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The U.S. Department of Health and Human Services has turned down Texas’ request to run a family planning program that excludes certain providers — namely Planned Parenthood — saying it’s a violation of the federal Social Security Act.

But in the same breath, federal officials approved the state’s request for a waiver to expand Texas’ Medicaid managed care program statewide, and to establish funding pools to help providers recoup the costs of uncompensated care.

Gov. Rick Perry called the decisions out of Washington “one step forward” and “two steps back.” 

“I am concerned the Obama Administration is playing politics by holding women’s health care hostage because of Texas’ pro-life policies,” he said in a statement, “sacrificing the health of millions of Texas women in the name of their pro-abortion agenda.”

In one letter sent to the Texas Health and Human Services Commission on Monday, Cindy Mann, director of the Center for Medicaid and CHIP Services, said the state’s request to circumvent federal rules — namely the Social Security Act — by restricting family planning providers in the Medicaid Women’s Health Program was not acceptable. The state’s request was in keeping with lawmakers’ efforts last legislative session to try to force Planned Parenthood, which provides abortions at some of its facilities, but in none affiliated with the Women’s Health Program, out of business.

“We want to be very clear [that] Medicaid does not pay for abortions and will not pay for abortions,” Mann said in a phone interview. “…We indicated to the state today [that] their proposal violates the longstanding law.”

Mann said the agency would extend Texas’ existing Women’s Health Program through March while state and federal officials try to determine how to proceed.

“We’re very much interested in continuing discussions with them on having a longstanding renewal of the family planning demonstration program,” Mann said. “…The issue here is not whether Medicaid funding is involved but whether the state can restrict access to a qualified health provider simply because they provide other services Medicaid doesn’t pay for.”

In a second letter sent to Texas officials on Monday, Marilyn Tavenner, the acting administrator of the federal agency, said the feds had approved Texas’ request for a waiver to expand its STAR and STAR+PLUS Medicaid managed care programs, and to create funding mechanisms to help keep safety net hospitals afloat and transform the state’s health system. 

Tom Suehs, HHSC’s executive commissioner, said in a statement that his agency is disappointed with the family planning decision, “which is inconsistent with federal law that gives states the authority to establish qualifications for Medicaid providers.”

In better news, he said, the managed care waiver “will allow us to replace an archaic federal Medicaid funding system with one built around local solutions.”

He added: “These reforms will allow us to ensure the best, most efficient use of Medicaid funding and improve services for Texans.”