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WASHINGTON — The Biden administration is pressuring states to expand Medicaid — and it’s setting up a tussle with the hospital industry, too.

The Biden team is running out of options to ensure coverage for low-income people in states that have chosen not to expand coverage under the Affordable Care Act. An early overture in Texas reveals one of its strategies: There, the administration is forcing state officials to renegotiate an agreement that gives hospitals money for uninsured patients, and hospitals are nervous that their funding could be cut in the process.

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