Texas Hospital Association

Medicaid 1115 Waiver - Texas Health Care Transformation and Quality Improvement Program

Texas’ Medicaid 1115 Waiver is transforming how health care is delivered and paid for in Texas. Approved in Dec. 2011, the Waiver will expire Sept. 30, 2016. Effort to renew the Waiver must begin now to preserve uncompensated care funding and delivery system reform incentive payments.

The Waiver has two primary purposes:

  1. Expands Medicaid managed care to the entire state.
  2. Replaces the upper payment limit program with two new pools of funding. One, the uncompensated care pool, valued at $17.582 billion between 2011 and 2016, reimburses hospitals for the cost of care for Medicaid and uninsured patients for which the hospital does not receive payment. The second, the delivery system reform incentive payment pool, provides up to $11.418 billion in earned incentive payments to hospitals and other providers upon their achieving certain goals that are intended to improve the quality and lower the cost of care.
  Year 1
Year 2
Year 3
Year 4
Year 5
UC $3.7B $3.9B $3.534B $3.348B $3.1B $17.582B
DSRIP $500M $2.3B $2.666B $2.852B $3.1B $11.418B
$4.2B $6.2B $6.2B 6.2B $6.2B $29B
% UC 88% 63% 57% 54% 50% 60%
% DSRIP 12% 37% 43% 46% 50% 40%

THHSC Waiver Resources

Waiver as Approved

Waiver Amendments

Waiver Overview and Background Resources

Dates and Deadlines

Recorded Webinars and Conference Calls

Regional Healthcare Partnership Plans (includes active DSRIP projects)

Tools and Guidelines for Regional Healthcare Partnership Participants

Waiver Rules and Workgroups

Comments and Questions

CMS Deferral of Uncompensated Care Payments

In Oct. 2014, CMS notified THHSC that it is deferring $68 million in federal Medicaid funds tied to private hospital uncompensated care payments from 2013 under the Waiver. CMS is deferring payment while it investigates concerns it has about allegedly improper provider donations.

CMS Letter Lifting UC Deferral (Jan. 2015)

CMS Notice of Deferral (Oct. 2014)

THHSC Notice of Deferral (Oct. 2014)

THA Letter to THHSC Executive Commissioner (Oct. 2014)

CMS is questioning the financing mechanisms being used based on guidance issued in a State Medicaid Director Letter #14-004 on May 9, 2014.

THHSC Letter to Cindy Mann – CMS (Nov. 2014 )

Waiver Renewal Resources

THA Comments on THHSC’s Draft Waiver Transition Plan (Feb. 13, 2015)

Subsidiaries and Affiliates


Texas Hospital Insurance Exchange

Texas Hospital Association Foundation

Texas Healthcare Trustees


According to Texas Government Code 305.027, portions of this material may be considered “legislative advertising.” Authorization for its publication is made by John Hawkins, Texas Hospital Association, 1108 Lavaca, Suite 700, Austin, Texas, 78701-2180.