Texas Medicaid, SNAP delays could cost state millions in federal funding

AUSTIN (Nexstar) — Federal agencies are warning Texas they may withhold federal funding if the state's delays and backlogs in administering healthcare and nutrition programs persist, according to internal communications provided by U.S. Rep. Lloyd Doggett.

Since last summer, KXAN has reported major delays and errors inside Texas Health and Human Services that have erroneously removed thousands of Texans off of Medicaid and subjected others to months-long wait times to get food aid through the Supplemental Nutrition Assistance Program (SNAP).

Now, the federal Centers for Medicaid and CHIP Services (CMS) and the U.S. Department of Agriculture are requiring HHSC to provide a plan to remedy the errors or lose funding associated with administering the programs.

HHSC "continues to be riddled with backlogs, delays, errors, and failing leadership. Families are being denied SNAP food assistance and more than two million Texans have lost access to a family physician and must reapply for Medicaid coverage," U.S. Rep. Lloyd Doggett, D-Austin, said. "Texans will continue to suffer until we have competent state leadership that prioritizes those most in need. Any loss of federal funding, even administrative funds, would be a direct result of the Abbott HHSC’s failures."

Federal law requires HHSC to determine Medicaid eligibility within 45 days. As of January, 40% of applications took longer and are thus out of compliance with the law, CMS warned in a letter to State Medicaid Director Emily Zalkovsky late last month.

"Many individuals have lost coverage for procedural and administrative reasons even though they may otherwise meet Medicaid or CHIP eligibility criteria. As these individuals reapply for Medicaid or CHIP, taking meaningful steps to facilitate their enrollment will be essential to support their access to coverage," CMS wrote.

CMS said HHSC has inadequate staffing to deal with the influx of application review demands after federal COVID policies expired, requiring HHSC to reconsider eligibility for millions of Texans.

CMS is now requiring HHSC to share data on applications, staffing and workflow so they can review the agency's efficacy on providing Medicaid. Those materials are due 30 days after May 22 — making the deadline June 21 — or CMS warns of "formal compliance action."

"We believe it is critical for the state to adopt alternative strategies that will mitigate the harm being caused to applicants due to the ongoing delay in the state’s processing of applications," CMS wrote.

USDA is also threatening to suspend nearly $8.4 million of SNAP funds if HHSC does not come into compliance with federal SNAP requirements. As of May 3, Texas reported more than 90,000 backlogged SNAP applications, with the oldest from August 2023.

"For the tens of thousands of families awaiting consideration and approval of benefits, Texas has not addressed the backlog and timeliness issues as urgently as it should," USDA wrote to HHSC Executive Commissioner Cecile Young on May 21. "Low [application processing timeliness] rates have a real and significant impact on eligible families who struggle to put food on the table."

In a May 29 response to USDA, HHSC provided a corrective action proposal. The plan includes executing a new grant contract that delineates responsibilities between HHSC and the Texas Workforce Commission (TWC), developing a monthly review of expenditures and expanding monitoring, training and technical assistance with TWC.

"Central to HHSC's mission is fidelity and good stewardship of our resources. We are committed to responsible contract oversight and fiscal monitoring to ensure funding is going to its intended purpose," HHSC Deputy Executive Commissioner Molly Regan wrote.

The agency estimates it can come into full compliance by Sept. 1, 2025.