CMS will allow 10-year Texas Medicaid renewal denial to survive

The Biden administration abandoned its plans to prevent a ten-year extension of the gratuitous withdrawal from going into effect.

The Centers for Medicare and Medicaid Services said in a Friday notice to Texas that they are withdrawing the April letter that struck down the waiver extension, effectively ending the lawsuit on the matter after almost a year. The Trump administration approved Texas’ request for an extension in the final days of his tenure.

“CMS has concluded that further litigation on this matter is not the best use of the federal government’s limited resources,” the notice reads.

Texas first received approval for its waiver — which expanded Medicaid managed care, created a free medical care program for providers, and established incentive payments to hospitals for healthcare transformation efforts — in 2011.

The waiver allows the state to give out more than $3.8 billion to providers just to account for unpaid care. Texas Tribune in 2019 it was reported that the total cost of failure was $25 billion.

The state applied for a third renewal earlier in November 2020 under a “fast track” process. The waiver was not supposed to expire before September 2022.

Trump’s CMS has canceled the federal notice and comment period for the opt-out, citing the COVID-19 pandemic. The agency extended the waiver by 10 years just five days before leaving office. Medicaid waivers are typically extended by three or five years, and Texas has applied for a five-year extension.

Texas sued Biden CMS last May after the agency withdrew the Trump administration’s approval for an extension.

CMS stated that Texas did not go through the proper notice and comment period in the renewal process and encouraged him to reapply. The state said that CMS has withdrawn the extension to force Texas to expand Medicaid coverage.

In August, a federal judge granted Texas’s request for a preliminary injunction that temporarily halted the repeal of the CMS renewal.

Now CMS has voluntarily withdrawn its decision. But the agency remains committed to working with states to provide robust notice and comment periods on all Medicaid waivers in line with federal requirements. letter said.

The announcement came as a relief to Texas hospitals.

“Today’s decision creates confidence after months of uncertainty during the ongoing pandemic. While funding, staffing, and COVID-19 continue to pose challenges for hospitals, we hope we have a solid foundation to operate and recover from,” said John Hawkins, President and CEO of the Texas Hospital Association. says in the statement.

The Trump administration also extended the Medicaid waiver in Tennessee and Florida by 10 years at the end of its tenure. The Biden administration did not revoke either state’s approval, although beneficiary advocates sued Tennessee over the denial.

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