(Jan. 26) 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:

  • Expands Medicaid managed care to the entire state.
  • Replaces the upper payment limit program with two new pools of funding. One, the uncompensated care pool, valued at $17.582 billion between 2011 and 2016, reimburses hospitals for the cost of care for Medicaid and uninsured patients for which the hospital does not receive payment. The second, the delivery system reform incentive payment pool, provides up to $11.418 billion in earned incentive payments to hospitals and other providers upon their achieving certain goals that are intended to improve the quality and lower the cost of care.
  Year 1
Year 2
Year 3
Year 4
Year 5
UC $3.7B $3.9B $3.534B $3.348B $3.1B $17.582B
DSRIP $500M $2.3B $2.666B $2.852B $3.1B $11.418B
$4.2B $6.2B $6.2B 6.2B $6.2B $29B
% UC 88% 63% 57% 54% 50% 60%
% DSRIP 12% 37% 43% 46% 50% 40%
Texas’ Medicaid 1115 Transformation Waiver represents a major resource in reshaping the delivery of health care in communities across the state. Hospitals are collaborating with providers of all types to implement ways to make health care more effective and efficient. To demonstrate the local impact of the waiver for members of Congress and highlight the innovative work hospitals and their partners are pursuing, THA produced a series of one-pagers highlighting the unique needs and challenges of each region, and the projects developed to meet those needs ... Read more
In Oct. 2014, CMS notified THHSC that it is deferring $68 million in federal Medicaid funds tied to private hospital uncompensated care payments from 2013 under the Waiver. CMS is deferring payment while it investigates concerns it has about allegedly improper provider donations.
CMS Letter Lifting UC Deferral (Jan. 2015)
CMS Notice of Deferral (Oct. 2014)
THHSC Notice of Deferral (Oct. 2014)
THA Letter to THHSC Executive Commissioner (Oct. 2014)
CMS is questioning the financing mechanisms being used based on guidance issued in a State Medicaid Director Letter #14-004 on May 9, 2014.
THHSC Letter to Cindy Mann – CMS (Nov. 2014)
DY 7-8 DSRIP Webinar Presentation
Draft DY 7-8 DSRIP Protocol (Feb. 5, 2017)
DY 7-8 Measure Bundle Overview for Providers (Feb. 5, 2017)
THHSC 1115 Waiver Update Presentation (Feb. 5, 2017)
THHSC 21-month Waiver Renewal Request (Jan. 26, 2017)
CMS Affirms Disallowance (Dec. 21, 2016)
Final Reconsideration Letter (Oct. 28, 2016)
CMS Disallowance Response (Oct. 27, 2016)
THA Takeaways, THHSC Uncompensated Care Study: Implications for 1115 Waiver Renewal (Sept. 2, 2016)
THHSC Study of Hospital UC Costs (September 2016)
Letter from HHSC to CMS on Waiver Extension (Aug. 19, 2016)
Medicaid Draft Report on Hospital UC Cost (July 19, 2016)
THA Takeaways, Medicaid 1115 Waiver Extension: What Does It Mean for Texas Hospitals and Patients? (May 4, 2016)
Texas Medicare Transformation 1115 Waiver Extension CMS Special Terms and Conditions (May 2, 2016)
CMS - Request for 15-Month Extension of the 1115 Demonstration Waiver (April 7, 2016)
Medicaid 1115 Waiver CMS Response to Johnson
Performance Bonus Pool
Transformational Extension Protocol Models, Jan. 26, 2016
Transition Year Plan
Delegation Waiver Letter of Support Signed (November 2015)
1115 waiver extension: Comment letter to CMS (November 2015)
Congressional Letter of Support (November 2015)
Waiver Extension FAQs (October 2015)
Final 1115 Waiver Extension Application (Submitted September 2015)
Infographic: Uncompensated Care (Aug. 7, 2015)
THA Comments on THHSC's Draft Waiver Extension Request(Aug. 3, 2015)
THA Takeaways: Hospitals Support Waiver Continuation (July 8, 2015)
1115 Extension Application Draft (July 2, 2015)
Attachment A - Texas DSRIP Projects (July 2, 2015)
Attachment B - Quality Monitoring Reports and Deliverables (July 2, 2015)
Attachment C - Performance Indicator Dashboards and Pay-for-Quality Measures (July 2, 2015)
Attachment D - 1115 Waiver Extension Budget Neutrality Calculations (July 2, 2015)
Attachment E - STC Compliance (July 2, 2015)
Public Notice (July 2, 2015)
THA Takeaways: Waiver Renewal Discussion (April 2015)
Special Terms and Conditions (STC) 48 Requirement (March 23, 2015)
Special Terms and Conditions (STC) 48 Requirement Attachment A (March 23, 2015)
THA Comments on THHSC’s Draft Waiver Transition Plan (Feb. 13, 2015)


John Hawkins, senior vice president, advocacy and public policy, 512/465-1505

2017 Texas Hospitals’ Policy Priorities
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.