United States: Trump Administration Draws A Line In The Sand On Medicaid Waivers

Last Updated: May 9 2018
Article by Ross Margulies

If recent history provides us with any guideposts on how the current Administration will review and approve (or not approve) State waiver requests, today's news may come as a bit of a surprise. In the wake of recent approvals of never-before-seen waivers — including the imposition of new work requirements in Kentucky, Indiana , and Arkansas — today we learned that CMS has said no to lifetime limits on Medicaid benefits in the state of Kansaas. While this decision has immediate implications for Kansas' pending waiver, we note that Arizona, Maine, Utah and Wisconsin also have pending waivers that include some form of time limit on coverage.

On May 7, 2018 CMS Administrator Seema Verma sent a letter to Jon Hamdorf, Acting Medicaid Director for the State of Kansas advising Hamdorf that CMS was not approving the state's request to impose lifetime limits on eligible Medicaid enrollees in the state, in connection with the state's pending community engagement (work requirement) waiver. Notably CMS is not denying Kansas' overall waiver request, but instead invites the state back to the drawing board to come up with a waiver proposal that CMS is able to approve.

Kansas' waiver ("KanCare") was submitted to CMS on December 20, 2017 and included, among other requests, (1) a request to impose work requirements on parents with children ages six and older who make less than 38% of FPL; and (2) to impose a three-year lifetime limit on access to Medicaid benefits on this same population, even if they continue to meet the work requirement standard. While CMS' announcement does not necessarily mean the agency will reject every state request to add lifetime limits, it provides us with our first glance at where the Trump Administration may draw the lines in terms of waivers that do not "promote the objectives" of the Medicaid program.

As we have previously discussed, the statutory standards for CMS to approve an 1115 are vague at best — instead the agency has traditionally relied upon self-published objectives that can change from Administration to Administration. The Trump Administration, in late 2017, amended the Obama-era objectives toward objectives that better align with the Administration's views of what the Medicaid program should look like. Those new objectives are:

  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.

Given the relative focus on individual responsibility and independence in these objective, we have long wondered where the Trump Administration would draw the line in terms of waivers that are "beyond the pale."

In her letter to Kansas, Administrator Verma notes in part:

"We have approved, in other states, meaningful incentives for certain adults to participate in community engagement activities and to take greater responsibility for their health and well-being, including periods of ineligibility for failing to comply with these requirements. In every case, these incentive structures are designed to engage beneficiaries in ways that promote positive health and well-being."

In her remarks at the America Hospital Association's annual membership meeting in Washington today, Administrator Verma added:

"We seek to create a pathway out of poverty, but we also understand that people's circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them.,"

It may come as a relief to many in the advocacy community that there are limits to what this Administration will approve in the waiver space. Given the upcoming litigation in Kentucky, it will be interesting to see if/how the plaintiffs in that case intend to use CMS' recent statements re: Kansas against CMS in arguing that the imposition of work requirements are not consistent with the objectives of the Medicaid program.

To view Foley Hoag's Medicaid and the Law blog please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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