TMA Shooting for Reinstatement of 1115 Waiver Extension
By Joey Berlin

Facing a major setback for uncompensated care, the Texas Medical Association is taking the opportunity to think bigger and better. 

In April 2021, the Centers for Medicare & Medicaid Services (CMS) rescinded its previous extension of Texas’ Medicaid 1115 Transformation Waiver, which had been approved three months earlier. For a decade, the 1115 waiver has helped pick up the tab for care Texas safety-net hospitals and their affiliated clinics deliver to Medicaid patients, as well as the uninsured and underinsured. 

Now, instead of Texas being able to count on that funding through September 2030, the waiver will expire at the end of September 2022 – unless the state, with input from TMA and others, can convince the Biden administration to reconsider its April decision. 

However, TMA is pushing for CMS to not just reinstate the extension, but also make a long-term commitment to Texas’ entire safety-net system. Until now, 1115 funding has gone almost exclusively to hospitals and certain other clinics, while leaving out many other integral parts of the safety-net equation. In testimony and a written letter to the Texas Health and Human Services Commission (HHSC) in June, TMA and specialty societies asked HHSC to propose a broader version of the waiver. That includes urging HHSC to establish a Texas-tailored solution for coverage expansion, a proposal medicine also unsuccessfully advocated for during this year’s session of the Texas Legislature.

CMS reverses course

The 1115 waiver, if extended, will bring as much as $11.4 billion in federal dollars to the state each year. It was originally intended as a bridge to Medicaid expansion before the U.S. Supreme Court ruled in 2012 that states couldn’t be required to expand Medicaid under the Affordable Care Act.

Prior to the waiver’s approval in 2011, “we really were in a bad place, and so that’s why this uncompensated care pool really has saved the day for a lot of hospitals, in particular,” said Dallas internist Sue Bornstein, MD, executive director of the Texas Primary Care Consortium and a member of TMA’s Board of Trustees. “Is it ideal? No, and quite frankly, it’s been pretty hospital-centric. There’s a whole lot of other folks that are part of the health care system, including private practice docs, who … have not been able to participate in the waiver in any kind of meaningful way, because it’s really been focused on hospitals and also on some other kinds of clinics.” 

In the Trump administration’s final days in January 2021, CMS extended the waiver through September 2030. But three months later, the agency reversed course under the Biden administration and took back the extension, citing failure to seek sufficient public comment. It gave HHSC the opportunity to reapply for an extension, which the agency is in the process of doing.

Vision for the future

TMA President-Elect Gary Floyd, MD, testified to HHSC in June, advocating for a future waiver that fosters a more inclusive and holistic health care system than the waiver that was approved a decade ago. He told HHSC that medicine supports:

  • Offsetting uncompensated care for safety-net entities and amending the waiver to ensure financial viability for all components of the safety-net system – including allowing the redirection of funds to physicians and community clinics; 
  • Seeking the authority to establish a comprehensive health coverage initiative tailored to Texas to reduce the state’s alarming uninsured rate among adults of working age; and 
  • Promoting an inclusive, holistic, and community-driven approach to improving population health and health outcomes. That includes piloting organized medicine’s vision for an accountable health organization (AHO), governed by a community-based board of physicians, hospitals, safety-net entities, and others, to develop a locally tailored approach to health and implement value-based care.  

Just before the pandemic, TMA had promoted the AHO model – previously known as a community-based accountable care organization – in conversations with the state as a way to promote greater local accountability and inclusivity in care delivery. The AHO would not deliver actual care, but would work with those who do to establish a common vision, purpose, and direction for addressing health care quality, safety, and equity for the community. Ultimately, its aim is to foster local decisions regarding how best to improve access to care, health outcomes, and health equity, and reduce costs.  

HHSC published its intention to re-seek an extension of the waiver in the Texas Register in May.

Last Updated On

July 08, 2021

Originally Published On

July 06, 2021

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Medicaid | Texas legislation

Joey Berlin

Associate Editor

(512) 370-1393
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Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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