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.

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 1What Is an 1115 Waiver and How Will It Help My State?

1115 Waiver = A “Demonstration Project” to Expand Coverage

•E.g., categories of eligibility

•E.g., benefits package

•E.g., statewideness

States have flexibility in designing Medicaid

programs, but have to follow federal laws

•“experimental, pilot, or demonstration project[s] which,” in her judgment, are “likely to assist in promoting the objectives of [the Act]”

Section 1115 of Social Security Act says that

Secretary of HHS can waive federal requirements

•Federal Costs w/ Waiver ≤ Federal Costs w/out Waiver

Traditionally, successful waivers must demonstrate

“budget neutrality”

•Federal share (FMAP) varies by state and is based on per capita income

Federal & state governments share coverage costs

•Must be re-approved after a five-year period

1115 waivers are time-limited

Examples of 1115 Waivers to Expand Medicaid Coverage

Examples of 1115 Waivers

Response to public health emergency

Expansion to childless adults

Cost-effective early intervention to people

living with HIV

How Will an 1115 Waiver Help My State?

• 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

A Waiver Will Help Address the

AIDS Drug Assistance

Program (ADAP) Crisis

How Will an 1115 Waiver Help My State?

• Because Medicaid is funded jointly by the federal government and states, moving people from ADAP to Medicaid means matching federal $$

A Waiver Will Allow States to

Leverage Federal Matching Funds

State Response 1115 State/Federal Response

$28 million out of state budget to address ADAP crisis

$28 million from state would leverage $51.3 million in federal matching funds (at 64.71% FMAP) with an 1115 waiver

Example: North Carolina

How Will an 1115 Waiver Help My State?

• 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

A Waiver Will Provide Cost-Effective Early Intervention

How Will an 1115 Waiver Help My State?

• 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

1115 Waiver Is a Test Run for the 2014 Medicaid

Expansion

Year Enrolled State Cost Federal Cost Total Cost (including rebates)

FY02 2301 $ 699,700 $ 7,816,675 $ 9,716,375

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

Massachusetts ADAP: How Many Are Covered and at What Cost?

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: Expenditures by Category

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%13

Massachusetts ADAP: Eligibility (Sept. 2009)

• 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.

Massachusetts Medicaid HIV ExpansionLine Item Budget Allocation

Key Mass. Outcomes

38% decrease in HIV incidence compared to

8% national increase (2005-08)

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 (2002-08)

Adjusted death rate of 2% compared to 3.7% nationally (2008)

Total viral suppression rate of 65% compared to

49% nationally (2006)

Estimated Cost Saving Associated with HIV Investments

Estimated lifetime medical costs of over $300K per person and over $1.2B saved

Estimated 4,085 cases averted

Between 1999 and 2008…

Part 2CMS Guidance: What Is It and How Will it Help My State?

What is CMS Doing to “Promote and Support” 1115 Waivers?

• 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

State Medicai

d Director Letter

How Will the CMS Guidance Help States Put Together Successful Applications?

• 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

Waiver Population = “Pass Through”

Creative Ways to Demonstrate “Budget Neutrality”

How Will the CMS Guidance Help States Put Together Successful Applications?

• 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

Cost Avoidance

• Factors in the number of AIDS cases averted due to expanded Medicaid coverage

Simplified Cost Avoidance

Creative Ways to Demonstrate “Budget Neutrality”

How Will the CMS Guidance Help States Put Together Successful Applications?

• States divert DSH funds to pay for uninsured individuals living with HIV/AIDS

Disproportionate Share Hospital

(DSH) Diversion

• E.g., implementation of a managed care service delivery model or a pharmacy discount program such as 340B

“Unique Programmatic

Savings”

Creative Ways to Demonstrate “Budget Neutrality”

1115 Waiver Is Still a Heavy Lift in Most States

Still need to allocate scarce state $$ to draw the federal match

State Medicaid offices are understaffed and underfunded

Part 3Next Steps

What You Can Do…

• 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)

Start talking with state officials about

the 1115 waiver

• Commission a study to analyze costs and benefits of implementing a waiver

• Commit Medicaid office to consider applying

Support introduction of a resolution in your

state legislature, if needed

• Contact Barbara Edwards, Director, Disabled and Elderly Health Program Group, or Vikki Wachino, Director, Children and Adults Health Program Group at (410) 786-5647

Use CMS as a resource

Treatment Access Expansion ProjectTaepusa.orgContact: Amy Killelea, [email protected]

Dose of ChangeDoseofchange.org

CMS, State Medicaid Director Letterhttps://www.cms.gov/SMDL/SMD/

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