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Section 1115 Medicaid Demonstration Waivers: The Current Landscape of Approved and Pending Waivers

Appendix A

How Have States Used Section 1115 Demonstration Waivers in the Past?
From Medicaid’s beginning in 1965 through the early 1990s, waivers were small in scope. Beginning in the 1990s, there was an increase in waiver activity, and waivers became broader in scope. General periods of waiver activity are discussed below:

Broad Expansion Waivers (Mid-1990s-2001). In the pre-ACA mid-90s through the early part of this decade (before statutory authority/federal funds directly authorized for coverage expansion to childless adults), most waivers focused on expanding coverage. Many began as state efforts to implement broader managed care systems than were permitted under federal law. States used savings from mandatory managed care or redirected disproportionate share hospital (DSH) funds to offset expansion costs, and flush economic times during the mid- to late-90s helped support expansion efforts. Two of the largest waivers approved during this time (Oregon Health Plan and Tenncare) also restructured coverage for existing beneficiaries in ways that were considered very controversial at the time.

HIFA Waivers (2001 Forward). In August 2001, under President Bush, the administration announced the Health Insurance Flexibility and Accountability (HIFA) waiver initiative, which promoted the use of waivers to expand coverage within “current-level” resources and offered states increased flexibility to reduce benefits and charge cost-sharing to offset expansion costs. However, states had limited interest and success in expanding coverage under HIFA, and waivers instead began to increasingly focus on cost control as the nation moved into an economic downturn. Expansions that did move forward under HIFA waivers were generally limited, particularly when compared to the larger expansions of the 1990s.

Reform Waivers (2005 Forward). Beginning in 2005, some broad waivers were approved that restructured Medicaid financing and other key program elements, for example, by setting a global cap on federal funds.1 These waivers stemmed from continued federal emphasis on and interest by some states in controlling and increasing predictability of program costs as well as ideas about reshaping Medicaid to promote personal responsibility and reflect private market trends. However, during this same period, Massachusetts obtained a waiver that provided support for its efforts to provide universal coverage without significantly restructuring its Medicaid program.

Pre-ACA Expansion Waivers (2010-2013). Six states (California, Colorado, the District of Columbia, Minnesota, New Jersey, and Washington) used waivers to expand Medicaid coverage to adults after the enactment of the ACA to prepare for 2014.

Emergency Waivers (periodic over time in response to emergencies). Beyond these themes, waivers have also helped states quickly provide Medicaid support during emergency situations, for example, by enabling a vastly streamlined enrollment process in New York in the wake of the September 11th attacks, and by assisting states in providing temporary Medicaid coverage to certain groups of Hurricane Katrina survivors.

Appendix B

What are the CMS Criteria for Evaluating Section 1115 Medicaid Demonstration Waivers?
In response to criticism from the General Accounting Office (GAO) about the lack of standards used to determine whether proposed Section 1115 demonstrations further Medicaid program objectives, the CMS posted a set of criteria to evaluate waiver requests in 2015. These criteria were revised by the Trump Administration in November 2017. For comparison, both sets of criteria are listed below.

2015 CMS Waiver Approval Criteria:
  1. Increase and strengthen overall coverage of low-income individuals in the state;
  2. Increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state;
  3. Improve health outcomes for Medicaid and other low-income populations in the state; or
  4. Increase the efficiency and quality of care for Medicaid and other low-income populations through invitations to transform service delivery networks.
November 2017 Revised CMS Waiver Approval Criteria:
  1. Improve access to high-quality, person-centered services that produce positive health outcomes for individuals;
  2. Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term;
  3. Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals;
  4. Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making;
  5. Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and
  6. Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.

