Texas Attorney General Ken Paxton secured a nationwide legal victory against a Biden-era regulation that sought to expand federal control over state Medicaid funding.
The ruling struck down a U.S. Centers for Medicare & Medicaid Services (CMS) rule targeting Texas’ Local Provider Participation Funds.
The decision protects Medicaid funding for millions of Americans while reinforcing states’ rights to manage healthcare programs without federal overreach.
The CMS rule attempted to force Texas and other states to police private contracts between healthcare providers. Local Provider Participation Funds, authorized by the Texas Legislature in 2013, allow hospital districts to collect uniform payments from providers to help cover state Medicaid costs.
“This is not only a win for the integrity of Texas health care, but it’s also a defeat of Joe Biden’s unlawful overreach,” Paxton said in a news release. “This rule is just one example of the Biden administration’s misuse of CMS, which was employed to target conservative states.”
The court ruled that federal law applies only to contracts involving states, not private agreements between healthcare providers. The judge also found CMS lacked authority to restrict Texas’ flexibility in allowing these private arrangements.
Paxton described the regulation as part of broader federal efforts to undermine state policies.
“Joe Biden attempted to use federal agencies to hurt our economies, undermine our health care systems, destroy our energy industries, and target numerous other areas where our commonsense policies deliver prosperity,” he said.
The attorney general pledged continued opposition to regulations from the Biden era.
“My office will continue to work relentlessly to uproot and overturn any Biden-era regulations that rewrote the law and threaten the care Texans depend on and our freedoms.”
The ruling prevents major cuts to Medicaid funding and protects private healthcare providers from what Paxton described as unlawful federal control. The decision also reinforces the legal framework that has governed Texas’ Medicaid funding mechanisms since 2013.
