The Medicaid Waiver Process The Good, the Bad, and the Very Ugly National AIDS Treatment Action Forum December 2004 Randolph T. Boyle Staff Attorney

Some Important Medicaid Principles Medicaid is an entitlement program Services should be of “sufficient…amount, duration, and scope” to reasonably achieve their purpose Medicaid is payment in full—no balance billing Cost sharing must be “nominal” Comparability of services between certain groups of beneficiaries (states cannot play favorites or play groups against one another)

Different Types of Medicaid Waivers Home and Community-Based Waivers (HCBW) [1915(c) of the SSA] Home health and other services enable a person to live at home or in the community, instead of in an institution Freedom of Choice [1915(b) of SSA] Limits who can provide services to beneficiaries State may contract with certain health care providers, e.g. managed care plans Since the Balanced Budget Act of 1997, states can implement managed care using a state plan amendment instead of a waiver Demonstration Waiver [1115 of the SSA] Experimental, pilot or demonstration project Supposed to show something innovative or new “assist in promoting the objectives” of the Act Supposed to be time-limited Include HIFA and Independence Plus waivers

States Already Have “Flexibility” State participation in Medicaid is voluntary Some groups and services are optional Utilization review (prior authorization) Greater use of managed care systems Reimbursement rates to providers Limitations on the amount, duration, or scope of services Improve eligibility and administrative processes

Opportunities with Waivers Help people live at home or in the community instead of in an institution States can try programs to give more and better services to beneficiaries or to new groups of beneficiaries States can gain some control over costs States can get federal matching money for medical care for uninsured individuals

Dangers of Runaway Waivers Global/Aggregate or Per Capita Caps Pose limits if demand increases in the future Feds and states are attempting to waive things that are not waivable Co-payments that are more than “nominal” Denials of service if co-payment is not paid Mandatory managed care for certain groups that should be exempt from mandatory managed care Cutbacks in eligibility or services or barriers erected in the name of “efficiency” Premiums or coinsurance that will pose barriers to services

California’s Proposal (Medi-Cal Redesign) Expansion of managed care Tiered benefit structure Increased cost sharing, some services would become prohibitively expensive Make Medi-Cal look more like private insurance Deny services if co-payments not paid Cut off beneficiary if premium or coinsurance not paid Must be cost neutral—capped Next steps in January 2005 Check www.medi-calredesign.org

Tennessee Proposal (TennCare) Benefit limits Limits on notices and appeal rights Strict pharmacy controls Redefine “medical necessity” Give Governor power to eliminate pharmacy benefit or coverage for certain groups Fraud and abuse crackdown All will depend on whether TennCare survives

For More Information Randy Boyle National Health Law Program (310) 204-6010 boyle@healthlaw.org www.healthlaw.org www.HealthCareCoach.com In California: www.healthconsumer.org