Texas Governor Abbott demands release of $10 billion in withheld Medicaid funds

Texas Governor Greg Abbott is demanding that the Trump administration and the Centers for Medicare and Medicaid Services (CMS) release nearly $10 billion in withheld Medicaid funding. The impasse, which has lasted nearly a year, centers on federal questions regarding how the state generates and calculates hospital taxes used to fund the Comprehensive Hospital Increase Reimbursement Program (CHIRP).

Texas officials maintain that the state’s financing fully complies with federal law. The withholding of funds began in December following changes enacted through the One Big Beautiful Bill Act. The funds are intended to bridge the gap between Medicaid reimbursements and the actual costs incurred by hospitals treating low-income patients.

The Texas Hospital Association reports that the delay is causing significant financial strain, estimating that Texas hospitals lose approximately $27 million in reimbursements every day the funding is withheld. The dispute involves the state’s non-federal share of Medicaid payments, which the federal government typically matches.