The Big Picture
On Sunday, March 22, the Centers for Medicare & Medicaid Services (CMS) released a suite of tools to help state Medicaid and Children’s Health Insurance Program (CHIP) agencies respond to the COVID-19 pandemic. The tools are designed to streamline and simplify the process whereby states request, and CMS approves, temporary changes to state Medicaid and CHIP programs using both waiver and state plan authorities. CMS pledged its intent to act quickly on requests that are consistent with the new template “checklists” in the toolkit, and to work with states to consider additional requests. To expedite implementation of the various flexibilities described below, CMS also is waiving otherwise applicable public notice and budget neutrality requirements and permitting states to implement changes retroactively. The emergency administrative relief that CMS is offering states is time limited, applicable only during the current emergency period. Throughout the guidance, CMS indicates that it is likely to update the tools in response to states’ evolving needs or further congressional action.
Each of the four tools is briefly described below.
Section 1135 Waiver Template
CMS released a new Section 1135 Waiver COVID-19 State/Territory Request Template, prepackaging relevant and commonly requested Section 1135 authorities to expedite the application and approval process. Section 1135 of the Social Security Act provides the Department of Health & Human Services (HHS) Secretary with expanded authority to temporarily waive or modify certain federal Medicare, Medicaid, and CHIP requirements during a public health and national emergency. Section 1135 is generally used to waive conditions of participation and payment (as opposed to eligibility or benefit rules) in order to ensure that sufficient healthcare items and services are available to meet beneficiary needs and to ensure that providers who deliver services in good faith are reimbursed and exempted from sanctions.
The new template includes flexibilities that CMS anticipates will be most relevant to states, including authority to suspend Medicaid fee-for-service prior authorization requirements or to extend pre-existing authorizations, suspend preadmission screening and annual resident review (PASRR) Level I and Level II assessments, provide beneficiaries more time for appeals and fair hearings, relax standard provider enrollment rules, and modify certain reporting and oversight requirements. States also can request additional authorities, which may take longer for CMS to approve. CMS likely will approve Section 1135 requests in waves, quickly authorizing standard applications and taking more time to examine novel requests. As of March 23, CMS has approved 13 states’ Section 1135 waiver requests. The waivers are effective March 1 and will end upon termination of the public health emergency, including any extensions.
COVID-19 Public Health Emergency Section 1115(a) Opportunity
To help states quickly secure approval for eligibility and benefit-related changes in response to the pandemic, CMS issued a State Medicaid Director letter introducing a new COVID-19 Section 1115 demonstration opportunity and an accompanying checklist template application form. The demonstration could be used, for example, to help states enroll new Medicaid populations, target additional benefits to existing or new populations, permit self-attestation of applicant resources to streamline eligibility determinations, or authorize retainer payments to certain providers to retain capacity during the emergency. The template application enumerates these and other options and also gives states an opportunity to request additional flexibilities unique to their own needs. For example, the template gives states the opportunity to request additional “costs not matchable” expenditure authority to secure funding for activities not otherwise matchable by Medicaid; the breadth of activities that CMS is willing to approve remains to be seen.
In light of the current public health emergency, CMS is not requiring states to comply with standard Section 1115 public notice requirements, and CMS will expedite its approval of demonstrations. Demonstrations can be retroactive to March 1 and will expire no later than 60 days after the end of the public health emergency. States would not have to provide budget neutrality calculations as part of their application, but the application does request basic budget information and requires states to track expenditures and evaluate the demonstration (including cost-effectiveness), with a final report due one year after the waiver expires.
COVID-19 Appendix K Template
Section 1915(c) Waiver Appendix K (Appendix K) is a long-standing federal authority that helps states streamline and expedite changes to their 1915(c) home and community-based services (HCBS) waivers to prepare for and respond to emergencies. States generally receive preapproval of an Appendix K document that they can implement during emergency periods. Building on the existing Appendix K template, CMS released a COVID-19 Specific Sample Appendix K Template, which includes a pre-populated addendum to facilitate states’ requests for commonly requested and relevant program changes unique to the scope of the current emergency. CMS also released corresponding COVID-19 Appendix K instructions.
Some of the key Appendix K flexibilities pre-populated in the new template would allow states to:
- Waive compliance with the HCBS settings requirements that enable individuals to have visitors of their choosing at any time;
- Provide services such as case management and personal care services electronically (e.g., telephonically);
- Offer home-delivered meals and medical supplies/equipment (over and above those provided for in a state’s Medicaid plan); and
- Waive requirements related to conflict of interest to enable sufficient provider capacity to serve affected enrollees.
States must complete and submit to CMS an Appendix K for each 1915(c) waiver the state wishes to include in its request; the flexibilities checked in the addendum will be approved by CMS, but additional flexibilities must be articulated in writing by states. As of March 23, CMS has approved COVID-19 Appendix Ks in three states—Pennsylvania, Washington State, and West Virginia.
Medicaid Disaster Relief SPA Template
CMS released a Medicaid Disaster Relief SPA Template (and accompanying instructions) that bundles together multiple state plan authority changes that CMS anticipates states will seek as they respond to the coronavirus emergency. States can use the template to submit a combined request for time-limited programmatic changes, including temporary coverage of optional eligibility groups or new benefits; streamlined enrollment procedures, including expanded use of presumptive eligibility authorities; temporary suspension of premiums and cost sharing; increased provider reimbursement rates; and other changes.
The Medicaid Disaster SPA includes a standard request—under the Section 1135 authority described above—to permit states to waive standard notice requirements and tribal consultation requirements and to apply approved state plan changes retroactive to the first calendar quarter of January 2020, regardless of when the state submits its SPA. (Typically, SPA requests are only approvable retroactive to the beginning of the quarter in which they were submitted.)
The temporary authorities approved under the Medicaid Disaster Relief SPA would be effective during the emergency period (and any renewal thereof).