Medicaid Waiver

A comprehensive pair of rules introducing new “access standards” in Medicaid and the Children’s Health Insurance Program (CHIP) propose new requirements touching on multiple aspects of managed Medicaid, from medical loss ratio (MLR) reporting and state directed payments (SDPs) to provider payments and quality ratings. Industry experts tell AIS Health, a division of MMIT, that such changes are intended to ensure that Medicaid dollars are being used appropriately in managed care, support the Biden administration’s efforts to advance health equity and align Medicaid and CHIP with other government programs such as Medicare Advantage and the Affordable Care Act exchanges. But experts say not all provisions will be easy to implement, and the rules should be viewed as directing incremental steps toward moving the needle on health equity.

CMS recently approved Maine, Minnesota, New Mexico and Washington, D.C., to offer 12 months of postpartum coverage through Medicaid and Children’s Health Insurance Program (CHIP) extensions, adding an additional 15,000 enrollees annually with extended coverage from 60 days to 12 months after pregnancy. In total, nearly 253,000 people in 14 states and D.C. have gained such access as a result of the American Rescue Plan Act (ARPA).

Starting on April 1, states were able to apply “to extend Medicaid postpartum coverage to 12 months via a state plan amendment,” according to the Kaiser Family Foundation. So far, Connecticut, Indiana, Kansas, Maryland, Massachusetts, North Carolina, Pennsylvania, Washington and West Virginia have also submitted the extension proposals.

State Medicaid programs now have the option of applying to CMS to expand postpartum coverage for parents who have just given birth to 12 months, up from the default 60 days of coverage. Medicaid MCOs in states that have opted into the expanded coverage tell AIS Health, a division of MMIT, that they are taking steps to get ready for the new coverage and anticipate better outcomes for both new parents and new children as a result of the program.

Maternal mortality rates in the United States are disturbingly high compared to other developed countries — in 2018, 17 women per 100,000 live births died, compared to three in the Netherlands, Norway and New Zealand, per the Commonwealth Fund — and the U.S. is the only developed country to see that rate increase in recent years. Most of those deaths were preventable.

Since taking office, the Biden administration has taken a hard line on Section 1115 Medicaid waivers, rescinding multiple demonstrations that were approved by the Trump administration and subsequently becoming ensnared in legal fights with Republican-leaning states. Such disputes may wind up being detrimental to Medicaid managed care organizations, which in some cases spent considerable resources on implementing waiver demonstration programs that may never come to fruition.

The latest legal conflict is in Georgia, where the state is trying to preserve an 1115 waiver that the Trump administration approved. Georgia’s waiver would have imposed premiums and work requirements on Medicaid beneficiaries, with the added twist of expanding Medicaid eligibility just for the population earning up to 100% of the federal poverty level — rather than 138% like with regular Medicaid expansion — and therefore receiving a smaller federal funding match.

In January 2021, the outgoing Trump administration approved a Medicaid waiver that would have allowed Tennessee to do something novel: implement a “commercial-style” closed drug formulary while still receiving statutory Medicaid rebates for covered drugs. In the year that’s followed, however, it has become clear that the demonstration program faces long odds regarding whether it will ever actually be implemented.

First, the waiver program — known as TennCare III — is the subject of a lawsuit filed in April 2021 by the National Health Law Program, the Tennessee Justice Center and King & Spalding LLP on behalf of Tennessee Medicaid enrollees. The lawsuit challenges the demonstration program on procedural grounds, arguing that the Trump administration did not provide the required public comment period when it approved Tennessee’s waiver, and on substantive grounds, saying CMS exceeded its authority under Section 1115 of the Medicaid statute in approving the waiver.