Appendix C

Approved Section 1115 Medicaid Waivers, as of February 1, 2018
Waiver Name Waiver Expiration Date Delivery System Reform BH MLTSSi Other Targeted Populations Medicaid Expansion Work Requirements Eligibility and Enrollment Restrictions Benefit Restrictions, Copays, Healthy Behaviors
Total active, approved waivers: 43 (across 35 states)   16 16 12 16 8 1 8 7
AL Alabama Medicaid Transformationii 3/31/2022 X
AR Arkansas Works 12/31/2021 X X
AR Arkansas’ Tax Equity and Fiscal Responsibility Act (TEFRA-like) 12/31/2017 expands eligibility for children with disabilities
AZ Arizona Health Care Cost Containment System 9/30/2021 X X X X X X
CA California Medi-Cal 2020 12/31/2020 X X X
DE Delaware Diamond State Health Plan 12/31/2018 X X
FL Florida Managed Medical Assistance 6/30/2022 X X
FL Florida MEDS-AD 12/31/2017 expands eligibility for seniors and people with disabilities
HI Hawaii QUEST Integration 12/31/2018 X X
IA Iowa Wellness Plan 12/31/2019 X X X
IN Healthy Indiana Plan (HIP) 2.0 1/31/2018 X X X
IN Indiana End Stage Renal Disease (ESRD) 12/31/2020 expands eligibility for Medicare-enrolled people with ESRD
KS KanCare 12/31/2018 X X Xiii
KY Kentucky HEALTH 9/30/2023 X X X X X
MA MassHealth 6/30/2022 X X
MD Maryland Health Choice 12/31/2021 X
ME Maine Section 1115 Demonstration for Individuals with HIV/AIDS 12/31/2017 expands eligibility and provides limited benefit package for people with HIV/AIDS
MI Healthy Michigan 12/31/2018 X X X
MI Flint MI 2/28/2021 expands eligibility and provides additional services to pregnant women & children
MN Minnesota Reform 2020: Pathways to Independence 6/30/2018 expands eligibility for HCBS
MN Minnesota Prepaid Medical Assistance Project Plus 12/31/2020 expands eligibility for one-year-old children
MO Missouri Gateway to Better Health 12/31/2022 expands eligibility and provides limited benefits to nonelderly adults in St. Louis area
MS Healthier Mississippi 9/30/2018 expands eligibility and offers limited benefit package to capped number of seniors and people with disabilities
MT Montana Health Economic Livelihood Partnership (HELP) 12/31/2020 X X
MT Montana Additional Services and Populations 12/31/2017 X
NH New Hampshire Health Protection Program Premium Assistance Demonstration 12/31/2018 X X
NH Building Capacity for Transformation 12/31/2020 X X
NJ New Jersey Comprehensive Waiver 6/30/2022 X X X provides HCBS to targeted groups of people with I/DD
NM Centennial Care 12/31/2018 X X X
NV Nevada Comprehensive Care 6/30/2018 provides primary care case management to high-cost/high-need people w/ certain chronic conditions
NY New York Medicaid Redesign Team 3/31/2021 X X X
OK Oklahoma SoonerCare 12/31/2017 expands eligibility to certain populations (working people with disabilities, college students, working foster parents, nonprofit employees), varies benefits and cost-sharing, and authorizes federal funds for primary care case management
OR Oregon Health Plan 6/30/2022 X
RI Rhode Island Comprehensive Demonstration 12/31/2018 X X
TN TennCare II 6/30/2021 X X
TX Texas Healthcare Transformation and Quality Improvement Program 9/30/2022 X X
UT Primary Care Network 6/30/2022 X expands eligibility and provides limited benefit package to nonelderly adults
VA Virginia Governor’s Access Plan (GAP) and Addiction and Recovery Treatment Services (ARTS) Demonstration 12/31/2019 X
VT Vermont Global Commitment to Health 12/31/2021 X X X
WA Washington Medicaid Transformation Project 12/31/2021 X expands eligibility and offers limited HCBS benefit package targeted to seniors with unpaid family caregivers
WI Badger Care Reform 12/31/2018 expands eligibility and establishes sliding scale premiums for nonelderly adults
WI Wisconsin SeniorCare 12/31/2018 authorizes pharmacy benefits and cost-sharing for seniors
WV West Virginia Creating a Continuum of Care for Medicaid Enrollees with Substance Use Disorder 12/31/2022 X
NOTES: “MLTSS” = Managed long-term services and supports, “BH” = Behavioral health. This table does NOT include family planning or CHIP-only waivers. I Four states (CA, NY, RI & TX) have concurrent Section 1115A authority for financial alignment demonstrations that integrate Medicare and Medicaid benefits for dual eligible beneficiaries in a single health plan. ii Alabama is no longer moving forward with this demonstration and is in the process of standing down the demonstration. iii Kansas administers MLTSS through concurrent Section 1115/1915 (c) waivers.

