FederalHealthcareStatewide NewsTexas Attorney General Sues Biden Administration Over Medicaid Waiver Revocation

In April, the State of Texas received notice that the previously accepted renewal of a Medicaid waiver would be rescinded — opening the state and area hospitals up to billions of dollars in uncompensated health care.
May 14, 2021
The latest in a long line of lawsuits between the Texas attorney general and the Biden White House centers on the state’s Section 1115 Medicaid waiver and the administration’s revocation of it.

About a month ago, the Centers for Medicare & Medicaid Services (CMS) reneged on its previous approval of a waiver that approves funding for certain uncompensated care and around which Texas has structured its health care system.

Without it, the state and, more specifically, local hospitals will be on the hook for billions of dollars in costs which patients fail to pay themselves.

Before the administration change, CMS under the Trump presidency approved a decade-long extension of the waiver. But CMS under the Biden administration reversed course, stating in a 650-page notice, “We have determined that the state’s exemption request did not articulate a sufficient basis.”

The suit alleges that the federal government breached its proper authority granted to it by the Constitution and abridged proper agency procedure, including lack of adequate notice.

The Texan Tumbler

“The Biden Administration cannot simply breach a contract and topple Texas’s Medicaid system without warning. This disgusting and unlawful abuse of power aimed at sovereign states must end,” Attorney General Ken Paxton said in a release.

“Not only does this violate agency regulations and threaten to rip a $30 billion hole in Texas’s budget, it was clearly intended to force our state into inefficiently expanding Medicaid under the Patient Protection and Affordable Care Act.”

While the Biden administration skirted around explicitly saying so, many on both sides of the argument took the move as the federal government prodding the state to expand Medicaid. The state legislature again rejected the program’s expansion this legislative session.

That expansion increases the income threshold for whom can enroll in Medicaid, and thus increase the state’s related costs but also the federal government’s financing proportion of the overall cost.

Texas has the largest uninsured population in the U.S., but a Medicaid expansion would only make Medicaid coverage available to 15 percent that weren’t already eligible. That’s only slightly above the percentage of the uninsured population that are already eligible for Medicaid but have chosen not to enroll.

There is still time for the state to reapply for the extension and was told to do so by CMS. But there is no guarantee the stated concerns would be assuaged.

The Office of the Attorney General is requesting the court invalidate CMS’s April notice and operate from the earlier approval.


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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.