1115 Waivers: A Bridge to 2014
for People Living with HIV
Prepared by:
Center for Health Law and Policy Innovation,
of Harvard Law School &
the Treatment Access Expansion Project
July 2011
Presentation Outline
• Part 1: Background on 1115 Waivers
and How They Can Help Your State
• Part 2: Centers for Medicare and
Medicaid (CMS) Guidance
• Part 3: Next Steps
1115 Waivers and the National
HIV/AIDS Strategy
The Federal Implementation
Plan calls on Centers for
Medicare and Medicaid Services
(CMS) to:
“promote and support the
development and
expedient review of
Medicaid 1115 waivers to
allow States to expand
their Medicaid programs
to cover pre-disabled
people living with HIV.”
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Part 1
What Is an 1115 Waiver and How Will
It Help My State?
1115 Waiver = A “Demonstration Project”
to Expand Coverage
States have flexibility in
designing Medicaid
programs, but have to
follow federal laws
• E.g., categories of eligibility
• E.g., benefits package
• E.g., statewideness
Section 1115 of Social
Security Act says that
Secretary of HHS can waive
federal requirements
• “experimental, pilot, or demonstration project[s]
which,” in her judgment, are “likely to assist in
promoting the objectives of [the Act]”
Traditionally, successful
waivers must demonstrate
“budget neutrality”
• Federal Costs w/ Waiver ≤ Federal Costs w/out
Waiver
Federal & state
governments share
coverage costs
1115 waivers are timelimited
• Federal share (FMAP) varies by state and is based on
per capita income
• Must be re-approved after a five-year period
Examples of 1115 Waivers to Expand
Medicaid Coverage
Response to
public health
emergency
Cost-effective
early
intervention to
people living
with HIV
Examples
of 1115
Waivers
Expansion to
childless adults
How Will an 1115 Waiver Help My State?
A Waiver Will
Help Address
the AIDS Drug
Assistance
Program (ADAP)
Crisis
• Waiting lists for ADAP have
grown to over 8,000
individuals nationwide
• Ryan White care, treatment
and service demands far
outpace current funding
• The majority of ADAP
beneficiaries in every state
would be eligible for
Medicaid through a waiver
How Will an 1115 Waiver Help My State?
A Waiver Will
Allow States to
Leverage Federal
Matching Funds
• Because Medicaid is funded
jointly by the federal
government and states, moving
people from ADAP to Medicaid
means matching federal $$
Example: North Carolina
State Response
1115 State/Federal Response
$28 million out of state budget $28 million from state would
to address ADAP crisis
leverage $51.3 million in federal
matching funds (at 64.71% FMAP)
with an 1115 waiver
How Will an 1115 Waiver Help My State?
A Waiver Will
Provide CostEffective Early
Intervention
• Reduces transmission rates
• Reduces costly
hospitalizations and other
costs of late intervention
• Reduces expenditures by
disproportionate share
hospitals
• Reduces Social Security
disability costs
• Increases productivity and
employment
How Will an 1115 Waiver Help My State?
1115 Waiver Is a
Test Run for the
2014 Medicaid
Expansion
• In 2014, most people up to
133% FPL will be eligible
for Medicaid
• Incremental expansion
allows for a smooth
transition to full Medicaid
expansion
• Phases-in integration of
providers and consumers
• Provides opportunity to
effectively integrate Ryan
White model of care
Massachusetts ADAP: How Many Are
Covered and at What Cost?
Year
Enrolled
State Cost
Federal Cost Total Cost
(including rebates)
FY02
2301
$ 699,700
$ 7,816,675
FY03
2716
$ 1,011,873 $ 8,491,468
$ 10,703,342
FY04
4399
$ 4,635,821 $ 9,352,017
$ 15,887,838
FY05
4738
$ 4,216,175 $ 11,591,967
$ 17,708,142
FY06
4668
$ 4,216,175 $ 7,427,022
$ 13,543,197
FY07
5141
$ 1,958,523 $ 10,726,583
$ 14,585,106
FY08
5601
$ 1,958,523 $ 11,733,010
$ 15,591,533
FY09
5882
$ 1,958,523 $ 12,640,882
$ 16,099,405
$ 9,716,375
Massachusetts ADAP:
Expenditures by Category
Year
Full Pay
Co-Pay
Premiums
FY02
$ 7,947,832
$
648,030
$ 1,120,512
FY03
$ 7,961,862
$
963,205
$ 1,778,272
FY04
$11,174,879
$ 1,553,758
$ 3,159,200
FY05
$ 9,756,201
$ 1,839,807
$ 6,112,132
FY06
$ 4,634,683
$ 1,893,206
$ 7,015,306
FY07
$ 4,147,713
$ 2,071,118
$ 8,366,273
FY08
$ 4,184,279
$ 2,083,431
$ 9,323,821
FY09
$ 4,695,780
$ 2,567,789
$ 8,835,835
Massachusetts ADAP:
Eligibility (Sept. 2009)
Income
Enrolled
Percentage
< 100% FPL
2711
52%
100 - 200% FPL
1251
24%
200 - 300% FPL
618
12%
300 - 400% FPL
402
8%
> 400% FPL
249
5%
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Massachusetts Medicaid HIV Expansion
Line Item Budget Allocation
• FY09 $16,591,488
• FY10 $18,078,571 (1,233 enrolled)
• FY11 $18,801,714
In addition, MA provides approximately $30M
per year in funding to MA DPH to support a
broad range of testing, care, treatment and
prevention initiatives.