General Notes: Some states have multiple waivers, and many waivers are comprehensive and may fall into a few different areas. This table does NOT include/capture states mandating managed care through Section 1115 (since waiver authority is not generally required for these initiatives) and does not capture delivery system reform, behavioral health, or LTSS initiatives that do not require Section 1115 expenditure authority/federal funds. For additional details on what is included in each category, see category specific notes below.

Delivery System Reform: These states are using Section 1115 waiver authority to use federal Medicaid funding on delivery system reforms that otherwise would not be available under current law. This includes states using Section 1115 waivers to: implement Delivery System Reform Incentive Payment (DSRIP) initiatives, to invest in delivery system reform initiatives other than DSRIP, and to operate Uncompensated Care Pools (also called “Low Income Pools” in some states).

Behavioral Health: These states are using Section 1115 authority to: use Medicaid funds to pay for inpatient substance use and/or mental health services for nonelderly adults in “institutions for mental disease” (IMDs); fund other behavioral health or supportive services for people with behavioral health needs (such as supportive housing, supported employment, peer supports, and/or community-based mental health or SUD treatment services); expand Medicaid eligibility to cover additional people with behavioral health needs who are otherwise uninsured; or request waiver funding for delivery system reform initiatives (such as physical/behavioral health integration, value-based purchasing, and workforce development initiatives).

CMS Guidance: In July 2015, the CMS issued a state Medicaid director letter describing new service delivery opportunities for individuals with substance use disorder under Section 1115. In November 2017, the CMS issued a state Medicaid director letter revising the 2015 guidance.

Managed Long-Term Services and Supports (MLTSS): These states are using Section 1115 waivers to authorize the delivery of Medicaid long- term services and supports through capitated managed care. These states need waiver authority to require seniors and people with disabilities to enroll in managed care, and most are choosing to use Section 1115 waivers instead of separate Section 1915 (c) waivers to authorize home and community-based services.

Other Targeted: These states operate Section 1115 waivers that affect targeted populations (e.g., persons with HIV/AIDS, seniors and people with disabilities, uninsured nonelderly adults in non-expansion states). These targeted waivers may provide limited benefit coverage and/or include cost-sharing. “Other Targeted” waivers for seniors and people with disabilities may include eligibility and/or acute care benefits and/or FFS home and community-based services (HCBS) expansions. (States implementing capitated HCBS under Section 1115 authority are captured under “MLTSS.”) “Other Targeted” does NOT include family planning waivers (with the exception of Texas’ Healthy Women waiver).

Medicaid Expansion: These states are implementing the ACA Medicaid expansion through alternative models that differ from federal law. Expansion waivers typically include eligibility and enrollment restrictions for the ACA expansion population (see “Eligibility and Enrollment Restrictions”).

Work Requirements: These states are implementing waivers that would require work as a condition of eligibility, for most ACA expansion adults and/or traditional populations. Note: States do not need Section 1115 waiver authority to implement voluntary work referral programs.

CMS Guidance: On March 14, 2017, the CMS sent a letter to state governors that signaled a willingness to use Section 1115 authority to “support innovative approaches to increase employment and community engagement.” On January 11, 2018, CMS posted new guidance for state Section 1115 waiver proposals to condition Medicaid on meeting a work requirement.

Eligibility and Enrollment Restrictions: These states are implementing certain eligibility and enrollment restrictions as part of ACA Medicaid expansion waivers or for traditional populations. Provisions approved by CMS to date include: charging premiums beyond what is allowed under federal law; eliminating retroactive eligibility; making coverage effective on the date of the first premium payment (instead of the date of application); disenrollment and lock-out for unpaid premiums; and imposing a lock-out for failure to timely renew eligibility and/or lock-out for failure to timely report a change in circumstance that would affect eligibility. Provisions in pending waivers not approved by CMS to date include: limiting expansion eligibility to 100% FPL (with ACA enhanced match); eliminating hospital presumptive eligibility; requiring asset tests for poverty-related eligibility pathways; waiving MAGI requirements; requiring drug screening and testing; imposing a tobacco premium surcharge; and imposing time limits on coverage.

