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The agreement was set to expire next year after federal health officials in April rescinded the Trump-era extension to the 1115 waiver agreement — which Texas has had with the U.S. Centers for Medicare and Medicaid Services since 2011 and is up for review every few years — and ordered Texas to collect public input, as the agreement requires, while it renegotiates a new extension beyond its original October 2022 expiration date.
The decision did not stop the funding for the current waiver, which provides $3.87 billion in annual funding to partly offset free care provided by Texas hospitals to the uninsured, and to pay for innovative health care projects that serve low-income Texans, often for mental health services.
In his order Friday, U.S. District Judge J. Campbell Parker granted a preliminary injunction sought by Texas to block the federal government from rescinding the original Trump-era agreement. The decision removes the requirement, at least for now, for Texas to negotiate its deal with CMS if it wants 1115 funding beyond October 2022.
The decision by CMS was “likely unlawful” and resulted in “turmoil in the state’s Medicaid program,” in part because the state had already begun “reassigning staff, making plans, appropriating money, passing regulations, and engaging stakeholders to work towards implementing the necessary changes” allowed by the original deal, which was confirmed in January before it was rescinded by the Biden administration in April, Barker said in the order.
On Friday, Texas Attorney General Ken Paxton, who had sued to reinstate the 10-year deal, applauded Barker’s decision, calling the April action of the CMS “capricious” and a political ploy by President Joe Biden to pressure the state into expanding Medicaid.
