Waiver Summary

In December 2011, Texas received federal approval of an 1115 waiver that would preserve Upper Payment Limit (UPL) funding under a new methodology, but allow for managed care expansion to additional areas of the state.

The purpose of the 1115 Healthcare Transformation waiver, supplemental payment funding, managed care savings, and negotiated funding will go into two statewide pools now worth $29 billion (all funds) over five years. Funding from the pools will be distributed to hospitals and other providers to support the following objectives: (1) an uncompensated care (UC) pool to reimburse for uncompensated care costs as reported in the annual waiver application/UC cost report; and (2) a Delivery System Reform Incentive Payment (DSRIP) pool to incentivize hospitals and other providers to transform their service delivery practices to improve quality, health status, patient experience, coordination, and cost-effectiveness.

Texas Regional Healthcare Partnership (RHP) Regions

In August 2012, HHSC approved 20 RHP regions. Our area is region 5 which consist of Starr County, Hidalgo County, Willacy County and Cameron County. Hidalgo County is the anchor entity for Region 5. “An anchoring entity is the single IGT entity in an RHP serving as the primary contact to HHSC responsible for providing opportunities for public input to the development of RHP plans and coordinating discussion and review of proposed RHP plans prior to plan submission to the State.”

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Texas Secures Nearly $25 Billion in Medicaid Funding for Next Five Years

Thursday, December 21, 2017
Charles Smith, Executive Commissioner
Contact: Christine Mann, 512-424-6951

AUSTIN – Governor Greg Abbott today announced that Texas Health and Human Services Commission and the Centers for Medicare and Medicaid Services have reached an agreement to continue a critical part of the state’s Medicaid program over the next five years.

The approval of the 1115 Demonstration Waiver will allow the state to continue expanding managed care to Medicaid clients while also preserving supplemental payments to hospitals and other critical Medicaid providers.

“I committed to the people of Texas that we would focus on preserving access to care without expanding a broken Medicaid system under Obamacare,” said Governor Abbott. “The new 1115 Waiver ensures that funding will remain available for hospitals to treat and serve people across our state who are in need of top-quality healthcare. I am proud of the work done by Commissioner Smith and thank the federal government for a willingness to work together to ensure all Texans are able to access care.”

Texas is positioned to receive nearly $25 billion in Medicaid funding over the next five years. The agreement was reached today.

“We are a state that is committed to helping people. With this agreement, we will continue our innovative approach to providing health care to millions of Texas Medicaid clients,” said Texas HHS Executive Commissioner Charles Smith. “We’re committed to delivering a sustainable health care system over the long term while being good stewards of taxpayer dollars.”

The waiver funds uncompensated care for Texas hospitals and other Medicaid providers and maintains level funding for Texas at $3.1 billion each year for the first and second year of the five-year agreement. This will provide much-needed assistance to safety net hospital providers. In the third year and moving forward, CMS will transition to a new method of distributing UC payments to hospitals. The new methodology will account for all provider types and will be based upon uncompensated charity care costs. This will provide a more accurate calculation of Texas’ uncompensated care costs.

The extension will also allow adequate opportunity to expand supplemental payments for nursing facilities and new directed payment programs for hospitals.

The Delivery System Reform Incentive Payment funding pool will be maintained at level funding for the first two years of the waiver extension. The DSRIP pool is funded at more than $11 billion and will be phased out over four years under the waiver. HHSC will continue to work with CMS and local providers on developing innovative approaches to health care delivery within Medicaid.

State leaders have worked together over the last two years to craft a waiver that works for all Texans.

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