection of outcome data for medically indigent individuals and Medicaid enrollees. Also passed in 2013, SB 126 (83rd, Nelson/Davis) required DSHS to publicly report easily comparable performance measures for community behavioral health providers. Following the 83rd legislative session, DSHS made a number of changes to how client outcomes and response to services are measured and reported, including the adoption of new uniform assessment tools for use across DSHS-funded mental health programs — the Child and Adolescent Needs Assessment (CANS) and the Adult Needs and Strengths Assessment (ANSA). The goal is for the CANS and ANSA to improve the accuracy and consistency of DSHS client outcome data. The Department of Family Protective Services has also begun using the CANS and ANSA assessments. See the DFPS section for more information.

Following the changes made by the 83rd Legislature, the Sunset Advisory Commission raised concerns that DSHS appeared to be collecting a large amount of client outcome measures (over 300) without focusing on how to use the data meaningfully to evaluate programs, compare effectiveness, and improve service delivery. The Sunset Commission’s final report noted that of the 302 behavioral health performance measures DSHS collects for substance use and mental health services, 211 of them are measures created by DSHS itself (as opposed to being required by state or federal legislation). The Commission also expressed concern that DSHS’ data collection and reporting processes were cumbersome and may not “drive best practices or provide enough flexibility for clinicians who actually provide services.” The Commission recommended a complete overhaul of how DSHS tracks client outcomes and measures program performance. In response, the 84th Legislature passed two major riders that addressed the Sunset Advisory Commission’s concerns about performance measures and client outcome data.

Rider 58

Rider 58, “Mental Health Outcomes and Accountability” (HB 1, 84th, Otto/Nelson), requires DSHS to withhold 10 percent of general revenue (GR) funds from local mental health authorities (LMHAs) each quarter as a performance-based incentive to encourage providing high quality services. Instead of penalizing specific LMHAs for failing to meet the outcome targets, Rider 58 is structured so that every LMHA begins each quarter at a 10 percent funding deficit and is required to reach certain client outcome targets in order to receive the final 10 percent of their full funding that was pre-emptively withheld. Initial outcome targets were set by DSHS in September 2013 (under Rider 78) and performance is assessed every six months.

In order to better understand the types of measures currently used by DSHS, Figure 34 shows a sample of some of the measures that DSHS uses to gauge LMHA performance and make a determination whether to release the withheld funds.


Source: Department of State Health Services. (2016, February 18). Presentation to the Select Committee on Mental Health.

Rider 82

The 84th Legislature also passed Rider 82 (HB 1, 84th, Otto/Nelson) “Behavioral Health Services Provider Contracts Review,” that requires DSHS (in collaboration with HHSC) to “conduct a review to identify improvements to performance measurements, contract processing, and payment mechanisms for behavioral health services.” In addition to reviewing the outcome targets and methodology used under Rider 58 to withhold 10 percent of GR funds from LMHAs, Rider 82 requires DSHS to submit a report to the Texas Legislature by December 1, 2016 that includes the following:

  • Identification of client outcomes and performance measures that are not required by state or federal statute and could be consolidated or eliminated altogether from DSHS provider contracts;
  • Consideration of client outcome measures and contracting strategies that focus on recovery and whole health, similar to those used by managed care organizations (MCOs);
  • Consideration of best practices in performance measurement, including incentive payments and sanctions that align with how HHSC purchases health care services; and
  • A proposal for a publicly available web-based dashboard so that individuals can compare the performance of different behavioral health service providers that contract with DSHS.

Many newer, more holistic client outcome measures focus on features beyond traditional clinical diagnoses and include both symptom reduction and concepts of recovery, such as functioning and community integration. Historically, outcomes have focused narrowly on clinical recovery such as a decrease in symptoms or a reduction in acute need rather than measuring progress in terms of personal recovery. Recovery is a process of change through which individuals use self-directed approaches to improve their health and wellness and strive to reach their full potential. There are a number of emerging recovery outcome measures that examine both individual experiences of recovery as well as the more traditional recovery-oriented measures based on service utilization and clinical improvement. Because consumer-centered outcome measures are still a fairly new concept, there are some issues that remain to be solved in terms of their psychometric properties and consumer accessibility (i.e., length and reading level needed to understand measures).

Behavior Health Funding

Mental health services are provided by many state agencies. The information provided in this section refers only to the funding appropriated to the behavioral health section of the Medical and Social Services Division (included in the HHS system but previously appropriated to DSHS). For a summary of all behavioral health funding by agency, please refer to the HHS System section Office of Behavioral Health Coordination.

Mental health services are funded by state general revenue (59 percent), federal funds (25 percent), and local funds (16 percent). In 2015, mental health program expenditures by state budget strategy were as depicted in Figure 35.

The figure below depicts historical trends and biennial requests from FY 2015-2019.

Source: Data captured from the HHSC Legislative Appropriations Request for FY 2018/19, September 12, 2016. *HHSC and DSHS LARs did not include separate funding amounts for 2017. NorthStar will be eliminated as of January, 2017.

According to a 2013 Kaiser Foundation Report, the per capita mental health spending in Texas was $40.65 compared to the national average of $119.62. Realizing that transformative actions were imperative to expand access to mental health services, nearly $332 million in new funding was appropriated for FY 2014 and 2015 than was allotted in the previous biennium. This increase put an end to a decade of flat funding for behavioral health. The FY 2014-15 DSHS budget contained an unprecedented $2.6 billion for the public mental health system, with $1.7 billion from the state general revenue.

It should be noted that Medicaid 1115 Waivers have served a significant role in drawing down federal funds to help fund many different mental health programs within the HHS System. For detailed information regarding Medicaid 1115 Waivers, please refer to the Texas Environment Section.

Source: Ligon, K. (October 21, 2013). Sizing up the 2014-2013 Texas Budget: Mental Health. Center for Public Policy Priorities.

While the amount of funding per person has improved as a result of recent increases in mental health appropriations, the preceding decade of stagnant funding has been unable to fully keep pace with the increased cost of services and the ever-expanding Texas population, which has resulted in fewer services being available and a smaller percentage of persons receiving services.

Much of the increased demand for behavioral health services in Texas is due to the state’s rapidly expanding population, growing from a total population of 25,145,561 in 2010 to an estimated 27,469,114 in 2015 — a 9.2 percent increase, the highest of any state in the country. The population growth rate in Texas between 2010 and 2015 (9.2 percent) was roughly double the national average growth rate (4.1 percent) and far outpaced other large states like California and Florida, accounting for roughly 19 percent of total population growth in the U.S. during that time and increasing demand for DSHS services.

Service Providers

Publicly funded mental health services in Texas are provided by the following four types of service providers:

  • Medicaid Managed Care providers
  • Local Mental Health Authorities (LMHAs)
  • NorthSTAR (ending in January 2017)
  • FQHCs and other community health centers

Medicaid Managed Care Providers

Texas is increasingly moving toward a managed care model of healthcare including for behavioral health services. In a Medicaid managed care system, individuals access services through a managed care organization (MCO) under contract with the state. The state contracts with MCOs (sometimes referred to as “health plans”) and pays a capitated rate (monthly base rate per member) for each client enrolled rather than paying a fee for each individual service provided.

MCOs are responsible for creating a network of public and private providers to ensure that adults and children receiving Medicaid are able to access needed services. MCOs are responsible for service authorization and directly contract with and reimburse service providers.

Managed care programs in Texas include:

  • State of Texas Access Reform (STAR)
  • Children’s Health Insurance Program (CHIP)
  • CHIP and Children’s Medicaid Dental
  • STAR Kids

See HHSC section for additional information on managed care services in Texas.

In 2013, SB 58 (83rd, Nelson/Zerwas) directed the integration of mental health and physical health services into Medicaid managed care. As of September 2014, the Medicaid managed care program is responsible for the network development and payment for mental health targeted case management and mental health rehabilitative services. Through these added services, targeted case managers are tasked with providing face-to-face crisis planning and mental health service coordination for Medicaid-eligible individuals with complex needs. Many of these integrated care programs started serving clients in September 2014 and are being continually guided by recommendations from the Behavioral Health Integration Advisory Committee. DSHS will not report data on the outcomes and costs of these programs until summer 2017.

Rehabilitative services coordinated through targeted case management include:

  • Crisis intervention services,
  • Medication training and support services,
  • Skills training, and
  • Development services and day programs for acute care.

SB 58 (83rd, Nelson/Zerwas) only allows providers to bill for targeted case management and rehabilitative services if they offer a full array of comprehensive services. The goal of these requirements is to provide continuity of care and seamless integration of services across a client’s needs but as a result of these rigorous requirements, LMHAs continue to serve as the primary providers of rehabilitative and targeted case management for the majority of people in managed care. MCOs also contract with LMHAs to serve as Significant Traditional Providers (STPs) for Medicaid-eligible clients.

Local Mental Health Authorities

Public mental health services are primarily provided through designated LMHAs, also commonly known as community mental health centers. The HHS System contracts with 39 LMHAs to provide or arrange for the delivery of both crisis and ongoing community mental health and substance use services for:

  • Children, adolescents, and adults meeting medically indigent criteria;
  • Individuals with a priority population diagnosis; and
  • Any individuals eligible for Medicaid who reside in that LMHA’s designated geographic area, shown below in Figure 37.

The Medical and Social Services Division oversees and regulates the quality of services provided to individuals through LMHAs and also regularly provides LMHA staff with training and technical assistance. Of the 39 LMHAs in Texas, 37 are designated as official LMHAs while two serve as contracted providers for the NorthSTAR service region. NorthSTAR will be defunded and all its duties transferred to other providers on January 1, 2017. Local Behavioral Health Authority (LBHA) is a newer term for LMHAs that better reflects the new requirements under SB 1507 (84th, Garcia/Naishtat) that in addition to providing mental health services, LMHAs must be responsible for providing substance use services and are the only entities that can act as Outreach, Screening, Assessment and Referral (OSAR) provider authorities. As of September 1, 2015, 12 LMHAs are the OSAR provider authorities for all of the state’s OSAR regions. LMHAs are still authorized to subcontract with substance use providers to provide OSAR services, but the new requirements reflect a larger shift in DSHS toward more integrated and patient-centered behavioral health services that are easier to locate and access.


Source: Texas Council of Community Centers. (2015). Community Centers of Texas Map.

As an authority, LMHAs are responsible for:

  • Allocating funds from the HHS Medical and Social Services Division to ensure mental health and substance use services are provided in the local service area for indigent populations;
  • Balancing community input, cost effectiveness, and quality of care issues to ensure choice and the best use of public funds;
  • Creating and maintaining a network of service providers;
  • Recommending the most appropriate and available treatment alternatives for individuals requiring mental health services; and
  • Demonstrating that the services provided comply with state health and regulatory standards, whether those services are provided directly by LMHA employees or through subcontractors and other private community providers involving state funds.

Each LMHA is required to plan, develop, and coordinate local policy, resources, and services for mental health care. Additionally, LMHAs are required to develop external provider networks and serve as a provider of last resort when other subcontractors or providers are unavailable. Some LMHAs have found it challenging to establish successful contracts for services, especially rehabilitation and other routine outpatient services, in part due to provider reimbursement rates and extensive mental health workforce shortages in rural counties and in the Texas-Mexico border regions. In such cases, LMHAs typically serve as primary service providers.

Individuals seeking behavioral health services can arrive at an LMHA with or without an appointment. Their first step into services is for a qualified mental health professional to provide them with a brief mental health screening to verify that they are seeking services that the LMHA is equipped to provide. If so, the client then works with licensed staff to complete a full psychosocial and diagnostic standardized assessment — youth are given the Child and Adolescent Needs and Strengths (CANS) and adults are given the Adult Needs and Strength Assessment (ANSA). An adult client’s score on the ANSA is combined with a supplemental assessment specific to the client’s diagnosis (for example, the Quick Inventory of Depressive Symptomology (QIDS) for individuals with a diagnosis of major depression), and a level of care (LOC) determination is calculated. For children, no supplemental assessments are used in conjunction with the CANS and the LOC is based solely on the child’s diagnoses and the score obtained from the CANS. Individuals also may enter into LMHA services by first utilizing crisis services (via Mobile Crisis Outreach Teams [MCOT], mental health deputies, or a crisis hotline), in which case they are provided crisis services package. Once an individual is enrolled in LMHA services, providers regularly update the CANS and ANSA to verify that the LOC is still correct. The state also tracks changes in these scores over time to estimate how individuals and groups of individuals are responding to treatment. Clients seeking substance use services are referred to Outreach, Screening, Assessment and Referral (OSAR) providers.

LMHAs also work with schools and law enforcement to help integrate treatment plans and provide intervention as early as possible. During the 84th Legislature, HB 2186 (84th, Cook/Campbell) improved suicide prevention efforts by requiring suicide prevention trainings for school staff. Additionally, SB 133 (84th, Schwertner/Coleman) strengthened efforts toward early intervention by allowing DSHS to provide mental health first aid training to school resource officers who are specially trained, school-based police officers, and school district employees. The mental health first aid training teaches non-medical professionals how to respond to signs of potential mental health needs and crises. See the TEA section for more detailed information on mental health first aid training initiatives.


The NorthSTAR managed care carve-out program was created in 1999 and will be discontinued as of January 1, 2017. For more information on NorthSTAR, see the Changing Environment section in the HHS System section.

Federally Qualified Health Centers (FQHCs) and Other Community Providers

In addition to state-funded LMHAs and Medicaid managed care providers, individuals in Texas may also receive behavioral health services from Federally Qualified Health Centers (FQHCs) or other non-federally funded community health centers. The goal of FQHCs is to provide underserved communities with comprehensive healthcare, including services such as mental health counseling or substance use treatment. While the FQHC benefit was first added to Medicare in 1991, the passage of the Affordable Care Act (ACA) allocated $11 billion in new funding to build and expand health centers nationwide, and FQHCs have since become a central component of the push toward integrating behavioral health services with primary healthcare. Being certified as an FQHC brings a number of benefits, including:

  • Cost-based (enhanced) payment for Medicare and Medicaid patients;
  • Access to medical malpractice coverage through the Federal Tort Claims Act;
  • 340b (reduced) drug pricing; and
  • The ability to participate in the National Health Service Corps (NHSC).

