Medicaid Section 1115 waivers provide states the opportunity to pilot new demonstrations that are designed to test innovative alterations to their existing Medicaid program. Under Section 1115 of the Social Security Act, states can “waive” specific requirements of Medicaid and use federal Medicaid funds to support program changes in eligibility and service delivery components to improve Medicaid care quality and cost. In this blog post, we review recent developments related to Medicaid expansion funding, work requirements and hospital reimbursement.
One of the biggest and potentially impactful waiver developments of late was the decision by the Centers for Medicare and Medicaid Services (CMS) to deny approval of full federal funding for partial Medicaid expansion. This is expected to have significant domino effects, as Medicaid experts fear this decision will deter other states from pursuing any form of expansion. On a more positive note, Senators Maggie Hassan (D-NH) and Lisa Murkowski (R-AK) introduced a bi-partisan bill that would dismiss the waiver requirement for Medicaid Assisted Treatment (MAT) therapy. This legislation, known as the Mainstreaming Addiction Treatment, or MAT, Act, is aimed at eliminating a significant barrier in utilizing telemedicine for Substance Use Disorder treatment.
Similar to the mixed messages being delivered at the federal level, states are experiencing mixed results with 1115 waiver activity. Nebraska, Hawaii, and Delaware all received either approvals or extensions to their waiver programs, while New Hampshire’s work requirement waiver was blocked by a federal judge, mirroring similar decisions in both Arkansas and Kentucky. While these three states have interest in appealing and fighting these legal decisions, the benefit of the work requirement waiver is being put into question. Many advocates in Montana, for example, have vocalized their fear that the mandates are unattainable and that many Medicaid recipients will become ineligible for the program.
Finally, in an interesting legal decision, a judge in Florida ruled in favor of hospitals to allowing patient days attributable to individuals who received care by Florida’s Low Income Pool (LIP) to be included in Medicare Disproportionate Share Hospital (DSH) payments as established under a CMS-approved section 1115 waiver. The ruling noted that Medicare statute and regulations unambiguously regard such individuals as “Medicaid eligible” and, therefore, CMS must count Florida LIP days in the so-called Medicaid fraction of the Medicare DSH formula. This decision is predicted to impact evaluation precedent, as it may redistribute existing evaluation design in states that could potentially adopt similar Medicaid structures in the future.
These and other issues continue to be an area of focus for the AcademyHealth-led Medicaid Demonstration Evaluation Learning Collaborative. These evaluation researchers examine the critical policy questions, as well as study designs, methodologies, data sources and metrics used in Medicaid waiver initiatives to demonstrate the effectiveness of the waiver programs as designed. Learn more here.