Medicaid 101 Policy Academy: Innovation in Medicaid

Innovation in Medicaid: to Waiver or not to Waiver Rachel Nuzum Vice President, Federal and State Health Policy Council of State Governments, Medicaid Policy Academy October 10, 2019

INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Federal statutes and regulations set minimum standards but considerable state flexibility exists to design Medicaid programs • Eligibility • Benefits • Premiums and cost sharing • Delivery system design and payment policies • Waiver authority to go beyond flexibilities provided above

“

If you’ve seen one Medicaid program… you’ve seen one Medicaid program.

— Every Medicaid Director

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Medicaid Eligibility Covers Four Broad Categories: Aged, Disabled, Children, and Adults MANDATORY POPULATIONS • Low-income children • Low-income pregnant women • Families who would have qualified under the state’s 1996 criteria for Aid to Families with Dependent Children • Aged, blind and disabled individuals who qualify for Social Security Income

OPTIONAL POPULATIONS • Low-income children and pregnant women at higher income levels • Medically Needy • Medicaid Expansion under the Affordable Care Act – adults with income up to 138% of Federal Poverty Level

• Low-income Medicare beneficiaries

*Undocumented immigrants are ineligible for Medicaid unless they have an emergency condition as defined under federal law

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Medicaid Benefits Mandatory

Optional

• Physician services • Lab and x-ray services

• Prescription drugs • Clinic services

• Inpatient hospital • Outpatient Hospital

• Dental services, dentures • Physical therapy and rehab

• Early and periodic screening diagnostic and treatment (EPSDT) services for individuals under 21 • Family planning

• Prosthetic devices, eyeglasses • Primary care case management

• Rural and federally qualified health center (FQHC) services • Nurse midwife services • Nursing facility (NF) services for individuals 21 and over • Home health for certain populations

• Institutions for individuals with intellectual disabilities, formerly intermediate care facilities for the mentally retarded (ICF/MR) services • Inpatient psychiatric care for individuals under 21 • Personal care services • Hospice services • Alcohol and Drug Treatment

Expansion Medicaid • Essential Health Benefits (“Benchmark Coverage”) — Ambulatory patient services — Emergency services — Hospitalization — Pregnancy, maternity, and newborn care — Mental health hand substance use disorder services — Prescription Drugs — Rehabilitative and Habilitative services — Laboratory services — Preventive services — Pediatric services

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

State Options to Tailor Medicaid State Plan Amendment

Waivers

(SPA)

(1115, 1915)

 State plan is a written agreement on how the state will administer its Medicaid program  Indicates what optional groups or services the state will cover  Describes eligibility determination standards, provider payment methodology, and administration processes  CMS has 90 days to review

 Provides additional flexibility by waiving certain provisions of the Social Security Act  Generally must be budget neutral for the federal government  Can be targeted to specific populations or geographic areas  Requires public comment periods  Often entails negotiations with CMS on provisions & can be a lengthy process 5

INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

1115 v. 1332 Waivers At a Glance

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1115 Waivers

1332 Waivers

(Demonstration Projects)

(Innovation Waivers)

Allows demonstration in a variety of health and human services programs, predominantly used for Medicaid.

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Allows a state to waive certain Medicaid requirements for projects that are “likely to promote the objectives of the Medicaid program”.

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“1115” is the section of the Social Security Act that outlines the purposes and limitations of these waivers

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Allows states to waive certain federal requirements for private insurance and marketplace coverage.

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States that waive these requirements still must show that their residents are protected with coverage that is at least as comprehensive and affordable; that residents are protected against excessive out-of-pocket costs; and that the waiver will not increase the federal deficit.

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Section 1332 of the Affordable Care Act outlines the requirements for these waivers.

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

1115 Waivers/ Demonstration Waivers • Extensive waiver authority + broad purpose • Applies to almost any Medicaid state plan requirement under §1902 (with the exception of citizenship and requirements of another agency as in the case of ERISA) to the extent necessary to carry out a demonstration or experimental project furthering the goals of the program • The Secretary can also permit federal financial participation for costs not otherwise matchable, allowing states to cover services and populations not included in the Medicaid state plan.

