Texas Attorney General Ken Paxton has announced a major nationwide legal victory to protect the integrity of states’ Medicaid programs for both hospitals and the millions of Americans who rely on Medicaid.
On Sept. 26, a federal court enjoined a rule from the Biden Administration’s U.S. Centers for Medicare & Medicaid Service (CMS) that sought to expand federal control of states’ Medicaid funding mechanisms.
“This is not only a win for the integrity of Texas health care, but it’s also a defeat of Joe Biden’s unlawful overreach,” said Paxton. “This rule is just one example of the Biden administration’s misuse of CMS, which was employed to target conservative states. Joe Biden attempted to use federal agencies to hurt our economies, undermine our health care systems, destroy our energy industries, and target numerous other areas where our commonsense policies deliver prosperity.
“My office will continue to work relentlessly to uproot and overturn any Biden-era regulations that rewrote the law and threaten the care Texans depend on and our freedoms.”
CMS’s rule targeted Texas’s Local Provider Participation Funds (LPPFs), which allow hospital districts to collect uniform payments from providers to help pay the state’s Medicaid costs.
The agreements were permitted by the Legislature in 2013 and are allowed by federal law. With the rule and various other bulletins, Biden’s CMS attempted to force Texas and other states to police purely private contracts, imposing unlawful federal overreach that could have led to a massive cut in critical Medicaid funding, a press release states.
The Office of the Attorney General secured a ruling determining that federal law applies only to contracts involving states, not private contracts between healthcare providers. The judge also ruled that CMS lacked the authority to restrict Texas’s flexibility to allow these private agreements.
With the legal victory, Paxton claims to have dismantled a key aspect of Biden’s attempt to undermine the states, protected funding essential to sustaining Texas’s Medicaid program, and reinforced the right of private providers to operate free from unlawful federal control.
U.S. District Court of Eastern Texas, case No. 6:23-cv-00161-JDK
