Governor Greg Abbott announced on Thursday that nearly $12 billion in Medicaid funding for Texas hospitals will be reinstated, effectively resolving a prolonged standoff between the state and federal authorities that has lasted almost a year.
“This funding represents a significant victory for patients across Texas,” Abbott stated. “It allocates nearly $12 billion for hospitals, physicians, rural clinics, nursing homes, and behavioral health services that cater to patients statewide. Emergency rooms will continue to operate, rural families will maintain access to local care, and Texans will receive the necessary treatments. I express my gratitude to CMS and the Trump Administration for their role in ensuring that Texans have access to essential medical care.”
The cessation of funding commenced on September 1, coinciding with the onset of Texas’s new fiscal year. This marked the first instance since 2014 that the Centers for Medicare and Medicaid Services had suspended supplemental funding for Texas hospitals. It remains unclear when the funds will be disbursed to the hospitals, which have faced a staggering loss of $27 million daily during the funding freeze.
“Today, we can take a sigh of relief. The looming Medicaid crisis has been averted. We extend our heartfelt thanks to Governor Abbott and the state and federal leaders who listened, took our concerns seriously, and acted swiftly to safeguard Texas patients,” remarked John Hawkins, president and CEO of the Texas Hospital Association. “Hospitals can now concentrate on their primary mission—saving lives and caring for Texans. Our gratitude is immense.”
Abbott’s announcement follows a report from two weeks prior, which indicated that his office had intervened in the dispute last month. In a letter addressed to Health Secretary Robert F. Kennedy Jr., Abbott described the withholding of funds as an economic threat to Texas. The funding is crucial for hospitals to bridge the gap between their Medicaid reimbursements and the actual expenses incurred while treating low-income Texans.
The conflict originated late last year, stemming from concerns regarding how Texas generates over $4.2 billion in taxes to access these federal funds.
