Centers for Medicare & Medicaid announce decision to withdraw Medicaid waiver extension for Texas

AUSTIN – Governor Greg Abbott today issued a statement after the Centers for Medicare & Medicaid Services (CMS) announced their decision to withdraw their April 16, 2021 letter rescinding the previously approved 1115 Medicaid waiver extension.

Last April, the Biden administration rescinded the extension that was granted by the prior administration. This extension, which was scheduled to run through 2030, provides critical healthcare funding, including funds for uncompensated care.

“CMS’ decision to withdraw the rescission of the 1115 Medicaid waiver extension allows Texas’ 1115 Waiver, originally approved in January 2021, to continue for the next 10 years and ensures that Texans will have access to crucial healthcare funding, including funds for uncompensated care. I applaud CMS for their reversal and thank Texas Attorney General Ken Paxton for fighting this decision over the past year in court,” said Governor Greg Abbott.

“I also thank the Texas Health and Human Services Commission for their tireless work to secure this waiver extension. The original rescission by the Biden administration last April obstructed healthcare access for vulnerable Texans and took away crucial resources for rural hospitals in Texas, and I am grateful that Texans will now continue to have access to the health care resources they need,” said Abbott.

The waiver extension allows the state to maintain an efficient and effective Medicaid managed care model while standing up new programs, including those to support the replacement of the Delivery System Reform Incentive Payment (DSRIP) program which ended September 30, 2021.

The extension also allows the Texas Health and Human Services Commission to maintain existing directed-payment programs, including the Uniform Hospital Rate Increase Program for hospitals and the Quality Incentive Payment Program for nursing facilities, and to implement new or increased directed-payment programs in managed care contracts as outlined in the DSRIP transition plan and approved by CMS.

The current Uncompensated Care program will continue to be authorized at $3.87 billion until resizing for fiscal year 2023.

A new Uncompensated Care program launched in October 2021, supports uninsured Texans receiving behavioral health and public health services, providing stability for these services as DSRIP programs phased out.