Texas, CMS agree to extend Medicaid 1115 waiver through 2017

Texas has been granted a 15-month waiver extension by CMS, allowing federal Medicaid funds to offset the cost of specialized delivery programs and treating the uninsured while putting off a larger discussion about the state’s rejection of expanding Medicaid under the Affordable Care Act.

The Medicaid 1115 waiver was set to expire in September after directing $17 billion in federal dollars and another $12 billion in local funding to hospitals and health providers in the state over the past five years. After a request for a five-year extension was rejected by CMS, the Texas Health and Human Services Commission asked to keep the funding flowing through the end of 2017.

“Failure to extend the 1115 waiver would have resulted in near catastrophic consequences for the state’s most vulnerable populations,” Texas Hospital Association CEO Ted Shaw said in a statement. “The waiver has been absolutely critical for increasing access to quality healthcare.”

Shaw said the pools for uncompensated care and delivery system reform incentive payments would be funded at $3.1 billion per year. If no permanent deal is reached, incremental annual cuts of 25 percent would kick in beginning in 2018 until the funding is completely cut off.

The extension includes a requirement for Texas to study whether or not money used in the uncompensated care pool is paying for costs which could be otherwise covered by an expansion of Medicaid.

State lawmakers rejected an expansion plan in 2013, and the idea has been criticized by Texas Gov. Greg Abbott, who has called the program “broken and bloated.”

In a similar situation with Florida’s 1115 waiver, CMS also agreed to an extension, though unlike the Texas deal, Florida will have its uncompensated care pool cut by 50 percent in 2016 and 70 percent in 2017.