On a Monday evening in May 2016, Carol Everett sent an email to fellow anti-abortion activists detailing “an extraordinary pro-life opportunity.” Her nonprofit, the Heidi Group, she said, had spent the past year pushing for nearly $40 million in funding to help Christian pregnancy centers “bless many poor women” across Texas.

“It is no exaggeration to say this is the greatest possibility for expansion of pro-life care for the poor ever,” she wrote.

The enthusiasm might have sounded familiar to those who knew Everett, whose decades of work in the anti-abortion movement had earned her accolades from the state’s leading conservatives. But this wasn’t an advocacy project she was describing, and these weren’t private dollars. It was an application she had just submitted to become one of the state’s leading family planning providers.

Everett had never contracted with the state and had no clinical background. Many of the pregnancy centers she cited don’t provide contraception, a core service. Yet state health officials gave her much of the money anyway, ignoring warning signs and overruling staff who recommended millions less in funding, according to a review of the contracting by the Houston Chronicle. When Everett’s clinics began failing, the state delayed for months in shifting money to higher performing clinics, instead devoting vast amounts of time to support Everett and her small, understaffed team.

Though it’s impossible to say how many more women could have been served had the resources been shifted sooner, several competing clinics burned through their funding early in the grant cycle, surpassing their targets for both spending and patients treated. Had they been sent some of the $6.75 million sitting in wait for the Heidi Group, the door could have opened for thousands more women to receive access to contraception, STD screenings and breast exams.

“We would definitely have been able to serve more,” said Marcie Mir, the chief executive officer of El Centro de Corazon, which serves immigrant communities in East Houston.

The Chronicle’s review, including emails, internal records and interviews with two dozen people, found that the Health and Human Services Commission made repeated concessions, and not just to the Heidi Group. Officials there lowered the standards for applicants in two new women’s health programs and revised past patient counts, making it easier to show growth. Quality control measures were stalled, and only the Heidi Group received on-site clinical assessments in the first year, despite similar problems with other contractors.

At least one top Republican, Gov. Greg Abbott, laid the groundwork for Everett’s selection, controlling her appointment to an influential committee helping to develop the new programs, according to records. And the health official who allocated her award has close personal ties to the Texas Public Policy Foundation, whose founder, Dr. James Leininger, has been a key donor to the Heidi Group, as well as Abbott.

More Information The Heidi Group fell far short of its goals. It wasn’t alone. The Heidi Group was not the only contractor that struggled in Texas Healthy Women. By the end of the first year, others had met just 46 percent of their combined patient targets, according to an analysis of the most recent state data. They had spent just over a third of their proposed fee-for-service expenditures, the state’s preferred source because every expense can be tracked. Those excelling early on were established providers versed in the state’s labyrinthine billing procedures. For them, the program has been a boon from the beginning, increasing funding for equipment and staff, and adding reimbursements for a larger swath of health services. But many of the smaller, less-experienced clinics could not scale up quickly enough, and felt they had not received adequate training on billing, enrollment delays and other procedures. Family Planning had twice the success rate, both in spending and patient targets. Though the 39 Healthy Texas Women contractors had access to more money in the first year, those in Family Planning outspent them by several million, according to the analysis, which the state said it could not immediately verify. Because of its less stringent eligibility requirements, Family Planning providers say they can more easily meet need where it exists. And for many of them, that is with immigrant and undocumented families. With Family Planning patients, “we could use millions and millions because there are so many, oh my God,” said Patricio Gonzalez, the head of Access Esperanza in South Texas. “With Healthy Texas Women, it’s like looking for a needle in a haystack.” The health commission has asked for more funding in Family Planning, but lawmakers convening this session have so far proposed maintaining current levels in both programs. That assumes the federal government kicks in tens of millions through a waiver program that has been in limbo for years. If it doesn’t, the state will have to find the money elsewhere — a variable that concerns some providers. Sen. Jane Nelson, who chairs the Senate Finance Committee and has worked closely on women’s health policy over the years, said the programs are succeeding. “Funding is at an all-time high,” she said in a statement. “We are serving more women than ever before with a provider network that delivers services all across the state.”

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The health commission is still struggling to recover from the lapses. Everett’s funding was revoked last fall after two years of poor performance, and auditors are reviewing whether the Heidi Group mishandled funds. As legislators now reconvene for the first time since data became available for the programs, providers who have performed well worry they — and in turn their patients — will suffer from the notoriety Everett’s contracts have brought, and that the programs’ more positive outcomes may get lost.

Overall, the number of Texas women receiving services grew in fiscal year 2017, the most recent year of available data. New treatments were offered, and some experienced providers thrived, though there were wide disparities in the programs’ early outcomes. The state still served 100,000 fewer patients than in 2010, despite spending about $35 million more in 2017, including federal dollars.

The health commission said many providers were still ramping up in the first year, making it an incomplete window into the health of the programs. In a statement, however, a spokeswoman acknowledged some shortcomings, and said the commission is working to strengthen its processes for contracting, oversight and data collection in women’s health.

