Wharton Post

WHARTON — OakBend Medical Center says the current Medicaid funding dispute in Texas is affecting the hospital system, while separate federal changes could also reduce CHIRP-related funding over the next several years.

Beginning Sept. 1, 2026, Texas hospitals began going without billions of dollars in Medicaid supplemental funding after federal approval for several state payment programs remained unresolved. The Texas Hospital Association has estimated hospitals statewide are going without about $27 million per day while the issue continues.

One of the programs involved is the Comprehensive Hospital Increase Reimbursement Program, or CHIRP, which provides supplemental Medicaid payments to hospitals.

Wharton Post reached out to OakBend Medical Center to ask how the situation could affect its Wharton Hospital Campus and the patients it serves in Wharton County.

OakBend President and CEO Joseph Freudenberger said he did not have the detailed Wharton-specific figures available, but provided a broader look at how the issue is affecting the hospital system.

“The CHIRP program contributes roughly $3mm to our revenue stream,” Freudenberger told Wharton Post.

He said OakBend is hopeful the current dispute between Texas and the Centers for Medicare & Medicaid Services will be resolved soon.

“We are hopeful that the current impasse between the State of Texas and CMS will be resolved shortly,” Freudenberger said.

The immediate dispute involves this year’s Medicaid funding, which began being held up Sept. 1 as Texas and federal officials remained at odds over the state’s Medicaid financing system.

Federal officials have raised questions about how Texas finances portions of its supplemental Medicaid payments, including local hospital taxes that are used to draw federal matching funds. Texas officials have maintained that the state’s system complies with federal requirements.

OakBend expects longer-term CHIRP decline

Freudenberger also pointed to a separate, longer-term issue involving changes included in the federal legislation commonly referred to as the One Big Beautiful Bill Act.

He said those changes could significantly reduce the amount OakBend receives through CHIRP over the next several years.

“The cuts envisioned in the Big Beautiful Bill will over a few years cause a decline of between 20% to 30% in CHIRP related funding,” Freudenberger said.

OakBend did not provide a specific dollar amount for how much of the roughly $3 million in CHIRP revenue is tied directly to the Wharton campus.

The 20% to 30% figure also represents OakBend’s expected longer-term reduction in CHIRP-related funding and should not be confused with the current funding being withheld beginning Sept. 1.

OakBend Plans to Grow Services in Wharton

Despite the funding pressure, Freudenberger said OakBend intends to find other ways to grow revenue and continue serving its communities.

“As we have for our 75 years serving our communities, we will seek grow our revenues to mitigate this hit,” he said.

Freudenberger also gave a clear indication that OakBend is not currently planning to reduce its presence in Wharton.

“While it’s impossible to say anything with certainty, we have plans to expand our services in Wharton not shrink them,” he told Wharton Post.

OakBend has not yet provided details on which services it plans to expand in Wharton.

The hospital system’s response provides one of the first local indications of how the statewide Medicaid funding dispute and future federal Medicaid changes could affect a hospital provider serving Wharton County.

Wharton Post will continue following the issue, including any additional details on OakBend’s planned expansion in Wharton and the impact of the Medicaid funding dispute on other local hospitals.