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A panel charged with reviewing Texas government voted Wednesday to recommend the state combine all health and human services programs into one mega-agency and limit the power of Medicaid abuse investigators to pursue less serious cases. The recommendations, if adopted by the Legislature next year, would dramatically change the structure of health and human services in the state. However, it is unclear how services would be affected. The combination of the departments of State Health Services, Family and Protective Services, Aging and Disability Services and Assistive and Rehabilitative Services into the state Health and Human Services Commission would continue a consolidation that has been going on for years and improve efficiency, said state Sen. Jane Nelson, a Flower Mound Republican who chairs the panel known as the Sunset Advisory Commission. (Rosenthal, 12/10)

In a letter being sent to insurance companies this week, the governor said that because state law requires insurance coverage for the diagnosis and treatment of psychological disorders, people who are found to have a mismatch between their birth sex and their internal sense of gender are entitled to insurance coverage for treatments related to that condition, called gender dysphoria. (Hartocollis, 12/10)

The Massachusetts Medicaid program spent $35 million on questionable claims for health care provided to low-income immigrants, according to a critical report released Wednesday by state Auditor Suzanne Bump. The findings reflect “serious weaknesses” in the agency’s claims processing system, Bump concluded, and illustrate the need for tighter controls. (Lazar and Anderson, 12/11)

Florida’s tough new safety rule for medical-office surgery, years in the making, has been delayed at the last minute by an outcry from obstetrician-gynecologists. The OB-Gyns appeared Friday at the Florida Board of Medicine, which was to have passed the safety rule that day, to ask for an amendment to spare them from some of the provisions. Board members decided instead to postpone the issue while they figure out what to do. The physicians protesting the move say it would force them to stop doing certain common procedures in an ordinary medical office, which the rule calls “Level One.” They would have to add staff and equipment to become “Level Two” offices, which they claim would boost the cost of the procedures beyond many women's ability to pay. (Gentry, 12/10)

Veterans' health care facilities should strive to provide immediate mental health care for any who request it, the leader of the Department of Veterans Affairs said Wednesday in Atlanta amid concern in neighboring Alabama that average wait times are too long. Secretary Robert McDonald spoke with reporters while in the city to attend a conference for veterans who own businesses. McDonald's visit came after U.S. Rep. Martha Roby of Montgomery's criticism of the average wait time of 67 days for an appointment in mental health care at the Central Alabama Veterans Health Care System in recent federal statistics. A June audit found the wait was around 57 days. The system has disputed those figures because of incorrect appointment record-keeping. (Foody, 12/10)

Florida Healthcare Plus, a Medicare HMO with 10,000 members, was declared insolvent Wednesday and turned over to state authorities. In such cases, state and federal officials help patients move into other health plans or to traditional Medicare. More information is expected on that today or Friday. The three-year-old company was already reeling. In September, the state suspended the plan from signing up any more members, only weeks before Medicare open enrollment. Worse was to come in November with a federal indictment of 11 people, including two former executives and four other plan ex-employees, in an alleged Medicare and Medicaid fraud ring. (Gentry, 12/11)

Hundreds of nursing homes and other assisted living facilities in Kansas will be required to participate in a fund meant to spread the risk of malpractice lawsuits starting next month. Advocates for those facilities say the change is a positive, but it has insurance agents scrambling to find liability coverage for their assisted living clients in a limited market. For more than two decades, health care facilities in Kansas have been required to participate in the Health Care Stabilization Fund, a pot of money derived from a surcharge on their private malpractice insurance that provides additional coverage for malpractice claims. The fund makes it less likely that a few expensive claims could sink a facility financially. (Marso, 12/10)

The Northern Arapaho tribe filed a federal lawsuit Tuesday alleging that proposed Internal Revenue Service rules could cause Native Americans to pay higher insurance premiums or lose health care benefits. Tribal leaders said the recently proposed IRS interpretation of the large-employer mandate would unlawfully exempt Native Americans working for the tribe from receiving tax credits and cost-sharing benefits specifically outlined by new federal health laws. (12/10)

Two years ago, a coterie of biotechs began lobbying state legislatures to pass laws that would make it more difficult to substitute lower-cost biosimilars for brand-name biologic medicines. The plan was to require pharmacists to notify doctors when substituting one drug for the other, which would act as a deterrent by slowing the process. Generic drug makers responded with a counterattack. (Silverman, 12/10)