Texas sues HHS over $25 million in Medicaid payments

Texas sued HHS over a decision that would force the state to pay back more than $25 million in supplemental Medicaid payments.

The Texas Health and Human Services Commission said in its complaint that HHS exceeded its authority when it concluded that the state made improper uncompensated-care payments to private hospitals. The agency’s decision would allow the CMS to claw back the matching Medicaid funds it paid to the state for providing uncompensated care.

State officials told the U.S. District Court for the Northern District of Texas that HHS’ “standards were inconsistent with CMS’ established regulations and practices and did not appear in the statute or regulation at the time.”

The lawsuit stems from 2015 payments by the Texas Health and Human Services Commission to private hospitals in Dallas and Tarrant counties, including Baylor Health Care System and Texas Health Resources. The state alleges that the CMS all but admitted that it didn’t have the power to make Texas pay back the funds when the agency proposed the Medicaid Fiscal Accountability Rule last month.