Mega Doctor News
AUSTIN – Texas Attorney General Paxton has launched a legal battle against the Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS), contesting a federal bulletin that poses a threat to Texas’s Medicaid program and its nearly five million beneficiaries.
The lawsuit argues that the imposed requirements are neither supported by existing laws nor mandated by current regulations. Furthermore, Attorney General Paxton has filed a motion for a preliminary injunction to halt CMS’s actions.
Attorney General Paxton expressed concerns that CMS’s actions could jeopardize not only local governments’ ability to support Medicaid providers but also the entire state’s capacity to fund its Medicaid program. The potential consequences of CMS’s actions could lead to reduced access to healthcare for vulnerable Texans and hinder local providers’ ability to serve communities across the state.
Texas’s Medicaid program relies on funding from both the state and federal government, with local governments also contributing to ensure access to healthcare for citizens, irrespective of income level. Since 2013, and with CMS’s authorization, Texas has permitted local governments to administer Local Provider Participation Funds (LPPFs). In 2021, the Biden administration’s CMS attempted to revoke Texas Medicaid’s use of LPPFs, but a preliminary injunction was issued against this effort.
LPPFs involve local governments collecting mandatory assessments from healthcare providers and transferring these funds to the state to finance Texas’s share of non-federal Medicaid funding. Federal law explicitly allows such arrangements. However, federal law also prohibits hold harmless arrangements, which guarantee healthcare providers will receive their total tax payment back through Medicaid payments. CMS recently issued an unlawful informational bulletin that would wrongly classify private contracts involving entities that contribute to an LPPF as prohibited hold harmless arrangements, even though federal law does not prohibit such private contracts.
CMS’s bulletin revealed its intent to require the Texas Health and Human Services Commission (HHSC) to provide information about these private “hold harmless arrangements” as a prerequisite for receiving federal funding, despite the HHSC’s lack of authority to do so. This could potentially endanger billions of dollars meant for Texas’s Medicaid program. The changes represent a significant departure from CMS’s previous policy and an unprecedented expansion of its authority.
To read the full complaint, click here.
To read the motion for preliminary injunction, click here.
