Texas AG Paxton sues Biden administration again, this time over health care

By Bethany Blankley | The Center Square

The state of Texas was the first to sue the Biden administration, and its lawsuits continue. Texas Attorney General Ken Paxton has sued the Biden administration primarily over immigration and oil and gas policies, now adding access to health care for the poorest Texans.

Paxton sued the Centers for Medicare & Medicaid Services and the U.S. Department of Health and Human Services and their respective secretaries, and the federal government, for rescinding federal Medicaid funds already approved by the prior administration.

The extension, which was scheduled to run through 2030, would have provided $11 billion per year in health care funding to Texas, including for uncompensated care.

The Biden administration rescinded the waiver, not because of any material issues pertaining to the application but because of a procedural issue with the paperwork. Liz Richter, acting administrator for CMS, wrote in a letter to Texas officials that its approval was rescinded because “it did not go through the full federal rulemaking process.”

But Gov. Greg Abbott, who blasted President Joe Biden last month over the decision, said, “By rescinding this waiver extension, the Biden administration is obstructing healthcare access for vulnerable Texans and taking away crucial resources for rural hospitals in Texas. The state of Texas spent months negotiating this agreement with the federal government to ensure vital funds for hospitals, nursing homes, and mental health resources for Texans who are uninsured. With this action, the Biden administration is deliberately betraying Texans who depend on the resources made possible through this waiver.”

Texas submitted an application to extend its 1115 demonstration project waiver, which was accepted on Dec. 15, 2020 and approved on Jan. 15, 2021. Within three months, the Biden Administration rescinded the waiver extension, which would have ensured stable funding for providers of health care for children, people with disabilities, and the elderly, Abbott and Paxton argue.

“The Biden Administration cannot simply breach a contract and topple Texas’s Medicaid system without warning,” Paxton said in a statement. “This disgusting and unlawful abuse of power aimed at sovereign states must end. Not only does this violate agency regulations and threaten to rip a $30 billion hole in Texas’s budget, it was clearly intended to force our state into inefficiently expanding Medicaid under the Patient Protection and Affordable Care Act. This would be a disaster for our state, and yet President Biden seems intent on thrusting his bloated model of government on everyone – including Texas.”

Texas, like other states, works with the federal government to administer and pay for the Medicaid program. One aspect includes a temporary “Demonstration Project,” which allows states to achieve health care related goals while tracking efficiency, success, and needed changes along the way. In 2020, Texas commissioned a survey of Medicaid providers and determined more time was needed for its current project.

After many weeks of negotiations, Texas’ request for an eight-year extension was granted by the Trump Administration in January 2021. The Biden administration rescinded that extension “without warning, proper authority, reasoning, or the required notice-and-comment period,” Paxton argues.

The waiver funds “are vital to the very existence of many hospitals in Texas,” Texas Essential Healthcare Partnerships President Donald Lee told The Center Square. “By placing this funding in doubt, this action by CMS threatens the healthcare safety net in Texas. The loss of this funding would create a cascading disaster as hospitals failed and Texans would then have no, or limited access, to hospital services. The impact will be felt most acutely in the inner city of our major metro areas, in our rural areas, and especially along the Texas-Mexico border.”

The move is seen as an attempt to push states toward participating in the federal government oversight of the Affordable Care Act’s Medicaid expansion, a move Texas has so far rejected. The Washington Post reports that the Biden administration has already forced a dozen holdout states to accept Medicaid expansion by rescinding funding or through other measures. If Texas were to participate, it would receive $3.9 billion in funding over two years and more than two million uninsured individuals would be eligible to receive Medicaid coverage, the Post reports.

The lawsuit was filed in Federal District Court, Tyler Division, and asks the court to declare CMS’ April 16 letter invalid because “it imposes unconstitutional conditions on federal funding for Texas’ Medicaid program.” It also asks the court to enjoin any agency or individual working in concert with them from enforcing the April 16 letter.