Feds say Texas hospitals owe Medicaid $27 million

hospital sign
A hospital.

The federal government found that hospitals in the Dallas-Fort Worth were overpaid by $27 million to provide care to the uninsured, according to a new report.

The feds want the hospitals to reimburse the sum in the next few months, the Texas Tribune has reported.

The disputed payments are tied to how the hospitals leveraged matching funds from the federal Medicaid program, through a special demonstration waiver. The Obama administration contends that Texas used donations from private hospitals and non-profit organizations to leverage matching funds, which it said is prohibited, although revenues from district hospitals are allowed for matching purposes.

“In this arrangement, a group of private hospitals indirectly assumed financial responsibilities once held by the local governments and, in exchange, received payments under the Medicaid program,” wrote Bill Brooks, a CMS official said in a letter to the state of Texas, the Tribune reported. He told Texas officials they needed to subtract $26.8 million on their next quarterly expense report to correct the violation.

The federal government has been pressuring Texas to insure its poorer residents through means other than the use of Medicaid waiver programs. The state, which has the highest rate of uninsured in the country, is among 18 that has yet to expand Medicaid eligibility under the Affordable Care Act. It is believed Texas is sacrificing as much as $100 billion in federal revenue over the next decade.

It is not the first time recently Texas hospitals have been accused of receiving overpayments. Last year, the feds concluded its hospitals had received $15.3 million in excess electronic health record incentive payments. However, the Tribune also reported that a 2015 e-mail exchange between Texas and federal officials suggested that such an arrangement was allowed and could be kept in place through September of next year.