On September 28, 2022, the Centers for Medicare & Medicaid Services (CMS) issued approval letters for Section 1115 Medicaid demonstration applications previously submitted by Oregon and Massachusetts. Section 1115 waivers allow the Secretary of Health and Human Services to waive certain provisions of the Medicaid law to provide states with additional flexibilities to design and improve their Medicaid programs through experimental, pilot, or demonstration projects. These projects must be budget neutral and are approved for a five-year period,… More
Category Archives: Waivers
Oregon’s New Waiver Request to Exclude Accelerated Approval Drugs from Medicaid Coverage
Hello readers! Today’s post focuses on a topic we’ve touched on a few times in the past – Medicaid drug formularies.
Back in December 2021, the state of Oregon released a draft Medicaid waiver proposal that caught the attention of many stakeholders. In the draft proposal, Oregon stated that it was considering asking CMS for approval to a) adopt a commercial-style closed drug formulary and b) exclude from Medicaid coverage certain drugs approved via the accelerated approval pathway “with limited or inadequate evidence of clinical efficacy.” Oregon proposed to “use its own rigorous review process to determine coverage of new drugs and to prioritize patient access to clinically proven,… More
Georgia Files Suit Against CMS for “Regulatory Bait and Switch” Over its Expansion Population
Before jumping into the latest litigation over Medicaid waivers, Medicaid and the Law would like to introduce its readers to Adam Schilt. Adam is a healthcare associate in the Washington, DC office and will be a regular contributor to the blog. In a past role, he’s written pieces of legislation that have been enacted into the Medicaid statute and continues to be very passionate about the subject,… More
Advocates File Suit Over Tennessee Waiver – Dissecting the Complaint
On April 22, 2021 the Tennessee Justice Center and the National Health Law Program, representing thirteen (13) aggrieved Medicaid beneficiaries in the state of Tennessee, filed suit in the U.S. District Court for the District of Columbia against the U.S. Department of Health and Human Services (HHS) seeking to block the implementation of the TennCare III “modified block grant” 1115 waiver approved in the waning days of the Trump Administration.… More
BREAKING: Supreme Court Cancels Arguments on Medicaid Work Requirements
On March 11, the Supreme Court removed the dispute over Medicaid work requirements, which was previously scheduled for March 29, from its argument calendar. It is worth noting that the Court did not issue a ruling with its cancellation notification.
Recall how the High Court granted certiorari to Azar v. Gresham and Arkansas v. Gresham on December 4, 2020. … More
CMS Begins Internal Purge of Trump-Era Medicaid Policies
While CMS has been relatively quiet as of late from a public-facing perspective as it waits for new political leadership to arrive (including newly announced CMS Administrator, Chiquita Brooks-LaSure), a recent review by your Editors at www.MedicandandtheLaw.com of CMS’ website indicates a fast-paced effort to roll back a number of Trump-era Medicaid policies, particularly around waiver flexibilities. As I recently mentioned,… More
CMS Indicates Reversal of Medicaid Work Requirements
On Friday, February 12, the Centers for Medicare and Medicaid Services (CMS) took a first step to ending Medicaid work requirements. Acting CMS Administration Elizabeth Richter sent letters to Medicaid Directors in states which had previously received 1115 waiver approvals to implement so-called “community engagement” requirements, explaining CMS now does not believe that requiring employment as a condition for Medicaid coverage promotes the program’s objectives and intends to commence a process of determining whether to withdraw the waiver approvals. … More
BREAKING: CMS Withdraws Letter of Agreements to States Establishing Additional Procedures for Waiver Withdrawals
This just in – as previously discussed, on January 4, 2021 CMS Administrator Seema Verma sent a letter (available here) to State Medicaid Directors requesting they sign a Letter of Agreement “as soon as possible” establishing new procedural rights for any future waiver withdrawals by CMS.
