Health & Science

Texas Children’s Hospital Goes To Court Over Medicaid Cutback

Texas Children’s Hospital has filed a lawsuit over how it’s being reimbursed by the government for sick children. The hospital could lose almost $30 million dollars in just one year.


To embed this piece of audio in your site, please use this code:

<iframe src="" style="height: 115px; width: 100%;"></iframe>

Of all the kids that Texas Children’s Hospital treats, 55 percent are covered by Medicaid.

That’s the government insurance program for low-income people — and the costs are split between Texas and the federal government.

Compared to Medicare and private insurance, Medicaid reimbursement is the lowest.

That means Texas Children’s often loses money on those patients, especially when they need expensive treatments for things like cancer or an organ transplant.

Alec King is the hospital’s Senior Vice President of Finance.

“We’re trying to balance being available for all our kids, we don’t differentiate by who can pay. So when 55% of our kids are Medicaid, you know, we want to balance that equation to figure out a way to sustain ourselves on that.”

To help balance that bottom line, Texas Children’s gets a supplemental payment from Medicaid every year.

But a new way of classifying some pediatric patients means the payment has dropped — from an expected $30 million this year to just $2.5 million.

The hospital has filed a suit against the Texas Health and Human Services Commission.

The suit puts the payments on hold until the dispute can be worked out.

“We’ve received a lot of support, both locally and at the federal level, and we have high hopes that we can get this interpretation reversed.”

State Commission spokesman Stephanie Goodman says if the federal government doesn’t correct that calculation, the state has the authority to make up for the shortfall in other ways.

In the meantime, other pediatric hospitals may join the lawsuit. 

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required