CMS rescinds Texas’s 1115 waiver extension

Today, the Centers for Medicaid Services (CMS) rescinded its approval of Texas’ Medicaid 1115 waiver extension request. The waiver provides funding for “uncompensated care” in the absence of an expanded Medicaid program. 

The waiver extension was approved by the Trump Administration on Jan. 15, 2021 through 2030, even longer than the extension requested by the Abbott administration of 2027.

The current waiver is set to expire on September 30th, 2022.



CMS made the decision on the grounds that Texas didn’t have adequate reasoning to request that it be exempt from the public notice and comment requirements.

From the CMS’s letter to the Abbott administration. 

Texas’s rationale for seeking exemption from the normal public notice process was premised on the state’s conclusory assertion that healthcare providers in the state must have the financial stability they need to prepare for and respond to the COVID-19 public health emergency, and without an emergency approval of the extension request, the goals, purpose, and achievements from the THTQIP demonstration would be undermined. 

However, the state’s exemption request did not meaningfully explain why the extension request addressed the COVID-19 public health emergency or any other sudden emergency threat to human lives, as required under 42 C.F.R. § 431.416(g)(1) and (2); why the circumstances constituted an emergency, as required under 42 C.F.R. § 431.416(g)(3)(ii); or why delay would undermine or compromise the purpose of the demonstration or be contrary to the interest of beneficiaries, as required under 42 C.F.R. § 431.416(g)(3)(iii)…

Specifically, the state’s request did not sufficiently demonstrate that its extension request addressed a natural disaster, public health emergency, or other sudden emergency threat to human lives; the circumstances of the state’s exemption and extension requests constituted an emergency; and that a delay sufficient to complete the state- and federal-level public notice and comment processes would have undermined or compromised the purpose of the demonstration or been contrary to the interest of beneficiaries…

Accordingly, we are rescinding our approval of the state’s 42 C.F.R. § 431.416(g) exemption request and our January 15, 2021 demonstration extension approval, and providing Texas the opportunity to resubmit its completed application after going through the necessary public notice and comment procedures required under section 1115 of the Act and its implementing regulations. We are withdrawing the January 15, 2021 extension approval, rather than leaving it in place while Texas and CMS conduct the required state- and federal-level public notice and comment processes, to avoid uncertainty for Texas and providers in Texas.

Governor Greg Abbott released a statement following the decision:

“By rescinding this waiver extension, the Biden administration is obstructing healthcare access for vulnerable Texans and taking away crucial resources for rural hospitals in Texas. The State of Texas spent months negotiating this agreement with the federal government to ensure vital funds for hospitals, nursing homes, and mental health resources for Texans who are uninsured. With this action, the Biden administration is deliberately betraying Texans who depend on the resources made possible through this waiver.”

Texas Attorney General Ken Paxton also provided his input in a statement:

“The Biden Administration has effectively blocked vulnerable Texans from accessing healthcare by stripping hospitals, nursing homes, and mental health centers of critical resources that serve our most vulnerable populations. Our state negotiated with the federal government for months in order to secure this necessary funding and, in the blink of an eye, President Biden grossly betrayed those who rely on our assistance the most. Texas will not stand for this disgusting removal of resources and I will use every legal tool available to regain the assistance Texans need.”

Stephen Love, president and CEO of the Dallas-Fort Worth Hospital Council, provided State of Reform with his comments:

“It’s bad, because we were all working on this Medicaid 1115 waiver renewal, and the hospitals were appreciative of the work the state did to do this … We’ve really got to absorb this, we’ve got to see. ‘What are the concerns CMS brought?’”

Love nonetheless is optimistic about Cecile Young (executive commissioner of the Texas Health and Human Services Commission)’s ability to navigate the issue, saying he has “full confidence” that Young and her team can work with CMS to “get this back on track.”