In addition to the 73 FQHCs currently operating in Texas, there are also three FQHC-lookalikes — centers that offer similar services as FHQCs but do not receive all of the benefits as certified FQHCs. Beyond the basic certification requirements of providing comprehensive services and having a quality assurance program, FQHCs must also meet the following requirements in order to receive federal funding under Section 330 of the Public Health Service Act:

  • Serve an underserved area or population;
  • Offer a sliding fee scale (i.e., individuals do not get turned away for inability to pay); and
  • Have a governing board of directors with the majority of members receiving care at the FQHC

Finally, many community health centers in Texas are affiliated with charitable, nonprofit organizations or hospitals and typically serve as the public health safety net for individuals who are uninsured, underinsured, do not have the financial means to pay for services, or are in geographic locations where access to care is severely limited. While the central mission of most community health centers is to provide effective and affordable primary healthcare, many community health centers have started to partner with LMHAs and other providers to offer behavioral health services in their clinics. Because of the way FQHCs are funded there is less mandated reporting on client outcomes compared to LMHAs and Medicaid managed care providers, but FQHCs are increasingly becoming an integral part of the health safety net in many parts of Texas.

One example of an FQHC is Central Health in Austin, which operates local community health centers through its CommUnity Care clinics. CommUnity Care has partnered with the local mental health authority (LMHA) — Austin Travis County Integral Care — so that both organizations can draw on each other’s resources and expertise to provide more comprehensive health care. Behavioral health professionals from ATCIC provide mental health assessments, counseling, and other psychiatric services in CommUnity Care community health centers while medical professionals from CommUnity Care provide primary care and wellness programs in ATCIC clinics.


Texas Resilience and Recovery Framework

The state’s vision for behavioral health services of “Hope, Resilience, and Recovery for Everyone” aligns with a broader national movement to incorporate resilience and recovery-based services, practices, performance measures, and beliefs into the public mental health system. The framework under which DSHS delivers public mental health services is known as Texas Resiliency and Recovery (TRR), an outgrowth of the shift in mental health service delivery that was launched in 2004 under the name Texas Resiliency and Disease Management (RDM). In September 2012, the Texas mental health system’s guiding framework changed to further reflect the state’s commitment to person-centered, family-centered, and community-driven recovery-based approaches. The TRR model relies on evidence-based practices and principles of recovery and resilience to obtain the best possible outcomes and maximize the therapeutic impact of available resources.

The TRR system is responsible for:

  1. Establishing who is eligible for services through a uniform assessment (ANSA and CANS);
  2. Establishing ways to manage service utilization;
  3. Measuring clinical outcomes and impacts of services rendered; and
  4. Determining service cost.

Clinical needs are identified through a psychosocial assessment and a uniform clinical instrument. The Adult Needs and Strengths Assessment (ANSA) and the Child and Adolescent Needs and Strengths Assessment (CANS) are used to determine the appropriate level of care (LOC) and corresponding eligibility for services and specialty treatments. Within this model, the intensity of services is based on an individual’s respective place on the continuum of active symptoms and corresponding mental health needs. The expectation built into the model is that as strengths are identified and resilience is built, the majority of individuals will transition to lower LOCs, and eventually to a place where they can transition into sustained recovery in the community. Figure 38 describes the adult target population and services provided at each TRR Level of Care (LOC). Figure 39 describes the same for children and adolescents.


Source: Texas Department of State Health Services. (2015). Adult Utilization Management Guidelines-FY 2014.


Source: Texas Department of State Health Services. (2015). Child & Adolescent Utilization Management Guidelines-FY 2014.


Medicaid is a jointly funded federal and state program that serves low-income individuals who also meet other categorical eligibility requirements (e.g., presence of a disability). Medicaid covers acute health care needs as well as long-term services and supports for families, children, pregnant women, older adults, and people with disabilities. Only U.S. citizens or legal permanent residents who live in Texas and have an income less than the federal poverty level (FPL) shown in Figure 40 may qualify for Texas Medicaid.


As of July 2015, an estimated 1 million adults and 3.3 million children in Texas were enrolled in Medicaid. That translates to roughly 45 percent of all children living in Texas being enrolled in Medicaid. Most Texans enrolled in Medicaid now receive health services through Medicaid managed care (discussed further in the Service Providers section in this chapter).

An optional Affordable Care Act (ACA) provision allows states to expand Medicaid coverage to wider populations, but Texas has no current plans to expand Medicaid coverage to adults below 100 percent of the FPL who do not have access to insurance through the Marketplace. The federal match for ACA Medicaid expansion is much higher than typical Medicaid programs, starting at 100 percent and phasing down to 90 percent in 2020. If Texas were to expand Medicaid eligibility to adults up to 138 percent of the FPL, the majority of medically indigent individuals requiring mental health and substance use services served by LMHAs would have access to health insurance. For more information on the Texas Medicaid program, see HHS System section.

Individuals Considered Medically Indigent

According to the Texas Health and Safety Code, a person is considered to be indigent under the following circumstances:

  1. Possesses no property
  2. Has no person legally responsible for their support
  3. Is unable to reimburse the state for the costs of support, maintenance, and treatment.

Individuals who are deemed to be medically indigent and meet the priority population criteria (described below) are eligible to receive services through the state mental health system without the state receiving compensation or reimbursement for services. Within the first 30 days of rendering mental health services, LMHA staff (typically benefits coordinators or office managers) conduct a financial assessment of an individual’s ability to pay for services and calculates a maximum monthly fee or no fee, depending on the individual’s gross income minus extraordinary expenses:

  • Individuals whose adjusted income is at or below 200 percent of the FPL are eligible for full funding of substance use services;
  • Individuals whose adjusted income is at or below 150 percent of the FPL are eligible for full funding of all other mental health services; and
  • All other contribution amounts are assessed on a sliding scale basis (based on family size and income).

The County Indigent Health Care Program (CIHCP) also provides services to individuals who are deemed indigent. CIHCP provides health services through counties, hospital districts, and public hospitals throughout the state to eligible residents whose income does not exceed 21-50 percent (depending on the county) of the Federal Poverty Guidelines (FPG) and whose household resources do not exceed $3,000. As of February 2015, indigent residents were being served by the following different CIHCPs:

  • 143 of Texas’ 254 counties administered a CIHCP for indigent residents;
  • 142 hospital districts were served by CIHCPs; and
  • 18 public hospitals provided CIHCP services (i.e., inpatient and outpatient hospital services).

Priority Populations

During the 83rd Legislative session, HB 3793 (83rd, Coleman/Hinojosa) amended the Health and Safety Code to expand treatment services provided by LMHAs beyond serving only adults with a “big three” diagnosis of schizophrenia, bipolar depression, and/or major depressive disorder. Although providing treatment services to individuals with other diagnoses was not prohibited prior to 2013, previous law only mandated the provision of services to adults with those three major illnesses. In an effort to reduce involvement in the criminal justice system and expand access to community mental health services for a wider variety of individuals, LMHAs with sufficient resources can now provide services for individuals with any of the diagnoses listed in Figure 41.


System Utilization (Community Mental Health Services)

From FY 2010 through FY 2015, roughly 1.1 million adults and children received community mental health services in Texas through LMHAs (including NorthSTAR). The unduplicated number of persons who received publicly-funded mental health services increased by approximately 40 percent during this same five-year period, driven in part by a greater need for services by adults. Much of the increased demand for behavioral health services in Texas is due to the state’s rapidly expanding population, growing from a total population of 25,145,561 in 2010 to an estimated 27,469,114 in 2015 — a 9.2 percent increase, the highest of any state in the country. The population growth rate in Texas between 2010 and 2015 (9.2 percent) was roughly double the national average growth rate (4.1 percent) and far outpaced other large states like California and Florida, accounting for roughly 19 percent of total population growth in the U.S. during that time and increasing demand for DSHS services.

As illustrated in Figure 42 and Figure 43, there are many more adults and children in Texas who require mental health services than are currently being served in the public mental health system. In 2014, there were 240,088 adults in Texas who had a serious persistent mental illness (SPMI) such as schizophrenia or bipolar disorder and were living below 200 percent of the Federal Poverty Level (FPL); 66,273 of them— or 27.6 percent — did not receive services at DSHS-funded community mental health centers. Similarly, there were 126,052 children with serious emotional disturbances (SED) living below 200 percent of the FPL in 2014; 78,763 of them – or 62.5 percent) – did not receive services through DSHS-funded community mental health centers or NorthSTAR.

Source: Texas Department of State Health Services. (2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides].

Source: Texas Department of State Health Services. (2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides].


Waitlists for Community-Based Mental Health Services

When LMHAs exhaust their funding, non-Medicaid eligible individuals who require mental health services are added to a waitlist. Individuals who are on Medicaid must be admitted into services because federal law prohibits waitlists for Medicaid. If an individual is approved for Medicaid while on the waitlist, the LMHA has 60 days to expedite the individual into services. Individuals on waitlists are contacted every 90 days by a mental health professional to assess basic mental health status and to determine if there has been any deterioration of their mental health. If immediate intervention is required, the individual waiting for routine services may be placed into crisis services.

Recent legislative efforts have made significant progress toward addressing waitlist issues at LMHAs. Approximately $48.2 million of the supplemental mental health funding appropriated by the 83rd Legislature (Rider 92, DSHS section of Article II, SB 1) provided funding for adults and children requiring mental health services who were on LMHA waitlists as of May 2012. An additional $43 million was appropriated to:

  • Expand community health services;
  • Address the needs of individuals who are underserved due to resource limitations; and
  • Meet the treatment needs of a growing population that exhibits increasing demand for services.

The 84th Legislature continued to appropriate funding to help eliminate LMHA waitlists; Rider 71 directed $9 million toward reducing waitlists and an additional $46 million for LMHAs and NorthSTAR to increase the number of individuals receiving community-based services with a stated goal of preventing a waitlist in FY 2016-2017.

From FY 2009 to FY 2012, the number of adults on waitlists for community mental health services increased by an alarming 85 percent. In contrast, children on waitlists for community mental health services decreased by 24 percent during that same time period due to a special appropriation. As a result of the bills passed during the 83rd legislative session mentioned above, the number of adults on waitlists dropped from over 7,000 in FY 2011 to just 285 adults by May 2014. That number rose back to 1,562 adults on waiting lists at the end of 2015. The child waitlists, on the other hand, dropped from a high of 527 youth waiting for LMHA services in 2010 to just eight by the end of 2015.


Crisis Services

The Texas Administrative Code defines a psychiatric crisis as a situation in which, due to a mental health condition, an individual:

  • Presents an immediate danger to self or others;
  • Is at risk of serious deterioration of mental or physical health; and/or
  • Believes that he or she presents an immediate danger to self or others, or that his or her mental or physical health is at risk of serious deterioration.

During the 83rd legislative session, lawmakers appropriated funds to improve crisis services across the state by enhancing community-based psychiatric emergency services projects that serve as alternatives to divert individuals from hospitals, emergency rooms, and/or jails. While individuals with behavioral health issues only account for 9.5 percent of all initial hospital admissions, the clinical ineffectiveness of treating mental illness in an emergency room leads to individuals with behavioral health issues being disproportionately represented (28.2 percent) in hospital readmissions that occur within 15 days of discharge.

In May 2013, LMHAs (and NorthSTAR) submitted needs assessments for psychiatric emergency service funding based on: demonstrated local need, cost effectiveness, collaboration with emergency rooms and the criminal justice system, clinical appropriateness, overall design, and demonstrated local project support. As a result, 16 new crisis facilities were added and an additional three crisis sites were enhanced.

The 84th Legislature maintained previous funding levels for crisis services and added an additional $13 million per year to enhance and expand the reach of psychiatric crisis services. The number of persons using crisis intervention services increased as a result of increasing funding and resources, from roughly 5,039 in FY 2013 to 6,767 in FY 2015.

Crisis services are available statewide to individuals whether or not they are enrolled in ongoing care. Figure 49 lists most of the crisis services available through state funded programs and providers:

Source: Texas Department of State Health Services. (2010). Crisis Services. Texas Department of State Health Services. (2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides].

Crisis Services: Utilization and Costs

The utilization and costs for crisis mental health services are included in Figure 50 below.


Inpatient Mental Health Hospital Services

Important note: As a result of the HHS transformation directed by SB 200 (84th, Nelson/Price), DSHS, along with the entire HHS System has been undergoing massive reorganizations that are only partially complete as of the writing of this guide. Mental health and substance use community services transferred to HHSC on September 1, 2016. However, the state owned and operated psychiatric hospitals and the state supported living centers do not transfer until September 1, 2017. In order for this guide to provide information on mental health and substance use services as clearly and concisely as possible, information on state hospital services are included in this section and in the DSHS section of this guide.

Inpatient mental health services are provided by state, community, and private hospitals to children, adolescents, and adults experiencing a psychiatric crisis due to mental illness. Inpatient hospitalization may be necessary for a period of time so that individuals can be closely monitored in order to:

  • Provide accurate diagnosis and review of past diagnoses and treatment history;
  • Adjust, stabilize, discontinue, or begin new medications;
  • Provide intensive treatment during acute episodes during which a person’s mental health worsens; and/or,
  • Assess or restore a person’s mental competency to stand trial.

Introduction to Inpatient Services and the Admissions Process

As discussed earlier, DSHS designates LMHAs as responsible for achieving continuity of care in meeting a person’s need for mental health services. Within this continuum of care, the state hospitals’ primary purpose is to stabilize people by providing inpatient mental health treatment. Each state hospital has a utilization management agreement with a partnering LMHA that requires the LMHA to screen all individuals seeking mental health services to determine if inpatient psychiatric services are required. If the screening and assessment determine that there is a need for inpatient psychiatric services, the LMHA decides on the least restrictive treatment setting available, with the very restrictive setting of a state hospital considered the provider of last resort. When the LMHA has not screened and referred the individual for inpatient services, a hospital physician can determine if the person has an emergency psychiatric condition appropriate for admission to the state hospital. Additionally, a hospital physician can make a referral to the local LMHA if the person has less acute needs and only requires coordinated alternative services.

Chapter 411 of the Texas Administrative Code defines inpatient mental health treatment as residential care provided in a hospital that includes medical services, nursing services, social services, therapeutic activities, and any other psychological services ordered by the treating physician. Specific services include diagnostic interviews, structured therapeutic programming, collaboration with appropriate courts and law enforcement, suicide safety planning, and discharge planning.

