CMS Extends Texas’ Medicaid 1115 Waiver
By Joey Berlin

Waiver story photoWhile celebrating the Centers for Medicare & Medicaid Services’ (CMS') decision to continue funding to help hospitals provide charity care, TMA continues to work toward helping physicians who struggle with limited Medicaid payments.

Late in December, CMS awarded Texas a five-year extension of its Medicaid Section 1115 Transformation Waiver, providing crucial funding for public and private safety-net hospitals that are improving care delivery for Medicaid and low-income uninsured patients.

The waiver extension, which runs through Sept. 30, 2022, provides Texas with an additional $25 billion in funding, 60 percent of which is financed by federal resources while the rest comes from local hospital districts or county taxes. The funding is divided into two pools ― one for hospital uncompensated care and the other to test new models for delivering care, known as the Delivery System Reform Incentive Payment (DSRIP) program. 

DSRIP funding will be level during years one and two of the extension but  will decline in years three and four, and evaporate in year five. The uncompensated care pool funding is primarily for public and private safety-net hospitals and their affiliated networks of physicians and clinics. Funding for uncompensated care will remain level across the life span of the waiver.

TMA always has supported the 1115 waiver, while holding some reservations about its hospital-centric nature, notes Helen Kent Davis, TMA's director of governmental affairs. Community-based physicians don't directly benefit much from the waiver, she says.

"But at the same time, without those dollars, we would've seen a devastating financial hit to the large safety-net hospitals, as well as other hospitals that do a lot of uncompensated care for low-income, uninsured patients," Ms. Davis said. "So in terms of the big picture … if CMS had not renewed the waiver at all, it would've been very difficult for safety-net hospitals to make up the difference, potentially resulting in cuts in services or programs."

"CMS recognizes the critical role that safety net hospitals play in providing charity care to the uninsured and the associated fiscal burden that hospitals bear for that care," CMS Administrator Seema Verna told the Texas Health and Human Services Commission in a December letter announcing the waiver extension. 

Meanwhile, TMA is pursuing other avenues to help community doctors, who receive notoriously low payments for treating Medicaid patients. It's studying that issue with other entities in a group known as the Texas Alliance for Health Care, which includes the Texas Hospital Association, the Texas Association of Community Health Plans, and others. Also, TMA and the Texas Hospital Association recently formed a task force on Medicaid physician payments that contains four members from each association. TMA President-Elect Douglas Curran, MD, is the task force chair.

Last Updated On

January 10, 2018

Originally Published On

January 10, 2018

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