Acting CMS Administrator Elizabeth Richter on Friday February 12th sent a letter to states that had signed the Letter of Agreement (including Tennessee) advising them that CMS is now retracting these additional procedures,… More
President Biden Takes First Step Towards Reversing Trump Era Medicaid Policies
On January 28th, President Biden issued an “Executive Order on Strengthening Medicaid and the Affordable Care Act.” The E.O. states that the Biden Administration will promote policies that “protect and strengthen Medicaid and the ACA and … make high-quality healthcare accessible and affordable for every American.” To this end, the E.O. makes several important policy changes, including asking the HHS Secretary to establish a Special Enrollment Period for the ACA marketplace,… More
CMS Releases Last Minute Letter of Agreement Establishing New Procedures for Waiver Withdrawals
A quick, timely update for our reader. As reported in our previous posts on the recently approved Tennessee waiver, in likely anticipation of the Biden Administration withdrawing the newly approved, but controversial waiver, on January 4, 2021 CMS Administrator Seema Verma sent a letter (available here) to State Medicaid Directors requesting they sign a Letter of Agreement “as soon as possible”… More
CMS Reneges on Historic “Grand Bargain” with Manufacturers in Tennessee Wavier Approval
If you have not already read it, you can read our main summary of the Tennessee waiver approval HERE.
Now that we have had the chance to read and meditate on the historic Medicaid waiver approved on Friday January 8th, giving Tennessee permission from the Federal government to fundamentally alter Medicaid’s traditional “matching” financing structure for the 1.5 million Tennesseans who rely on the program for healthcare services,… More
Washington D.C. Appellate Court Upholds Prohibition on Medicaid Work Requirement Waivers
The Centers for Medicare & Medicaid Services (CMS) suffered a big loss in court last week. The United States Court of Appeals for the D.C. Circuit upheld a lower court ruling that blocked CMS from implementing one of the hallmarks of the Trump Administration’s efforts to restructure the Medicaid program. We first wrote about the agency’s attempts to require some Medicaid recipients to participate in community engagement activities back in 2018. … More
CMS Releases Block Grant Guidance: Answers to your FAQs
On January 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued its long awaited and highly anticipated State Medicaid Director Letter (SMD Letter) announcing the “Healthy Adult Opportunity” (HAO) initiative that will allow states to carry out demonstrations to implement either an aggregate or per-capita cap financing model for certain Medicaid populations. We’ve previously previewed and highlighted some of the key expectations for this long-awaited guidance.… More
Ten Things to Watch for in the Forthcoming Block Grant Guidance (UPDATED)
UPDATED: It’s out! The much anticipated guidance, entitled the “Healthy Adult Opportunity” (HAO), from CMS introducing ways to revamp Medicaid financing has been out for nearly a week and we have had some time to review the guidance in more detail. We’ve update our questions below with answers based on our review of the guidance document.
As previously reported here on the blog,… More
CMS Withdraws Block Grant Guidance – What’s Next?
We’ve posted previously the long-standing rumor (substantiated by several folks within the Administration) that CMS is working on a guidance document to states to receive their Medicaid funding through a block grant. In June, the Office of Management and Budget (OMB) received a guidance document entitled, “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity.” This document was widely reported by press as the block grant guidance document. … More
Tennessee Announces First-in-Nation Block Grant Proposal
On September 17, 2019, Tennessee released its proposal to block grant most of the funding the state’s Medicaid program (TennCare) receives from the Federal government. If approved by CMS, the amendment to the state’s longstanding 1115 waiver program would make Tennessee the first state in the nation to move to a true “block grant” format for Medicaid funding. A draft of the proposed waiver is available on the state’s website —… More
Court Strikes Down Work Requirements in Arkansas and Kentucky
There’s a saying that one should work hard in the present to reap the rewards later in life. But should one need to work to qualify for Medicaid?
In a week of legal machinations and legal setbacks on the health care front for the Trump Administration, Judge James E. Boasberg’s opinion in Gresham v. Azar suggests that the answer is no,… More
As Block Grants Resurface, Does CMS have the Authority?
A recent news article suggests that Trump Administration officials are considering allowing states to receive their Medicaid funding through a block grant. The article did not specify how CMS would accomplish such a goal without a statutory change. Details are supposedly being developed, but until we see those details, it’s hard to know exactly what the agency is considering.
