Texas hospitals expect to lose $27 million a day in Medicaid funding starting Tuesday

Starting Tuesday, Texas hospitals anticipate losing $27 million daily in Medicaid funding. This significant loss stems from the Trump administration's decision to withhold approval for approximately $9.8 billion in federal funds across three programs, primarily impacting the Comprehensive Hospital Increase Reimbursement Program (CHIRP).

CHIRP supplements Medicaid payments for hospitals to cover extra costs of serving Medicaid patients. Hospitals, typically reimbursed less than their expenses for Medicaid patients due to outdated state-set rates, would lose their additional CHIRP reimbursement for 2027. The state's new fiscal year commences on Tuesday, triggering the $27 million daily shortfall.

With four million low-income Texans relying on Medicaid, most of them children, the loss could cripple the public healthcare system, potentially forcing hospitals to cut services. Texas Governor Greg Abbott has challenged the federal government's request to alter Texas' hospital tax system, asserting compliance with federal law.

The funding holdup, which began last December, has escalated, prompting Abbott to send a letter to U.S. Health Secretary Robert F. Kennedy Jr. condemning the impasse as an economic threat.