Medicaid Waivers
Joan Alker
Co-Executive Director
Annual Conference
July 19, 2012
Section 1115 Waivers
o Permit states to use federal program funds
(e.g., Medicaid & CHIP) in ways not otherwise
permitted
o Law says they must be “experimental, pilot, or
demonstration project(s)”
o that promote the objectives of the program
o Broadest waiver authority
2
Why are they important for kids?
o They can change the way Medicaid is
financed;
o They can change the way services are
delivered;
o States sometimes requests limits to EPSDT or
increases in cost-sharing.
3
Enforcing Budget Neutrality
o Budget neutrality is longstanding federal policy to
ensure feds don’t spend more
o In general, section 1115 waivers rely on per
capita caps to enforce budget neutrality
o State claims match for all people covered by the
waiver but
o Cannot claim more than amount permitted by the cap
o Per person amount is agreed as part of the waiver
(usually based on historical costs with a “trend rate”)
4
What is a Global Cap?
o Global caps have been used in Vermont,
Rhode Island, and Pharmacy Plus waivers
during Bush years
o Waiver sets overall cap on federal funding (not on
a per person basis)
o Similar in nature to a “block grant”
5
What are some recent trends?
o Move to managed care for more vulnerable
populations;
o New cost-sharing and/or premiums (CA, FL,
UT, WI) that have been turned down for kids
o Limits around the edges on EPSDT
o (19 and 20 yr olds approved in some states,
Oregon list of services, other proposals rejected)
6
1915 Waivers
o Section 1915(b) Managed Care Waivers: States can apply for
waivers to provide services through managed care delivery systems
or otherwise limit people’s choice of providers.
o 1915(c) Home and Community-Based Services Waivers: States can
apply for waivers to provide long-term care services in home and
community settings rather than institutional settings.
o Concurrent Section 1915(b) and 1915(c) Waivers: States can apply
to simultaneously implement two types of waivers to provide a
continuum of services to the elderly and people with disabilities, as
long as all Federal requirements for both programs are met.
7
What flexibility exists already in
Medicaid?
o Significant delivery system reform possible
o North Carolina PCCM model didn’t need a waiver
o Most Medicaid beneficiaries can be required
to enroll in managed care without a waiver as
long as consumer protections are observed as
in HealthWave
o Dual eligibles, children on SSI or in foster care
require an 1115 or 1915 waiver
8
Waiver Process: How Does it Work and
What is Required?
9
Waiver Process
o Closed negotiations between state and federal
government
o At federal level, Secretary of HHS makes the decision
o Centers for Medicare and Medicaid Services (CMS)
staffs the process for the Secretary
o Office of Management and Budget (OMB) is typically
deeply involved in negotiating financing terms
o Not unusual for members of Congress to weigh in, but
no formal process for their involvement
10
What are the Opportunities for Public
Input?
o Widespread concern about the lack of
transparency in the process leads to a
provision in the Affordable Care Act requiring
new rules
o These rules were just issued on Feb. 22, 2012
and became effective April 22nd, 2012
o State and federal governments must have a 30
day public notice and comment process
11
Waiver Pressure Points
o CMS National Office
o Office of the Secretary of HHS
o White House/OMB
o Congressional delegation
o State legislators
o State agency/Executive branch
12