The Texas Hospital Association hopes the Trump administration will renew a waiver that its members have come to rely on to offset uncompensated-care costs.
Since 2011, the waiver has provided $4 billion a year to cover providers' uncompensated-care bills, and its Delivery System Reform Incentive Payment program which encourages providers to adopt innovative programs that raise the quality and cost-effectiveness of care.
The 1115 waiver was originally set to expire at the end of September. It will now continue through Dec. 31, 2017, as state and federal officials continue to weigh the continued need for the waiver. The CMS believes that if the state were to expand Medicaid, uncompensated care would decrease.
The Obama administration believes there is no need for pools of uncompensated-care funding since coverage has expanded under the Affordable Care Act.
Compared to fiscal 2016, total federal funds provided under the 1115 waiver would decrease by an estimated $1.4 billion in fiscal 2018 and $1.8 billion by 2019, the hospital association estimated in a report released Tuesday. This includes reductions in the DSRIP pool of $465 million in 2018 and $900 million in 2019. The uncompensated-care pool would drop $900 million in both 2018 and 2019.
The reductions would occur as Medicaid disproportionate-share hospital payments are set to decrease. The drop was made to offset the increased revenue providers would benefit from through coverage gains under the ACA.
In 2018, federal funds for Medicaid DSH payments will drop by $2 billion; the next year they drop by $3 billion and will fall by $8 billion in 2024 and 2025.
“Hospitals have to provide care to anyone who seeks it,” said John Hawkins, senior vice president, advocacy and public policy at the Texas Hospital Association. “Without funding to pay for that care, hospitals will have to make tough choices about staff and services.”
The group hopes the new administration will allow the state to negotiate to renew the 1115 waiver without federal funding reductions and pursue congressional action to maintain the Medicaid DSH program at current federal funding levels.
President-elect Donald Trump's nominees to lead the HHS and the CMS are committed to state-driven reforms.
Hawkins said that gives him hope.
Also, if the insurance coverage provisions of the ACA are going to be repealed, “it's common sense that the DSH cuts that help finance those coverage provisions also will be repealed,” Hawkins said.
