Medicaid State Plan Amendments and Waiver Authority

Background

A state plan is a contract between a state and the federal government describing how the state administers its Medicaid program. It gives assurance that a state will abide by federal rules as a condition of receiving federal funding for its Medicaid program. The state plan specifies groups of individuals to be covered, services to be provided, and methodologies for provider reimbursement.

Whenever a state makes changes to its Medicaid program, it sends state plan amendments (SPAs) to CMS for review and approval. For example, the state may wish to implement changes required by federal or state law or regulations, or by court orders. States also have the flexibility to request permissible program changes, to make corrections, or to update their plan with new information.

Strategies to reform Medicaid at the state level rely, in part, on exemptions (known as waivers) from certain federal laws and regulations. 

Under Section 1115 of the Social Security Act (SSA), the Secretary of the Department of Health and Human Services (HHS) can waive certain federal Medicaid requirements in the context of research and demonstration projects that promote program objectives. Some states are seeking permission—through the Section 1115 waiver process—to, among other things, the following:

  • impose higher than nominal premiums and cost-sharing,
  • impose work requirements on certain enrollees,
  • deny access to Medicaid coverage for non-payment of cost-sharing obligations and non-compliance with work requirements;
  • impose lifetime limits on enrollment, and
  • waive certain benefits like non-emergency transportation.

In addition, some states are seeking to diminish access to services by asking for permission to eliminate statutory provisions like retroactive eligibility (back-dated eligibility) and presumptive eligibility (an expedited enrollment process that ensures provider payments) for some or all populations. All of these provisions raise serious questions about both the intent of the exclusions themselves, and the potential burden of demonstrating compliance.

Since the enactment of the Affordable Care Act ( ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. ), some states are seeking waivers to conduct their Medicaid expansions using marketplace-qualified health plans, or to impose higher cost-sharing on beneficiaries (see also this chapter’s section on Health Care Coverage: Private Insurance—Individual- and Employment-Based Group Plans).

Before the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. , these waiver programs were authorized for two to three years, with a maximum three-year renewal. Under the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. , new waiver demonstration authority is created for states to receive five-year waivers that provide Medicaid to dual-eligible beneficiaries under SSA Section 1115 (Research and Demonstration Projects), Section 1915(b) (Managed Care/Freedom of Choice Waivers), Section 1915(c) ( Home- and Community-Based Services Long-term services and supports provided in individuals’ homes or in home-like environments, such as supportive housing. Waiver), and Section 1915(d) (Waivers). The law authorizes dual-eligible waivers to be conducted over longer periods and allows them to be renewed for five-year periods if certain conditions are met.

The Affordable Care Act ( ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. ) created transparency and public-notice requirements for Section 1115 research and demonstration projects. The law increases the degree to which information about Medicaid and Children’s Health Insurance Program waiver applications and approved demonstration projects must be made available to the public. It also promotes greater transparency in the waiver review and approval process. Notably, the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. transparency requirement does not apply to Medicaid state plan amendments.

Some states are using the Section 1115 waiver process to implement the state option to expand their Medicaid programs under the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. . Upon approval of their waivers, these states will enroll their Medicaid-expansion populations in private insurance plans through the health insurance marketplaces (see also this chapter’s section on How the Affordable Care Act Affects Medicaid).

Federal law gives states the option to implement estate recovery for receipt of primary and acute-care services. People who enroll in the Medicaid expansion could be subject to estate recovery rules (see also Chapter 8, Long-Term Services and Supports for more information).

MEDICAID STATE PLAN AMENDMENTS AND WAIVER AUTHORITY: Policy

General

In this policy: FederalState

Waiving certain provisions of the Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… and Medicaid statutes are appropriate and even desirable under some circumstances. However, to safeguard existing coverage and maintain important protections, certain criteria (described below) must be met.

States should not use the waiver process to gain permission to disenroll people from Medicaid, deny services to eligible beneficiaries, impose lifetime limits on Medicaid eligibility, eliminate retroactive eligibility, limit or cap spending for important benefits or necessary care, or otherwise inappropriately restrict access to Medicaid.

States should not achieve statutorily-required budget neutrality in the waiver process by threatening existing services for eligible beneficiaries.

The federal government should conduct rigorous oversight of Medicaid waivers.

Eligibility

In this policy: FederalState

The federal government must ensure that the entitlement nature of Medicaid applies to expansion populations. Current prohibitions against enrollment caps, exclusions for preexisting conditions, and waiting periods should not be waived. In addition, Medicaid presumptive and retroactive eligibility policies should be maintained.

Federal and state governments must ensure that eligibility expansions are consistent with the principle of covering those who are more in need before those less in need. For example, Medicaid programs should not cover people with income at 200 percent of the federal poverty The federal government defines “poverty” as income below specific amounts that the Bureau of the Census establishes. These thresholds, known as federal poverty levels (FPL), are adjusted annually for inflation and vary according to family size and the age of the head of the family. … level unless they have extended coverage to those below that income level.

Transparency in the waiver and State Plan Amendments (SPA) process

In this policy: FederalState

Federal and state governments must comply with the transparency requirements established by the Affordable Care Act ( ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. ).