“The Heidi Group had substantial deficiencies,” she said. “These are lessons learned, and we are moving forward to make the program better.”

What has happened in Texas may be a preview for the country at large. The Trump administration on Friday announced it is cutting family planning funding to abortion affiliates, a decision that further undermines groups like Planned Parenthood, which provide the bulk of non-abortion services to low-income women nationally.

The move, much like the one in Texas years ago, is expected to direct millions toward faith-based providers.

A key political appointment

Conservative lawmakers won big in 2011 when they moved to defund Planned Parenthood, but the celebration didn’t last long.

For years, the national abortion provider had delivered the bulk of non-abortion family planning services to the state’s low-income women. After its removal, the number of patients receiving care in the programs declined from a high of 350,000 in 2010 to 170,000 in 2013 — just under 10 percent of the 1.8 million Texans thought to be eligible for services.

Under siege from health advocates, the Legislature in 2015 agreed to earmark $50 million more in funding to the efforts, and to overhaul and relaunch the programs. Their centerpiece, Healthy Texas Women, would be tied to Medicaid and offer an array of services, from birth control to pregnancy testing and immunizations. Family Planning would offer similar services and take in anyone remaining, including men and undocumented immigrants. Everett hoped to play a key role.

A resilient entrepreneur with a warm Southern drawl, Everett’s life story is so well known in the Capitol that it’s practically etched into the granite. For a few years in the early ’80s she worked for a group of abortion clinics in North Texas, then left amidst a company-wide scandal, became devout and began renouncing the industry. In 1995, she created the Heidi Group, naming it after the unborn child she says she aborted at the insistence of her second husband.

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Two decades later, the state created the Women’s Health Advisory Committee and appointed Everett to it. The committee was established to provide input for the launch of Healthy Texas Women, and it included some of the top reproductive care experts in Texas.

Everyone except Everett was either a practicing clinician or had the formal support of state and federal health organizations. According to an internal memo sent to the executive health commissioner, Everett’s name was backed only by Abbott and two other Republicans, Lt. Gov. Dan Patrick and state Sen. Jane Nelson.

Spokespeople for Nelson and Patrick strongly denied that they had any involvement, calling the memo inaccurate. A spokesperson for Abbott didn’t respond to a request for comment. The health commission said it had no other records on the nominations.

The appointment would come in handy for both Everett and the state, helping cement her stature as a perceived expert in women’s clinical health. Later, when the Heidi Group began building its clinic network, providers asked the state about its credentials, according to emails. The health commission responded by pointing to Everett’s role on the committee.

Lesley French, a lawyer and former political aide who was new to public health, managed the launch of the programs. Her husband, Robert Henneke, is general counsel for the Texas Public Policy Foundation, the right-wing think tank that Leininger founded in the late 1980s. French resigned in December and is now an assistant attorney general. She didn’t respond to requests for comment.

Everett declined to comment at length, but said her relationships with Abbott, Patrick and Nelson had no bearing on her application. She also noted that Leininger hasn’t donated to the Heidi Group in years.

As the advisory committee began meeting in 2015, Everett remained unusually silent. She asked few questions, and offered fewer suggestions. Despite the state’s ban on abortion affiliates, she suspected that some fellow members were still performing abortions, or connected to providers that did, according to a person with direct knowledge. If they led the way on the new programs, Everett worried, the same things that she says happened at her clinics decades earlier could happen again.

To prevent that, she would have to take the lead herself.

Lower standards, missed signs

With the launch nearing in early 2016, French made it clear that the health commission was tossing out its old contracting playbook. “Whatever you know about the process, please just forget about it,” she told the advisory committee that February. “Seriously, just forget about it. We’re going to start all over.”

In the past, women’s health contracts had been awarded through a competitive bid. Applications were reviewed by teams of employees and awards allocated based on numerical scores.

Healthy Texas Women started out that way as well. But by early May 2016, when the applications were due, it became apparent that only some of the providers would pass an initial business screening. Thirteen of the 34 applicants were missing materials, including antitrust and lobbying disclosure certifications, and security and privacy inquiries, records show. The Heidi Group was one of 21 that passed.

On May 9, French emailed Ron Pigott, the then-head of procurement. “Can we talk when you have a minute?” she wrote. “I’m a little worried.” The next day, Pigott sent a directive to staff in which he referenced the “insufficient responses we’re receiving” for Healthy Texas Women. The process, he said, was moving to open enrollment.

That switch was crucial. It meant the health commission could push back the deadline and consider providers who would otherwise not have made the cut. It also reduced transparency — scoring sheets and disclosure forms for large contracts like the Heidi Group’s were no longer required.

By May, Everett had persuaded more than two dozen clinics to join her new network, and said it could support 111,000 patients annually across 60 counties, including 67,000 in Healthy Texas Women. Even in its best years with the state, Planned Parenthood had served about 50,000 in a comparable program.

