DALLAS (CBSDFW.COM) – A healthcare group is sounding the alarm that hospitals in the DFW region could collectively lose $1.1 billion each year.

The President of Texas Essential Healthcare Partnerships or TEHP, Don Lee said, “We believe it’d be catastrophic, not just for the hospitals, but for all Texans.”

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The TEHP represents 72 hospitals in the DFW region, including those operated by Tenet, Methodist, Texas Health Resources, and Baylor Scott & White.

Lee said he’s concerned about the impact of the federal government’s recent decision to rescind what’s called the 1115 waiver in October of next year.

What’s worse he said, is that some of the cuts could be felt in just three months.

“There’s about $330 million of very important mental health care funding for mental healthcare services for the poor, that will be lost starting in September of this year,” said Lee.

When compared to other states, Texas has a limited medicaid program, so the 1115 waiver provides funding to hospitals in DFW and across the state to provide what’s called uncompensated or charitable care for the uninsured and those who could otherwise not afford to pay.

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The Biden administration said the state should not have been granted an extension of the 1115 waiver by the Trump administration until 2030 because Texas didn’t seek the necessary public input.

At the time, Lee said there was a reason the federal government granted the waiver. “That was due to timing and the need to get certainty behind funding to hospitals so that they can feel comfortable to go ahead and spend money on pandemic response efforts.”

A Texas Health and Human Services Commission spokeswoman tells CBS 11 the agency held four public hearings this month on the matter and that public comment ends today.

The state will soon submit its new waiver application.

Without the extension of that 1115 waiver, Lee said some hospitals in the North Texas region may have to close. “Those hospital systems run numerous hospitals throughout the DFW area, and they may not be able to keep them all open.”

He said aside from cuts in services, the lack of a waiver extension could raise healthcare prices for those who are insured.

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WATCH INTERVIEW WITH DON LEE