38% decrease in
HIV incidence
compared to 8%
national increase
(2005-08)
Total viral
suppression rate
of 65% compared
to 49% nationally
(2006)
Key Mass.
Outcomes
Adjusted death
rate of 2%
compared to 3.7%
nationally (2008)
AIDS diagnosis
rate of 6.5 per
100K compared to
11.2 per 100K
nationally (2008)
42% decrease in
AIDS deaths
compared to 24%
decrease
nationally (200208)
Estimated Cost Saving Associated
with HIV Investments
Between 1999 and 2008…
Estimated 4,085 cases averted
Estimated lifetime medical costs of over
$300K per person and over $1.2B saved
Part 2
CMS Guidance: What Is It and How
Will it Help My State?
What is CMS Doing to “Promote and
Support” 1115 Waivers?
State
Medicaid
Director
Letter
• Guidance on several health care reform
opportunities to expand access to care
for people living with HIV and AIDS
• 1115 waiver to cover pre-disabled
people living with HIV and AIDS
• Medicaid Health Home program for
Medicaid enrollees with chronic
conditions (including HIV and AIDS)
• 1915 Home and Community Based
Care waivers
• “Money Follows the Person” program
to Help People Living with HIV and AIDS
transition from institutions to the
community
How Will the CMS Guidance Help States
Put Together Successful Applications?
Creative Ways to Demonstrate “Budget Neutrality”
Waiver
Population =
“Pass Through”
• The health care reform law permits
states to immediately cover most
individuals up to 133% of the federal
poverty level rather than wait until 2014
• For the purposes of the waiver, covering
pre-disabled people living with HIV is a
way for a state to expand Medicaid early
for this population
How Will the CMS Guidance Help States
Put Together Successful Applications?
Creative Ways to Demonstrate “Budget Neutrality”
Cost Avoidance
• Providing early intervention to an
individual living with HIV through the
waiver is less costly than waiting for that
person to become disabled
• Early intervention reduces costly
hospitalizations and other costs
associated with disease progression
Simplified Cost
Avoidance
• Factors in the number of AIDS cases
averted due to expanded Medicaid
coverage
How Will the CMS Guidance Help States
Put Together Successful Applications?
Creative Ways to Demonstrate “Budget Neutrality”
Disproportionate
Share Hospital (DSH)
Diversion
“Unique
Programmatic
Savings”
• States divert DSH funds to pay for
uninsured individuals living with HIV/AIDS
• E.g., implementation of a managed care
service delivery model or a pharmacy
discount program such as 340B
1115 Waiver Is Still a Heavy Lift in
Most States
Still need to allocate scarce state
$$ to draw the federal match
Difficult political environment
for Medicaid
State Medicaid offices are
understaffed and underfunded
Part 3
Next Steps
What You Can Do…
Start talking with
state officials about
the 1115 waiver
• Meet with your state Medicaid office,
Governor’s office and state legislators
• Make sure you know what the application
process is in your state (some states require
legislative approval to apply for a waiver)
Support introduction
of a resolution in your
state legislature, if
needed
• Commission a study to analyze costs and
benefits of implementing a waiver
• Commit Medicaid office to consider applying
Use CMS as a
resource
• Contact Barbara Edwards, Director, Disabled
and Elderly Health Program Group, or Vikki
Wachino, Director, Children and Adults
Health Program Group at (410) 786-5647
For More Information
Treatment Access Expansion Project
 Taepusa.org
Contact: Amy Killelea, akillelea@law.harvard.edu
Dose of Change
 Doseofchange.org
CMS, State Medicaid Director Letter
 https://www.cms.gov/SMDL/SMD/
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