CMS Drops Opposition to Texas’ Medicaid Waiver Extension; TMA Concerns Persist
By Sean Price


Texas’ safety net got a reprieve when the federal government  agreed to drop its opposition to a 10-year extension of Texas’ Medicaid 1115 Transformation Waiver, ensuring an annual $3.8 billion to offset uncompensated care through 2030. 

While keeping the waiver in place preserves part of the safety net, the Texas Medical Association’s longstanding concerns remain over the exclusion of community physicians from the funding, says Helen Kent Davis, TMA associate vice president of governmental affairs. 

“The waiver’s approval will protect safety-net health care systems’ ability to continue their missions,” she said. “But on their own, hospitals cannot meet the needs of Medicaid and uninsured patients. Community physicians play a critical role, too, and Texas must invest resources to help sustain them.”

The Centers for Medicare & Medicaid Services (CMS) rescinded approval of the waiver extension in April 2021, a move widely seen as an attempt to force Texas to expand Medicaid under the Affordable Care Act. Texas has the highest number of uninsured in the country at 5 million, and Medicaid expansion would provide health insurance coverage to at least 1.2 million of these, according to the Texas Hospital Association.

Before dropping its opposition, CMS had already lost one round of litigation with Texas to block the 10-year extension, which was approved back in January 2021. In August 2021, a Texas federal district judge temporarily reinstated it.

On April 22, CMS sent a letter to the Texas Health and Human Services Commission (HHSC) stating that contesting the waiver extension was not “the best use of the federal government’s limited resources.” 

“This should resolve the issue without the need for further litigation and will create no disruption to the people who rely on Texas’ Medicaid program,” CMS said in its letter to HHSC. 

In a June 2021 letter to HHSC, TMA and seven other Texas health care organizations had supported a five-year extension of the waiver.

“We have serious reservations regarding HHSC’s request to extend the waiver for 10 years, locking the state into a framework that reflects today’s health care delivery environment not one necessarily for tomorrow,” then-TMA President E. Linda Villarreal, MD, wrote. 

TMA also called for several changes in the 1115 waiver design to make Texas’ safety net more robust. They included expanding payment for uncompensated care to physicians and community clinics and creating a “Texas-style” solution to cover more of Texas’ uninsured patients. 

Both the Texas House of Representatives and the state Senate are studying possible access-to-care improvements for consideration during the legislative session that will begin in January 2023.

Last Updated On

May 10, 2022

Originally Published On

May 10, 2022

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Sean Price


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Sean Price is a reporter for Texas Medicine and Texas Medicine Today. He grew up in Fort Worth and graduated from the University of Texas at Austin. He's worked as an award-winning writer and editor for a variety of national magazine, book, and website publishers in New York and Washington. He's also helped produce Texas-based marketing campaigns designed to promote public health. Sean lives in Austin and enjoys hiking, photography, and spending time with his wife and two sons.

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