The Centers for Medicare & Medicaid Services (CMS) on Friday announced the withdrawal of its Jan. 15, 2021, approval to extend Texas Medicaid’s 1115 Transformation Waiver for 10 years.
In withdrawing its approval, CMS said it had “materially erred in granting Texas’ request for an exemption from the normal public notice process” because Texas lacked a sufficient basis for the exemption despite the COVID-19 public health emergency.
In November 2020, the Texas Health and Human Services Commission (HHSC) submitted a “fast track” request to extend the current waiver another five years, which CMS approved for 10 years. Without an extension, the original 2011 waiver is set to expire Sept. 30, 2022.
In its fast-track request, HHSC cited the need to expedite approval to give safety-net hospitals and health systems greater financial certainty throughout the pandemic and beyond.
The agency specifically asked that CMS:
- Maintain the state’s authority for statewide Medicaid managed care, with a focus on promoting value-based care;
- Preserve the hospital uncompensated care pool; and
- Create two new uncompensated care pools to benefit public behavioral health care clinics and public health departments.
The request did not ask for an extension of funding for the Delivery System Reform Incentive Payment (DSRIP) pool included in the original 2011 waiver – dollars that support not only care for Medicaid patients but also for low-income uninsured patients. CMS announced in 2017 it would phase out DSRIP funding by Sept. 30, 2021. Texas could replace DSRIP by pursuing federal dollars to implement a health care coverage initiative, a Texas Medical Association priority this legislative session.
“CMS’ decision is very concerning,” TMA President Diana L. Fite, MD, said. “Many safety-net systems remain financially precarious due to the pandemic, and securing a stable source of uncompensated care funds must remain a priority to ensure patients can get the care they need.
“At the same time,” Dr. Fite added, “TMA is relieved Texas’ health care safety net system is not in immediate jeopardy of losing funding.”
The state’s previous waiver terms and conditions will remain in effect, continuing the hospital uncompensated care pool through Sept. 30, 2022. Additionally, Texas can resubmit its renewal request, which Dr. Fite says could offer another opportunity to craft solutions that will benefit all parts of the safety net still financially reeling from the pandemic.
Over the coming days, TMA will continue to closely review CMS’ 700-page announcement. In the meantime, Dr. Fite said, “the physicians of Texas stand ready to assist state leaders in responding to this significant development, and in helping craft a new long-term solution for our patients.”