There are two types of inpatient commitments in which individuals are provided comprehensive inpatient mental health services: civil and forensic. Within these two types of commitments, an administrative decision is made as to whether an individual needs a maximum security or non-maximum security placement.

Civil Commitments

Civil commitments to state hospitals occur when an individual is involuntarily detained by a peace officer because he or she has symptoms of mental illness that present a substantial and imminent risk of serious harm to themselves or others. Voluntary civil commitments can also be initiated if the person needing help is actively seeking inpatient treatment.

Once a mental health warrant has been granted and the individual has been transported to a mental health facility, the initial civil commitment is only valid for a 48-hour emergency detention, in which time a doctor must visit with the individual (within 24 hours) and make an assessment about whether an order of protective custody (OPC) should be issued and the emergency detention extended. Within 72 hours of the initial detainment, a probable cause hearing must be held to determine whether the individual should stay at a mental health facility or in the community while he or she waits for their final mental health hearing. During the final mental health hearing, the court takes testimony from medical experts, the patient, and individuals in the patient’s life (e.g., family, friends, coworkers). Following the final mental health hearing, emergency detentions can extend to 30-day orders of protective custody or 90-day court-ordered mental health service stays (which the court can then extend by three month increments if the treating physician has determined the individual is not stabilized and safe to return to the community). In a small number of cases in which minimal improvement is seen in the first 60 days of inpatient treatment, an individual’s treating physician may request an extended civil mental health commitment for up to 12 months, but individuals subject to extended commitments are entitled to have their case heard before a jury rather than a judge.

Forensic Commitments

Individuals who are forensically committed to a state hospital in Texas go to either Rusk State Hospital or the Vernon Campus of North Texas State Hospital; this type of commitment happens for two reasons:

  • Individuals have been admitted to a hospital by judicial order because they have been determined Incompetent to Stand Trial (IST) and are in need of competency restoration services so that they can better consult with legal counsel and understand the charges against them; or
  • Individuals have been determined to be Not Guilty by Reason of Insanity (NGRI) and were ordered to a state hospital for a period of time not exceeding the maximum sentence length of the crime they committed.

Maximum vs. Non-Maximum Security Placements

Patients placed in maximum security commitments include individuals who are:

  • Civilly committed and determined by professionals to be manifestly dangerous to self and/or others; or
  • Charged with a violent felony offense involving an act, threat, or attempt of serious bodily injury.

All cases involving serious bodily injury, imminent threat of harm, or use of a deadly weapon are sent to a maximum security unit (MSU) for an initial 30-day evaluation period. MSUs are more expensive to operate than traditional state hospital units and a statewide shortage of MSU beds has contributed to the increasing waitlists for forensic beds in state hospitals. Transitional programs for forensic commitments are available for individuals who transfer out of maximum security units after their treatment team and a judge determines that they are no longer manifestly dangerous to themselves or others. In regards to the method of bed appropriation in inpatient settings, only transitional forensic programs and forensic maximum security beds are designated as forensic beds and reserved for those populations; all other psychiatric beds are available for either civil or forensic patients on a first come, first serve basis.


State Hospitals

The State Hospital Services Division provides oversight of the nine state mental health hospitals and one psychiatric residential treatment facility for youth (the Waco Center for Youth) displayed in Figure 51. Each LMHA receives an allocation of state hospital resources to coordinate inpatient mental health services for residents of their specific state hospital service area. On average, Texas spends more per capita than comparable states on inpatient psychiatric services.

Source: Texas Department of State Health Services. (2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides].

In FY 2015, the average daily census of all state hospitals in Texas was 2,238 individuals — 25 fewer individuals than in 2014.

Figure 52 shows the total number of beds at each of the state-operated psychiatric hospital facilities in 2015; note that although this chart does not include community and private hospitals that contract with DSHS to provide inpatient treatment, those numbers can be found in Figure 56.
Source: Texas Legislative Budget Board. (April, 2016). State Hospitals: Mental Health Facilities in Texas, Legislative Primer. Confirmation that 2015 numbers apply to 2016 obtained via personal communication with Legislative Liaison for the Mental Health and Substance Abuse division of the Texas Department of State Health Services, on June 30, 2016.

Figure 53 below shows the total inpatient bed capacity in Texas, including both state-operated and state-funded psychiatric beds. In FY 2016, there were a total of 2,995 state psychiatric beds across all bed types available for children, adolescents, and adults in Texas. Of the 2,463 state-operated psychiatric beds in 2015, 204 were allotted to provide acute services for children and adolescents and 116 beds were designated for individuals who no longer need state hospital inpatient care but do not have community alternatives available.

Source: Texas Department of State Health Services. (2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides]. Slide 25.

Staffing and Functional Capacity of State Hospitals

In determining how many psychiatric inpatient beds there are in state hospitals, it is important to note that a hospital’s functional capacity is typically lower than their total bed count. This happens for a number of reasons, including high staff turnover, poor building designs, aging infrastructure, and increased resources and supervision needed for patients with complex medical and/or behavioral problems. In 2016 there were 2,463 inpatient beds in state-operated psychiatric hospitals, but the estimated available capacity of state-operated facilities was much lower (2,297 as of July 2016). As of May 2016, the state-operated hospital system as a whole had a functional capacity that allowed them to provide services for:

  • 256 individuals on maximum security forensic commitments;
  • 955 individuals on non-maximum security forensic commitments;
  • 915 individuals on non-maximum security civil commitments; and
  • 26 individuals on maximum security civil commitments.

While turnover in state hospitals has been an issue across all positions, state hospitals have had particular difficulty with staffing shortages in skilled nursing positions. On top of the already-stressful work environment on state hospitals, salary caps for nurses working in state hospitals make it difficult for nurses to earn as much as they would in the private sector. This shortage of skilled nurses has a disproportionate impact on individuals with complex needs and individuals in maximum security units because they require higher staff-to-client ratios and more frequent interventions to remain safe and healthy. Many available units and inpatient beds cannot be utilized for treatment because they do not have the proper skill sets and required staffing ratios in place. The 84th Legislature appropriated $1.4 million for targeted increases in nursing salaries and appropriated to DSHS an additional $5.6 million to improve staff recruitment and retention through increased salaries and geographic-based incentive payments for nurses.

Funding for Inpatient Care

In total, the 84th Legislature appropriated $872.6 million in all funds to operate the state hospital system for the 2016-17 biennium. In addition to maintaining current capacity and providing salary and benefits for 7,838 FTE positions per year, the funding also included:

  • $24.4 million in GR funds to address inflation-related cost increases;
  • $1.7 million to replace technology infrastructure; and
  • $2.5 million to create a supported community transition program.

Funding from federal sources accounted for 4.4 percent of the total appropriations for state hospitals in the 2016-17 biennium ($38.8 million) but because of the Institutions for Mental Diseases (IMD) Exclusion, this funding will be primarily used for youth under the age of 22 and adults over age 65.


Source: Data captured from HHSC Legislative Appropriations Request for FY 2018/19, September 12, 2016

Institutions for Mental Disease (IMD) Exclusion

The IMD exclusion in Section 1905(a)(B) of the Social Security Act defines an IMD as “a hospital, nursing facility, or other institution with more than 16 beds, that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services.” Until recently, the Act excluded funding inpatient services for individuals between 22 and 64 years of age in IMDs.The IMD exclusion policy has been in place since Medicaid was enacted in 1965 and was intended to promote the expansion of community services and ensure that the federal government did not have to assume financial responsibility for inpatient psychiatric care. Due to this federal restriction on funding for inpatient hospital services, state general revenue has traditionally been the primary funding source for state hospital services for adults between ages 22 and 64, and efforts to improve or expand public inpatient services were funded almost entirely by state funds without federal matching.

The final managed care rules regarding the IMD exclusion were entered into the Federal Register on May 6, 2016. The new rules permit “Federal Financial Participation (FFP) for a full monthly capitation payment on behalf of an enrollee aged 21 to 64 who is a patient in an IMD,” so long as the individual elects to receive services in a public or private IMD and the IMD in question provides psychiatric inpatient care, substance use disorder inpatient care, or behavioral health crisis residential services. Federal Financial Participation also only applies for short-term IMD stays of less than 15 days in one month, but stays can exceed the 15-day limit if the days are spread out over two months (e.g., 10 days at the end of July and 10 days at the beginning of August). While some advocates have argued that the 15-day limit is too restrictive or that the new rules incentivize inpatient treatment over community-based interventions, CMS has expressed that this new rule will help a large number of cases because the average length of stay for all inpatient psychiatric hospitals is 8.2 days. Before this rule change, stand-alone psychiatric facilities could not deny admission to individuals referred to them, but they also did not receive federal Medicaid match payments, creating the risk of lower quality care and premature discharge. The objective of the rule change was to mitigate the IMD exclusion and address shortages in short-term inpatient behavioral health treatment by providing more flexible financing options.

While it is still too early to directly analyze the impact of this new rule on individuals in Texas, a pilot study in the District of Columbia and 11 states, the Medicaid Emergency Psychiatric Demonstration (MEPD) pilot, provides some preliminary data on the possible impact of this new change to the IMD exclusion. While the final report on the MEPD pilot is not due until September 2016, initial results show that improving federal reimbursements for short-term admissions to IMDs results in:

  • Shorter lengths of stay;
  • Fewer transfers to other psychiatric facilities;
  • Fewer readmissions to emergency rooms and general hospitals;
  • Faster clinical response to patients experiencing a psychiatric crisis; and
  • Lower overall costs of care.

Inpatient Services at State Hospitals: Utilization and Costs

Over the past decade, the yearly average cost per patient served in state hospitals has almost doubled, from $11,912 in FY 2006 to $21,437 in FY 2015, an increase of $9,525 in the average cost per state hospital client (an 80 percent increase). As Figure 54 shows, Kerrville State Hospital (which only provides transitional forensic services) had both the highest average length of stay (839 days) and the highest cost per individual served of all Texas state hospitals in 2015 ($34,749 per client per year).

Figure 54 also shows that despite there being a shortage of inpatient psychiatric beds, the average daily censuses of all hospitals are below their total funded capacities — this is partly because hospitals must retain some open bed capacity in case of emergencies, but also because staffing shortages and high turnover have made it difficult for many hospitals to fully utilize the number of beds they have. There has also not been any increase in the number of state-operated beds in recent years — only more contracted community hospital beds — and unmet hospital infrastructure repair and renovation needs have actually taken state contracted beds out of operation.


Data obtained from: Texas Legislative Budget Board. (April, 2016). State Hospitals: Mental Health Facilities in Texas, Legislative Primer.

Whether due to an individual’s especially severe mental health needs or their lack of access to community-based treatments and services, many individuals have trouble remaining in the community after discharging from a state hospital. As Figure 55 shows, individuals who cycle in and out of state hospitals account for a significant portion of the roughly 2,236 patients who are in state hospitals on any given day. Since inpatient hospitals serve as a safety net for many individuals who receive inadequate or no community-based treatments, the availability and quality of community-based services has a direct impact on inpatient hospital capacity.


Source: Promoting Independence Advisory Committee. (July 21, 2016). Department Activity Report. Page 59.

State-Funded Community and Private Hospitals

Community and private hospitals are neither owned nor operated by the state, but instead receive state funding in order to provide mental health inpatient services to individuals. The red line in Figure 53: State-Funded Psychiatric Bed Capacity: FY 1994-2015 shows the growth of community and private contracted hospitals over time while Figure 56 below shows the community hospitals that are currently contracted with DSHS, the state funds allocated for each facility, and the number of hospital beds available.

Source: Personal communication with Legislative Liaison for the Texas Department of State Health Services’ Mental Health and Substance Abuse Division. (June 30, 2016).

The 84th Legislature allocated an additional $50 million to DSHS in order to secure 150 more contracted beds in community and private hospitals by the end of FY 2017.244 DSHS has since contracted with 13 different LMHAs to provide an additional 94 inpatient beds by the end of FY 2016, at an estimated initial annual cost of $17.1 million.

In addition to beds in community hospitals, locally supported beds also help meet psychiatric inpatient needs by providing approximately 1,936 psychiatric beds across the state. About half of these locally supported beds are funded by insurers (e.g., Medicaid and Medicare) while the other half are used to help indigent individuals who do not have insurance. While efforts are underway to divert individuals experiencing mental health crises away from emergency rooms and into more therapeutic environments, regular hospitals also help meet the inpatient needs of individuals with mental illness. As of FY 2015, there were 2,808 licensed psychiatric beds in non-state-owned general and specialty hospitals in Texas and 4,408 licensed beds in freestanding psychiatric hospitals. While there is no comprehensive information on the statewide utilization of inpatient beds in freestanding psychiatric hospitals, a survey by the Texas Hospital Association found that the majority of non-state-owned psychiatric beds are full.

Due in part to the increasing need for forensic beds in recent years, DSHS considered privatizing some state-operated facilities to help alleviate the inpatient psychiatric bed capacity shortage. For example, DSHS entered into a contract in 2011 with Correct Care Recovery Services (CCRS), a privately owned provider of correctional and detention services, to run the first publicly funded and privately run psychiatric hospital in Texas — the Montgomery Country Mental Health Treatment Facility. The Texas Legislature directed HHSC to attempt to privatize the Terrell State Hospital as well, even going so far as awarding the contract to CCRS in October 2015, but that plan was abandoned after the Texas State Auditor found HHSC undervalued the contract and failed to consult with the Texas Attorney General’s office before awarding the contract. The state dropped a similar plan to privatize Rusk State Hospital in 2012 after concluding that it would not save money or improve care.


Addressing the Shortage of Publicly-Funded Inpatient Beds

The forensic population’s use of state psychiatric hospital resources has grown significantly over the past decade, rising from 16 percent of all publicly funded inpatient beds in 2001 to more than half of all state beds (52 percent) in 2016. The steady increase in Texas’ population during this same period contributed to an overall decrease in the number of psychiatric beds available per capita in the state; while there were an estimated 18 inpatient psychiatric beds per 100,000 Texans in 1995, that number dropped to roughly 12 in 2003 and 10.5 in 2015.

Figure 57 below shows how these co-occurring trends of more forensic commitments and fewer civic commitments have continued in recent years.

Source: Texas Department of State Health Services. (February 18, 2016). Presentation to Select Committee on Mental Health: The Behavioral Health System [PowerPoint slides].

