TX – $1.9B Medicaid Cut Under State Budget

June 2017 ~

Texas lawmakers have agreed upon a budget for FY 2018-2019 which includes a $1.9 billion cut to Medicaid spending.

According to the budget summary, the budget includes direction to reduce the risk margin for Medicaid managed care and emphasizes cost containment strategies and includes specific direction to the Health and Human Services Commission (HHSC) to contain costs and realize savings.

Funding includes for the 2018–19 biennium comprises “$62.4 billion in All Funds, including $25.6 billion in General Revenue Funds and $0.2 billion in General Revenue–Dedicated Funds. This amount is a biennial reduction of $1.9 billion in All Funds, including $0.4 billion in General Revenue Funds.”

Other key items in Texas’ FY 2018-2019 budget include:

• $57.4 billion in funding for Medicaid client services;
• $1.7 billion in funding for programs supported by Medicaid funding;
• $3.3 billion in funding for administration of the Medicaid program and other programs supported by Medicaid funding;
• Funding for Medicaid client services supports caseload growth at fiscal year 2017 average costs for most services in fiscal year 2018;
• Fiscal year 2019 funding is maintained at the fiscal year 2018 level for each method of financing
  • With the exception to this level of funding is for long-term-care waivers, which are maintained at the August 2017 level throughout the 2018–19 biennium except for the Texas Home Living (TxHmL) and Home and Community-based Services (HCS) waivers;
• An additional 735 HCS waiver slots for promoting independence are funded by the end of fiscal year 2019 under the assumption that TxHmL slots will continue declining throughout the 2018–19 biennium;
• Funding levels include amounts to restore approximately 25.0% of reductions made to therapy reimbursement rates in the 2016–17 biennium and to phase in reductions associated with reimbursement policy for therapy assistants;
• Funding levels for the 2018–19 biennium assume $1.0 billion in All Funds ($0.4 billion in General Revenue Funds) in cost containment for Medicaid client services, which includes amounts related to reducing risk margin for Medicaid managed care, and includes specific direction to the Health and Human Services Commission (HHSC) to contain costs and execute savings.

As stated in the summary, “The reduction in Medicaid funding is due to decreases of $1.3 billion in All Funds in Medicaid client services, $0.6 billion in All Funds in administrative funding, and $0.1 billion in All Funds for other programs supported by Medicaid funding.”

The House voted 115-21 to accept the Senate’s version of the supplemental budget which currently awaits the Governor’s signature.

Source(s): HMA; The Texas Tribune; Becker’s Hospital Review;