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States seek Medicaid flexibilities due to COVID-19 emergency

Special emergency waivers allow them to better address prevention and treatment of COVID-19

States are winning additional Medicaid flexibilities from the Trump administration through special emergency waivers that allow them to better address prevention and treatment of COVID-19. 

The waivers allow states to take steps including easing licensing restrictions on new or out-of-state doctors and other providers, and allowing nursing homes or other residential facilities to move patients to alternate settings.

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“They are a unique waiver that’s only available in the time of a national emergency. They are really helpful because they can give some pretty quick flexibility to states and their Medicaid programs on a whole range of requirements,” said Anne Karl, partner at Manatt Health.

So far, the Centers for Medicare and Medicaid Services has approved 23 waivers, including three on Tuesday and seven on Wednesday, related to the coronavirus-based illness known as COVID-19, after President Donald Trump officially declared a national emergency earlier this month.

Beginning with Florida, states started applying for the so-called Section 1135 waivers soon after Trump’s announcement.

During the Obama administration, then-Health and Human Services Secretary Kathleen Sebelius urged states to apply for this same type of waiver after the president declared a national emergency due to H1N1 influenza, but the current process has been more detailed and involved, according to experts. CMS released a template earlier this week for states to follow in their waiver applications.

“CMS has been able to swiftly remove barriers and cut red tape for our state partners,” CMS Administrator Seema Verma said in a statement. “These waivers give a broad range of states the regulatory relief and support they need to more quickly and effectively care for their most vulnerable citizens.”

Matt Salo, executive director of the National Association of Medicaid Directors, told CQ Roll Call that he has not heard of any states that do not intend to apply for the waiver.

“A state can do a lot with these,” said Andy Schneider, a research professor at Georgetown University’s Center for Children and Families. He noted that the second COVID-19 aid law included language to create a new eligibility group under Medicaid that would allow states to cover coronavirus tests for the uninsured.

States can use a CMS template that streamlines the process to cover this eligibility group.

“One issue which these can’t solve is that … this is limited to testing and does not include treatment,” Schneider said.

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Earliest adopters

Florida was the first state to seek and be approved for a waiver on March 17, but other states soon followed suit.

Florida’s waiver will allow the state to provide care in alternate settings, remove some prior authorization requirements before people can get care, extend some deadlines and streamline enrollment processes for medical providers to participate in Medicaid.

Florida’s waiver would allow evacuating facilities to provide care in an emergency setting that is not licensed for up to 30 days, after which the temporary facility would need to either seek licensure or a new place for the patients.

Anne Swerlick, a senior policy analyst and attorney focused on health care issues at the nonprofit Florida Policy Institute, said the move will help beneficiaries and providers by waiving a number of requirements.

“It’s a good, important first step, and I think the intent is to make sure that requirements are waived so that all medically necessary services required for testing and treatment can be provided to Florida’s Medicaid population,” she told CQ Roll Call. “But there are definitely limitations, and these waivers can only go so far, especially in states that have not expanded their Medicaid program. We still have 800,000 Floridians that could get coverage if we did expand the program.”

Fourteen states, including Florida, have yet to adopt Medicaid expansion under the 2010 health care law, which extends coverage for individuals earning up to 138 percent of the federal poverty level.

Swerlick said Florida may have been first because of its experience using these waivers during natural disasters such as hurricanes.

Washington state, one of the hardest and earliest hit by COVID-19 cases, got its waiver approved on March 19. Its waiver would similarly allow the state to remove some prior authorization requirements, which eliminates some red tape and speeds up care, and would allow facilities to provide care in alternate settings when the facility is inaccessible.

The approval would also waive a public notice period for State Plan Amendments that would temporarily help enrollees access care for COVID-19. Examples could include changes to waive cost sharing, or adding services or providers for the adults covered under alternative benefit plans, or ABPs, which generally include adults eligible under Medicaid expansion or in some cases medically frail individuals.

“We appreciate CMS’s close collaboration and responsiveness as we continue working to ensure we have the flexibility we need to support Washington residents,” MaryAnne Lindeblad, state Medicaid director for the Washington State Health Care Authority, said after the approval.

Parade of state approvals

Late Monday, CMS announced the approval of 11 more state waivers, for Alabama, Arizona, California, Illinois, Louisiana, Mississippi, New Hampshire, New Jersey, New Mexico, North Carolina and Virginia. On Tuesday, CMS approved waivers in North Dakota, South Dakota and Oklahoma.

And on Wednesday, the agency approved waivers for Iowa, Indiana, Rhode Island, Kansas, Kentucky, Missouri, and Oregon.

Broadly, these waivers cover similar ground. The waivers would generally ease licensing restrictions on new or out-of-state providers, relax certain deadlines for Medicaid state plan amendments related to COVID-19, remove some prior authorization requirements temporarily, and change the timelines for state fair hearings and appeals related to coverage loss.

For example, California’s waiver requested flexibility to temporarily delay Medicaid fair hearings and decisions during the emergency by 90 to 120 additional days. Fair hearings allow an individual to appeal a change in their Medicaid services. Virginia used its waiver to lift prior authorization requirements for services performed through fee-for-service providers. 

States praised the move as essential.

“We need to maximize every opportunity to fight this outbreak, and I know these steps will be immensely helpful for our medical providers and ultimately the people of South Dakota,” said Laurie Gill, South Dakota’s secretary of Social Services.

CMS’s expedited waiver process approved many of the states’ requested changes, but some remain to be decided. States may also submit multiple waivers during the national emergency.

“Virginia is continuing to move forward with its work on a larger set of waiver policies that are currently under development, and the agency will submit those strategies to CMS for approval as planned,” said a Virginia Department of Medical Assistance Services spokesperson. “Plans for additional rounds of waiver policy requests are already in progress, and providers and stakeholders can expect to receive a series of communications as these strategies are approved and implemented.”

California is similarly working on multiple requests.

“We are tremendously pleased that CMS responded so quickly to our request,” said California State Medicaid Director Jacey Cooper. “CMS is still reviewing California’s remaining 1135 requests, and we look forward to working closely with them to receive approval of the pending items that will help our state meet the challenge posed by COVID-19.”

More states are expected to continue filing for 1135 waivers in the coming days.

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