Texas hospitals are confronting an escalating funding crisis as the Centers for Medicare & Medicaid Services (CMS) is refusing to approve critical Medicaid directed payment programs (DPPs) and threatening to disrupt funding for state fiscal year 2027. After months of negotiation, CMS has still not approved three DPPs – CHIRP, TIPPS, and RAPPS – for the fiscal year beginning Sept. 1. Without urgent federal action, Texas hospitals stand to lose an estimated $27 million per day – funding that hospitals rely on to bridge the persistent gap between Medicaid’s low base payment rates and the actual cost of care.
Read THA’s background white paper for more information, In the Crosshairs: Texas Hospitals Face $10 billion Crisis.
AUSTIN, Texas (Aug. 31, 2027) — “We’re bracing for a crisis that will crack the Texas healthcare safety net. No industry can withstand $27 million in losses per day,” said Texas Hospital Association CEO John Hawkins. “The numbers are seismic and will shake the Texas economy, eliminate thousands of jobs statewide and diminish Texas health. There is no more business-as-usual in the world of hospitals.
“If the federal government continues to withhold payment approvals, Texas hospitals will be forced to make difficult decisions about cuts to service lines, such as NICU and labor and delivery units. No community wants that. Hospitals that serve primarily Medicaid patients – and hospitals that are already barely scraping by – will be hurt hard and fast, and we need federal action now.”
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About THA
Founded in 1930, the Texas Hospital Association is the leadership organization and principal advocate for the state’s hospitals and healthcare systems. Based in Austin, THA enhances its members’ abilities to improve accessibility, quality and cost-effectiveness of healthcare for all Texans. One of the largest hospital associations in the country, THA represents more than 85% of the state’s acute-care hospitals and healthcare systems, which employ some 400,000 healthcare professionals statewide. Learn more about THA at www.tha.org or follow THA on Twitter at http://twitter.com/texashospitals.