The increase in forensic commitments is one of the key drivers of the upsurge in hospital spending and waiting lists in recent years because forensic commitments are typically longer and more expensive than civil commitments. In FY 2015, the average length of stay at discharge for state mental health hospital forensic patients ruled NGRI was 421 days, compared to just 95 days for competency restoration involving a felony and 65 days for competency restoration involving a misdemeanor. In contrast, the average length of stay at discharge was only 56 days for civil commitments and 41 days for voluntary commitments in FY 2015. Long-term hospital stays are also on the rise, with the number of individuals residing in Texas state hospitals for over a year growing from less than 400 in 2001 to over 700 in 2014. Because of the growing proportion of forensic commitments in recent years, the average length of stay for all state hospital patients (and the corresponding costs that come with a longer hospital stay) has continued to increase:

  • 44.9 days in FY 2006;
  • 58.3 days in FY 2012; and
  • 74.4 days in FY 2015.

The increase in forensic commitments has also resulted in waitlists for these services more than quadrupling since 2013; in all of FY 2015, an estimated 1,668 individuals sought forensic services and were put on waiting lists for competency restoration services. While a 2012 Texas court ruling that required incompetent defendants to wait no longer than 21 days for competency restoration services was overturned on procedural grounds in 2014, DSHS stated that it intended to abide by the 21-day limit. Unfortunately, the average length of time on forensic waitlists has continued to surpass the 21-day mark since 2014; in 2015, individuals needing a bed in a maximum-security forensic unit waited significantly longer (102 days) than individuals needing forensic services in non-maximum-security facilities (32 days).

In order to address the needed expansion of inpatient capacity, the 84th Legislature passed Rider 86, which directed DSHS to evaluate the feasibility and potential benefits of allowing a university-related health institution to operate a state hospital. This model of operating inpatient facilities through a partnership between the state and a university has already seen success in Ohio, Georgia, and Kentucky. Benefits from this type of model include: improved medical and psychiatric services, training opportunities for residents, increased integration of behavioral and primary health services, and improved recruitment through residency and internship programs. The report from that study was released August 2016. An overview of the Rider 86 report is available.

Also passed in 2015, Rider 74 allocates $1.2 million annually to fund additional civil beds in a pilot program at the University of Texas Harris County Psychiatric Center for individuals needing treatment for less than 90 days.

The 84th Legislature also passed SB 1507 (84th, Garcia/Naishtat), part of which deals with addressing capacity issues at state hospitals. Beyond improving coordination of forensic services and creating a new DSHS forensic director position, SB 1507 requires HHSC to work with LMHAs, stakeholders, and the new DSHS forensic director to develop a new regional methodology for the allocation of state-funded beds in state hospitals and other inpatient facilities that contract with DSHS.

The Joint Committee on Access and Forensic Services (established by SB 1507) submitted an initial proposal to HHSC for a bed day allocation methodology and a bed day utilization review protocol and which HHSC then adopted in the spring of 2016. The joint committee will continue to meet quarterly to monitor and make recommendations regarding the implementation of the process.

Since the 84th Legislative session came to a close, problems with growing waitlists for forensic inpatient beds have continued; in January 2016, 424 individuals were in jails waiting for a forensic inpatient bed to become available — that is a record high for the previous 10 years and roughly four times as many individuals on forensic waiting lists as there were in August 2013. As of February 19, 2016, the waiting list for forensic beds consisted of:

  • 219 individuals waiting for non-maximum security beds
    • 117 individuals (53 percent) waiting more than 21 days
    • Average wait: 34 days
  • 195 individuals waiting for maximum security beds
    • 161 individuals (83 percent) waiting more than 21 days
    • Average wait: 130 days (an 83 percent increase since April 2015)

As of April 2016, an estimated 400 individuals were still on waiting lists for forensic beds in state-run mental health hospitals — over half of whom were waiting for maximum security beds.


In 2013, the 83rd Legislature required DSHS (in conjunction with DADS) to develop and implement a 10-year plan on the future infrastructure of state hospitals and state supported living centers (Rider 83, SB1, Article II). This plan outlines operational needs, infrastructure needs, capacity issues, and recommendations on how to better serve individuals through community-based providers. The plan also includes best practices within inpatient settings and transitional services for individuals returning to the community.

As part of the 10-year plan, DSHS conducted an in-depth analysis of three facilities (Rusk State Hospital, North Texas State Hospital at Vernon, and San Antonio State Hospital) and found all three facilities to be in “poor to critical condition.” While all 10 of the state’s hospitals are in need of extensive repairs or complete facility renovations, the preparation and replacement/renovation costs for just the three state hospitals mentioned above would cost more than all of the deferred state hospital maintenance funding appropriated by the previous five legislatures combined ($104 million):

  • Rusk State Hospital = $193 million
  • North Texas State Hospital at Vernon = $50.1 million
  • San Antonio State Hospital = $202.5 million

Figure 58 below shows the vast gap between the amount of money needed to fully repair state hospital infrastructure and the amounts requested by DSHS and approved by the Legislature each biennium.

Source: Mike Maples & Lauren Lacefield Lewis. (June 16, 2016). Inpatient Mental Health Planning: Presentation to the Senate Committee on Health and Human Services [PowerPoint slides].

The 84th Legislature appropriated $18.3 million for critical state hospital repairs for the FY 2016-2017 biennium — roughly 20 percent of what the department asked for and less than 10 percent of what was needed to complete all crucial repairs and renovations.

Also passed in 2015, Rider 86 allowed DSHS to use up to $12.4 million in surplus “Hospital Facilities and Services” funds for planning and developing renovations at Rusk State Hospital. Texas needs to add an estimated 570 publicly funded beds in psychiatric facilities in order to fully meet the current unmet need for inpatient services. Looking at both privately and publicly funded inpatient beds, a 2014 evaluation by CannonDesign estimated that Texas needed 4,300 state-funded beds in 2014 to meet all inpatient mental health needs. More recently (2016), the Joint Committee on Access and Forensic Services (JCAFS) estimated that Texas needs to add 1,800 hospital beds over the next eight years – 1,400 immediately and 50 more each year to keep up with population growth. The JCAFS report also recommended that these beds be added through “a significant initial expansion of state-operated and state-funded inpatient capacity, to include additional maximum security beds, followed by a gradual increase in beds to meet both the current and future demand.”

In addition to exacerbating the current capacity issues at state hospitals, failure to renovate and repair the infrastructure of state hospitals may negatively impact their accreditation by The Joint Commission (TJC), which would make it nearly impossible for the state hospital system to meet the needs of individuals with acute mental health conditions in Texas. Outside evaluators of the state hospital system indicate that five of the state hospitals (Austin, North Texas-Wichita Falls, Rusk, San Antonio, and Terrell) should be completely replaced and renovated while the remaining five hospitals require significant repairs to continue meeting TJC hospital licensing standards in the future. These replacements and improvements would cost the state an estimated $2.9 billion over the next 10 years.


Reducing the Use of Seclusions and Restraints
In an effort to promote behavioral management techniques that encourage well-being and decrease the risk of traumatization and injury, staff from RTCs across Texas have received training in how to reduce the use of seclusion and restraint. “Seclusion and restraint” refers to techniques used by administrators, clinical, and direct care staff to physically isolate (seclude) or hold with force (restrain) individuals believed to be at risk of harming themselves or others; this may include physical, mechanical, or chemical restraints. Emotional and physical trauma is common among youth in RTC settings and seclusion and restraint techniques may exacerbate their trauma. Thus, instituting alternatives to seclusion and restraint techniques help reduce the likelihood that a resident youth will be re-traumatized.

Texas has made improvements in the culture of care at the state hospitals, most notably reflected in reductions in both the numbers of incidents of restraint or seclusion, the numbers of individuals involved, and the length of time spent in restraint or seclusion per incident. In 2007, Texas was awarded a federal grant from SAMHSA to reduce or eliminate the use of restraints and seclusion in four of the state’s psychiatric hospitals — this grant was called the State of Texas Alternative to Restraint and Seclusions grants (STARS grant). One product resulting from a STARS grant was a toolkit designed to help reduce seclusion and restraint in any setting: Creating a Culture of Care: A Toolkit for Creating a Trauma-Informed Environment.

In 2015, the 84th Legislature passed SB 1129 (84th, Zaffirini/Raymond), which restricts the use of restraints by requiring that individuals must be able to sit upright during restraints that occur during apprehension, detention, or transportation, and mandating that restraints during transportation be documented and reported to the receiving facility.

Increasing Access to Timely Competency Restoration Services
A person charged with a crime who is found incompetent to stand trial (IST) must be restored to competency before the legal process can continue. In order to be considered competent to stand trial, that person must be able to consult with his or her defense lawyer and have a rational and factual understanding of the legal proceedings. Individuals determined to be incompetent, typically due to mental illness or an intellectual disability, may be placed into inpatient competency restoration (ICR) programs, jail-based competency restoration (JBCS) programs, or outpatient competency restoration (OCR) programs.

Figure 59 displays a conceptual framework for placement into the three different competency restoration tracts. As shown in the diagram, placement into these specialty programs is determined by a mixture of factors, including an individual’s clinical complexity, criminal history, and the safety risk they pose to the community and to other individuals placed in their program.


Delays in receiving timely restoration and mental health services may violate speedy trial provisions in the U.S. Constitution and can be extremely detrimental to long-term mental health outcomes for the individual. In 2006, DSHS attempted to address the growing shortage of inpatient psychiatric resources by implementing a policy requiring all individuals who are found IST and in need of restoration services be placed on the DSHS State Hospital Admissions Clearinghouse waitlist, capping the number of state hospital beds used for forensic commitments at 738. As a result, admission to one of the 738 designated state hospital forensic beds became more restricted because of its being contingent on limited availability. Because forensic commitments at state hospitals are on average much longer than civil commitments, bed capacity was reduced so much that an average of 250 patients were waiting in jail for six months or longer for competency restoration services.

In 2012, a Travis County District Court judge ruled on a forensic restoration capacity lawsuit filed by Disability Rights Texas in 2007 that challenged the DSHS clearinghouse waitlist for people found IST. The court found that a defendant deemed IST cannot be held in a jail for more than 21 days prior to admission into a competency restoration program. However, in May 2014, the Third Court of Appeals in Austin overturned that ruling on procedural grounds, finding that plaintiffs in the case had failed to demonstrate that DSHS’ list operates in an unconstitutional manner for every detainee. While the court found that the DSHS practice of maintaining the list was not unconstitutional, it indicated that detention beyond a certain period would be unconstitutional. As of May 2016, Disability Rights Texas was still in litigation with DSHS over the constitutionality of the lengths of time experienced by individuals on the waitlist. Wait times for forensic services in April 2016 were still in some cases as long as nine months.

Following the initial ruling in 2012, DSHS made several improvements and expansions to the state hospital system in an attempt to decrease wait times for beds, including:

  • Adding eight maximum security beds, 32 intermediate security beds, and converting 20 civil beds to forensic beds at North Texas State Hospital (NTSH);
  • Converting 25 civil beds to forensic beds and converting 40 beds to maximum security forensic beds at Rusk State Hospital (RSH); and
  • Converting 35 civil beds to forensic beds at San Antonio State Hospital (SASH).

However, as the Texas population and the corresponding demand for services has continued to increase in recent years, the average length of time on forensic waitlists has continued to surpass the 21-day mark; in 2015, individuals needing a bed in a maximum-security (102 days) or non-maximum-security forensic unit (32 days) waited significantly longer than the 21-day objective.

Inpatient Competency Restoration
Individuals found IST (i.e., unable to competently understand court proceedings) may be committed to a state hospital forensic unit to receive treatment and hopefully restore their competency to stand trial. Before 2004, inpatient competency restoration was the only option for individuals found IST. In FY 2015, individuals receiving inpatient competency restoration (ICR) services (872) accounted for roughly 39 percent of the average daily census of state-run psychiatric hospitals (2,235). There has been a steady and significant increase in the percentage of forensic commitments for inpatient competency restoration services in recent years and because those commitments have a much longer average length of stay than civil or voluntary commitments, the average daily census for forensic patients has now surpassed that of civil patients. The average cost of competency restoration in a Texas state hospital in FY 2013 was over $415 per bed per day, and a more recent national study of 47 states and the District of Columbia found an average per day cost of $603 ($300-$1,000) for ICR programs.

Jail-Based Competency Restoration
The 83rd Legislature passed SB 1475 (83rd, Duncan/Zerwas) to create a jail-based competency restoration (JBCR) pilot program for individuals who otherwise would be committed to a mental health facility or residential care facility for inpatient competency restoration services. The pilot is projected to provide 20 beds for jail-based restoration services but has faced significant barriers to implementation — see Changing Environment section for more information on the JCBR pilot.

Outpatient Competency Restoration
Outpatient competency restoration (OCR) is a process of providing legal education training and other competency restoration services to non-dangerous individuals in a community-based, outpatient setting. The idea of OCR is to give individuals the resources and services they need to maintain a level of psychiatric stability and be able to understand the legal process so that they can proceed through the court system. OCR programs typically provide mental health and substance use treatment, case management services, and legal education to people charged with misdemeanors and non-violent felony offenses. OCR programs can allow low-risk individuals with mental illness to avoid prolonged stays in jails or state hospitals, which are costly to local taxpayers and often have the result of exacerbating individuals’ mental illness, making treatment more difficult and generally more expensive.

The Texas Code of Criminal Procedures (TCCP) began allowing individuals to be referred to OCR programs in 2003. In 2007, Texas initiated four outpatient competency restoration (OCR) pilot programs in response to the growing number of forensic commitments in state psychiatric hospitals. For the four pilot sites, the average cost to provide restoration services through OCR in FY 2012 was $11,894 per case, far less than the average cost of $50,520 for inpatient restoration in a state hospital.

In 2011, Rider 78 (82nd Legislative Session) directed DSHS to allocate $4 million each year to support expanding the number of OCR pilot sites beyond the initial four. Texas added another eight OCR programs between 2011 and 2013, now constituting the largest system of OCRs in the country and serving roughly 1,700 individuals as of 2016. In the Hogg Foundation’s 2014 evaluation of OCR programs in Texas, the typical participant was a 38- year-old (SD = 13) Black (46 percent) or White (32 percent) single (87 percent) male (72 percent) diagnosed with schizophrenia (63 percent) or bipolar disorder (21 percent) and whose criminal charge was not a felony (60 percent). In addition, 28 percent of participants were homeless.

