A New Use for Section 1115 Medicaid Waivers?

Historically, states have pursued section 1115 Medicaid waivers as a means of expanding Medicaid eligibility.

But the Centers for Medicare & Medicaid Services now appears to be looking at granting 1115 waivers to help states reduce their Medicaid populations.

According to a new report published by the Commonwealth Fund, CMS is encouraging states – both Medicaid expansion and non-expansion states – to launch demonstration programs designed to reduce enrollment in “means-tested public assistance” programs such as Medicaid.  In their efforts to cut spending and reduce Medicaid enrollment, states are expected to seek section 1115 waivers to experiment with means of doing so such as:

  • establishing monthly premiums for Medicaid recipients
  • eliminating retroactive eligibility
  • imposing lifetime limits on how long individuals may participate in Medicaid
  • excluding people with substance abuse problems
  • shifting Medicaid enrollment to a single annual open-enrollment period
  • implementing more frequent eligibility determinations

And just last week CMS signaled states that it was now welcoming waiver applications to impose work requirements on some Medicaid recipients.

In a recent section 1115 waiver application, the state of Kentucky, for example, projects that the combination of establishing premiums for Medicaid participation and locking out those who do not make their payments, eliminating retroactive eligibility, and imposing a work requirement would reduce its Medicaid population 14.8 percent in the sixth year such changes were implemented.  That waiver was granted last week.

Learn more about how CMS is preparing to use section 1115 Medicaid waivers to enable states to reduce their Medicaid enrollment in the Commonwealth Fund report “State 1115 Proposals to Reduce Medicaid Eligibility: Assessing Their Scope and Projected Impact,” which can be found here.

Filed under: Federal Medicaid issues

Administration Lays Groundwork for Medicaid Work Requirements

The Centers for Medicare & Medicaid Services has issued guidelines for states interested in adding a work requirement component to their Medicaid programs.

With nearly a dozen states applying to implement controversial Medicaid work requirements, CMS has issued a guidance letter to state Medicaid directors outlining the criteria it will use when considering such applications.

The new policy does not mandate work requirements in state Medicaid programs; it only presents the parameters CMS will use when considering the applications of states wishing to impose such requirements.

For  more information about the new policy, see the following resources:

  • CMS’s news release announcing the new policy
  • The letter CMS sent to state Medicaid directors explaining the new policy
  • A CMS FAQ on the new policy

Filed under: Federal Medicaid issues

U.S. House Committee Calls for Action on 340B

The section 340B prescription drug program has flaws and needs change, a report by the House Energy and Commerce Committee has concluded.

The program, which requires pharmaceutical companies to provide discounts on prescription drugs to be dispensed on an outpatient basis to qualified providers that serve large numbers of low-income patients, has been controversial in recent years.  As the number of providers eligible for the program has grown, pharmaceutical companies have claimed that the program is expensive, is being abused, and is responsible for driving up prescription drug costs while providers insist that 340B is a vital tool in helping them serve low-income patients.  Congress, meanwhile, has questioned the program’s growth and sought accountability for how providers use the savings the program generates to serve their low-income patients.

The controversy moved into a new area in the fall when the Centers for Medicare & Medicaid Services adopted a regulation greatly reducing 340B payments to providers – even though the federal government does not pay for the drug discounts – and seeking to move savings elsewhere in the federal budget.  A coalition of providers sued unsuccessfully to delay implementation of the regulation.

Now, the House Energy and Commerce Committee has issued a report on the program.  The following findings are taken directly from the committee’s report:

  • Congress did not clearly identify the intent of the program, nor its parameters.
  • HRSA lacks sufficient regulatory authority to adequately oversee the program and clarify requirements.
  • HRSA has started but still has not completed the process to issue and enforce regulations in the areas in which it has regulatory authority.
  • Although HRSA has increased the number of covered entity audits it conducts each year, the audit process still needs improvement.
  • The 340B statute does not require covered entities to report program savings or how they are used. As a result, there is a lack of reliable data on how program savings are used, and covered entities may use these savings in a variety of ways.

