HealthcareFour Texas Democrats Call for Restoration of Medicaid Section 1115 Waiver Funding

The Biden administration denied Texas' application to renew a Medicaid waiver that reimburses hospitals for uncompensated care after the Trump administration had already approved it.
December 7, 2021
Four Texas Democratic members of Congress have appealed to the federal government to restore health care funding that has been frozen over the last few months.

Those legislators are Reps. Veronica Escobar (D-TX-16), Henry Cuellar (D-TX-28), Marc Veasey (D-TX-33), and Filemon Vela (D-TX-34).

Funding to Texas’ Directed Payment Programs (DPPs), which reimburses health care providers for uncompensated care, was suspended on September 1.

“[T]he approval of new DPPs and the successful renewal of existing waivers are critical to sustaining access to health care services and lowering health inequalities for Medicaid enrolled and uninsured people across the state,” reads Veasey’s letter.

Over $10 billion in annual funding is at risk in DPP funding.

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“Texas is now entering its fourth month without funding for Directed Payment Programs which support vital healthcare services for our most vulnerable,” said Texas Essential Healthcare Partnerships President, Don Lee.

Texas is embroiled in a fight with the federal government over its Medicaid Section 1115 Waiver, and the funding that comes with it.

Back in April, the Biden administration’s Department of Health and Human Services (HHS) retroactively denied Texas’s waiver application. Before the regime changed hands, the Trump administration’s HHS and Centers for Medicare & Medicaid Services (CMS) approved Texas’ application for a 10-year renewal.

Texas then sued the federal government and secured a temporary injunction. A final decision has not yet come.

The waiver grants funding for certain categories of uncompensated care and is something certain hospitals rely upon heavily because of the large amounts of patients they serve who cannot pay. It is estimated to be worth about $30 billion for hospitals in Texas.

Overarching this dispute is a broader one featuring the expansion of Medicaid and Texas’ refusal to acquiesce Democrats’ demands to exercise that section of Obamacare. Texas Republicans view the federal government’s reneging as an effort to force the state’s hand into expanding Medicaid.

Expanding Medicaid would increase the number of people eligible for the state-sponsored program that supplies health insurance to poor individuals and families. It would also increase the percentage of health care spending that the federal government takes on.

But the move would only give the option of coverage for 15 percent of Texas’ uninsured population, the largest in the nation, that weren’t already eligible for it — about even with the percentage of Texas’ uninsured that are already eligible but have chosen not to enroll.

Texas is currently negotiating with the federal government to reapprove the waiver and has until September 2022 before the current waiver expires.

Veasey’s letter concluded, “While over a million uninsured Texans may acquire coverage because of Democrats’ unshakable commitment to extending health-care coverage in the state, over 3 million will remain uninsured, making these financing sources even more vital to guaranteeing access to care and needed resources.”


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.