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

2. 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)

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. For More Information Randy Boyle National Health Law Program
(310)
In California: