On Sept. 22, 2017, the Centers for Medicare & Medicaid Services notified the Texas Health and Human Services Commission of its intention to seek a joint stay with the state to stop the current proceedings before the Departmental Appeals Board at the U.S. Department of Health and Human Services on the disallowed $27 million in federal uncompensated care payments to private hospitals in North Texas. The stay has not yet been granted, but the Texas Hospital Association is optimistic that with CMS’ request, the DAB will issue the stay shortly and it can begin to identify a mutually acceptable method of finance for the future.
(Jan. 26, 2017) The Texas Health and Human Services Commission has submitted a request to CMS for a 21-month extension of the 1115 waiver that would take funding through Sept. 30, 2019. The request is to continue level funding for both the DSRIP and UC pools consistent with the current 15-month extension that expires Dec. 31, 2017. This additional extension allows time for transition to the new presidential administration and an additional Texas legislative session from January to May 2019.
Texas’ Medicaid 1115 Waiver is transforming how health care is delivered and paid for in Texas. Approved in Dec. 2011, the Waiver will expire Dec. 31. 2017.
The Waiver has two primary purposes:
Note: Demonstration years align with the federal fiscal year, which begins on Oct. 1 and ends on Sept. 30. For example, Year 1 began on Oct. 1, 2011 and ended on Sept. 30, 2012.
In September 2014, CMS notified THHSC that it was deferring $74 million in federal Medicaid funds tied to private hospital uncompensated care payments from 2013 under the Waiver. While it did not accept the financial arrangement, CMS ultimately released the deferral in January 2015 and stated its willingness to work with THHSC before making a final determination.
In May 2015, THHSC and CMS revisited the issue, and shortly thereafter, CMS agreed that if changes to private hospital funding were required following the discussions, Texas would have until Sept. 1, 2017 to transition to other funding mechanisms without risk of disallowance on the same grounds as the 2014 deferral. Discussions concluded in September 2015 without CMS’ authorization of the private hospital funding arrangement in question.
In September 2016, CMS issued another disallowance notice to THHSC stating that$27 million in federal uncompensated care payments were being disallowed because they constituted “impermissible provider donations.” THHSC is appealing that decision.
John Hawkins, senior vice president, advocacy and public policy, 512/465-1505
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Disallowance of Federal Uncompensated Care Payments for Texas Hospitals
Download an overview of the 2017 Texas Hospitals’ Policy Priorities
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, TX 78701-2180.