Medicaid Waivers Joan Alker Co-Executive Director Annual Conference July 19, 2012.

Medicaid Waivers

Joan AlkerCo-Executive Director

Annual ConferenceJuly 19, 2012

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Section 1115 Waiverso Permit states to use federal program funds

(e.g., Medicaid & CHIP) in ways not otherwise permittedo Law says they must be “experimental, pilot, or

demonstration project(s)”o that promote the objectives of the program

o Broadest waiver authority

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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.

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Enforcing Budget Neutralityo Budget neutrality is longstanding federal policy to

ensure feds don’t spend moreo In general, section 1115 waivers rely on per

capita caps to enforce budget neutralityo State claims match for all people covered by the

waiver buto Cannot claim more than amount permitted by the capo Per person amount is agreed as part of the waiver

(usually based on historical costs with a “trend rate”)

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What is a Global Cap?o Global caps have been used in Vermont,

Rhode Island, and Pharmacy Plus waivers during Bush yearsoWaiver sets overall cap on federal funding (not on

a per person basis)o Similar in nature to a “block grant”

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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 kidso Limits around the edges on EPSDT

o (19 and 20 yr olds approved in some states, Oregon list of services, other proposals rejected)

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1915 Waiverso 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.

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What flexibility exists already in Medicaid?

o Significant delivery system reform possibleo 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 HealthWaveo Dual eligibles, children on SSI or in foster care

require an 1115 or 1915 waiver

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Waiver Process: How Does it Work and What is Required?

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Waiver Processo Closed negotiations between state and federal

governmento At federal level, Secretary of HHS makes the decisiono Centers for Medicare and Medicaid Services (CMS)

staffs the process for the Secretaryo Office of Management and Budget (OMB) is typically

deeply involved in negotiating financing termso Not unusual for members of Congress to weigh in,

but no formal process for their involvement

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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

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Waiver Pressure Pointso CMS National Officeo Office of the Secretary of HHSo White House/OMBo Congressional delegationo State legislatorso State agency/Executive branch