Nearly 300 East Texas children with disabilities who are part of the state’s Early Childhood Intervention program have no one to provide them with medically necessary therapies after the region’s lone provider closed its doors this week in response to hefty budget cuts ordered by state lawmakers.

And another 500 children in North Texas are likely to lose their therapy provider at the end of October, also a result of the budget cuts ordered by the legislature in 2015.

The Tyler-based nonprofit Andrews Center told state officials months ago that lower reimbursement rates would force it to stop offering services for infants and toddlers — including speech, physical and occupational therapies and coaching families on caring for high-needs children. The center formally withdrew from the early intervention program Oct. 1, and Texas health officials are now scrambling to plug the gap in services for the children up to three years old who are entitled to early intervention care under federal law. Deep cuts to the amount of money the state pays providers have left officials unable to find a replacement, despite months of advance notice.

When state lawmakers drafted a two-year budget in 2015 that slashed $350 million from the Medicaid budget for children’s therapy services, they ordered state bureaucrats to perform a delicate balancing act: Figure out how to pay therapy providers less money but continue to ensure children’s “access to care” while doing so.

With the Andrews Center’s decision to withdraw from the program, the state appears to have publicly admitted for the first time that it could not achieve both goals at once.

A letter sent by the Texas Health and Human Services Commission to the families who received care from the Andrews Center said their children “may experience a break” in treatment, despite a requirement under federal law that children with disabilities have access to early intervention services.

“I understand how important ECI services are to your child,” wrote Rosalin Willis, who leads the state’s Early Childhood Intervention program, which serves approximately 50,000 children with disabilities and developmental delays in Texas each year. “We are doing everything to minimize any disruption in services.”

The Andrews Center, which could not be reached for comment, served about 300 children in seven counties in East Texas. The next closest Early Childhood Intervention program provider is based in Longview, about 40 miles east of Tyler.

A lawsuit filed by for-profit therapy providers delayed the state’s $350 million cut for more than a year and argued that the cuts would cause children to lose services. The for-profit providers argued the payment cuts from Medicaid, the federal-state insurer for the poor and disabled, would reduce their revenue by up to 25 percent and cause many businesses to close their doors, harming medically fragile children.

State health officials have said Texas Medicaid overpays for therapy services in comparison to private insurance and programs in other states. The Texas Supreme Court recently handed the state a victory by tossing the lawsuit, allowing the cuts to move forward.

The payment reductions also hit nonprofit providers. Though the Early Childhood Intervention program receives its own dedicated stream of federal and state funding, nonprofit providers bill Medicaid to pay for the bulk of their services. Child welfare advocates had warned that the Medicaid cuts would cause providers to drop out of the program.

“It’s devastating to see that children with autism, speech delays, Down syndrome or other disabilities won’t get the services they rely on because our state legislators cut funding for ECI and enacted rate cuts for pediatric therapies,” Stephanie Rubin, chief executive of the advocacy group Texans Care for Children, said in an emailed statement.

Three providers in the Early Childhood Intervention program announced this year they would withdraw from the early intervention program. The state was able to recruit a replacement for one of those providers: the Emergence Health Network in El Paso.

Another provider, the North Texas Rehabilitation Center in Wichita Falls, which serves about 500 children each year in 10 counties, will stop offering early intervention services on Oct. 31. State officials said Monday they have not yet found a provider to take its place.

Charlcie Flinn, the Early Childhood Intervention program director at the North Texas Rehabilitation Center, said the center’s decision to stop offering services came down to financial pressure.

“This agency did not see the program as sustainable with the current funding,” she said. “We have many, many families who are grieving because there are no similar kind of services out in their areas, especially some of these small towns that we travel to.”

A federal law, the Individuals with Disabilities Education Act, requires Texas to assure that early intervention services are available to all eligible infants and toddlers with disabilities in the state. A spokesman for the U.S. Department of Education said the agency would “reach out” to state officials about the gaps in service.

In June, when the Andrews Center first notified the state it would drop out of the Early Childhood Intervention program, state officials said they were not concerned that children would lose access to care.

Cassie Fisher, a spokeswoman for the Texas Department of Assistive and Rehabilitative Services, which formerly oversaw the Early Childhood Intervention program, said at the time that the state would “ensure children continue to receive necessary services.”

On Monday, a spokeswoman for the Texas Health and Human Services Commission said the state was now “definitely concerned about a break in service.” The spokeswoman, Carrie Williams, added that state officials were “exploring ways to possibly link [families] to other services they may qualify for through Medicaid.”

The health commission said last year in court it never formally studied how its Medicaid cuts would affect children’s access to medically necessary services.

Pam McDonald, the director of rate analysis for the Texas Health and Human Services Commission, testified in September 2015 that state employees were told they should never say they were certain that the cuts would not jeopardize access to care.

Read more of the Tribune’s related coverage:

• The $350 million cut to the amount of money Texas pays therapists who treat children with disabilities was finally cleared to take effect when the Texas Supreme Court tossed a year-long lawsuit last month.
• Texas health officials testified in court that they had not studied how the budget cuts would affect children’s access to medically necessary therapy treatments.