While asserting strong bipartisan support for the program among committee members, the 79-page report offers the following recommendations (again, taken directly from the report):

  • HRSA [the Health Resources and Services Administration] should finalize and begin enforcing regulations in the three areas in which it currently has regulatory authority.
  • Congress should give HRSA sufficient regulatory authority and resources to adequately administer and oversee the 340B program.
  • Congress should clarify the intent of the 340B program to ensure that HRSA administers and oversees the 340B program in a way that is consistent with that intent.
  • Congress, or HRSA where HRSA already has authority to make such changes, should promote transparency in the 340B program, including ensuring that covered entities and other relevant stakeholders have access to ceiling prices, and requiring covered entities to disclose information about annual 340B program savings and/or revenue.
  • Congress should establish a mechanism to monitor the level of charity care provided by covered entities.

The committee is expected to pursue legislation implementing its regulations in the near future.

All private Pennsylvania safety-net hospitals qualify to participate in the 340B program, consider it a vital tool in serving their communities, and support the program’s preservation.

Go here to see the full House Energy and Commerce Committee report on the 340B program.

Filed under: Medicare, Pennsylvania safety-net hospitals

Report Looks at Work Requirements

As a growing number of states consider implementing work requirements as a condition for Medicaid eligibility, the Urban Institute has released a report that describes work requirements in various government cash assistance, nutrition assistance, and housing assistance programs and considers the degree to which those requirements have achieved their policy objectives.

The report also describes the applications that eight states have submitted to the federal government seeking permission to introduce a work requirement in their Medicaid programs.

Go here to see the Urban Institute report Work Requirements in Social Safety Net Programs: A Status Report of Work Requirements in TANF, SNAP, Housing Assistance, and Medicaid.

Filed under: Federal Medicaid issues

New Medical Assistance Bulletin Addresses Hospital Uncompensated Care

The Pennsylvania Department of Human Services has issued a new Medical Assistance Bulletin titled “Hospital Responsibilities Related to the Uncompensated Care Program and Charity Care Plans.”

According to the document,

The purpose of this Medical Assistance (MA) Bulletin is to remind hospitals of the requirements for the Hospital Uncompensated Care Program (Program) and reinforce the responsibility of hospitals to actively engage patients when determining eligibility for the Program.

See the entire Bulletin here.


Filed under: Pennsylvania Bulletin, Pennsylvania Medicaid laws and regulations, Pennsylvania Medicaid policy, Pennsylvania Medical Assistance

The Continued Need for Medicaid DSH

While the Affordable Care Act has greatly increased the number of Americans with health insurance and reduced the demand for uncompensated care from hospitals, many hospitals still see significant numbers of uninsured patients.

Some of those patients simply have not taken advantage of the health reform law’s creation of easier access to affordable insurance while others live in states that have not expanded their Medicaid programs.

Hospitals that care for especially large numbers of such uninsured patients qualify for Medicaid disproportionate share hospital payments, commonly referred to as Medicaid DSH.  The purpose of these payments is to help these hospitals with the unreimbursed costs they incur caring for such patients.

The Affordable Care Act calls for reducing Medicaid DSH payments to hospitals.  Many hospitals and hospital groups oppose this cut and are asking Congress to block its implementation.  Pennsylvania’s safety-net hospitals benefit considerably from Medicaid DSH payments.

The Commonwealth Fund recently published a commentary calling for delaying scheduled Medicaid DSH cuts.  Go here to see the article “Keep Harmful Cuts in Federal Medicaid Disproportionate Share Hospital Payments at Bay.”

Filed under: Affordable Care Act, Federal Medicaid issues, Medicaid supplemental payments

Pennsylvania Health Law Project Newsletter

The Pennsylvania Health Law Project has published its latest Health Law News.

Included in this edition are articles about:

  • The January 1 introduction of Community HealthChoices, a mandatory program of managed long-term services and supports, in southwestern Pennsylvania
  • the January 1 implementation of the federal ordering, referring, or prescribing rule that requires that all such actions involving Pennsylvania Medicaid patients be undertaken by providers enrolled with the state to serve Medicaid patients
  • various Medicare issues

Find these stories here in the latest edition of Health Law News.

