CMS Announces Updates to Medicaid Wavier Reviews and Processes
New guidance from the Centers for Medicare and Medicaid Services (CMS) reports updated policies and procedures around state plan amendments (SPAs), 1115 waivers and 1915 waivers in states’ Medicaid programs. Two informational bulletins released within the past week outline the agency’s efforts to streamline approval processes and provide clarity around these options that are meant to give states flexibility in how they administer their Medicaid programs. These updates are part of CMS’s ongoing efforts to address concerns from states and federal policymakers around long administrative approval times and lack of transparency and oversight.
1115 DEMONSTRATION UPDATES
In a letter issued earlier this week, CMS formalized Obama-era adjustments stating that demonstration programs approved under 1115 waivers must remain “budget neutral,” or not require more federal funding than the baseline Medicaid program. The new policy affirms CMS’ intent to apply more restrictive budget neutrality parameters for Medicaid 1115 demonstration projects, and helps fulfill the agency’s commitment to “protect the fiscal integrity of the program.” This could potentially curtail some of the program reforms of interest to states and stakeholders, as well as put additional pressure on state budgets due to the loss of “roll over” funds in states with long-running programs.
Among the updates discussed in the guidance:
- Limiting Savings Rollover: Under CMS’s previous budget neutrality approach, states were permitted to roll over savings from older demonstration approval periods rather than limiting roll-over savings to recent years. Under CMS’s current approach to budget neutrality, states are permitted to roll over accumulated budget neutrality savings only from the most recently-approved five years.
- Rebasing non–waiver baselines: Beginning with 1115 demonstration extensions effective as of January 1, 2021, CMS will adjust budget neutrality limits to better reflect states’ most recent historical experiences.
- Transitional phase–down of newly accrued savings: Until the new rebasing strategies begin in 2021, CMS expects to phase-down the annual savings of demonstrations that are being extended based on when that demonstration was first implemented.
For more details on the updates to 1115 demonstration waivers, read the full letter here.
STATE PLAN AMENDMENTS & 1915 UPDATES
In another informational bulletin issued last week, CMS detailed the agency’s updates to the review pathways of state plan amendments (SPAs) and 1915 waivers, which have historically often seen long administrative approval times.
SPAs and 1915 waivers are meant to give states flexibility in how they administer their Medicaid programs, and must be approved by CMS before being implemented. This bulletin is the second in a series from CMS to detail the agency’s process improvement initiatives, and presents successes from implementing strategies from the first bulletin along with details on the new processes. According to CMS, the agency has seen a 20 percent increase over 2016 approval times for SPAs since releasing the first round of guidance, and hopes to continue those successes with these new efficiencies.
To read the full bulletin and for more details on the specific updates, visit CMS’s website here.