To rectify the overpayments, CMS told Texas health officials to subtract $26.8 million on their next quarterly expense report to the federal government. Texas health officials said they plan to challenge the decision.
It is the latest development in the state’s long, protracted dispute with the federal government over its 1115 waiver.
The waiver, set to expire in December 2017, directs federal funding to Texas’ safety-net hospitals to cover uncompensated care costs. Texas has the highest uninsurance rate in the country. It is one of 19 states that chose not to expand its Medicaid program under the Affordable Care Act.
Under terms of the waiver, local governments in Texas gather funding through property taxes and other means to redistribute to its safety-net hospitals. But CMS has alleged Texas health officials allowed private hospitals to leverage donations to local governments to improperly draw matching federal funds.
Senior vice president of government relations for the Texas Hospital Association John Hawkins declined The Texas Tribune’s request for comment on the alleged overpayments. “Hospitals will continue to work in concert with state and federal agencies to ensure the continuation of funds that offset uncompensated care,” Mr. Hawkins said.
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