Texas AG sues Biden administration over revoked Medicaid funding

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Texas Attorney General Ken Paxton filed a lawsuit against the Biden administration May 14, alleging that its decision to revoke a state Medicaid funding waiver was an unlawful "power grab." 

In April, CMS rescinded approval for a Section 1115 waiver amendment that would have extended reimbursement to Texas hospitals for uncompensated care through September 2030. The Biden administration said that under the previous administration, CMS and Texas failed to adhere to public comment period requirements in the approval process. CMS argued that the public comment period is necessary for stakeholders to share feedback.

In a May 14 news release accompanying the lawsuit, Mr. Paxton said, "the Biden Administration cannot simply breach a contract and topple Texas's Medicaid system without warning. ... Not only does this violate agency regulations and threaten to rip a $30 billion hole in Texas's budget, it was clearly intended to force our state into inefficiently expanding Medicaid under the Patient Protection and Affordable Care Act."

Texas has had an extension for its 1115 waiver agreement since 2011, according to The Texas Tribune. The current waiver is set to expire in October 2022.

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