HealthcareJudicialStatewide NewsTexas Wins Preliminary Victory Against Biden Administration in Medicaid Lawsuit

The district court's order temporarily suspends the Biden administration's revocation of Texas Section 1115 Medicaid waiver.
August 23, 2021
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The impending cancelation of a Medicaid waiver that funds certain instances of uncompensated health care has been paused by a preliminary injunction from the U.S. District Court for the Eastern District of Texas.

The court denied the federal government’s motion to dismiss and approved Texas’ request for a preliminary stay on the waiver cancelation.

Back in April, the Department of Health and Human Services (HHS) announced it had retroactively denied Texas’ Section 1115 waiver under Medicaid. The waiver was applied for and approved by the Trump administration’s HHS and Centers for Medicare & Medicaid Services.

The waiver allows certain categories of uncompensated care to be paid for by the federal government without expanding the welfare program under Obamacare — that would expand the qualifications for coverage under the law.

Without it, Texas hospitals and other health care facilities would find themselves on the hook for billions of dollars that the patients cannot pay for themselves.

The Texan Tumbler

Biden’s HHS denied Texas’ approved waiver under the justification that the state had not adequately demonstrated its urgent necessity to skip the typical public notice requirements before approval. Texas had obtained an exemption from those requirements by the Trump administration’s HHS due to the pandemic.

While not part of its official ruling, many in the state on both sides of the political aisle took the denial as a warning shot from the federal government over Texas’ refusal thus far to expand Medicaid.

Texas Attorney General Ken Paxton sued Biden’s HHS director, Chiquita Brooks-LaSure, over the retroactive cancelation. Multiple Texas Republican congressmen joined the suit with the Texas Public Policy Foundation filing an amicus brief on their behalf.

After the injunction, Paxton said, “This deplorable attempt to force our state into expanding Medicaid — the Biden Administration’s ultimate goal — was illegal, and we will continue to fight against every political ploy this Administration throws at us.”

In its ruling, the court said the waiver’s recission has resulted in “[t]urmoil in the State’s Medicaid program.”

A final decision on the case must now be issued and the court will consider the case in full. The Texas Eastern District Court may not be the case’s final stop, either. Whichever way the district court rules, it will likely be appealed by the losing side.

And while this occurs, Texas’ health care industry will rush to cobble together a contingency plan. Texas’ current 10-year waiver expires in September of 2022 and the state would have to expedite a new application should the courts ultimately rule with the federal government.

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Brad Johnson

Brad Johnson is 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.