Medicaid waivers give states greater flexibility for health care programs

The system of federal waivers allowing states to try different strategies under Medicaid is actually a major way the program operates and a major reason the state programs differ from each other.

In general, a waiver is a way for the US Secretary of Health and Human Services-with that authority sometimes delegated to the Centers for Medicare and Medicaid Services (CMS)-“to allow a state to receive federal Medicaid dollars for an expenditure that otherwise would not qualify for the funds,” says Cindy Mann, director of the Center for Medicaid and Children’s Health Insurance Program (CHIP) Services.

The current administration is pledging that Medicaid flexibility will continue as health care reform is implemented, but it also promises there will be more transparency to the process.

In recent times, a number of states have used waivers to move into capitated managed-care arrangements with a broader group of beneficiaries and a broader group of services or to simplify and enhance enrollment and eligibility, she said.

Among the hundreds of waivers listed on Medicaid.gov, for example, is one under which Nebraska will provide “early intensive behavioral intervention to children with autism ages 0-17.” Another is the Georgia Planning for Healthy Babies program that is intended to provide family planning and related services to certain low-income, uninsured women, as well as interpregnancy care for such women who have delivered a very low-birth-weight baby.

Many states have waivers for home and community-based services, although there are ways to conduct such programs under the statute, including new provisions under the Affordable Care Act (ACA), Mann told the recent advisory meeting of the Medicaid and CHIP Payment and Access Commission in Washington, DC.

What waivers are used to do changes over time, she said, depending on “what states are interested in doing in any given point in time and what is happening in the marketplace.” Some administrations encourage states to apply for certain kinds of waivers but indicate they will not approve another kind, she said. It is obvious, she noted, that under Section 1115 of the Social Security Act, one key type of waiver, “quite a bit of discretion lies with the secretary.” Section 1115 waivers can also apply to other health programs, including CHIP.

Mann did say that the waiver process has long been criticized as being like deals cut between the federal government and the state’s executive body, with the public not knowing exactly what the plan is until the final waiver is announced.

The ACA contains rules for waiver transparency that CMS has now implemented. A state must have at least a 30-day comment period and hold public hearings on a proposed waiver before submitting it to the federal level. After that, CMS checks it for completeness and opens a comment period of at least 30 days at the federal level.

All current, pending, disapproved, and expired waivers are on Medicaid.gov, she said.

In addition to statutory changes that allow states to do a number of things without a waiver, she said, this administration has been looking at ways to expand flexibility through the state plans. She indicated that 15 years ago, “we may have interpreted a statute or looked at a regulation this way, but the marketplace is changing.”

She indicated there is a lack of understanding of the flexibilities available to states without waivers, due to the complexity and changing nature of the program and the sometimes rapid change in Medicaid directors.

She also said that “in some circles, waivers become synonymous with reform,” and asking for them makes it seem as if a state is doing something more significant than doing something the program allows.

Mann noted that CMS has initiatives on quality and on better, consistent evaluation in waivers.