Texas hospitals expect to lose $27 million per day starting Tuesday
When Texas’s new fiscal year begins on Tuesday, the state’s hospitals expect to lose $27 million a day in additional Medicaid funding. The shortfall stems from a Trump administration decision to withhold federal approval for about $9.8 billion over the next year across three programs, the bulk of which affects the Comprehensive Hospital Increase Reimbursement Program, known as CHIRP.
CHIRP provides supplemental payments that cover the difference between what Texas Medicaid rates reimburse hospitals and the actual cost of serving Medicaid patients. State-set Medicaid payment rates are outdated, leaving hospitals frequently paid less than what they spend on Medicaid patients. Under CHIRP, local governmental entities collect taxes from hospitals — about $4 billion a year, according to the Texas Hospital Association — and the federal government matches those funds so Texas hospitals can apply them to the actual costs of providing Medicaid services.
Hospitals say those CHIRP dollars are critical, and that if they lose the funding they will likely have to cut services to patients.
The administration’s withholding covers three programs in total, with CHIRP accounting for the bulk of the $9.8 billion. Hospitals are losing the additional 2027 reimbursement that CHIRP would have provided.