Proposed Medicaid Cuts Could Cost Maternal and Children’s Health Care Billions

The Centers for Medicare and Medicaid Services has proposed rules limiting State Directed Payments, a mechanism Texas hospitals rely on to boost Medicaid reimbursement, with an estimated $19.7 billion in state funding at stake.

Advocates including the Children's Hospital Association of Texas, Texans Care for Children, and Texas Parent to Parent warn the changes would hit rural hospitals and children's services hardest, since nearly 3 million Texas children and roughly 260,000 pregnant women rely on Medicaid, which pays for 53% of the state's births.

The proposal would cap many payments at Medicare rates, a system built for adults 65 and older, despite Medicare having no equivalent rates for pediatric, maternal, or community-based services. Groups including Every Texan say the plan exceeds even the cuts already codified in last year's federal budget law.

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