In addition to avoiding the high cost of hospitalization, OCR can reduce costs to jails and local communities by reducing the length of time individuals remain in jail and eliminating the cost of transporting an individual long distances to an available hospital bed. The Hogg Foundation’s 2014 evaluation of OCR programs found that a person’s likelihood of restoration increased with greater lengths of stay in an OCR program, up to a 21-week threshold. After the 21-week mark, longer lengths of stay were not associated with greater likelihood of restoration.310 In addition, prior hospitalizations were shown to have a significant effect on a person’s likelihood to be restored to competency in an OCR program; individuals in OCR programs who had zero (86.0 percent) or one (80.5 percent) prior psychiatric hospitalizations were more likely to be successfully restored to competency than individuals who had two (67.8 percent) or three or more (68.7 percent) prior hospitalizations. Figure 60 below shows some of the most important components of successful OCR programs.

Source: Hogg Foundation for Mental Health. (July 2015). Texas Outpatient Competency Restoration Programs: Evaluation Report. Page 16.

More recent research on OCR programs across the country concluded that OCR programs have “promising outcomes in terms of high restoration rates, low program failure rates, and substantial cost savings.” OCR program evaluations in multiple states have shown a number of benefits to OCR, including:

  • An average rate of 70 percent competency restoration (77 percent in Texas);
  • An average of 149 days to be restored to competency (70 days in Texas); and
  • Total cost of OCR averaged $215 per individual per day ($140 in Texas).

In Texas, OCR costs an average of $21,208 less per individual restored to competency compared to inpatient competency restoration. Diverting individuals from inpatient competency restoration programs into OCR programs can also have the benefit of reducing forensic waitlists and free up state hospital beds for individuals with more severe needs and/or risk factors.

Figure 61 compares the three different types of competency restoration programs based on cost, length of stay, and restoration success rate. As demonstrated in Figure 61, Texas’s outpatient competency restoration programs provide treatment at lower costs and with higher success rates than the San Bernardino jail-based competency restoration program.

*Percentage is for cumulative success rate for FY 2008-2013.
**The length of stay and cost per individual for the community- and jail-based programs do not reflect the additional time and cost of treating defendants who are not restored to competence and are transferred to the state hospital for additional restoration services.


According to the most up-to-date statistics from Substance Abuse and Mental Health Services Administration (SAMHSA), an estimated 20.2 million adults in America struggled with substance use disorders in 2014. The addition of children between the ages of 12 and 18 increases that number by another 1.3 million for a total of 21.5 million Americans over age 12 with a substance use disorder — that is 8.1 percent of the total U.S population in 2014.

Substance use can result in serious behavioral and emotional challenges — it has the potential to alter an individual’s brain chemistry, and long-term usage can negatively impact behavior, judgment, mood, thought processes, and memory. Continued and persistent substance use can also lead to chemical dependency and drug addiction. Ultimately, substance use has a significant effect on the individual, family, and the community as a whole, and it can both create mental health conditions and exacerbate existing ones.

State agencies and organizations are increasingly using the term “behavioral health” in place of “mental health” to more accurately represent the co-occurrence of mental health and substance use conditions. In an effort to improve integrated care, there has also been increased focused on how LMHAs can better integrate substance use services with the mental health services typically provided by LMHAs. As a result of SB 1507 (84th, Garcia/Naishtat), the Outreach, Screening, Referral and Assessment (OSAR) providers responsible for substance use screenings and referrals for substance use services are now co-located with LMHAs across all of Texas.

The HHS System provides substance use services for eligible youth and adults and contracts with service providers to deliver treatment. The Medical and Social Services Division is responsible for creating and implementing policies regarding substance use services and defining optimal treatment outcomes. Within that division, the Substance Abuse Prevention, Intervention, and Treatment (SAPIT) Program’s primary goal is to provide supports and services for substance use prevention, intervention, and treatment. Figure 62 describes the program’s major activities relating to substance use.

Source: Texas Health and Human Services. (2016, October 12). Personal communication: Available Substance Use Treatment Services.


Only a small portion of individuals needing substance use treatment receive the appropriate services. In Texas in FY 2013, 18,088 (or 10.4 percent) of the 174,730 adults living below 200 percent of FPL with chemical dependence were served by state-funded substance use providers, including the NorthSTAR program. Additionally, only 47,086 (or 38.4 percent) of the 122,580 children living below 200 percent of FPL with chemical dependence received services through DSHS or NorthSTAR; this means the majority of children living in poverty with substance use Division treatment needs did not receive state-funded treatment services.* This discrepancy between need and utilization could result from shortages of substance use providers, low funding, waiting lists for services, stigma surrounding seeking services for drug use, worries about having drug use reported to law enforcement, and a general perception that mental health priorities take precedence over substance use priorities.

* It should be noted that these figures for substance use service utilization don’t include the number of individuals who are not living in poverty (i.e., below 200 percent of FPL) but may still have trouble accessing state-funded substance use services due to their falling in the Medicaid coverage gap and not having the financial resources to pay for services on a sliding scale.


The level of public funding for substance use services is not sufficient to address need, creating significant barriers to treatment. The state is attempting to address these concerns by expanding the capacity of the substance use treatment delivery system beyond the level established by the Legislative Budget Board (LBB).

In 2013, legislators increased substance use funding by over $25 million, including nearly $11 million to increase provider reimbursement rates for substance use services in an attempt to attract new and competitive providers into the service system. The introduction of competitive service providers aimed to incentivize higher service quality, treatment, and recovery rates. During the 84th legislative session, DSHS received a $9.5 million increase for Substance Abuse Prevention, Intervention and Treatment services for the 2016-17 biennium.

Source: Data captured from HHSC and DSHS Legislative Appropriations Request for FY 2018/19, September 2016.


Following concerns in the 81st Legislative session about the high costs of treating substance use disorders, adults with substance use disorders who are on Medicaid began having access (on September 1, 2010) to inpatient and outpatient services (e.g., assessment, ambulatory detoxification, counseling, inpatient treatment, medication therapy, and specialized services for women) to treat substance use disorders free of cost. As a part of the legislation authorizing coverage of these services, the Legislative Budget Board (LBB) was mandated to conduct a cost effectiveness analysis to see whether covering substance use treatment for adults increased overall Medicaid spending for those clients. The LBB’s analysis of the cost effectiveness of paying for substance use treatment was incomplete due to data limitations, but the LBB’s initial results indicate a 9.1 percent reduction in overall costs to Medicaid before substance use treatment ($900) and after treatment ($818). HHSC is planning to replicate the LBB cost analysis with more complete data and continuation of funding for substance use treatment under Medicaid will be dependent on the results of this second, more complete evaluation.

Similar to the financial eligibility process for mental health services at LMHAs, individuals who are not eligible for Medicaid but are seeking state-funded substance use services must complete a financial assessment before beginning services with the substance use providers. Individuals whose adjusted income is at or below 200 percent of FPL are eligible for fully funded substance use services. If their adjusted income is greater than 200 percent, individuals will be assessed a fee on a sliding scale.


Three populations receive priority for admission to substance use services before anyone else, in the following order of priority:

  1. Pregnant, intravenous substance users
  2. Pregnant substance users
  3. Intravenous drug users

Additionally, youth age 13 to 17 who meet the DSM-V criteria for substance-related and addictive disorders are eligible for treatment services. Adults ages 18 to 21 may be admitted to a youth treatment program depending on the individual’s specific needs, experiences, developmental level, and behavior.


Mental illness and substance use disorders commonly occur in persons at the same time. Looking at national data from 2014:

  • 35.6 million adults had a mental health diagnosis and no substance use disorder;
  • 12.3 million adults had a substance use disorder and no mental health diagnosis; and
  • 7.9 million adults had both a mental health and substance use diagnosis, of which:
    • 39.1 percent of individuals using substances had a mental health diagnosis; and
    • 18.2 percent of individuals with a mental health diagnosis also used substances.

The high prevalence of these comorbidities demonstrates the need for interventions and policies that support dual diagnosis treatment — integrated treatment that addresses both conditions in concert. When examining the relationship of co-occurring psychiatric and substance use disorders, the following scenarios should be considered:

  • Drug use can lead to mental illness;
  • Mental illness can lead to drug use; and
  • Drug use and mental illness can be the result of other independent common risk factors.

The Texas HHS System supports the integration of substance use and mental health services for the simultaneous treatment of co-occurring disorders. The goal of co-occurring psychiatric and substance abuse disorder (COPSD) services is to provide coordinated services, wherein both conditions are treated in conjunction as the primary condition. The Medical and Social Services Division contracts with 488 outpatient substance use treatment facilities and 160 residential treatment facilities for this specialty service. In FY 2015, 3,772 individuals were served through COPSD programs.


The following two figures show the utilization and costs of substance use services; Figure 65 details information for adults and Figure 66 is for children and adolescents.

Source: Texas Department of State Health Services. (2016). Behavioral health data book, FY 2015, fourth quarter [PowerPoint slides].

Source: Texas Department of State Health Services. (2016). Behavioral health data book, FY 2015, fourth quarter [PowerPoint slides].


HHSC monitors quality and performance in several areas based on the TRR framework. Figure 67 shows some of the measures tracked on a regular basis for adult substance use services and Figure 68 shows the same for children and adolescent services.

Sources: Texas Department of State Health Services. (2016). Behavioral health data book, FY 2015, fourth quarter [PowerPoint slides].

Sources: Texas Department of State Health Services. (2016). Behavioral health data book, FY 2015, fourth quarter [PowerPoint slides].


The Texas Recovery Initiative (TRI) began in 2007 with the goal of ensuring that needed person-centered services and resources are available to support individuals in their recovery from a substance use disorder. The purpose of the multi-phase TRI is “to gather information and recommendations for designing protocols that implement holistic, recovery-oriented models of care for use within the behavioral health community.” In order for a delivery system to be recovery-oriented, it must be person-centered, multi-disciplinary, and use coordinated treatment plans and a comprehensive array of services that allows individuals receiving services to take responsibility for their own recovery.

The Texas Recovery Initiative is supported by the Recovery Oriented System of Care (ROSC) framework, which coordinates “multiple systems, services, and supports that are person-centered, self-directed, and designed to readily adjust to meet the individual’s needs and chosen pathway to recovery.” ROSC is an organizational framework for mental health and social services that is strength-based and collaborative. An SOC framework is sensitive to the youth and their family’s cultural and linguistic preferences and delivers highly individualized services such as wraparound and YES waiver supports to reduce youth admissions into hospitals, the juvenile justice system, and the child welfare system. Care for youth with intensive support needs is coordinated across agencies, private and public organizations, and families so that children can overcome the barriers that prevent them from accessing the services they need. The Texas System of Care (SOC) Consortium was established in 2013 to improve the delivery of mental health services for youth with high needs in Texas by expanding the SOC services throughout the state.

TRI and the ROSC/SOC approach provide the philosophical and organizational framework that is essential for the collaborative, systematic planning and delivery of child and family mental health services. Established in practice and research for over 25 years, systems of care have been proven nationally to be a cost-effective approach resulting in better child and family outcomes and increased access to services and supports. TRI and the ROSC framework underscore the significance of community partnerships and collaborations between federal and local governments, nonprofit organizations, and faith-based entities. By providing continual support, ROSC services aim to enhance individuals’ strengths and functioning by building resilience and recovery management skills. DSHS is currently assisting communities statewide to initiate the ROSC framework in local municipalities by:

  • Conducting on-site informational trainings to organize communities and assisting them with the development of the initial phase of this systems change approach for achieving recovery;
  • Providing telephone and email technical assistance regarding the ROSC concept;
  • Participating in person and via teleconferencing in local ROSC community meetings;
  • Adding a week-long educational track on recovery during the Texas Behavioral Health Institute; and
  • Assisting with development and training of recovery coaches.

There are currently 43 counties in Texas that have implemented federally-funded SOC frameworks to serve families in their community, 13 counties that have established Texas SOC community expansion sites, and three counties (McLennan, Denton, and Midland) that are “communities of interest” for future SOC frameworks. As of spring 2015, over half of Texans are living in communities that have established or are in the process of actively establishing SOC frameworks. Surveys in early 2016 indicate that communities across the state are becoming more familiar with the SOC philosophy and approach to services. Communities that have implemented the SOC framework report having improved coordination across agencies and better collaboration between providers and youth and their families. Moving forward, surveys indicate a need for the SOC framework to focus more on giving communities more concrete steps to achieve the goals of SOC.

A full list of ROSCs across Texas is available, as is a list of upcoming TRI meetings in the state.

Intellectual and Developmental Disability Services Department 

(formerly provided through the Department of Aging and Disability Services)

Policy Concerns

  • Addressing the mental health needs of individuals with disabilities
  • Coordination of services between HHSC divisions during and after transition process
  • Service delivery during the HHSC transformation process
  • Access to crisis services including emergency respite
  • System-wide implementation of trauma-informed care, positive behavior supports, and person-centered recovery-focused practices
  • Improved psychiatric services in state supported living centers and community-based supports
  • Significant wait time for community-based services·Reduction of restraint in SSLCs

Fast Facts

  • The coexistence of an intellectual or developmental disability (IDD) along with a mental illness is sometimes referred to as a dual diagnosis.
  • It is estimated that as many as 30 to 40 percent of persons with intellectual disabilities are diagnosed with a mental health condition. Further, reports indicate that individuals who have IDD are three to five times more likely to have a co-occurring mental health condition than the general population.
  • Children with IDD are more likely to have experienced traumatic events including emotional, physical, and sexual abuse, neglect, and maltreatment when compared to able-bodied peers. While many individuals with IDD have known histories of abuse (some research suggesting nearly 30 percent), the rate may be higher in reality because of underreporting or lack of recognition by family and other caregivers.
  • Individuals with IDD who have a dual diagnosis or who present behavioral “challenges” are more likely to be institutionalized and are often the last to be released to a community-based setting. Additionally, community services and supports are frequently incapable of meeting the behavioral health needs of these individuals, leading to less successful outcomes when transitioning into the community.

Mental Health Needs of Individuals With Intellectual/Developmental Disabilities

Intellectual and developmental disabilities (IDDs) can often overshadow existing mental health or medical conditions. Professionals, caregivers, and family members who are accustomed to seeing an individual through the lens of their disability can misinterpret behaviors that may be associated with mental health conditions, distress, acute medical conditions, or past trauma.

