CMS Approvals of COVID-19 1115 Waivers are Limited to Date

Manatt on Health: Medicaid Edition

Four months after the Centers for Medicare & Medicaid Services (CMS) offered state Medicaid programs a new COVID-19 Section 1115 waiver opportunity, five of at least 20 applying states have received approval of their waiver applications. The scope of the approvals has been largely limited to the flexibilities outlined in CMS's waiver template. With the recent extension of the national public health emergency, and other funding sources and authorities for state flexibility still under debate, it remains unclear whether broader flexibility will be forthcoming under future COVID-19 Section 1115 waivers. 

Background on the COVID-19 1115 Waiver Opportunity

On March 22, as the potential scale of the COVID-19 pandemic was beginning to unfold, CMS issued a State Medicaid Director Letter offering a new COVID-19 Section 1115 demonstration opportunity and an accompanying template application form to help states quickly secure approval for changes to their Medicaid programs in response to the emerging crisis. With the template application, CMS has allowed states to apply for a preset list of waivers and expenditure authorities, including:

  • Broad waivers of Medicaid requirements for statewideness, amount, duration and scope, and comparability to permit states to vary and target services based on population needs
  • Expenditure authorities to grant flexibility in administering long-term services and supports (LTSS):
    • Permitting self-attestation or alternative verification of income, assets and level of care to qualify for services
    • Relaxing requirements related to the setting of care, updates to the plan of care and timing of functional assessments
    • Allowing modifications to eligibility criteria for services
    • Increasing payment rates for home and community-based services (HCBS) providers in order to maintain capacity
    • Making retainer payments to HCBS providers offering personal care and habilitation services to maintain capacity

The template application also gives states an opportunity to request additional flexibilities unique to their own needs, including the ability to seek funding for activities not otherwise matchable by Medicaid.

Scope of State COVID-19 1115 Waiver Requests

To date, at least 20 states have submitted applications for COVID-19 Section 1115 demonstrations.1 In addition to the waivers and expenditure authorities featured in the template application, states have requested a diverse set of “off menu” waiver requests, ranging from small tweaks to Medicaid policies to large-scale delivery system transformations. A sample of these requests include:

  • Covering treatment (not only testing) for uninsured individuals with COVID-19
  • Loosening certain Medicaid eligibility requirements (e.g., around verification of eligibility criteria and redetermination)
  • Covering new services, such as housing for homeless populations with or at risk of COVID-19, home-delivered meals, and nutrition support
  • Making retainer payments and/or enhancing rates for a broad range of vulnerable providers beyond those providing HCBS
  • Creating new funding pools/disaster relief funds to pay for investments such as COVID-19-related changes to provider facilities, telemedicine infrastructure and provider payments to maintain access to care
  • Transitioning state Delivery System Reform Incentive Payment (DSRIP) program infrastructure to address the COVID-19 and other public health emergencies

Approved COVID-19 1115 Demonstrations

As of July 31, CMS has approved COVID-19 1115 demonstrations for five states: Washington State (April 21), New Hampshire (May 29), Hawaii (June 25), North Carolina (June 25) and Rhode Island (July 21). For each of these states, the scope of approved flexibilities has been limited; the vast majority of flexibilities approved have been the ones included in the template application. Hawaii and Rhode Island are the only states to date to receive approval for off-menu requests. Hawaii’s demonstration approves a range of HCBS flexibilities; for example, it gives Hawaii flexibility not to comply with federal rules related to visitors in HCBS settings to help the state inhibit the spread of the pandemic. CMS granted Rhode Island the ability to “triage” non-emergency medical transportation services based on need.

CMS has not approved any of these states’ more ambitious requests. For example, Washington State and North Carolina both requested authority to institute disaster relief funds for providers. Washington State’s waiver approval letter in late April and North Carolina’s early July waiver acceptance letter both indicate that their proposed disaster relief funds are still under CMS review.

In addition, in its demonstration approval letters, CMS has indicated that many of the states’ COVID-19 1115 waiver requests may be approvable through other authorities (i.e., Section 1135, Disaster Relief State Plan Amendments or Appendix K) or that funding may be available through other means, and in these instances, CMS would prefer not to use 1115 authority to grant flexibility. Notably, at least one state—Connecticut—has withdrawn its COVID-19 1115 demonstration application because CMS indicated that all of its requests, including one in the 1115 template application, are approvable under other authorities.

Moving Forward

Based on the slow pace of COVID-19 1115 demonstration approvals as compared to approvals of other disaster relief authorities, it is clear that CMS is not relying on 1115 authority as a primary mechanism to grant state flexibility during COVID-19. As outbreaks across the country demonstrate that the emergency is continuing, stakeholders will be watching to see if the scope of any additional waiver approvals is broader than those issued to date.

1 Because of the public health emergency, states are not subject to 1115 demonstration transparency rules. CMS has not centrally posted states’ COVID-19 1115 waiver applications. Arizona (second request here and third request here), Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Massachusetts, Missouri, New Hampshire, New Mexico, New York, North Carolina, Oregon, Rhode Island, South Carolina, Tennessee (second request here), Texas and Washington State have publicly posted COVID-19 1115 waiver applications. An unknown number of additional states have submitted waiver applications that have not been publicly posted.



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