The transparency requirement should be extended to include amendments to waivers and SPAs.

Beneficiary Impact Statement

In this policy: State

States’ waiver and SPA applications should include a beneficiary impact statement that provides an analysis of the expected effect of any change on all beneficiaries. Applications should also describe the state’s plan to monitor beneficiary impacts on a continuous basis.

 

Cost-Sharing

In this policy: FederalState

The federal government should not allow states to impose or enforce greater than nominal Medicaid premium- and cost-sharing on Medicaid beneficiaries unless states and federal governments determine these changes will not deny access to needed care or increase barriers to receipt of services.

Coverage

In this policy: FederalState

Federal and state governments must ensure that waivers cover all mandatory Medicaid services in the same amount, duration, and scope for all eligible beneficiaries. Benefit changes should not deny access to needed care.

Federal and state governments should ensure that expansion populations have adequate access to the same or comparable provider networks as those available to non-expansion populations.

Federal and state governments must ensure waivers that include Medicaid beneficiaries with disabilities, older adults who need long-term services and supports Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… ( LTSS Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… ), and people with mental illness or other complex health care needs demonstrate adequate protections for these populations, including the adequacy of provider networks.

Access to provider networks

In this policy: FederalState

Federal and state governments should ensure that expansion populations have adequate access to the same or comparable provider networks as those available to non-expansion populations.

To the extent that waivers include Medicaid beneficiaries with disabilities, older adults needing long-term services and supports Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… , and people with mental illness or other complex health needs, federal and state governments must ensure adequate protections for these populations, including adequate provider networks.

Work requirements and personal incentive programs

In this policy: FederalState

Receipt of Medicaid should not be conditioned upon compliance with work requirements or personal incentive programs.

Medicaid beneficiaries should not be subject to work requirements. Waivers and SPAs that condition receipt of Medicaid on work, education, job search, volunteering, or any other activity are counter to the objective of the Medicaid statute “to furnish medical assistance on behalf of individuals whose income and resources are insufficient to meet the costs of necessary medical services.”

If work requirements are imposed by a waiver or by a SPA, federal and state governments should ensure that work requirements or any personal incentive programs

  • are not used to deny access to covered services to eligible individuals;
  • are not funded by money redirected from necessary services;
  • are not administered in ways that penalize people who do not participate in incentive programs such as weight-loss or smoking-cessation programs;
  • define family caregivers People who provide long-term services and supports to family members, relatives, friends, and neighbors. Some family caregivers are unpaid; others are paid through government programs, private funds, or long-term care insurance policies. as those caring for adults or children; and
  • exempt caregivers from work requirements or if caregivers are not exempted, allow caregiving to count as work.

Integrating health care and long-term services and supports (LTSS)

In this policy: FederalState

Federal and state governments must ensure that existing Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… and Medicaid waiver authority be used to integrate health care and LTSS Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… under the following conditions.

  • Beneficiaries must retain their rights to full Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… and Medicaid benefits. The ability of consumers to direct their own care must be ensured.
  • Cost-sharing and other participation requirements must not result in coercive inducements to enroll or disenroll or be a barrier to receipt of services.
  • Strong consumer protections, including an independent ombudsman Derived from the Swedish word for an intermediary, “ombudsman” as used in health care and long-term care settings is a person who investigates and resolves complaints on behalf of older people who are residents of nursing homes and supportive housing. The complaints generally focus on a… program and external grievance and appeal procedures, must be in place. In addition, beneficiaries must have access to independent enrollment counseling.
  • The state and CMS must provide strong and timely oversight.
  • Consumers must have the opportunity participate in the development, implementation, and oversight of the waiver program.

Strong quality assurance standards must be in place, including measures of functional and medical outcomes.

Eligibility criteria for LTSS Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… should consider and appropriately measure the need for these services among people with physical impairments, mental impairments, and chronic illnesses. Determination of need should be based on measures of physical and mental functioning. Individuals should not have to meet medical criteria to be eligible for LTSS Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… .

Contracting specifications should be adopted to ensure that a wide range of organizations is able to compete for the opportunity to manage the integrated systems. The organizations could include nonprofit, public, and community-based organizations; entities experienced in the delivery of LTSS Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… ; and managed care plans.

Outreach and education

In this policy: Federal

The federal government should require states to demonstrate the ability to conduct robust outreach and education when using waiver authority to enroll people who are eligible for the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. Medicaid expansion using qualified health plans in the health insurance marketplaces.

Quality and consumer protection

In this policy: FederalState

Quality assurance standards should include, at a minimum, internal and external quality review, meaningful grievance and appeals procedures, robust state monitoring and oversight (e.g., by an ombudsman Derived from the Swedish word for an intermediary, “ombudsman” as used in health care and long-term care settings is a person who investigates and resolves complaints on behalf of older people who are residents of nursing homes and supportive housing. The complaints generally focus on a… ), and strong sanctions for violations of quality standards

Research Design

In this policy: FederalState

The research design component of Section 1115 waivers must be adequate to support independent evaluation. At a minimum, states should be required to demonstrate that the research goals to be achieved through the waiver are measurable, that relevant data is being collected, and that data are being made available to the public.