April 17, 2026
Quick recap
The meeting focused on challenges facing behavioral health providers, particularly regarding increased scrutiny from HHSC and funding issues. Providers discussed experiencing more detailed audits and questions about their match reports and in-kind donations, with several organizations reporting difficulties with quarterly reporting processes. The group extensively discussed the decline in residential treatment services, citing low payment rates compared to outpatient services and the closure of detox programs as contributing factors. Providers shared experiences with Medicaid billing challenges, including low payment rates and denial issues, with some organizations achieving only 57% collection rates on billed amounts. The conversation also covered the impact of buprenorphine prescriptions being provided in emergency rooms, which has reduced referrals to residential treatment programs. The conversation ended with a discussion about implementing a new online platform for member communication and feedback collection regarding service gaps and challenges.
Next steps
Summary
Meeting Waiting for Participants
The meeting began with casual conversation about Anna's beautiful outdoor background in Dallas, which participants commented on. The group waited for additional attendees to join, including Doug who was running late. Noelle initiated the formal discussion by asking if anyone had issues or challenges they wanted to address, but the transcript ended before any substantive business topics were discussed.
Grant Funding and Scrutiny Updates
Chris announced that the Alcohol and Drug Abuse Council received restored funding for their outpatient programs, TRA, TRF, and TRY services for the entire grant cycle. Doug and SWagnon discussed experiencing increased scrutiny from grant administrators regarding their in-kind match reports, with administrators questioning the distribution of food and clothing to clients and denying quarterly reports due to minor technical issues and content concerns. Crystal and Julie reported similar experiences with increased monitoring of their performance reports and budget spending, with administrators requiring detailed explanations and additional information within tight deadlines.
Audit Experiences and Regulatory Challenges
The team discussed recent audit experiences, with Crystal describing a challenging program audit by Yolanda Vance from regulatory, who took a critical approach without allowing background context. Doug explained that low outpatient numbers during winter months and holidays, particularly affecting homeless and unhoused populations, often lead to lower performance metrics around February. The group noted that regulatory agencies are currently under increased scrutiny due to upcoming sunset reviews and strategic planning processes, which may explain the more thorough audits. Chris shared that their practice handles Medicaid billing through approximately 7 managed care companies, requiring significant time spent on denial appeals and employing full-time staff dedicated to Medicaid matters.
Residential Treatment Service Challenges
The group discussed challenges with residential treatment services, including decreased demand despite ongoing need, and issues with Medicaid payment rates. Crystal reported that their organization had to conduct clinical assessments within tight timeframes, creating burden on staff. The discussion revealed that residential treatment is financially disincentivized compared to outpatient services, with payment rates significantly lower than the cost of providing care. Vaughan noted that closing their detox program had resulted in decreased residential admissions, as many clients couldn't access detox services first. The group explored potential solutions including allowing simultaneous billing for ambulatory and residential services, and discussed challenges with hospital partnerships for detox referrals. Noelle announced a new online platform for members to discuss issues between meetings, with feedback needed by early May for an end-of-May discussion with state officials.
Over the years, our auditors make sure that we follow federal regulations as published in the Uniform Grant Guidelines. We are very careful to document as follows:
Donated goods and materials fall under the Uniform Guidance’s treatment of “in‑kind contributions” and are primarily addressed in:
2 CFR § 200.306 – Cost Sharing or Matching
2 CFR § 200.434 – Contributions and Donations
Under the Uniform Guidance, donated goods and materials (for example, supplies... provided at no charge) are treated as third‑party in‑kind contributions.
Donated goods and materials can be counted only if all cost‑sharing conditions are met under 2 CFR § 200.306(b). Specifically, the contribution must:
Be verifiable in the recipient’s records
Not be counted toward another federal award
Be necessary and reasonable for accomplishing the project objectives
Be allowable under the cost principles in Subpart E
Not be paid by the federal government under another award
Be included in the approved budget when required
Conform to all other applicable provisions of Part 200
Donated goods and materials must be valued at their fair market value at the time of donation—that is, what a willing buyer would pay a willing seller in an arms‑length transaction. The recipient must use the same valuation methods it uses for its own purchased goods, ensuring consistency and auditability. [govinfo.gov]