My colleagues and I at the Medicaid and the Law Blog thought it might be helpful to provide some background on the concept of block grants in Medicaid,… More
Massachusetts Seeks Bids for Rebates from Select Drug Manufacturers
In an interesting (intriguing even?) turn of events, in late December 2018 the Massachusetts Executive Office of Health and Human Services (EOHHS) announced through its public bidding site that it was seeking bids from manufacturers of select, generally high-priced outpatient drugs for supplemental rebates in MassHealth’s fee-for-service and managed care programs. While the state has before used the public bidding process successfully to negotiate supplemental rebates for the state’s Medicaid program (for example,… More
Court Case Involving Massachusetts Health Care Law Shows Relationship Between Medicare Payments and Medicaid
In 2006, former Massachusetts Governor Mitt Romney signed Chapter 58 of the Massachusetts Acts of 2006 into law. Chapter 58 was designed to ensure that all Massachusetts residents would have access to some form of health insurance, and it accomplished this through reforms to the individual insurance market; subsidies to purchase health insurance; and an expansion of the Massachusetts Medicaid program, known as “MassHealth.” Many observers have suggested that the enactment of Chapter 58 in Massachusetts paved the way for enactment of the Affordable Care Act at the federal level four years later (although Governor Romney strenuously denied this during his campaign for President in 2012).… More
Medicaid: A Winner in the 2018 Midterm Elections
Despite all of the drama surrounding the 2018 midterm elections, one thing was clear: Medicaid had a big night on November 6, 2018.
In particular, the electorate in the Red states of Nebraska, Idaho, and Utah voted to expand Medicaid (i.e. extend Medicaid coverage to low-income able-bodied adults). Although the Montana electorate rejected a ballot measure that would have permanently funded the Medicaid expansion in that state beyond 2019,… More
CMS Approves Michigan’s State Plan Amendment
In a wide-ranging speech on CMS’s efforts to lower Medicaid drug costs, Administrator Seema Verma announced yesterday that CMS has approved Michigan’s proposed state plan amendment to utilize value-based payment arrangements with drug manufacturers. With CMS’s blessing, Michigan can now enter contracts with pharmaceutical companies in which manufacturers provide the state supplemental rebates when their drugs fail to meet specified treatment benchmarks.
Michigan is the second state that has received CMS’s approval to pursue value-based purchasing agreements.… More
CMS Issues New Guidance Aimed at Addressing Care for Mental Illness
On November 13, 2018 CMS (as mandated by Congress in the 21st Century cures Act) issued a State Medicaid Director Letter providing states with guidance on both: (1) existing authority for states to provide support for adults with serious mental illness (SMI) and/or children with a serious emotional disturbance (SED); and (2) a new demonstration opportunity to permit states to offer care for certain individuals with serious mental illness residing in Institutions for Mental Disease (IMDs).… More
Administrator Verma Hints at New Work Requirement Guidance
In prepared remarks delivered by Administrator Seema Verma on September 27, 2018 at the 2018 Medicaid Managed Care Summit, the Administrator previewed the release of an impending guidance document on a new/updated “work requirement” demonstration. As noted in the prepared remarks:
Additionally, in January, we released a groundbreaking new demonstration opportunity in response to state requests to test work and community engagement incentives among able-bodied adult beneficiaries.… More
Kentucky Medicaid Waiver Blocked by Federal Courts
It has not been a good week for states that want to try innovative Medicaid waivers. First, CMS shot down Massachusetts’ attempt to re-structure the 25-year old Medicaid prescription drug rebate program to achieve additional savings on the cost of prescription drugs. And then on Friday, the United States District Court for the District of Columbia effectively blocked Kentucky’s attempt to impose “community engagement” requirements on some Medicaid recipients. … More
CMS Issues Long-Awaited Decisions on MassHealth Prescription Drug Request
It was a busy day for CMS today. After keeping everyone in suspense for months, CMS finally issued its decision on the Massachusetts state Medicaid program waiver request that proposed to limit access to covered outpatient drugs to Medicaid (in Massachusetts, called “MassHealth”) enrollees. As many observers predicted, CMS did not approve the state’s request. Notably, however, the CMS response letter provided a pathway for Massachusetts to achieve a substantially similar result. … More
Trump Administration Draws a Line in the Sand on Medicaid Waivers
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 Kansas.… More
Blogging Live from AHLA: Medicaid Litigation Update – Challenges to Waivers
Reporting live from the American Health Lawyer’s Association 2018 Institute on Medicare and Medicaid Payment Issues in Baltimore, MD, we are back again. This time, we are reporting on a deeply comprehensive program on recent trends in Medicaid litigation led by Alan Dorn, Chief Counsel of HHS Region V in Chicago, and Felicia Y Sze, a partner of Rotenberg & Sze LLP in San Francisco.… More
Blogging Live from AHLA: A Review of Recent Trends in Medicaid Waivers
Good morning from snowy Baltimore! Myself, along with my colleagues Tom Barker, Sean Ahern, and Erik Schulwolf are excited to be here here at AHLA’s Institute on Medicare and Medicaid Payment Issuers. Over the next few days we plan on blogging about our insight, key sessions, and other fun tidbits and developments as we take in all of the great information at this annual gathering of the health bar.… More
CMS Approves More Medicaid Work Requirements and Even More States Submit Request for the Same
We’re certain that no one has forgotten about the January CMS policy announced by the current administration that supports states seeking to adopt work and community engagement requirements as part of their Medicaid programs through section 1115 waivers. We certainly have not. We previously covered this topic in-depth following CMS’ policy announcement and the approval of Kentucky’s 1115 waiver containing a work requirement.… More
Trump Administration Outlines Priorities For FY 2019
The past couple of weeks have involved a flurry of healthcare-related developments, including on the Medicaid drug pricing front. On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018, which revises the rebate formula for line extensions applicable to certain drugs in the Medicaid program. Then later that same day, the Council of Economic Advisors issued a report titled “Reforming Biopharmaceutical Pricing at Home and Abroad,” which among other things,… More
Come see us at AHLA!
