United States: CMS Issues New Guidelines On 1115 Waivers; Signals New Medicaid Objectives

Last Updated: November 10 2017
Article by Ross Margulies

On November 6, 2017 the Centers for Medicare & Medicaid Services (CMS) issued an information bulletin on changes and improvements to the existing Section 1115 waiver process.1 Under Section 1115(a) of the Social Security Act, the Secretary of Health and Human Services is permitted to waive compliance with any of the requirements of section 1902 of the Act (which generally sets forth the requirements for state Medicaid programs in order to receive Federal financial assistance) in order to pilot or test projects which, in the judgment of the Secretary, are likely to assist in "promoting the objectives" of the Medicaid program. Issued by Brian Neale, CMS Deputy Administrator and Director of the Center for Medicaid and CHIP Services (CMCS), the bulletin generally describes several new policies designed to streamline the 1115 waiver approval process, as well as sets forth broad new policy objectives for such waivers.

Concurrent with the new waiver bulletin, CMS also revised the language on its website which describes revised "objectives" for the Medicaid program, signaling a major shift in the type of waivers CMS will approve – and a potentially even larger, long-term shift in the Medicaid program overall.

CMCS Informational Bulletin

The November 6th bulletin follows on the heels a letter sent to state governors earlier this year, in which former Secretary Price and CMS Administrator Verma set forth new overall goals for the Medicaid program, and the waiver process. The bulletin focuses on two particular areas of this new overall strategic shift in the Medicaid program – (1) reducing the burden and increasing the efficiency of the 1115 waiver application and approval process; (2) improving the ongoing monitoring and evaluation of waivers. The bulletin notes that the current waiver process is burdensome and time consuming, and proposes a number of new policies designed to speed up the waiver approval process, and reduce overall workflow burden for states.

Policies to Reduce the Burden and Increase the Efficiency of the Waiver Approval Process

In order to reduce the overall burden for states throughout the waiver approval process, as well as to speed up approval times, CMS proposes a number of new policies:

  • CMS will revise the 1115 waiver application to streamline and simplify the actual application;
  • CMS will work with states to commit to a particular review timeframe for an individual waiver application;
  • CMS will relax its policies and procedures regarding the content of Special Terms and Conditions (which generally act as the legally binding contract between a state and CMS during a waiver period). CMS is committing to additional flexibility in program operation, increased use of performance metrics and benchmarks, as well as flexibility in how the Special Terms and Conditions are actually developed (CMS proposed to offer standard language, or permit the state to submit its own draft);
  • CMS will develop parameters for expedited approval of waivers that are "substantially similar" to those approved in other states, permitting quicker approval of demonstrations similar to those already approved in other jurisdictions;
  • CMS may approve the extension of routine, non-complex waivers for a period of up to 10 years (with the flexibility to approve more complex waivers for shorter periods of times);
  • CMS will open up its "fast track" application pathway to more states, removing the requirement that states have had at least one full extension cycle in order to be eligible for this streamlined process;
  • CMS may permit states with pending extension requests to separate out routine, non-complex waiver requests for faster approval under an expedited timeframe;
  • CMS will expand the transparency of the waiver approval process by providing states with a transparency review checklist, sharing lists of open issues with states during the approval process, and working with states on the development of waiver-specific timeframes;
  • CMS will commit to coordinating approval efforts across the agency, such that concurrent actions will be addressed in a coordinated manner, and CMS staff will assist states in reviewing other possible approval pathways or funding mechanisms; and
  • CMS will work with states to bring more clarity to the budget neutrality rules, standardizing budget neutrality Terms and Conditions and offering states assistance on these rules.

Policies to Enhance the Monitoring and Evaluation of Section 1115 Waivers

In addition to waiver approval process improvements, CMS is also committing to new enhancements to the ongoing monitoring and evaluation of waivers in order to target resources more effectively and strengthen state evaluation designs (as part of this effort, CMS has formed a State Technical Advisory Group consisting of state-identified experts). The new enhancements include:

  • Combining the fourth quarterly reports with annual reports to reduce the overall reporting burden;
  • Reducing the frequency of reporting (from quarterly to semi-annual or annual) for certain waivers which are long-standing, non-complex, unchanged, and meet several other requirements; and
  • Providing technical assistance in the development of hypotheses and evaluation designs in the evaluation phase.

Updated Medicaid Objectives on Medicaid.gov

Following release of the new 1115 waiver bulletin, and timed with a speech on the Medicaid program by CMS Administrator Verma on November 7, 2017, CMS also made substantial revisions on its webpage to the description of the Medicaid program, and the "objectives" the agency seeks to promote in approving waivers. The new website text notes that "traditional Medicaid approaches to serving this diverse and medically complex population have not always been effective at eliminating barriers to access and quality services," and states that 1115 waivers may allow states to implement reforms beyond routine medical care.

The previous program objectives, and the new objectives are displayed below:

Notable additions to the "objectives" include an increased focus on individual responsibility and independence, as well as a desire to align Medicaid and commercial insurance products. The new objectives, created in the wake of a number of pending waiver applications which would the first time impose work requirements or institute commercial-like formularies, appear to foreshadow likely approval of this never-before-seen policies in the Medicaid program.


1 Note that CMS also issued a guidance document on the State Plan Amendment and 1915 Waiver Process on November 6th. That bulletin is available here: https://www.medicaid.gov/federal-policy-guidance/downloads/cib110617-2.pdf.

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