Filed under: Pennsylvania Medicaid, Pennsylvania Medicaid policy

Medicaid Directors Meet

The National Association of Medicaid Directors held its fall conference recently outside Washington, D.C.

This is an important event at which policy-makers and policy experts meet to discuss Medicaid programs, trends, challenges, and opportunities.

Many of the materials used during that conference are now publicly available, including video clips from speeches by CMS Administrator Seema Verma and others and presentations on a number of subjects, including:

  • Medicaid’s role in supporting community engagement and economic mobility
  • busting the silos of physical and behavioral health care
  • alternative payment models and addressing the social determinants of health
  • early intervention in behavioral health
  • the opioid epidemic
  • pediatric innovations in Medicaid

Go here for links to the speeches and presentations offered at the conference.

Filed under: Federal Medicaid issues


The non-partisan legislative branch agency that advises Congress, the administration, and the states on Medicaid and CHIP-related issues met recently in Washington, D.C.

The following is the Medicaid and CHIP Payment and Access Commission’s own summary of its meeting.

The December 2017 meeting of the Medicaid and CHIP Payment and Access Commission began with a brief update on the State Children’s Health Insurance Program (CHIP). Although federal funding for the CHIP expired at the end of September, legislation to renew funding was still pending in Congress. The Commission then heard from a panel discussing state tools to manage drug utilization and spending in Medicaid. Panelists included Renee Williams, director of clinical pharmacy services for TennCare; Doug Brown, Magellan Rx Management’s vice president for Medicaid drug rebate management; and John Coster, director of the Center for Medicaid and CHIP Services Division of Pharmacy at the Centers for Medicare & Medicaid Services. At the final morning session, Commissioners reviewed a draft March 2018 report chapter on streamlining Medicaid managed care authorities. The Commission voted to approve recommendations to Congress, but deferred action on a third recommendation for further discussion at its upcoming January 2018 meeting.

In the afternoon, MACPAC staff previewed highlights from the December 2017 MACStats: Medicaid and CHIP Data Book. MACStats pulls together Medicaid and CHIP data from multiple sources that often can be difficult to find. The collection is published annually and individual tables are updated throughout the year. The Commission then reviewed the draft March report chapter on telemedicine in Medicaid, and later in the day the Commission returned to the topic of prescription drugs, to explore potential recommendations on the Medicaid drug rebate program.

The final December sessions covered MACPAC’s annual analysis of disproportionate share hospital payments (a required element of its March reports), and findings from interviews with four states to better understand how they are implementing Section 1115 Medicaid-expansion waivers.

The following presentations, many with supporting documents, were offered during the MACPAC meeting:

  1. State Strategies for Managing Prescription Drug Spending
  2. Review of March Report Chapter: Streamlining Managed Care Authorities
  3. Highlights from MACStats
  4. Review of March Report Chapter: Telemedicine in Medicaid
  5. Potential Recommendations on Medicaid Outpatient Drug Rebates
  6. Review of Draft March Report Chapter: Analyzing Disproportionate Share Hospital Allotments to States
  7. Implementation of Section 1115 Medicaid Expansion Waivers: Findings from Structured Interviews in Four States

Filed under: Federal Medicaid issues

House to Set Sights on Medicare, Medicaid Cuts in 2018

The House of Representatives will pursue entitlement spending cuts next year, House Speaker Paul Ryan recently explained on a radio program.

That means Medicare, Medicaid, and possibly even Social Security.

Ryan said that

We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit… Frankly, it’s the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements — because that’s really where the problem lies, fiscally speaking.

Medicare and Medicaid cuts would be very harmful to Pennsylvania safety-net hospitals.

Learn more about Ryan’s remarks, the administration’s priorities, and what other members of Congress are saying about entitlement cuts in this Washington Post story.

Filed under: Federal Medicaid issues, Medicare

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2012 Safety-Net Association of Pennsylvania