With approval of Texas’ new 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 new Waiver, CMS will temporarily continue DSRIP funding. However, funding is phased down to zero over the five years. THHSC 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.
DSRIP Transition Plan
THHSC’s DSRIP Transition Plan must include milestones for the state to achieve through 2020-2021, related to the state’s use of alternative payment models, managed care payment models, payment mechanisms to support delivery system reform efforts, and other opportunities. THHSC anticipates meeting the following milestones to ensure federal financial participation is not jeopardized.
September 2021: THHSC identifies and submits to CMS any additional proposals for new programs to sustain key DSRIP initiative areas that would start in the next Waiver renewal period.
Additional details are available from THA's recent
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
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.