There were problems, though. Only seven of the Heidi Group’s clinics were licensed to distribute birth control pills and other prescriptions, as typically required by the health commission. Without it, they would be forced to refer patients to outside pharmacies, decreasing the likelihood that women would actually receive the contraception, and receive it in quantities that would serve them for months to come.

The Heidi Group was also struggling financially, posting losses in four of the five years leading up to 2016. And there were inconsistencies in its tax returns over the years: loan principles growing inexplicably, net asset calculations that didn’t add up. These should have been concerning, according to William Brown, a nonprofit expert at Texas A&M.

The health commission said it was not required to review applicants’ financial records, but plans to begin doing so.

The commission redacted nearly all records detailing deliberations on the Heidi Group contract, citing confidentiality. It did provide an email from July 22, in which one of French’s senior staffers, Travis Duke, recommended cutting the Heidi Group’s biggest award from $5.1 million to $2.5 million.

“If we give them more we will have to put in more money because I don’t think we can reduce everyone else any further,” Duke wrote. Even with that reduction, he warned they would need to lower allocations for providers who had performed well in the programs in the past.

French told Duke to stick with the $5.1 million figure, while also increasing the awards for a few of the top performers. “Send me the revised numbers,” she wrote.

Falling behind as others run out

By the summer of 2017, problems with the organization were beginning to emerge publicly. Healthy Texas Women was less than a year old, and the Associated Press was already reporting that the Heidi Group had not met its outreach goals, failing to air public service announcements, help clinics promote its work, or establish a toll-free number. Charles Smith, then the executive commissioner and a close ally of Gov. Abbott, assured lawmakers that the group had in place “a robust network of providers across Texas.”

But at that point, only about half of the clinics were still active. Some told Everett they were having trouble getting women in the door, and she suspected privately that abortion activists may be behind it, flooding their phone lines with fake appointments in an attempt to sink her operation, according to the person with direct knowledge.

The health commission had known as early as that February that the Heidi Group was failing. In Healthy Texas Women, it had served fewer than 700 women, about 1 percent of its goal, according to internal records. Only nine of Everett’s clinics had seen more than 10 patients. In Family Planning, as of March it had served just four people under fee-for-service, in which providers bill and are reimbursed for a specific medical service. Part of that was because the Heidi Group’s Family Planning contract wasn’t finalized until December, delaying when its clinics could start billing.

Meanwhile, other providers were already running out of fee-for-service money, meaning they could have used the millions that Everett had yet to spend.

Denton County had asked the state for $300,000 and was awarded less than half that. By February 2017, though, it had spent nearly all of its award and seen 475 patients, 98.5 percent of its approved target. There were still four months left in the grant cycle. Matt Richardson, the county’s health director, said with additional dollars they could have easily served “many more” patients.

“Demand is meeting supply for us,” Richardson said. “The more resources we seem to have, the more demand we seem to experience.”

Everett’s own clinicians were growing frustrated. Sherry Tenison, whose three clinics in Dallas were serving the majority of the Heidi Group’s patients, complained to the commission that Everett had only visited once, dropping off a binder of protocols at one of Tenison’s clinics.

“How does she know if the clinics are in compliance with what the grant requires?” she asked in an email.

The health commission later faulted Everett for inadequate oversight. During the rollout, though, the state had provided little of its own. The commission performed just three on-site clinical inspections in the first year, all for the Heidi Group, according to its records. It did less-stringent off-site reviews of records and written policies for 14 providers.

More than three dozen providers failed to serve even half of the patients they planned to that year, most of them in Healthy Texas Women.

A beginning

This past fall, after two years of underwhelming results, the health commission revoked its contracts with the Heidi Group. Critics breathed a sigh of relief. A few weeks later, in early December, a group of medical professionals assembled in downtown Austin for the final 2018 meeting of the Texas Women’s Healthcare Coalition.

French and her colleague Viveca Martinez, who had helped manage the launch of Healthy Texas Women, stopped by to update them on the health commission’s recent work.

Near the end, Martha Zuniga, the head of South Texas Family Planning and Health Corporation, raised her hand. Zuniga has been delivering reproductive care for decades, and had served on the Women’s Health Advisory Committee alongside Everett. But the state hadn’t heard publicly from her in awhile. Shortly after the launch in 2016, Abbott disbanded the committee, declaring its work complete.

For Zuniga, though, the rollout was just a beginning. Especially now, she thought, with the Heidi Group gone and a new legislative session approaching, health officials and lawmakers needed to be hearing about her experiences and ideas for ways to improve. She envisioned a dialogue in which providers set the agenda and resolutions are reached collectively.

"We really need that extra special communication, and that confidence from the state that we're all equal partners,” Zuniga said. “I'm not saying it's not better than it was, but I would like it to be even better than (that)."

French listened attentively. She told Zuniga not to hesitate to reach out, at any time, with any questions.

But after years of change, continuity was no guarantee. Two weeks later, French resigned. The health commission is still searching for a replacement.

jeremy.blackman@chron.com

Twitter.com: jblackmanChron