CMS Revokes Texas Medicaid Waiver as Lawmakers Consider Expansion

CMS Revokes Texas Medicaid Waiver as Lawmakers Consider Expansion by Peter Johnson CMS on Apr. 16 revoked an eleventh-hour Section 1115 waiver the Trump administration had granted to Texas. Experts say that CMS's action is an attempt by the Biden administration to push Texas to expand Medicaid. CMS had approved Texas' waiver request on Jan. 15, less than a week before the end of the Trump administration. The waiver would have sent about $11.4 billion to Texas annually in order for the state to compensate providers for unreimbursed care. The Trump administration approved the waiver for 10 years, a term that experts say is unusually long and likely motivated by politics. The notice issued by CMS Acting Administrator Elizabeth Richter indicated that Texas' 1115 waiver will expire at the end of its original term, Sept. 30, 2022. David Kaufman, a partner at Laurus Law Group LLC, says that the rescinded waiver is best understood as part of the Biden administration's strategy to push holdout states toward expanding Medicaid eligibility. If the more generous funds included in the American Rescue Plan are a carrot, then a stricter approach with 1115 waivers is the stick. "The recent legislation sweetens the pot for the states to expand Medicaid," Kaufman says. "So how good a deal do they have to offer before these holdout states decide to it’s in their interest to get people covered?" Medicaid expansion has been a hot topic in the Texas Legislature's current session. According to the Texas Tribune, an expansion bill in the state House of Representatives has support from both parties. However, the chamber on April 23 voted down a separate budget amendment that would have expanded Medicaid. Republican Gov. Greg Abbott has historically opposed expansion, although he had not taken a position on the bill as of April 21. The Texas Hospital Association supports Medicaid expansion "very much," says spokesperson Carrie Williams. But the provider group also wants the $100 billion uncompensated care fund to remain in place regardless of whether Texas expands. Gary Rosenfield, a senior vice president at ConsejoSano, points out that "in reality, if they can expand Medicaid, given the size of the Medicaid expansion, the amount of money that's going to be flowing into Texas government is going to be so much more than $100 billion over 10 years. And it actually will end up benefiting all the providers. From Health Plan Weekly Subscribers may read the in-depth article online. Learn more about subscribing to AIS Health's publications.