Medicare & Medicaid


With Medicare and Medicaid providing more than half of most hospitals’ patient revenue, any changes to these government-sponsored programs have a significant impact on hospitals. In a Medicare or Medicaid fee-for-service model, payment rates to hospitals are administratively set instead of negotiated between providers and payers. Medicare and Medicaid both also feature supplemental payment opportunities, which boost low hospital base payments in these programs, which typically do not cover enrollees’ costs of care.

The Texas Legislature sets the Medicaid program budget for each biennium, and the Texas Health and Human Services Commission (HHSC) administers the base and supplemental payment programs that reimburse hospital care for low-income and uninsured Texans. THA works with the Texas Legislature on legislation that affects health care financing and helps shape the regulatory environment through involvement with specific Medicaid advisory committees, HHSC and the Texas Department of State Health Services.

In Medicare, the amount and manner of payments are governed by acts of Congress and the Centers for Medicare and Medicaid Services (CMS). THA engages the Texas congressional delegation on key Medicare issues and takes part in public comment opportunities put forth by CMS to safeguard hospitals’ Medicare payments.


Medicaid Resources

General/Directed Payment Programs

Comprehensive Hospital Increased Reimbursement Program

Texas Incentives for Physician and Professional Services Program

Rural Access to Primary and Preventative Services Program

Disproportionate Share Hospital Payments and Uncompensated Care

Medicaid DSH Payment Cuts

The Texas Hospital Association is asking Congress to address Medicaid disproportionate share hospital (DSH) cuts to help protect patient care. THA has calculated the number of DSH hospitals and reduction amounts for each of the 38 U.S. House districts for FY 2024. More information is available here.

Medicaid 1115 Waiver

The Centers for Medicare & Medicaid Services has renewed Texas’ Medicaid 1115 Waiver through September 2030. The waiver authorizes the state to operate Medicaid managed care and sets budgetary limits for several key supplemental payment programs, including state directed payment programs and Texas’ uncompensated care pool.

Although the waiver itself received 10-year approval, payment programs within the waiver must be reapproved or resized periodically. THA continues its advocacy with state and congressional leaders to preserve the state’s health care safety net.

Texas hospitals urge CMS to continue working with the state to achieve the following outcomes: 

  1. Preserve a budget neutrality determination that permits sufficient safety-net hospital funding.
  2. Sustain a strong hospital uncompensated care pool.
  3. Reinforce the behavioral heath safety net.
  4. Recognize the waiver as a building block to comprehensive health care coverage.

10-Year Extension (DYs 10-19/Jan 2021 – Sept. 2030)

THA Written Testimony on 1115 Waiver, DPP Approvals (5/5/22)
Information Alert: CMS Reinstates Texas’ 1115 Waiver Extension (4/22/2022) | THA
CMS Reinstates Texas’ 1115 Waiver Extension (4/22/22) | CMS
THA Update to Texas Congressional Delegation on Medicaid Supplemental Payments and 1115 Waiver (12/1/2021)
CHAT Update to Texas Congressional Delegation on Children’s Hospital Funding (11/30/2021)
CMS Letter to Texas on DPP Next Steps, Outstanding Issues (11/15/2021)
Teaching Hospitals of Texas Letter to CMS on 1115-Related Waiver Requests (11/5/2021)
CHAT Request to Texas Congressional Delegation Regarding DSH and UC Funding (10/30/2021)
CHAT Update to Texas Congressional Delegation on Waiver Negotiations (10/28/2021)
CHAT Comment Letter on Status of 1115 Waiver and Directed Payment Programs (10/26/2021)
Multi-Association Letter to CMS Regarding Continuation of DSRIP, UHRIP and QIPP Programs (10/25/2021)
Texas Hospitals Urge CMS to Approve Temporary Payment Programs for Current Fiscal Year (10/1/2021)
Texas Accepts Offer for FY 22 DSRIP, UHRIP, QIPP; Commits to Work on DPPs (9/7/2021) | HHSC
Texas Essential Healthcare Partnerships Letter to CMS on 1115 Waiver Extension (8/30/2021)
Teaching Hospitals of Texas Comment Letter to CMS on 1115 Waiver Extension (8/25/2021)
Federal Comments on Texas’ 1115 Waiver Extension Application (8/25/2021)
Action Alert: Provide Federal Public Comment on Texas Waiver Extension Application; Use THA’s Template (8/17/2021)
Template Letter for Public Comment on CMS’ Waiver Extension Application (8/16/2021) | THA
Multi Association Letter to CMS on Waiver and DPP Approval (7/26/2021)
Teaching Hospitals of Texas Letter to CMS on Texas’ Directed Payment Programs (7/14/2021)
Waiver Extension Application Cover Letter (7/14/2021) | HHSC
Waiver Extension Application Appendices (7/14/2021) | HHSC
Waiver Extension Application Preliminary Findings (Supplement A – Preliminary Draft Results) (7/14/2021) | HHSC
Comments on HHSC’s Medicaid 1115 Waiver Extension Application (6/24/2021) | THA
Action Alert: Provide Public Comment on Texas Waiver Extension Application; Use THA’s Template (6/3/2021) | THA
Template Letter for Public Comment on HHSC’s Waiver Extension Application (6/3/2021) | THA
Multi Association Letter on Hospital Priorities for Potential Waiver Extension Negotiation (5/12/2021)
U.S. House Democrats Letter to CMS, HHS on Waiver Rescission (4/27/2021)
U.S. House Republicans Letter to HHS on Waiver Rescission (4/27/2021)
Letter to State Leaders – Hospitals Support the Waiver and Coverage Expansion (4/21/2021) | THA
Whitepaper: Losing Texas’ Waiver Extension Destabilizes the Health Care Safety Net (4/21/2021) | THA
Letter Rescinding 10-Year Extension of Texas’ 1115 Waiver (4/16/2021) | CMS
Information Alert: CMS Rescinds 10-Year Extension of Texas’ Medicaid 1115 Waiver (4/16/2021) | THA&
Statement on CMS Rescinding 10-Year Waiver Extension (4/16/2021) | THA
White Paper: 1115 Waiver Is a Building Block to Health Care Coverage (Feb. 12, 2021) | THA
Multi Association Thank you Letter to Gov. Abbott (Feb. 8, 2021)
Multi Association Thank You Letter to Commissioner Young (Feb. 8, 2021)
Information Alert: Summary of 10-Year Waiver Extension (Jan. 21, 2021) | THA
1115 Waiver Extension Presentation (Jan. 20, 2021) | HHSC
Letter Approving 10-Year Waiver for Texas (Jan. 15, 2021) | CMS

Supporting Web pages

Visit THA’s supporting Web pages for additional information on certain Medicaid and Medicare issues as well as hospital financing.

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