The Centers for Medicare & Medicaid Services has apparently issued an ultimatum to Texas regarding the way it provides funding to treat its indigent patients, according to the Houston Chronicle.
CMS has decided to pull the plug on the annual $5.5 billion in funding it provides to Texas for indigent care, the publication reports. Among the reasons why: Texas' decision not expand Medicaid under the Affordable Care Act. Although that is the state's right as the result of the 2012 U.S. Supreme Court decision, the feds say that Texas needs to find a more efficient way to pay for indigent care or it will begin to phase out those payments starting in late 2017.
The money provides coverage to about 1.5 million Texans who earn too much money to qualify for Medicaid under Texas' guidelines, but earn too little to qualify for a tax subsidy to purchase insurance through the state's health insurance exchange.
Texas is one of 18 states that has so far refused to expand Medicaid eligibility under the ACA, a decision calculated to cost the state at least $100 billion over the next decade. Among the most conservative states in the U.S., it is unlikely to relent on that decision anytime soon. Along with a high dependence on narrow networks among its commercial insurers and a physician shortage within the state, the ACA appears to have done little to improve healthcare access in the Lone Star State.
The schism on Medicaid expansion has perhaps had as big an impact on hospitals as it has patients. Although the ACA has brought multibillion dollar reductions in levels of uncompensated care, much of that has been enjoyed by hospitals that operate in expansion states.
The apparent edict from CMS has Texas hospital executives worried. "From a pure dollars and cents point of view, it's been critical to the safety net," Freddy Warner, head of government relations for Memorial Hermann Health System, told Houston Chronical. A cut in the funding would be “the difference between hospitals staying open or closing, the difference between adding jobs and hospitals tapping their lines of credit, particularly for some of the smaller and rural hospitals.”
- read the Houston Chronicle article