Many systems of care for people with IDD continue to focus on controlling and managing behaviors, without considering whether underlying mental health, medical conditions, or past trauma cause the behaviors. The focus of treatment has often been the development of behavior management plans to promote compliance or the use of medications to control the behaviors. In both cases, the treatment is targeting the behavior and not the actual mental health or medical condition. Often, the first line of “treatment” is psychopharmacological; psychotropic drugs are frequently used to control behaviors, which addresses the symptoms but not the illness. This significantly reduces opportunities for recovery.


The coexistence of an intellectual or developmental disability (IDD) along with a mental illness is one type of dual diagnosis. Individuals with intellectual disabilities experience the full range of mental health conditions at rates higher than the general population. It is estimated that as many as 30 to 40 percent of persons with intellectual disabilities are diagnosed with a mental health condition. Further, reports indicate that individuals who have IDD are three to five times more likely to have a dual diagnosis (with a psychiatric disability) than the general population. Individuals with IDD who have a dual diagnosis or who present behavioral “challenges” are more likely to be institutionalized and are often the last to be released to a community-based setting. Additionally, community services and supports are frequently incapable of meeting the behavioral health needs of these individuals, leading to less successful outcomes when transitioning into the community.

Children with IDD are more likely to have experienced traumatic events including emotional, physical, and sexual abuse, neglect, and maltreatment when compared to able-bodied peers.364 While many individuals with IDD have known histories of abuse (some research suggesting nearly 30 percent), the rate may be higher in reality because of underreporting or lack of recognition by family and other caregivers.

While trauma is not the only cause of mental health challenges in people with disabilities, it is significant and requires attention. Adults and children with disabilities experience abuse, neglect, institutionalization, abandonment, bullying, and other types of trauma at rates higher than the general population. In one study, nearly 75 percent of participants with IDD experienced at least one traumatic event in their lifetime, increasing the likelihood of developing a mental health condition

Further, while DSHS has integrated recovery-focused interventions into its mental health system, the HHS enterprise has not yet incorporated the principles of recovery into its culture. Individuals with IDD and older adults who have mental health conditions can benefit from recovery-focused interventions that are embedded in a culture of hope and resilience.

Individuals with disabilities can experience all types of mental health conditions and require access to quality mental health services. People with disabilities, while at a higher risk of having mental health conditions than the general population, often experience significant disparities in their ability to access needed services. The mental health needs of people with intellectual disabilities are routinely overlooked in the research and they often don’t receive quality mental health treatment.

The higher prevalence of mental health conditions among people with disabilities may also be linked to psychological stress related to a disability, social isolation, trauma, institutionalization, bullying, low self-esteem, and other factors.

Over the past decade, evidence has also shown a high prevalence of mental health conditions in people with autism spectrum disorder (ASD). Recent research indicates that 70 percent of children 10-14 years old living with autism had at least one co-occurring mental health condition, and 41 percent had two or more mental health diagnoses.

The Mental Health Needs of Aging Texans

Texas is home to a large number of aging individuals. According to the U.S. Census Bureau, in 2010 there were 3.8 million people in Texas age 60 or older (15 percent of the total population). This group is one of fastest growing populations in Texas, and is expected to more than triple between 2010 and 2050. By 2050, this group is expected to grow to 12 million.

Aging Texans require mental health and substance use services that meet their unique needs. People who are aging experience under-recognized and under-treated behavioral health conditions. Approximately 20 percent of the older population has some form of behavioral health condition, most commonly depression, a substance use disorder, or dementia-related behavioral or psychiatric symptoms. An estimated two million seniors in the United States have serious mental illness. The suicide rate among older Texans (over age 55) is higher than the rate among younger groups.

It is important to know that depression is not a normal part of aging. However, depression often co-occurs with other serious illnesses, such as heart disease, stroke, diabetes, cancer, and Parkinson’s disease. Many health professionals mistakenly conclude that depression is a consequence of these problems, leaving the condition widely unrecognized and under-treated among older adults.


Prior to the implementation of the HHS transformation plan, the Texas Department of Aging and Disability Services (DADS) was responsible for providing long-term services and supports (LTSS) for Texans over the age of 60, people with physical disabilities and people with intellectual and other developmental disabilities (IDD). LTSS (including both residential and community services) help individuals receive needed care and services to remain in their homes and communities of choice. DADS also had responsibility for regulating providers of LTSS and administering the state’s guardianship program. As a result of the HHSC transformation, DADS as a separate agency will be abolished and the programs and services incorporated into the HHSC organizational structure. For more information on the transition of DADS services see the DADS section of this guide.

HB 1 (84th, Otto/Nelson) – Additional Funding for Crisis Intervention Teams for People with IDD

The HB 1 (84th, Otto/Nelson) set aside funds in the state budget to help DADS expand crisis intervention teams to provide increased supports to people with IDD living in the community. Appropriations will provide an additional $18 million in state and federal funds over the 2016-17 biennium. This total exceeds the recommendation by the Sunset Commission for $7.5 million for ten additional teams.

SB 304 (84th, Schwertner/Raymond)- “Three Strikes Rule”

SB 304 requires that the HHSC executive commissioner revoke the license of a nursing home found to have three or more serious violations related to abuse, exploitation, or neglect within a two-year period. A serious violation occurs when a facility’s non-compliance with one or more requirements causes, or is likely to cause, serious injury, harm, impairment, or death to a resident, necessitating immediate corrective action. If a license is revoked, DADS can: 1) request the appointment of a trustee to operate the institution; 2) assist with obtaining a new operator for the institution; or 3) assist with the relocation of residents to another institution. Among other provisions, the bill provides for the monitoring of certain facilities, including long-term care facilities, and expands the circumstances under which rapid response teams can visit those facilities.

HB 2789 (84th, Raymond/Zaffirini)- Trauma-Informed Care within SSLCs and ICFs

Texas policymakers have recognized the impact of trauma on development and behavior and have statutorily mandated trauma-informed care training in the child welfare and the juvenile justice systems, as well as within some LTSS programs and facilities as a result of HB 2789 (84th, Raymond/Zaffirini). HB 2789 required DADS to develop or adopt trauma-informed care training for employees who work with individuals with IDD in SSLCs and Intermediate Care Facilities (ICFs). The training may be provided through online training. Training requirements for new employees of SSLCs and ICFs went into effect on September 1, 2015. As a result of HB 2789, DADS and DSHS collaborated to create an online training module titled “Trauma Informed Care for Individuals with IDD” as one module in a comprehensive online course, Mental Health Wellness for Individuals with Intellectual and Developmental Disabilities (MHW-IDD). The training is available online.

For information on DADS riders in the appropriated budget for FY 2016 and FY 2017, please see our Legislative Summary in Appendix X.

SB 7 (83rd, Nelson/Raymond) – Acute Care and Long-term Services and Supports

SB 7 required major changes in the delivery of both acute care and long-term services and supports (LTSS) to people with disabilities. See the HHSC section for more detailed information on the changes that have occurred and those that will be implemented in the coming year. Many of the changes in SB 7 involved expanding Medicaid managed care to provide services to people with disabilities. The SB 7

IDD System Redesign Advisory Committee is helping HHSC develop future service delivery systems that can better serve individuals with disabilities.

HB 3523 (84th, Raymond/Perry) IDD System Redesign Advisory Committee

HB 3523 reinforces the role of the IDD System Redesign Advisory Committee that was established through SB 7. HB 3523 delays the transition of Texas Home Living (TxHmL) by one year to September 1, 2018, and delays the transition of other IDD waivers and ICFs to managed care by one year, until September 1, 2021.382 The bill also changes the start date of the IDD pilot to September 1, 2017 and removes requirements that the pilot last at least two years, as well as clarifies that managed care organizations can participate in the pilot. HB 3523 clarifies that DADS can contract with IDD waiver service providers to deliver basic attendant and habilitation services (Community First Choice[CFC]) and specifies that DADS has regulatory and oversight authority over those providers in the delivery of CFC services. Further, the bill requires additional analysis of provisions required by SB 7. The required analyses must inform future transition activities, including evaluation how these activities effect access to LTSS, quality of acute care and LTSS, outcomes, service coordination, employment options, housing, etc.

SB 45 (83rd, Zaffirini/Naishtat) Employment Assistance and Supported Employment Services

In an effort to standardize the Medicaid waiver programs, SB 45 required the inclusion of employment assistance and supported employment services in all of the 1915(c) Medicaid home and community-based waivers and the STAR PLUS waiver in the 1115. Employment assistance is intended to help individuals with IDD find and secure a job according to the individual’s preferences and individualized needs. Supported employment services is meant to assist not only with job placement, but also with daily job orientation and tasks to improve the longevity and successfulness of individuals with IDD in their employment, including employment adaptations and supervision.

SB 1226 (83rd, Zaffirini/Perez) – Employment First Task Force

SB 1226 created the Employment First Task Force to advise the state on its efforts to promote competitive employment for individuals with disabilities. The bill further established competitive employment as the desired outcome for people with disabilities. The bill further established competitive employment as the desired outcome for working-age people with disabilities who receive public benefits. Competitive employment is considered to be work in the labor market that is performed on a full-time or part-time basis in an integrated setting for which the individual is compensated at or above minimum wage, but not less than the customary and usual wage paid by an employer for the same or similar work performed by individuals who do not have a disability. The Employment First Task Force is comprised of self-advocates, employers, agency representatives (including TEA, HHSC, DARS, and DADS), providers of integrated and competitive employment services and other stakeholders who would like to increase opportunities for individuals with disabilities to find employment in competitive settings. As a result of the task force, HHSC (on behalf of all HHS agencies), TEA, and TWC all adopted an Employment First philosophy. Among its recommendations, the task force wishes to bring the needs of individuals with more severe disabilities into the current discussion about inclusive employment services, as well as to end segregated employment and sub-minimum wage work for people with disabilities. The task force released a report in October 2014 with 72 recommendations. Get up-to-date information on task force activities and meetings.


Funding for LTSS program and services comes from both the federal and state governments. These figures include funding for an array of LTSS services and not limited to funding for mental health services.

Source: Data captured from HHSC and DADS Legislative Appropriations Request for FY 2018/19, September 12, 2016. Note: The funding reflected in this figure is included in the total Medicaid appropriation provided in the Medicaid section. Note: Data on costs for behavioral health services in these programs is unavailable.

The reduction in nursing facility payments is due to the transition of these services into managed care as of 3/1/15.


LTSS programs serve persons who are aging, people with physical disabilities, and people with intellectual and other developmental disabilities, including those who have co-occurring behavioral health conditions. Services and supports are provided through a variety of community-based and institution-based programs. The services are funded through various federal and state funding sources.


In addition to Medicaid and Medicaid waiver services, HHSC is now responsible for the administration of community long-term services and supports. The majority of Texans with disabilities receive services in a community-based setting. Many of these programs provide needed services to people with disabilities and co-occurring behavioral health challenges. Older Texans meeting the medical criteria for nursing home services may be eligible for community-based services funded by HHSC if they also meet financial eligibility criteria. Some of the major community service programs are described below.


HHSC now administers 1915(c) Medicaid Home and Community-based Services waiver programs (previously administered through DADS), which are designed to provide community supports and services to individuals eligible for institutional care (i.e., nursing facilities or intermediate care facilities). These waivers prevent the institutionalization of people with disabilities by providing appropriate community services and supports.

As opposed to institution-based care, access to these waiver services is not an entitlement and each program currently has a significant interest list. Legislative appropriations determine the number of people receiving services in these programs (i.e., funded waiver slots). The wait time for services varies by program but ranges from three to more than 10 years.

Figure 70 provides basic information about eligibility and services for three primary waivers for persons with intellectual and other developmental disabilities.

Sources: Texas Department of Aging and Disability Services. (2015). Reference Guide 2015. Texas Department of Aging and Disability Services. (n.d.). Website FAQs and fact sheets.


There are 39 local intellectual and developmental disability authorities (LIDDAs) in Texas that cover all 254 counties and serve as the front door for long-term services and support programs for people with intellectual and developmental disabilities (IDD), including those who also have co-occurring mental health conditions. While the LIDDAs may co-locate with local mental health authorities across the state, the two entities have separate administrative authorities and are not the same. LIDDAs connect individuals with IDD to long-term services and supports, which includes state supported living centers (SSLCs), Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Medicaid waiver programs, safety net services, and Community First Choice (CFC).

LIDDAs are responsible for program eligibility, waiver program enrollment, and determination of intellectual disability or a related condition as part of establishing the IDD priority population. Additional LIDDA responsibilities include developing service plans, providing targeted case management (TCM) services, maintaining Interest Lists for IDD Medicaid waivers, conducting Preadmission Screening and Resident Review (PASRR) evaluations for persons with IDD seeking admission to a nursing facility, providing continuity of care, and completing the Community Living Options Information Process (CLOIP) for persons residing in SSLCs. LIDDAs are also responsible for permanency planning for individuals less than 22 years of age who live in intermediate care facilities, state supported living centers, nursing facilities, and HCS group homes.

To identify the LIDDA serving a specific location, please refer to the LIDDA website.

Institutional Long-Term Services and Supports

Persons with disabilities residing in nursing facilities, privately operated intermediate care facilities, or in large state-operated supported living centers often experience co-occurring behavioral health conditions. Funding for these residential services is provided primarily through Medicaid. The state supported living centers currently administered through DADS will transition to the State Operated Facilities Division of HHSC by September 1st, 2016. While that change has not yet occurred and the SSLCs will not be included in the Medical and Social Services Division, information is included in this section for comparison purposes.

Skilled Nursing Facilities

Texas nursing facilities provide institutional care for older Texans and people with disabilities whose medical condition requires skilled licensed nursing services. In FY 2014, there were 1,224 licensed nursing facilities in Texas.387 While Medicaid nursing facilities require medical necessity for admission, many individuals residing in nursing facilities also have co-occurring mental health conditions. In March 2015, nursing facility services were integrated into STAR+Plus, a Texas Medicaid managed care program that provides both acute care and long-term services and supports.

Nursing facilities provide room and board, social services, medical supplies and equipment, over-the-counter drugs and personal needs items. Skilled behavioral health services are provided by psychiatrists and other medical and behavioral health professionals.