Benefit Restrictions, Copays, and Healthy Behaviors: These states are implementing certain service-use related waiver provisions as part of ACA expansion waivers or for traditional populations including: eliminating non-emergency medical transportation (NEMT), implementing healthy behavior incentives (tied to premium or cost sharing reductions), and charging copays in excess of the federal maximum for non-emergent use of the emergency room.

SOURCE: KFF analysis of approved and pending waiver applications posted on Medicaid.gov.

Appendix D

Pending Section 1115 Medicaid Waivers, as of February 1, 2018
Waiver Name New, Amendment, Extension Delivery System Reform BH MLTSS Other Targeted Populations Medicaid Expansion Work Requirements Eligibility and Enrollment Restrictions Benefit Restrictions, Copays, Healthy Behaviors
Total pending waivers: 23

(across 22 states)

  4 13 4 3 0 9 10 7
AR Arkansas Works Amendment X X
AZ Arizona Health Care Cost Containment System Amendment + Amendment X X X
FL Florida Managed Medical Assistance Amendment X
HI Hawaii QUEST Integration Amendment X
IL Illinois Behavioral Health Transformation New X
IN Healthy Indiana Plan (HIP) 2.0 Extension + Amendment X X X
KS KanCare 2.0 Extension X X X X
MA MassHealth Amendment +
Amendment
X X X
ME MaineCare New X X X
MI Michigan Pathway to Integration New X X
MI Michigan Brain Injury Waiver New Would provide specialized rehabilitative services to limited number of adults with brain injuries
MS Medicaid Workforce Training Initiative New X
MT Montana Health and Economic Livelihood Partnership (HELP) Program Amendment Xi
NC North Carolina’s Medicaid Reform Demonstration Newii X X X
NH New Hampshire Health Protection Program Premium Assistance Amendment X
NJ New Jersey FamilyCare Comprehensive Demonstration Amendment X Would add HCBS for seniors at risk of nursing home placement
NM Centennial Care Extension X X X X
NY New York Medicaid Redesign Team Amendment +
Amendment
X X
RI Rhode Island Comprehensive Demonstration Amendment Would establish pilot program for cortical integrative therapy for brain injuries
TX Healthy Women New X X
UT Primary Care Networkiii Amendment X X X
VA Virginia Delivery System Transformation New X X
WI Badger Care Reform Extension X X X X
NOTES: “MLTSS” = Managed long-term services and supports, “BH” = Behavioral health. This table does NOT include family planning waivers (with the exception of Texas’ Healthy Women waiver) or CHIP-only waivers. iMontana is proposing to eliminate their current waiver’s premium credit. Under current waiver, beneficiaries subject to premiums receive a credit toward accrued co-payments up to 2% of income. A member with a premium would now be subject to 2% income in premium and 3% income in copayment, per quarter, without the premium credit. This change does not require waiver authority; however, the change in policy is counted as a restriction in this table. ii On November 20, 2017, North Carolina submitted an amended Section 1115 waiver application. This revised waiver application was developed under Governor Roy Cooper while the original application was submitted under the previous Governor (Pat McCrory). The amended application includes provisions (premiums and work requirements) that would affect newly eligible adults only if proposed state legislation (“Carolina Cares”) is enacted. These provisions are not reflected in the table, as the state has not yet added this population to its Medicaid program. iiiUtah’s Primary Care Network Section 1115 5-year waiver extension was approved by CMS on October 31, 2017. However, the state submitted an amendment to the demonstration on August 15, 2017. Several provisions included in the amendment (e.g., work requirements, time limit on eligibility) remain pending review/approval at CMS.

General Notes: Some states have multiple waivers, and many waivers are comprehensive and may fall into a few different areas. Pending waivers include new applications, amendments to existing waivers, and renewal/extension requests. State waiver renewals that do not propose changes and amendments that are technical in nature are excluded. Pending waiver applications are not included in this table until they are officially accepted by CMS and posted on Medicaid.gov.

This table does NOT include/capture states mandating managed care through Section 1115 (since waiver authority is not generally required for these initiatives) and does not capture delivery system reform, behavioral health, or LTSS initiatives that do not require Section 1115 expenditure authority/federal funds.

For additional details on what is included in each category, see category specific notes below.

