Texas sues Biden administration for loss of Medicaid waiver

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Texas Attorney General Ken Paxton in Washington, United States on June 9, 2016. REUTERS / Jonathan Ernst

Texas has sued President Joe Biden’s administration over its decision to reverse the previous administration’s approval of changes to its Medicaid program, saying the move was intended to pressure the state to expand. Medicaid under the Affordable Care Act.

In a lawsuit filed in federal court in Tyler, Texas on Friday, the state said the loss of approval could cost the state more than $ 30 billion and would have “an almost incalculable effect on local citizens. most vulnerable in Texas ”.

“The Biden administration cannot just break a contract and overthrow the Texas Medicaid system without warning,” Texas Attorney General Ken Paxton said in a statement. “This disgusting and illegal abuse of power targeting sovereign states must end.”

The U.S. Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services agency that administers Medicaid, did not immediately comment.

The dispute involves a so-called Medicaid waiver first granted in Texas in 2011. CMS can provide waivers to states wishing to deviate from usual federal rules for administering Medicaid, a joint federal and state program intended to cover low income and disabled people.

The Texas waiver, which has been amended several times, allows the state to require Medicaid recipients to enroll in managed care organizations (MCOs), which aim to cut costs. Under a managed care model, Medicaid pays MCOs a fixed premium for each beneficiary, rather than paying for the services directly.

Texas also receives federal funding for a related incentive program whereby bonuses are distributed to Medicaid providers or regions based on improvement measures. About $ 20 billion has been distributed under the program, according to the lawsuit, but federal support for the program is expected to expire in September.

In 2020, the state requested an extension of the waiver, which was due to expire in 2022, until 2030. It was allowed to bypass the normal notice and comment period in light of the COVID-19 emergency. .

The newly extended program included new federal funding to replace the expiring incentive program, according to the lawsuit. In April, however, CMS informed Texas that the extension had been wrongly granted because there had been no notice and comment period.

The state said in the lawsuit that the sudden termination violated federal law.

“Federal authorities cannot overthrow a state’s Medicaid system like a child could with a sandcastle,” he said.

The state also said the decision had an “ulterior motive,” noting that CMS cited a letter from three advocacy groups – Children’s Defense Fund-Texas, Every Texan and Texans Care for Children – who criticized the state for relying on its waiver program rather than expanding Medicaid under the ACA.

The organizations said in their letter that despite the waiver’s “valuable contributions”, “Texans need and deserve more.”

The state seeks a court order declaring April’s annulment invalid.

Texas is one of the Republican-led states that has not taken advantage of the expansion of Medicaid funds through the ACA, the signature of former Democratic President Barack Obama.

The case is State of Texas et al v. Richter et al, US District Court, Eastern District of Texas, No. 21-cv-00191.

For Texas: Solicitor General Judd Stone

For the federal government: not immediately available

Our Standards: The Thomson Reuters Trust Principles.



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