In order to ensure that the mental health needs of nursing home residents are identified and addressed, the federal government mandates Preadmission Screening and Resident Review (PASRR) Level 1 screening prior to admission to a nursing facility. PASRR screening is intended to identify the following:

  • Individuals who have a mental illness, an intellectual disability, or other developmental disability (also known as related conditions);
  • The appropriateness of placement in the nursing facility; and
  • Eligibility for specialized services

In 2013, the Centers for Medicare and Medicaid Services directed Texas to make changes to the PASRR program. Three major changes included:

  • Eliminating the role of nursing facilities in the PASRR Evaluation determination process by introducing local authorities (LA) as the party that will complete the PASSR Evaluation;
  • Requiring specific, specialized services to be identified before nursing facility admission; and
  • Requiring an automated communication to local authorities that is triggered when a Resident Review is required.

Community Intermediate Care Facilities

The federal government gives states the option to include intermediate care facility (ICF) services in their Medicaid state plans. However, once a state chooses to include ICF services as a Medicaid benefit, those services become an entitlement to all those meeting eligibility criteria. Community-based ICFs can be licensed to provide services to people with intellectual disabilities or other developmental disabilities, referred to as related conditions. As of September 2016, there were 833 licensed ICFs in Texas. These facilities provide residential services similar to the state supported living centers but are privately owned and operated. Community ICF facilities vary in size from six beds to over 160 beds; most community-based ICFs are small, with eight or fewer beds.

State Supported Living Centers (will transfer to HHSC by September 1st, 2017)

State supported living centers (SSLCs) are large institutions that provide 24-hour residential services. Behavioral health treatment is a required service that must be provided by the facilities. The SSLCs are licensed and certified ICFs owned and operated by the state (community ICFs are privately owned). SSLCs operate in 13 locations: Abilene, Austin, Brenham, Corpus Christi, Denton, El Paso, Lubbock, Lufkin, Mexia, Richmond, Rio Grande, San Angelo, and San Antonio. Rio Grande State Center is also a licensed inpatient psychiatric hospital, serving persons with intellectual and developmental disabilities and mental illness. Individuals seeking placement in an SSLC must meet both financial and functional eligibility requirements.

Approximately 3,145 individuals reside in these facilities. Although the SSLC population has declined significantly over the past decade, any discussion related to closure or consolidation of facilities has been met with strong legislative opposition. There was significant debate around the SSLCs during the 84th legislative session due to the DADS Sunset Recommendations to close six SSLCs, including closing the Austin SSLC by September of 2017. As mentioned earlier, ultimately the legislature voted to keep the Austin SSLC and all other SSLCs operational. In Texas, only the Texas legislature can direct closure of a state supported living center.

Due to fixed costs and the deterioration of aging facilities, as the census in these facilities declines, the per person costs increase. According to the Sunset Commission final report, maintaining the large system of state-run facilities is costly, involving more than 13,900 employees and a budget of $661.9 million a year. An HHSC report revealed that delivering services to a person in an SSLC costs $856.70 per day, totaling over $360,000 per year. Further, maintaining the SSLCs’ dilapidated infrastructure adds even more cost to the state.

Source: Texas Department of Aging and Disability Services (2016, May). State Supported Living Centers Long-Range Plan May 2016.

As part of a 2009 settlement agreement with the U.S. Department of Justice over conditions at SSLCs, DADS agreed to improve health, safety, and quality of care for consumers living in them. The agreement includes increased access to psychiatric care and psychological services, as well as improved policy and practices to reduce of the use of restraints. Independent monitors were assigned in mid-2014 to visit and report on conditions at all 13 SSLCs. Despite the 2009 agreement, the June 2015 monitoring report for the Austin SSLC continued to identify significant deficiencies. The 2015 monitoring report also identified instances of “individuals receiving psychiatric services who were not making progress or maintaining stability.” Other monitoring reports in 2015 identified deficiencies at all of the SSLCs related to psychiatric and psychological services, including individual residents not progressing toward psychiatric goals and not maintaining psychiatric stability.

Figure 72 presents information on the eligibility requirements and services provided by institutional providers of LTSS services.

Source: Texas Department of Aging and Disability Services. (2015). Reference Guide 2015.

Average per person costs vary greatly between the long-term services programs. While the costs shown above are average costs, it should be noted that per person costs within each program can also vary greatly depending on the level of need of the individual. The Center for Medicaid and Medicare Services requires that each waiver program be cost neutral in the aggregate.

Figure 73 shows the trends over the past three years of the number of individuals in each Medicaid 1915(c) waiver program with a co-occurring mental health condition.

Source: Department of Aging and Disability Services. (2016, October 3). Data Request: People enrolled in DADS programs

Health, Developmental, and Independence Services

This department include two units:

  • Rehabilitative & Social Services
  • Health & Developmental Services


The Rehabilitative and Social Services Unit includes programs and services transferred from DARS to HHSC. The programs in this unit offering services to individuals living with mental illness include:

  • Independent Living Programs
  • Rehabilitative Services and Supports
  • Guardianship


The Independent Living Services Program is intended to promote self-sufficiency for individuals with one or more significant disabilities. Services within the Independent Living (IL) Program seek to provide the individual with “consumer control, peer support, self-help, self-determination, equal access and self-advocacy.” In FY 2015, 6,159 individuals received services under a plan or waiver from independent living centers. An additional 121,423 individuals without a plan or waiver received services from a Center for Independent Living. In FY 2015, the average monthly cost per consumer was $437.

Sunset legislation required both the blind and general independent living services programs to be combined into one Independent Living Program within HHSC. However, the Independent Living Services for Older Individuals Who are Blind transferred to TWC on September 1, 2016, along with other programs for individuals who are blind including the Vocational Rehabilitation Services, Blind and Visually Impaired Services, and the Business Enterprises of Texas Program. More information on these programs can be found in the TWC section of this guide.

The Independent Living Services Program partner with Centers for Independent Living (CILs) located around the state. These CILs are private, nonprofit, nonresidential centers that provide an array of independent living programs. CILs partner with HHSC (formerly with DARS), DADS and community-based organizations and are funded either privately or with state and federal funds. There are currently 27 CILs across Texas, 15 of which are funded by DARS. These 27 CILs serve 157 out of 254 Texas counties and are located in: Abilene, Amarillo, Angleton, Austin, Beaumont, Belton, Bryan, Crockett, Corpus Christi, Dallas, Denton, El Paso, Fort Worth, Houston, Laredo, League City, Lubbock, McAllen, Odessa, Palestine, Plano, Round Rock, San Angelo, San Antonio, San Marcos, Sugarland, and Tyler.


In order to be eligible for independent living services, an individual must be certified by a counselor to have a significant disability that results in substantial impediment to the person’s ability to function independently in the family or community. There must also be a reasonable expectation that assistance will result in the person’s ability to function more independently.


Independent living services may include:

  • Counseling and guidance
  • Training and tutorial services
  • Adult basic education
  • Rehabilitation facility training
  • Telecommunications, sensory and other technological aids for people who are hearing-impaired
  • Vehicle modification
  • Assistive devices such as artificial limbs, braces, wheelchairs, and hearing aids to stabilize or improve function
  • Other services as needed, such as transportation, interpreter services, and maintenance, in order to achieve independent living objectives.


Figure 74 lists the programs and services formerly provided by DARS to achieve increased quality of life outcomes for Texans who are blind or have visual impairments. Figure 74 also provides an overview of the programs and services moving to HHSC.

Source: Texas Department of Assistive and Rehabilitative Services. (2016). Annual Report 2015.*The Deaf and Hard of Hearing Services Program provides a wide variety of services including communication devices and issuing interpreter certificates. There is not an accurate average cost per individual for this program due to the wide variety of services offered.


The Comprehensive Rehabilitation Services (CRS) program serves people who have experienced traumatic brain injuries (TBIs) and/or traumatic spinal cord injuries (SCIs). The program is intended to ensure that consumers who have TBIs and/or SCIs receive individualized services to improve their functioning within the home and community to promote independence. In FY 2015, a total of 983 individuals were served, with 669 new applications received. CRS also had 333 successful case closures, with 93 percent of individuals living at home or with family at time of closure. The average monthly cost per individuals is $3,840.

Within CRS, consumers have the following conditions:

  • 62% Traumatic Brain Injury (TBI)
  • 32% Spinal Cord Injury (SCI)
  • 6% both TBI and SCI

CRS moved from DARS to HHSC on September 1, 2016.


The Guardianship Services program provides guardianship services to people referred by the Texas Department of Family and Protective Services, or by a court under limited circumstances as described in the Estate Code. The court appointment of guardianship over an individual is intended to provide protection for adults whom the courts deem incapacitated. Often guardianship is appropriate and works as intended, ensuring guardians effectively manage the affairs of older adults and people with disabilities fairly, honestly, and appropriately. Guardianship profoundly limits a person’s decision-making rights and therefore must be considered carefully. Guardianship may include, but is not limited to, overseeing services, arranging for community or institutional placement, managing estates, and making medical decisions. In order for HHSC to provide guardianship services, lesser restrictive alternatives must not be available; an appropriate and qualified alternate guardian must not be available and willing to serve; the individual under guardianship must have resources available to fund the services, including long-term care; and there must an expectation that guardianship will meet the person’s needs.

The DADS self-evaluation submitted to the Sunset Commission in 2013 indicates that in 2012 there were, on average, 913 individuals receiving guardianship services from DADS at an average monthly cost of $432 per adult individual. (Note: this is the most updated information available on DADS guardianship services available at print date)

The purpose of the guardianship program under Human Resources Code Section 161.101 is to provide guardianship services to:

  • Incapacitated children upon reaching the age of 18 who have been in CPS conservatorship;
  • Incapacitated adults age 65 or older, or between the ages of 18-65 with a disability, who were referred by Adult Protective Services (APS) following an investigation in which abuse, neglect, or exploitation was confirmed, and no other means of protecting the person is available and there is some indication the individual lacks capacity; and
  • Incapacitated individuals referred directly to the program by a court with probate authority under certain criteria established in statute or rule.

During the last legislative session, two bills passed that included supported decision-making agreements: HB 39 (84th, Smithee/Zaffirini) and SB 1881 (84th, Zaffirini/ Peña). Supported decision-making is assistance in helping an adult with a disability understand the options, responsibilities, and consequences of their life decisions, without someone making those decisions on behalf of the adult with a disability.421Additionally, a number of related bills were adopted ensuring that attorneys and judges explore all alternatives to guardianship prior to appointing a guardian. The 84th legislative session provided no movement toward utilizing person-first language by changing the term “ward” to “person under guardianship,” which many stakeholders prefer and consider more respectful.


Early Childhood Intervention (ECI) Services

Early interventions have the potential to mitigate the impact of developmental delays that can lead to later physical, cognitive, and behavioral challenges when not addressed. Providing services to families and children at an early stage in development can reduce the cost of special needs services, enable families to provide support to their special needs children, and counter environmental risk factors.

ECI is authorized by Part C of the Individuals with Disabilities Education Act (IDEA); Part C is a federal grant program that assists states in operating a statewide early intervention program for infants and toddlers ages zero to three. State general revenue funds are required to draw down federal funding for ECI programs. The operating budget for ECI in the 2016-2017 biennium was $140,691,606.

A Child’s Journey through ECI:

Getting Started
1.  Referral
2.  First Visit
3.  Evaluation and Assessment

Next Steps: ECI Services
4.  Individualized Family Service Plan Meeting and Individualized Family Service Plan Development
5.  ECI Service Delivery Begins
6.  Review of Child’s Progress

Future Steps: Leaving ECI
7.  Children must transition out of ECI by their third birthday

Eligibility for Services

To determine eligibility for ECI services, a team of at least two professionals from different disciplines performs a comprehensive evaluation of a child’s abilities. Generally, eligibility is determined by a child meeting at least one of following three criteria:

  • Medically diagnosed condition: Children with medical diagnoses that have a high probability of resulting in developmental delays. A list of diagnoses that qualify for ECI is available.
  • Auditory or visual impairments: Children with auditory or visual impairments as defined by the Texas Education Agency (TEA).·
  • Developmental delays: Children with developmental delays of at least 25 percent that affect function in one or more areas of development.

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Source: Texas Department of Assistive and Rehabilitative Services. (2016). DARS Annual Report 2015. Page. 38.

ECI evaluates a child for developmental delay using the Battelle Developmental Inventory, which includes an assessment of the child’s social and emotional delays. Based on the results of this evaluation, ECI professionals and the child’s family work as a team to develop an individualized family service plan. The plan may include a range of services such as evaluation, service planning, family counseling, therapy services (such as occupational, physical, and speech therapy), nutrition services, and psychological and social work services.

Services, Utilization, and Costs

Eligible children can participate in ECI regardless of their income level and certain ECI services are free of charge, including evaluation and assessment, case management, development of an Individualized Family Service Plan (IFSP), and translation and interpreter services. ECI is a cost share program, meaning that families with the ability to pay are expected to contribute financially to the cost of services. Children on Medicaid receive all ECI services free of charge. In Texas, 65 percent of children receiving ECI services are recipients of Medicaid. Other families pay for ECI services on a sliding scale basis. Family income, family size, the child’s foster care status, and public and private health insurance are taken into account when arriving at a maximum monthly charge for ECI services. Families will not be turned away due to an inability to pay.

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Source: Texas Department of Assistive and Rehabilitative Services. (2016). DARS Annual Report 2015.

In FY 2015, the distribution of enrollment in the ECI program by age was fairly evenly split among the three key age groups, as follows:

  • 0 to 12 months: 37 percent
  • 13 to 24 months: 34 percent
  • 25 to 36 months: 30 percent

In FY 2015, the percentage of enrolled children using each of the major types of services was:

  • Developmental services: 82 percent
  • Speech language therapy: 59 percent
  • Occupational therapy: 30 percent
  • Physical therapy: 26 percent
  • Nutrition: 8 percent
  • Psychological/social work: 4 percent
  • Vision services: 2 percent
  • Audiology: 2 percent

Note: Total planned service types sum to more than 100 percent because many children receive multiple services.