Delivery System Reform: These states seek to use Section 1115 waiver authority to use federal Medicaid funding on delivery system reforms that otherwise would not be available under current law. This includes states using Section 1115 waivers to: implement Delivery System Reform Incentive Payment (DSRIP) initiatives, to invest in delivery system reform initiatives other than DSRIP, and to operate Uncompensated Care Pools (also called “Low Income Pools” in some states).

Behavioral Health: These states seek to use Section 1115 authority to: use Medicaid funds to pay for inpatient substance use and/or mental health services for nonelderly adults in “institutions for mental disease” (IMDs); fund other behavioral health or supportive services for people with behavioral health needs (such as supportive housing, supported employment, peer supports, and/or community-based mental health or SUD treatment services); expand Medicaid eligibility to cover additional people with behavioral health needs who are otherwise uninsured; or request waiver funding for delivery system reform initiatives (such as physical/behavioral health integration, value-based purchasing, and workforce development initiatives).

CMS Guidance: In July 2015, the CMS issued a state Medicaid director letter describing new service delivery opportunities for individuals with substance use disorder under Section 1115. In November 2017, the CMS issued a state Medicaid director letter revising the 2015 guidance.

Managed Long-Term Services and Supports (MLTSS): These states seek to use Section 1115 waivers to authorize the delivery of Medicaid long- term services and supports through capitated managed care. These states need waiver authority to require seniors and people with disabilities to enroll in managed care, and most are choosing to use Section 1115 waivers instead of separate Section 1915 (c) waivers to authorize home and community-based services.

Other Targeted: These states seek to operate Section 1115 waivers that affect targeted populations (e.g., persons with HIV/AIDS, seniors and people with disabilities, uninsured nonelderly adults in non-expansion states). These targeted waivers may provide limited benefit coverage and/or include cost-sharing. “Other Targeted” waivers for seniors and people with disabilities may include eligibility and/or acute care benefits and/or FFS home and community-based services (HCBS) expansions. (States implementing (or seeking to implement) capitated HCBS under Section 1115 authority are captured under “MLTSS.”) “Other Targeted” does NOT include family planning waivers (with the exception of Texas’ Healthy Women waiver).

Medicaid Expansion: These states are seeking approval to implement the ACA Medicaid expansion through alternative models that differ from federal law. Expansion waivers typically include eligibility and enrollment restrictions for the ACA expansion population (see “Eligibility and Enrollment Restrictions”).

Work Requirements: These states seek waivers that would require work as a condition of eligibility, for most ACA expansion adults and/or traditional populations. Note: States do not need Section 1115 waiver authority to implement voluntary work referral programs.

CMS Guidance: On March 14, 2017, the CMS sent a letter to state governors that signaled a willingness to use Section 1115 authority to “support innovative approaches to increase employment and community engagement.” On January 11, 2018, CMS posted new guidance for state Section 1115 waiver proposals to condition Medicaid on meeting a work requirement.

Eligibility and Enrollment Restrictions: These states are seeking approval to implement certain eligibility and enrollment restrictions as part of ACA Medicaid expansion waivers or for traditional populations. Provisions approved by CMS to date include: charging premiums beyond what is allowed under federal law; eliminating retroactive eligibility; making coverage effective on the date of the first premium payment (instead of the date of application); disenrollment and lock-out for unpaid premiums; and imposing a lock-out for failure to timely renew eligibility and/or lock-out for failure to timely report a change in circumstance that would affect eligibility. Provisions in pending waivers not approved by CMS to date include: limiting expansion eligibility to 100% FPL (with ACA enhanced match); eliminating hospital presumptive eligibility; requiring asset tests for poverty-related eligibility pathways; waiving MAGI requirements; requiring drug screening and testing; imposing a tobacco premium surcharge; and imposing time limits on coverage.

Benefit Restrictions, Copays, and Healthy Behaviors: These states are seeking approval to implement certain service-use related waiver provisions as part of ACA expansion waivers or for traditional populations including: eliminating non-emergency medical transportation (NEMT), implementing healthy behavior incentives (tied to premium or cost sharing reductions), and charging copays in excess of the federal maximum for non-emergent use of the emergency room.

SOURCE: KFF analysis of approved and pending waiver applications posted on Medicaid.gov.

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