• Required to be budget-neutral, can be used to allow a state to use savings generated initiative to pay for other changes such as eligibility expansions as long as the waiver on a whole is budget neutral.

• Approved for 5 years, extended for up to three years at a time.

• In exchange for flexibility, states must contract with independent evaluators to evaluate waivers outcomes.

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Landscape of Approved vs. Pending Section 1115 Medicaid Demonstration Waivers As of September 18, 2019

Approved (49 across 40 states) Behavioral 8 Health; 0 31

3 4 10

3 9

1 4

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Pending (21 across 18 states) Set Aside by Court (3 across 3 states) 1 Delivery 16 System Reform; 0

3 MLTSS; 0 13

1 Other15 Targeted Waivers; 0

Some states have multiple approved and/or multiple pending waivers, and many waivers are comprehensive and may fall into a few different areas.

Therefore, the total number of pending or approved waivers across states cannot be calculated by summing counts of waivers in each category.

Pending waiver applications are not included here until they are officially accepted by CMS and posted on Medicaid.gov. “MLTSS� = Managed long-term services and supports.

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Status of Medicaid Expansion and Work Requirement Waivers Work Requirement Waiver Submitted (8) Work Requirement Waiver Approved/ Not Implemented (5) Work Requirement Waiver Approved/ Implemented (1) Work Requirements Blocked (3)

SPA Expanded (26 + DC) 1115 Expansion Waiver (7) Not yet expanded (14) Ballot initiative to expand Medicaid passed, state has not yet implemented (3)

Notes: Adults in Wisconsin and Utah are eligible for Medicaid up to 100% of federal poverty.

Last updated: September 25, 2019

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Coverage and Eligibility-Related Waiver Requests Denied by CMS • Life enrollment caps (AZ) • Asset test (NH) • Drug testing as condition of eligibility (WI) • Partial expansion and enrollment caps with enhanced match (UT) • Use of fed Medicaid $ for work supports (VA – still in negotiations)

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Status of State ACA Innovation Waivers No waiver State has enacted legislation authorizing waiver submission (8) State released draft waiver in past year (2) Waiver withdrawn/ no longer active (7) Waiver approved by federal government (13)

Last updated: August 26, 2019

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Thank You! For more information please visit: commonwealthfund.org and follow us @commonwealthfnd Contact Information: Rachel Nuzum, VP Federal and State Health Policy rn@cmwf.org@raenuzum

Additional Slides

Meeting Name | Meeting Date

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INNOVATION IN MEDICAID: TO WAIVER OR NOT TO WAIVER

Key Features of Approved and Pending CoverageRelated Waivers Under Trump Administration Approved

Pending

Features

AZ

AR

IN

KY

ME*

MI

NH

OH

Work Requirements

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Premiums (some states with lockout) Cost Sharing Healthy Behavior Incentives

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Healthy Risk Assessment as Condition of Eligibility

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Prompt Enrollment Waiver Enrollment Cap Health Savings-Like Accounts Late Renewal Paperwork Penalty/Lockout

UT

WI

AL

MS

OK

SC

SD

TN

VA

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Non-Emergency Medical Transportation Waiver Retroactive Coverage Waiver

NM

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Approved: AZ, AR, IN, KY, ME, MI, NH, NM, OH, UT, WI; submitted to CMS: AL, MS, OK, SD, TN, VA; released and undergoing public comment or pending submission to CMS: SC. Note: Chart includes approved and pending waiver features; some states are seeking amendments or extensions to current demonstrations while others are seeking new demonstrations; populations impacted by waiver features vary across states; chart does not include all waiver features. As of 4/4/2019 *On January 22, 2019, Maine’s Governor Janet Mills rejected the Special Terms and Conditions approved by CMS on December 21, 2019 Medicaid Expansion Experience Across States, Sept. 30, 2019 | Manatt Health Strategies, LLC

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