Children’s Autism Program

The Centers for Disease Control and Prevention (CDC) estimate that 1 in 68 children in the United States are born with or develop Autism Spectrum Disorder (ASD). The DARS Autism Program started as a pilot project in FY 2008 and was intended to extend treatment services, including Applied Behavior Analysis (ABA) therapy, to children aged 3 through 8 on the autism spectrum in Houston and Dallas/Fort Worth. Increases in funding from the Texas Legislature allowed the program to expand to Austin, Corpus Christi, El Paso, and San Antonio. In FY 2015, 288 children were served through the Children’s Autism Program. The 84th Legislature approved a total of $14 million to the Children’s Autism Program for the FY 2016-17 biennium, up from $9 million in the FY 2014-15 biennium. The increased funding allowed the program to expand to the following areas: Tyler, Round Rock, Brownwood, Bryan, Texarkana, Waco, San Angelo, Midland, Lubbock, Denton, and Edinburg.

The 84th Legislature also required other changes to the program, including directing the phasing out of the Comprehensive ABA treatment services by August 31, 2017. The 84th Legislature required the expenditures for comprehensive ABA treatment services only be used for children enrolled in the program before August 31, 2015. All children enrolled on or after September 1, 2015 are limited to Focused ABA treatment services. Focused ABA services are intended to target and improve a few specific outcomes including addressing certain behaviors and improving social and adaptive skills. Comprehensive ABA services address a full range of life skills, including communication, sociability, and self-care. The Children’s Autism Program now serves children across the state ages 3 to 15 and includes parent participation, child attendance, and additional staff training requirements along with the treatment services. In FY 2015, a total of 288 children were served through the Children’s Autism Program. The program aims to serve over 1004 children in FY 2016 – 59 in Comprehensive ABA services and 945 in Focused ABA services.

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Source: Texas Department of Assistive and Rehabilitative Services. (2016). Annual Report-2015.

The Children’s Autism Program moved from DARS to HHSC’s Medical and Social Services Division on September 1, 2016.


Non-Medicaid Services

HHSC administers several non-Medicaid funded programs providing direct long-term services and supports to individuals with disabilities. These include:

  • Adult Foster Care
  • Client Managed Personal Attendant Services
  • Emergency Response Services
  • Family Care
  • Home Delivered Meals
  • Special Services to Persons with Disabilities
  • In-Home and Family Support Program
  • Intellectual Disability Community Services

For more information on these programs and the services offered, please refer to the DADS FY2015 Annual Reference Guide.


Federal funds are currently available through the Promoting Independence initiative and the Money-Follows-the-Person Initiative. Additionally, while federal funds are not available for the Achieving a Better Life Experience (ABLE) initiative, federal and state authority has been granted to develop this program if states opt in. More information is provided below.

Promoting Independence Initiative

The Texas Promoting Independence Initiative began in January 2000 in direct response to the U.S. Supreme Court ruling in Olmstead v. L.C., in which the court ruled that states must provide community-based services for persons with disabilities (including mental health conditions) under the following circumstances:

  • The person would otherwise be entitled to institutional services;
  • The state’s treatment professionals deem community-based placement to be appropriate;
  • The affected person agrees to receive community-based services; and
  • The placement can be reasonably accommodated given the resources available to the state and the needs of others who are receiving state-supported disability services.

As part of the Promoting Independence Initiative, a number of supports are available to help individuals remain in or return to their communities of choice, including the Money Follows the Person program for nursing home residents.

In addition, statewide relocation assistance, housing opportunities, and community transition teams are available to assist nursing facility residents in their transition to community-based services. Similar relocation services are not currently available to individuals leaving state psychiatric facilities. Efforts to address this gap through a Balanced Incentive Program project were denied by CMS due to the “institutions of mental disease exclusion.” This exclusion prohibits the use of Medicaid funding for individuals between the ages of 22 through 64 years in a hospital, nursing facility, or other institution of 17 beds or more which is primarily engaged in providing mental health care (see DSHS section for more information).

Money Follows the Person Program

Among the many HHSC initiatives affecting individuals with co-occurring conditions, Texas participates in a federally funded national demonstration program known as Money Follows the Person Demonstration (MFPD). Texas was among the first of 30 states chosen to participate in MFPD in 2007. As of June 2016, 43 states participate in this federal demonstration designed to help older adults or persons with disabilities move from institutional settings (including nursing facilities, ICFs, and SSLCs) back into their communities.

MFPD provides federal grant funding as well as funding from Medicaid matching cost savings to assist states in moving individuals from institutions to the community. In FY16, the HHSC will receive over $16 million in federal funding to help individuals transition out of institutional settings. Funds are also used to provide behavioral health supports that help individuals remain living in the community andenhance opportunities for integrated employment, which leads to greater self-sufficiency, and increases the availability of affordable, accessible housing. The age span of individuals taking advantage of the Money Follows the Person program ranges from less than one year to more than 100 years old.

Since 2008, MFPD has helped over 10,000 individuals transition from institutional to community-based services. Another 34,598 individuals transitioned since 2003 under the Texas Promoting Independence initiative.

Achieving a Better Life Experience (ABLE) Program

The Achieving a Better Life Experience (ABLE) program and the Texas ABLE Program Advisory Committee were created through SB 1664 (84th, Perry/Burkett). The federal ABLE act was signed into law in December 2014 making these programs optional for states. Each state must pass legislation to create its own statewide implementation of the ABLE program. The ABLE program was created to support the financial independence of certain individuals with disabilities by allowing them to set aside personal savings in secured accounts without affecting their eligibility for services they are qualified to receive such as SSI, SSDI, or Medicaid. Anyone, including the individual’s family members and friends, can contribute to an ABLE account.

The Texas ABLE program will be operated through the Comptroller’s office. The Advisory Committee will provide assistance as needed to the Texas Prepaid Higher Education Tuition Board and Comptroller’s office during the creation of the program. For the most updated information on the Texas ABLE program, visit texasable.org.


HHSC and the Medicaid program have many partners and encompass a number of subprograms to help administer and provide services in Texas. The following sections highlight several subprograms and partnerships that help to administer or provide mental health services in Texas.


Federally Qualified Health Centers (FQHCs) provide healthcare services to underserved communities, including Texans who are under- or uninsured. FQHCs receive federal grants through Section 330 of the Public Health Services Act and play an important role in providing comprehensive health care services to people with public health insurance such as Medicaid and CHIP, as well as to people who are otherwise low-income and uninsured. There are 72 FQHCs in Texas with nearly 450 service delivery sites statewide. In 2014, FQHCs served nearly 1.2 million patients.

While FQHCs receive grant funding from the federal government, they also receive enhanced reimbursements for providing services to individuals receiving Medicaid and Medicare services. These reimbursements are designed to cover the additional costs associated with providing comprehensive care to both uninsured and publicly funded patients. As a result of 2010 policy changes from the Affordable Care Act, many FQHCs are transforming their practices to health homes or comprehensive medical homes to improve the coordination and integration of care for clients with multiple chronic conditions, including mental health and substance use disorders. As of 2014, 54 percent of FQHCs nationally were recognized Patient-Centered Medical Homes (PCMHs).


The Texas Medicaid buy-in programs allow adults and children with disabilities to enroll in Medicaid when their income levels exceed normal eligibility limits. Participants must meet certain income criteria and may be required to pay a monthly premium. The health care services provided are the same as in the traditional Medicaid program.

The Texas Medicaid buy-in program for adults is available to persons with a disability who are working and who do not live in a state institution or nursing home. The Texas Medicaid buy-in for children is available to families who have a child with a disability who is age 18 or younger, a U.S. citizen or legal resident, and not married. Most families are required to pay monthly premiums, co-pays, or deductibles. Cost-sharing is based on income, the number of people in the family, and access to employer-provided insurance or the Texas Health Insurance Premium Payment Program.


The Texas Health Insurance Premium Payment program (HIPP) is a program that covers the expense of employer-sponsored healthcare premiums for families who also qualify for Medicaid. HIPP may help people who otherwise would be uninsured obtain insurance. Family members who would otherwise be ineligible for Medicaid may be eligible to receive employer-sponsored premium assistance from HIPP.

In order to qualify for the program, at least one member of the family must remain Medicaid eligible and HHSC must deem the employer-sponsored policy cost effective. Families eligible for both the STAR+PLUS Medicaid program and HIPP may remain enrolled in both plans. However, families eligible for STAR cannot remain enrolled in both STAR and HIPP. If a family on STAR applies and is found to be HIPP-eligible, then the family will automatically be transferred from STAR to HIPP. Families covered under both Medicaid and HIPP are not responsible for cost-sharing when receiving services from within the Medicaid network. Families solely covered under HIPP are responsible for cost-sharing defined by terms in the employer-sponsored plan.


The Texas Medicaid and Healthcare Partnership (TMHP) is a group of subcontractors operating under the consulting firm Accenture, which contracts with HHSC to administer the state’s Medicaid fee-for-service claims payments and all Medicaid enrollment activities. All Medicaid managed care providers must first be enrolled in Medicaid through TMHP before they can be credentialed and part of an MCO network. TMHP does not process claims for services provided by managed care organizations (MCOs), but it does collect encounter data from MCOs to use for the evaluation of quality and utilization of managed care services.


In 2011, Texas won a “Medicaid Incentives for the Prevention of Chronic Disease” grant from the federal Centers for Medicare and Medicaid Services (CMS). The initiative is a national demonstration project evaluating the efficacy of providing incentives to Medicaid beneficiaries to adopt healthy behaviors. Texas received $2.7 million in the first year of the five-year grant period (and approximately $10 million over the lifetime of the project) to conduct a randomized, controlled trial on the efficacy of personal wellness incentives in improving health management and increasing utilization of preventive services among individuals with severe mental illness. HHSC oversees the project, DSHS provides day-to-day project management, and the Institute for Child Health Policy at the University of Florida conducts the program evaluation and provides technical assistance. The study period concluded in December 2015 and the project is now in the analysis phase. A final program evaluation report is due to CMS in late 2016.


The Veteran Services Division within HHSC was created in 2013 to coordinate, strengthen, and enhance veteran services across state agencies. The division’s focus is to review and analyze current programs, engage the charitable and nonprofit communities, and create public-private partnerships to benefit these programs. The Veterans Services Division is an active participant in the Texas Coordinating Council for Veterans Services. The HHS Enterprise offers Texas veterans services through several agencies including but not limited to the Department of State Health Services (DSHS), Texas Veterans Commission (TVC), and Texas Workforce Commission (TWC). More information on veterans can be found in the TVC section of this guide.



The Disability Determination Services Division (DDS) makes disability determinations for individuals with severe disabilities. DDS works with individuals who apply for benefits through the federal Social Security Administration (SSA) to help pay for daily needs. Benefits available for both adults and children who meet eligibility include Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

Both SSI and SSDI are cash assistance programs administered by SSA. HHSC staff makes the initial disability determination for Texans applying for SSDI and/or SSI. Approximately 323,550 disability cases were determined in FY 2015.

Some people with serious mental health conditions will qualify for either or both SSDI and SSI. Qualifying for both SSDI and SSI benefits at the same time is called “concurrent benefits.” While concurrent benefits are not common, they are possible if an individual worked enough at some point in his or her life to have the required number of work credits.


SSDI is available for individuals who can no longer work due to a medical condition, including mental illness, that is expected to last at least one year or result in death. SSDI is governed by rules set out in Title II of the Social Security Act and covers workers age 18 to 65 who have a disability, widows/widower of worker with a disability, and adult children (with a disability) of workers with sufficient work histories. People become eligible for SSDI throughout their working lives by paying social security taxes. Approval for SSDI payments results in eligibility for Medicare coverage after a two-year waiting period. Approximately a third of individuals receiving SSDI assistance qualify on the basis of a mental health diagnosis.


Supplemental Security Income (SSI) is governed by rules set out in Title XVI of the Social Security Act. SSI provides monthly stipends to qualifying low-income adults who have a disability, are blind, or are over the age of 65. Children who have a disability or are blind may also qualify for SSI. Unlike SSDI, SSI is not based on an individual’s work history. The monthly maximum amount for 2016 are $733 for an eligible individual and $1,100 for an eligible individual with an eligible spouse. Once approved for SSI, participants are eligible for Medicaid.

Figure 78 below details the disability claims process to receive SSI or SSDI benefits.

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Source: Texas Department of Assistive and Rehabilitative Services. (n.d.). Disability Determination Services.

People who disagree with their SSI or SSDI determination have a legal right to appeal the decision. There are four levels of appeal:

  • Reconsideration: Another disability examiner and medical team reviews the case to determine if the decision was proper. Claimants may submit additional evidence to support their case.
  • Administrative Hearing: Claimants may present witnesses and evidence at a formal, private hearing with an administrative law judge.
  • SSA Council Hearing: Reviews decisions by judges at the administrative hearing level.
  • U.S. Federal District Court: A hearing at the federal court level; very few cases reach this level

According to a report by the SSA that tracked SSDI outcomes from 2004–2013, the number of applicants who were granted awards upon initial review averaged 24 percent. Of those who appealed their denial, 2 percent of applicants were subsequently granted benefits at the reconsideration state and 11 percent through a hearing. A new report is scheduled to be released in November 2016.


Eligibility for both SSDI and SSI is conditioned on the determination that an individual has a disability that prevents his or her ability to work. Like serious physical conditions, mental health conditions can be disabling and may allow an individual to access SSDI or SSI cash benefits if they meet other eligibility criteria. Initial disability determinations are made by disability officers within the DDS Division.

According to a 2015 report by the SSA, mental health conditions constitute about a third of national SSDI diagnoses. Disability determinations for SSDI on the basis of a mental health condition are categorized as:

  • Organic mental disorders
  • Schizophrenic, paranoid, and other psychotic disorders
  • Affective disorders
  • Intellectual disability
  • Anxiety-related disorders
  • Somatoform disorders
  • Personality disorders
  • Substance use disorders
  • Autism Spectrum Disorder
  • Other pervasive developmental disorders

Each of these categories includes a set of criteria that must be satisfied in order to qualify for SSDI. Monthly benefits for SSDI are dependent on the social security earnings record of the worker. There is no minimum SSDI monthly benefit; the monthly maximum benefit depends on the age at which a worker left the workforce due to his or her disability. The SSA makes the final admission decision on eligibility after consideration of a more exhaustive set of eligibility criteria. To be eligible for SSI, adults and children must meet strict financial and functional criteria in addition to having a disability (including mental health conditions).

Additional information on eligibility criteria and how to apply can be found on the Social Security website.


Figure 79 provides information on applications for benefits for Texas in 2015.

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Sources: Texas Department of Assistive and Rehabilitative Services. (2016). DARS Annual Report 2015.