Texas Bolsters Hospital Medicaid Payments With $2.67B In Funding

AUSTIN, TX — The state has secured $2.67 billion in federal funding to support Texas hospitals providing care for people receiving Medicaid, officials announced Thursday.

The windfall is a $1.07 billion increase from the previous state fiscal year 2020, the governor and officials with the Texas Health and Human Services Commission noted in an advisory.

The Uniform Hospital Rate Increase Program is a statewide program that provides for increased Medicaid payments to hospitals for inpatient and outpatient services provided to persons with Medicaid, offiicals explained. The program aims to reduce the Medicaid shortfall for hospitals that serve people who receive Medicaid, officials added.

The Centers for Medicare and Medicaid Services approved the estimated Uniforim Hospital Rate Increase Program pool size for state fiscal year 2021 at $2.67 billion, up from $1.6 billion in state fiscal year 2020.

"This federal funding is a crucial source of support for Texas hospitals that provide care for Medicaid patients," Gov. Greg Abbott said in a prepared statement "As we respond to the COVID-19 pandemic, the State is committed to ensuring that our hospitals have the resources they need to continue providing care to Texans across the state."

Added Texas Health and Human Services Commission Executive Commissioner Phil Wilson: "Hospitals in Texas are on the front lines of care and prevention at all times, providing critical emergency and intensive care for people, including those with COVID-19. This federal funding is one way we can make sure hospitals have sufficient resources to provide quality care to people receiving Medicaid."

Through the Uniform Hospital Rate Increase Program, Texas Medicaid managed care organizations receive additional funding through their monthly capitation rate from HHSC and are directed to increase payment rates for certain hospitals. As designed, eligible hospitals receive a percent increase paid on claims submitted to a Medicaid managed care organization.

About the Uniform Hospital Rate Increase Program

Now in its third year, the Uniform Hospital Rate Increase Program is a uniform rate increase and applies to all hospitals in a hospital class in a managed care service delivery area. Individual hospitals do not have to apply for the program; the Texas Health and Human Services Commission receives a single application from a service delivery area that is submitted on behalf of all self-direction assistance (SDA) providers. The goal of the Texas Health and Human Services Commission is to maintain state fiscal year 2020 reimbursement rates for most hospital classes and to increase reimbursement rates up to Medicare reimbursement levels for the hospitals that remained below them.

For more information about the Uniform Hospital Rate Increase Program, visit the Texas Health and Human Services Commission website.