Texas sounds alarm on major Medicaid cuts

AUSTIN (Nexstar) -- A bipartisan group of state senators stood with faith leaders at the Texas Capitol Wednesday to push back on looming changes to Medicaid that could strip almost $9 billion out of the system and leave hundreds of thousands more Texans uninsured.

The concern followed a February memo from the federal Center for Medicare and Medicaid Services (CMS) that sought to end certain payment agreements between Texas and its hospitals. Texas taxes hospitals to cover the state's portion of Medicaid costs, and in return the state receives federal funds and the hospitals recover their taxes with state Medicaid funding. Texas hospitals also share their Medicaid funds to help hospitals that care for a higher proportion of low-income patients. The federal memo targets this arrangement as illegal.

"For forty years, we've had a good system where the state and the federal government cooperate with health care providers to provide care. This has been settled law for a long time. And Texas has built its system around this settled law. But now, because of changes proposed by unelected bureaucrats, this whole system is in jeopardy," State Sen. Bryan Hughes, R-Mineola, said.

Faith leaders stressed the human toll this esoteric policy shift could bring.

"This move proposed by CMS is not only unconstitutional and unlawful, but it's also not moral, it's immoral. We're talking about hospitals closing," Bishop James Dixon said. "This is a total crisis for all of us... please do not play politics with people's lives."

Attorney General Ken Paxton, before he was impeached and suspended pending trial, filed a lawsuit against CMS to challenge the policy shift.

"CMS' actions imperil not only local governments' ability to support Medicaid providers in their area, but the entire State of Texas' ability to adequately fund its Medicaid program," Paxton said in April. "This unlawful policy change will endanger vulnerable Texans' access to health care and handicap local providers' ability to serve our citizens in every community across the state."

This coverage is ongoing and will be updated throughout the day. Watch KXAN News at 5 for the latest.