On March 21 and 22, two of this blog’s authors will be presenting on two Medicaid topics at the American Health Lawyer’s Association (AHLA) annual Medicare and Medicaid conference in Baltimore, Maryland.
One of the hottest topics in Medicaid right now is the Trump Administration’s policy on granting Medicaid waivers to states, a topic we have posted about here, here and here. … More
CMS to Phase Out Designated State Health Program (DSHP) Funding
On December 15, 2017, CMS Director Brian Neale informed State Medicaid Directors of CMS’ intent to phase out funding for Designated State Health Programs (DSHP) in Section 1115 waivers. CMS will no longer approve waiver requests under Section 1115 for DSHP funding, and will not renew portions of existing waivers that provide DSHP funding.
DSHP funding in Section 1115 waivers developed alongside of CMS’ funding of Delivery System Reform Incentive Payments (“DSRIP”) following the passage of the Affordable Care Act in 2010. … More
Following on the Heels of Massachusetts, Arizona Floats New Medicaid Drug Proposal
On November 17th, Arizona’s state Medicaid agency (the Arizona Health Care Cost Containment System, or AHCCCS) sent a letter to CMS proposing policies that it believes will build on past successes and “leverage conservative principles.”
In the letter, AHCCS seeks input from CMS on ideas to “modernize” the prescription drug benefits offered under the state’s Medicaid plan.
(Also, notably, though not the topic of this blog post,… More
CMS Issues New Guidelines on 1115 Waivers; Signals New Medicaid Objectives
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. 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,… More
Baker Administration Submits 1115 Waiver Request to CMS, Including Major Change to Drug Coverage
On September 8, 2017, following the mandated 30-day public comment period, the Baker Administration concluded its review of the pending MassHealth Section 1115 Demonstration Amendment Request. The submitted waiver request can be viewed online here. Once received at CMS, the agency will have to time to review the proposal, and must also solicit additional public feedback, prior to finalizing any waiver.
While the agency made a number of modifications to the waiver based on public feedback,… More
Massachusetts Proposes to Dramatically Restructure Medicaid Benefits
On July 21, 2017, the Massachusetts Executive Office of Health and Human Services (“EOHHS”) announced its intent to submit a request to amend its existing MassHealth Section 1115 Demonstration to the Centers for Medicare and Medicaid Services (“CMS”). If approved (by both the State legislature, and CMS), it would be the most sweeping change to any state’s Medicaid pharmacy benefit to date. We previously previewed some of the changes EOHHS was considering under the new flexibility granted to states under the Price/Verma administration on this blog.… More
Wisconsin Eyeing A Controversial Section 1115 Waiver
Another state is stepping up to bat following Secretary Price’s and CMS Administrator Verma’s letter to state governors promising enhanced flexibility for their Medicaid programs. Wisconsin has recently unveiled its plan to submit a new Section 1115 waiver application to CMS by May 26, 2017. In short, the Wisconsin waiver seeks to infuse the state’s Medicaid program with features from the commercial sector, and it does this by borrowing some elements from the Healthy Indiana Plan (HIP 2.0) and Kentucky waivers,… More
Price and Verma to State Governors: Just Come and Ask Us for Flexibility – What Providers & Drug Manufacturers Could Expect
The last several weeks have been nothing short of enthralling, like an episode of House of Cards. After seven years of campaigning on the repeal of the Affordable Care Act (ACA), Republicans were ultimately unable to create consensus for their highly anticipated repeal-and-replace legislation known as the American Health Care Act (AHCA). But as the drama on the Hill comes to an end (at least until tax reform is picked up),… More
How the Medicaid expansion will be treated under a block-grant financing framework
One of the most pressing issues before the 115th Congress and newly inaugurated President Trump will be to determine how the Medicaid expansion population will fit into a broader reform package for the Medicaid program as a whole. Many state governors in expansion states have expressed concern that the long-standing Republican proposal of block-granting Medicaid will leave them exposed to unsustainable financial pressures.
