Cash-strapped rural Texas hospitals have been closing at an alarming rate, but health care advocates are warning that the trend likely will accelerate under a proposed rule change for federal Medicaid funding that’s also forecast to deal big financial blows to hospitals in urban areas like Austin.
Statewide, the Texas Hospital Association estimates that up to $11 billion in annual federal matching funds for Medicaid, the health insurance program for poor people, could be in jeopardy if the rule goes into effect.
“This is as scary as anything we have dealt with in my 20 or so years in rural health care,” said John Henderson, president of the Texas Organization of Rural & Community Hospitals.
The proposal, which would change how certain federal matching funds for Medicaid are calculated and result in reductions, is necessary “to strengthen the fiscal integrity” of the program in the wake of what has been a rapid increase in spending on it over the past few years, according to the U.S. Centers for Medicare and Medicaid Services.
It’s unclear when the federal agency might finalize the new rule, although a public comment period ended Feb. 1.
The proposal has been drawing opposition even from outside the health care sector, however. The U.S. Chamber of Commerce has said it risks “detrimental economic ramifications on communities across the country,” while the National Governors Association has urged that the plan be shelved for more study because of likely “significant and broad impacts” in many states.
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