Another 10 years for Texas’s 1115 waiver? Experts say it’s unlikely

The Texas Health and Human Services Commission’s (HHSC) inclusion of another 10-year extension in its Medicaid 1115 waiver extension request is unlikely to receive approval from the Centers for Medicare and Medicaid Services (CMS), according to some experts following the waiver. If CMS approves the extension, they are likely to only grant it for 5 years.

HHSC only asked for a five-year extension in its initial waiver extension application in January 2020, but the Trump administration increased the period to ten years in its approval.

 

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Anne Dunkelberg, associate director of Every Texan, explained how atypical the Trump administration’s 2020 extension increase was:

“That’s one of only three examples ever in the history of Medicaid waivers of a state getting a ten year extension, and all three of them were done in the last several months of the Trump administration.”

Stephen Love, president and CEO of the Dallas-Fort Worth Hospital Council, agreed. He said although 10 years would be “fantastic,” a five-year extension is more likely.

Subsections (e) and (f) of Section 1115 of the Social Security Act state that both initial 1115 waiver approvals and subsequent extensions should last three years — five at the maximum. Despite this federal statute, the Trump administration’s CMS released guidance in 2017 stating it could grant extensions of up to 10 years to “routine, successful, non-complex” extension requests.

Dunkelberg said such a lengthy extension is particularly uncommon because 1115 waivers are designed to be temporary demonstration projects. In fact, the Obama Administration’s original approval of Texas’s 1115 waiver application in 2011 was intended to be a bridge for the state to eventually expand Medicaid.

“I am not expecting that the new administration will be taking the 10-year leap, but that’s just a guess. 1115 waivers are supposed to be demonstration projects.”

“…the 10-year extension request is inconsistent with federal statute, and the Texas extension request regarding expenditure authorities is far from ‘non-complex.’”

While the state’s current waiver doesn’t expire until September 2022, federal funding for its Delivery System Reform Incentive Program (DSRIP) will run out at the end of September of this year — placing considerable urgency on a replacement plan for, or renewal of, the waiver.

DSRIP provides critical funding for the state’s uncompensated care pool, hospital reimbursements and services for its Medicaid population. Dunkelberg said uncompensated care funding is the only “immediately pressing issue” concerning the waiver.

“The only thing that was in the Trump Administration’s approval that is now lost until there’s a new agreement is the HHSC request for a brand new, $1.5 billion a year for a brand new uncompensated care pool for local health departments and local mental health authorities.”

The public comment period for HHSC’s new extension request opened on May 28 and will last until June 31. Individuals can submit their feedback on the application draft either via email or U.S. mail, or by attending one of three public meetings organized by HHSC. The lack of a public comment period was CMS’s reasoning for rescinding Texas’s previous waiver extension in April.

Dunkelberg believes some of the feedback during the public comment period will concern the abnormally long length of the extension request. Given the public’s overwhelming support for Medicaid expansion, she also thinks HHSC will receive a large number of calls to expand Medicaid instead of extending the waiver.

“It is significant and meaningful for people in Texas to be able to express that both to HHSC and to the feds, and say, ‘Uncompensated care pools are great when you have the worst uninsured rate in the country, and we don’t have any problem paying better Medicaid rates either.’”

Following HHSC’s public comment period and its submission of the extension request to the federal government, CMS will hold a second, federal public comment period prior to its decision. 

“Under the federal law, there’s a thirty day minimum period that states can take public comment. So that’s comment from people — mostly in Texas, presumably — to the agency, which is supposed to be taken into account by the agency before they submit their request for extension to federal Medicaid. And then there will be another federal public comment period before the feds make their decision about whether or not to approve it.”

The timeline for CMS’s decision on the waiver isn’t set in stone, Dunkelberg explained.

“Typically, on everything that’s related to waivers, there’s usually a whole lot of informal back-and-forth, and question asking, and stuff like that. So how long it takes, in part, depends on how complicated or controversial things are.”