President Trump’s nominee for HHS Secretary,… More
Medicaid Directors: Trump Administration Should Formally Include States in Development of Medicaid Regulations
Over the course of the last several blog posts, we’ve discussed how the Medicaid program could potentially be transformed under the incoming Trump Administration. We also described the central role that state-led demonstration waivers would play in defining the parameters of this transformation. Now, the association for State Medicaid directors is weighing in on precisely this issue. The National Association of State Medicaid Directors (NAMD)recently published a document laying out the group’s priorities for the Medicaid program in the first 100 days of the incoming Trump Administration. … More
CMS Announces new Medicare-Medicaid ACO Model
Currently, nearly 10 million Americans are dually-eligible for both Medicare and Medicaid. These “dual eligibles” are low-income seniors and individuals with disabilities who are separately eligible for and receive coverage under both the Medicare and Medicaid programs. In general, Medicare acts as the primary payer for dual-eligibles, while Medicaid provides “wrap-around” coverage for these individuals, helping with some out-of-pocket costs (such as premiums, copayments and deductibles) and offering coverage for services not otherwise covered by Medicare (vision,… More
Looking Forward: Pay for Success in the Medicaid Program
As we noted here last month, Medicaid is a 1960s-era health insurance plan operating in a 21st century world. As Medicare and commercial payers have started taking steps to move away from payment by volume to paying for value, it’s important to recognize that the same innovation needs to occur in Medicaid. In fact, one could argue that this innovation is even more critical in Medicaid.
Why? … More
Medicaid Waivers in Conservative States Hold Hints for What is to Come for Drug Manufacturers
The nomination of Seema Verma by President-Elect Trump for the position of CMS Administrator sends a clear signal that the Trump Administration considers Medicaid one of its top healthcare reform priorities. Seema Verma is the the “architect” of the Healthy Indiana Plan 2.0” waiver (HIP 2.0), a consumer-driven Medicaid expansion demonstration approved by the Obama Administration under a Section 1115 waiver. Most recently, Verma was also involved in designing Kentucky’s proposed “Kentucky HEALTH” (“HEALTH”) Section 1115 waiver,… More
Medicaid under a Trump Administration: Rethinking the Medicaid Program
Last week, we wrote about the importance of the Medicaid program, especially given its size as, by far, the largest health insurance plan in the United States. We noted that Medicaid covers 71 million people (this number increased dramatically after the Affordable Care Act was enacted in 2010). We said that “Medicaid is important for all of us” – whether you are a program beneficiary, a taxpayer who helps pay for it,… More
Medicaid under a Trump Administration: What the Next Four Years Might Look Like
Dear readers: this post is going to be a bit different from our regular posts, in that we are going to try to refrain from getting too far in the weeds, and avoid too much legalese. Why? Because the results of the November election will likely have major implications not only for the Medicaid program itself, but for the millions of individuals it serves. We are fortunate to have a platform here and it is our hope that,… More
CMS and Massachusetts Advance Delivery System Reform with Approval of New 1115 Waiver
On November 4, 2016, the Centers for Medicare & Medicaid Services (“CMS”) sent word to the Massachusetts Executive Office of Health and Human Services (EOHHS, referred to here as “MassHealth”) that it approved a major amendment to Massachusetts’ section 1115 demonstration project through June 30, 2017. At the same time, CMS also approved an extension of this same demonstration through June 30, 2022. Approval of Massachusetts’ waiver amendment comes after nearly a year of negotiations and may ultimately result in the transition of the vast majority of MassHealth enrollees into newly-formed Accountable Care Organizations (“ACOs”) operating under one three models,… More
Everything you have ever wanted to know about Medicaid waivers
We frequently read about state Medicaid programs receiving or being granted “waivers” by CMS, but what does that mean exactly? What is a “waiver”? What is the history of Medicaid waivers? How does the process work? We hope to answer these questions in this blog post.
The Legal Standard
A “waiver” refers to authority that the Secretary of Health and Human Services possesses under section 1115 of the Social Security Act:
“(a) In the case of any experimental,… More