(Story updated at 12:01 p.m. ET)
Warning providers could lose billions of dollars in reimbursement, Texas is seeking (PDF) an emergency 15-month waiver from CMS that would extend financing for programs designed to cover the unpaid bills of Medicaid-eligible patients who haven't signed up for the program.
Texas is one of 19 states that haven't expanded Medicaid under the ACA and has the largest pool of uninsured people in the country. Many would be eligible for coverage if Texas expanded Medicaid.
While they haven't said no yet, federal officials appear to be balking at last November's request by Texas Medicaid officials to extend its 1115 waiver, which was initially granted in 2011, for an additional five years. The waiver, which expires at the end of September, provides $4 billion a year for the Texas Healthcare Transformation and Quality Improvement Program, which covers providers' uncompensated care bills, and its Delivery System Reform Incentive Payment, or DSRIP, which encourages providers to adopt innovative programs that raise the quality and cost-effectiveness of care.
After learning the CMS was leaning against the five-year extension, Texas sought maintenance of funding for both programs at current levels for 15 months. "Because our providers require a level of certainty to continue serving Medicaid populations, a timely response is very important,” the state said in its extension request.
Texas Health and Human Services Executive Commissioner Chris Traylor told lawmakers at a committee meeting earlier this month that he was more optimistic about a short-term extension.
“I don't believe that the five-year extension we requested back in the fall is in the cards,” Traylor said. “I think a short-term extension that allows the state to look at other options is something that I am extraordinarily hopeful about.”
State lawmakers also shared Traylor' pessimism about the changes of a long-term renewal.
"A long-term decision would be preferable, but we have no reason to believe that is going to happen,” said Republican state Sen. Jane Nelson, the chairman of the state Senate Finance Committee. “Our hospitals and other healthcare providers need to have budget certainty—and soon—so timely action by CMS is critical.”
The Texas Medical Association and Texas Hospital Association backed the request. Texas Medical Association also implored the agency to grant the 15-month extension. Knowing for sure that the waiver funds will continue to be there will provide the budget certainty needed for hospitals to map out upcoming fiscal years, according to Marcus Cooper, a spokesman for the group. “At the end of the day you can't just take the funds in the waiver away, it would make the Medicaid program less viable,” said John Hawkins, senior vice president of advocacy and public policy at the Texas Hospital Association.
Four million Medicaid beneficiaries have access to both public and private hospitals and their networks under the original waiver. It also made it possible for hospitals to provide care to the millions that remain uninsured because of their undocumented status or their inability to afford coverage on the exchange, or because Medicaid hasn't been expanded, Hawkins said.
Even if the state expanded Medicaid under the ACA, 2 million people would remain uninsured, Hawkins said.
A CMS spokesman did not respond to a request for comment on Texas' latest request.
The dispute began last November when CMS Medicaid Director Vikki Wachino wrote in the letter to the state's Medicaid agency that “coverage is the best way to assure beneficiary access to healthcare for low-income individuals. ... Uncompensated-care pool funding should not pay for costs that would otherwise be covered in a Medicaid expansion.”
The CMS last year sent nearly identical letters to Florida and California. The Obama administration is reluctant to make special payments for the Medicaid-eligible uninsured since most of them would have access to coverage if their states expanded the program.
Recognizing the staunch opposition to Medicaid expansion in Texas, local advocates believe the CMS will grant the short-term extension to preserve funding for the uninsured. “CMS appears to take great pains to avoid dramatic action that would be seen as political in nature, or damage the healthcare safety net,” said Anne Dunkelberg, associate director of the Center for Public Policy Priorities in Austin.