$12 billion in Medicaid funds restored to Texas hospitals, ending impasse with the feds

Nearly $12 billion in Medicaid funding to Texas hospitals will be restored, Gov. Greg Abbott said Thursday, ending a near year-long impasse between Texas and the federal government.

“This funding is a major victory for Texas patients,” Abbott said in a statement. “It authorizes nearly $12 billion for hospitals, physicians, rural clinics, nursing facilities, and behavioral health providers that serve patients in every region of our state. Emergency rooms will stay open, rural families will retain local care, and Texans will have access to the treatment they need. I thank CMS and the Trump Administration for helping ensure Texans get the medical care they need.

The halt of the funds began on Sept. 1, the beginning of the state’s new fiscal year. It marked the first time the Centers for Medicare and Medicaid Services had stopped the supplemental funding to Texas hospitals since the funding began in 2014. It was not immediately clear when the funds would be transferred to Texas hospitals, which were slated to lose $27 million a day.

Abbott’s announcement comes two weeks after The Texas Tribune reported that the governor’s office had stepped in last month, according to a letter he sent Health Secretary Robert F. Kennedy Jr. in which he called the move to hold onto the money an economic gun to Texas. The funding helps hospitals close the gap between their Medicaid reimbursements and the actual costs they incur for treating low-income Texans.

The dispute began late last year over questions about how Texas raises more than $4.2 billion in taxes to access those federal funds.

The Texas Hospital Association did not have an immediate comment on the announcement.

This is a developing story. Check back for details.

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