A new analysis measuring the impact of losing the 1115 waiver program in the state estimates that hospitals in the Rio Grande Valley will lose nearly $100 million per year in federal healthcare funds.
Texas Essential Healthcare Partnerships, a nonprofit group, issued their analysis estimating that 11 hospitals in the Valley would lose about $98,130,066 without the waiver program, a calculation based on lost revenue in charity care and uncompensated care pools provided by the waiver.
“The 1115 Waiver is essential to the survival of Texas safety-net hospitals,” TEHP President Don Lee stated in a news release. “At a time when healthcare is more important than ever, the federal government and states must work together to ensure safety-net providers have the necessary resources to serve their communities.”
“It is important to recognize that if the Waiver is not renewed, it will have a disproportionately harmful impact on patients in communities that are unable to support a public hospital, like the Rio Grande Valley area, which stands to lose nearly $100 million every year,” Lee continued. “This includes communities like Laredo, Beaumont, Brownsville, McAllen, Temple, Amarillo, Tyler, Waco and many others.”
In January, the Trump administration approved an extension of the program through Sept. 30, 2030, but then on April 16, the Biden administration rescinded that extension. The current extension is set to expire in September 2022.
First approved in Texas in December 2011, the 1115 waiver was meant to be a temporary program as the Obama administration hoped the state would eventually transition into expanding Medicaid under the Affordable Care Act. However, despite attempts by Democratic state lawmakers to adopt Medicaid expansion, the state has only continued to expand the 1115 waiver every several years.
The program created an Uncompensated Care pool to reimburse hospitals for treating patients without insurance and also created a Delivery System Reform Incentive Payment pool of funds for projects that aimed to enhance access to care, improve quality, and reform the healthcare delivery system.
The extension under the Trump administration continued the uncompensated care fund pool but allowed the DSRIP pool to expire on Sept. 30, 2021.
“The 1115 Waiver program is a very detailed program involving many partners throughout South Texas,” said Eddie Olivarez, the Hidalgo County Health Department chief administrative officer, in an interview last month.
“The biggest partners have been the UTRGV medical school and many of the colleges and programs here locally to do preventive medicine, a preventative education on diabetes, obesity and dealing with overall public health concerns here in the community,” Olivarez said, adding that the county had contingencies in place to handle the expiration of the DSRIP pool.
But now that the 1115 waiver was completely rescinded, he said it was all up in the air.
“Worst-case scenario is that we would go back to pre-2006 indigent care guidelines where there would be significantly less funding available to help with indigent care, and so we would have to go back to pre-2006 operations where it’s a very limited budget,” Olivarez said. “It’s a localized limited budget, it’s localized through our general fund through the county and there would be no match to it.”
The state is currently in the process of applying for an extension and, on Tuesday, the Hidalgo County Commissioners Court passed a resolution urging the Biden administration to approve the application as soon as possible and encouraging the extension of the DSRIP funds.
Lee, the TEHP president, said the group intended to fulfill its mission of identifying solutions to strengthen the safety net.
“While there are critics of the Waiver renewal process, TEHP and its members remain focused on working with our Democratic and Republican leaders to reach a reasonable agreement to help the state continue to build a stronger healthcare system to serve the low-income population in Texas, since our membership provides much of that critical care,” Lee stated. “Like many of our leaders on both sides, TEHP is focused on patients and not politics.”