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CMS promotes work incentives in Medicaid state demonstration waivers

New policies giving states more freedom in program design are expected to reduce the rolls of those currently covered under Medicaid.

Susan Morse, Managing Editor

New Medicaid policies released on Tuesday encourage states to take advantage of Section 1115 demonstration waivers to get able-bodied citizens back to work and give a promise to states of a faster approval process.

Centers for Medicare and Medicaid Services Administrator Seema Verma unveiled the new policies during a meeting of the National Association of Medicaid Directors in Arlington, Virginia.

[Also: California Medicaid generating big profits for state administrators]

"In a significant shift from prior policies, in speaking about the new approach to Section 1115 demonstrations, Verma emphasized the agency's commitment to considering proposals that would give states more flexibility to engage with their working-age, able-bodied citizens on Medicaid through demonstrations that will help them rise out of poverty," CMS said. "As Medicaid has expanded to able-bodied individuals, the needs of this population are even more imperative … During her remarks, the Administrator made it clear that CMS will openly consider proposals that promote community engagement and work activities."

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The new policies do away with former requirement that any changes to Medicaid strengthen health coverage, according to TPM. State waivers to set work requirements, conduct drug tests and other policies are expected to greatly reduce the number of people who currently get Medicaid coverage.

[Also: Practices seeing fewer uninsured due to Medicaid expansion]

Former CMS Acting Administrator Andy Slavitt tweeted Tuesday, "This will not stop. Trump's HHS Unveils Medicaid Overhaul That Will Mean Fewer People Covered."

CMS said it would perform a case-by-case review of each proposal to determine whether the waiver's stated objectives are aligned with those of Medicaid.
CMS will also consider the degree to which the waivers supplant state-only costs for existing programs, and whether the waivers should be supported through other federal and non-federal funding sources.
The waiver projects must be budget neutral to the federal government, which means they will not cost more than what the spending would be without the demonstration.
Section 1115 demonstrations are generally approved for an initial five-year period and can be extended for up to an additional three to five years. States commonly request and receive additional three-year extension approvals
The new policies will allow for approval for certain 1115 demonstrations for up to 10 years, give more fast-track review and reduce certain 1115 reporting requirements.

[Also: Democratic leaders accuse CMS's Seema Verma of quid pro quo political deal with insurers]

Other policies for State Plan Amendment and 1915 waivers for home care allow a streamlined process and a new "within 15-day" initial review call with CMS officials.

CMS is also in the early stages of developing scorecards that will provide greater transparency and accountability of Medicaid and the Children's Health Insurance Program by tracking and publishing outcomes to validate the $558 billion spent on Medicaid.

As of September 2017, 33 states had 41 approved Section 1115 waivers, according to the Kaiser Family Foundation.

Some states have multiple waivers, the report said. The major areas of focus include delivery system reform initiatives, especially efforts that tie provider incentive payments to performance goals, the integration of physical and behavioral health services to targeted populations, the authorization of Medicaid long-term services through capitated managed care and the implementation of alternative ACA Medicaid expansion models, the KFF report said.

In their policy and repeal efforts to the Affordable Care Act, Republicans have wanted to end Medicaid expansion and turn  Medicaid from a federal entitlement to a state-run, per-capita funded program based on the number of beneficiaries in each state.

When the federal government established Medicaid in the mid-1960s, it was intended to be a partnership with state governments to care for society's most vulnerable citizens, Verma said during the fall conference.

With the growth of the program over the last several years came increased federal and state spending, which naturally meant increased federal oversight and regulation, she said. has been updated to show the new, broader view of Section 1115 demonstrations, CMS said.

"Our vision for the future of Medicaid is to reset the federal-state relationship and restore the partnership, while at the same time modernizing the program to deliver better outcomes for the people we serve," Verma said. "CMS believes that meaningful work is essential to beneficiaries' economic self-sufficiency, self-esteem, well-being, and health of Americans."

Federal and state officials have a higher purpose than "just handing out Medicaid cards and being a financier of healthcare," Verma said.

"We will not just accept the hollow victory of numbers covered [in the program], but will dig deeper and demand more of ourselves and of you," Verma said. "For those unable to care for themselves, we will create sustainable programs that will always be there to provide the care you need, to provide choices and allow you to live as independently as possible. For those that just need a hand up, we will provide you the opportunity to take charge of your healthcare and assist and empower you to rise out of poverty and government dependence to create a better life for yourselves and your family."

Twitter: @SusanJMorse
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