With approval of Texas’ Medicaid 1115 Waiver worth approximately $25 billion through 2022, Texas hospitals are working with state and federal partners to address the waiver’s new terms and conditions that will change hospitals’ supplemental payments. While maintaining significant funding for uncompensated care and Delivery System Reform Incentive Payments, the new waiver requires two major changes:
Texas will receive uncompensated care funding through Sept. 30, 2022. The size of the UC pool will be determined solely by hospital charity care provided to the uninsured, but UC payments can be distributed among all qualifying providers, including non-hospital providers whose costs are not counted in the size of the UC pool. Federal UC funds for 2018-2022 are as follows.
Under the terms of the waiver, CMS will temporarily continue DSRIP funding. However, funding is phased down to zero over the five years. HHSC must submit a draft plan by Oct. 1, 2019 for CMS' approval that outlines the transition from DSRIP to sustainable delivery system reforms that do not require DSRIP funding.
With the ongoing COVID-19 pandemic, now is not the time to wind down a program that has been vital to Texas' health care safety net and provided critical funding for health care services. Texas hospitals and health care providers instead support at least a one year extension of the program.
Learn more from the THA-led whitepaper supporting a DSRIP extension.
The Departmental Appeals Board at the U.S. Department of Health and Human Services decided in early August 2018 to uphold CMS' earlier decision to disallow approximately $25 million in federal uncompensated care payments to private hospitals in the Dallas-Fort Worth area. At this time, the state Medicaid agency is considering its options and could accept the decision or appeal.
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.”
John Hawkins, senior vice president, advocacy and public policy, 512/465-1505
Jennifer Banda, vice president, advocacy and public policy, 512/465-1046
Hospitals, Health Care Providers Support DSRIP Extension
1115 Waiver Is Critical for Texas’ Health Care Safety Net
A Perfect Storm in Texas: Access to Health Care in Jeopardy as Texas Hospitals Face Uncertain Financial Future
Future of Uncompensated Care Funding for Texas Hospitals
Milestones for Texas’ New Medicaid 1115 Waiver
UPDATED: Details On The New Medicaid 1115 Waiver For Texas
Texas Medicaid Waiver Renewal - Summary
CMS Approval Letter for Waiver
Disallowance of Federal Uncompensated Care Payments for Texas Hospitals
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.