NDRN Conference Call
Elizabeth Priaulx: Okay, I would like to begin the conference call now. Thank you all for being here. My name is Elizabeth Priaulx with the National Disability Rights Network and this is #4 of a 5 part web cast series called Medicaid 101. This section we will be discussing Medicaid waivers and it is designed for the protection advocacy and catch systems as well as the mental health Olmstead coordinators. I would like to introduce our speakers, Jane Perkins and Sarah Somers. Before we begin, just explain that we will not be taking calls at the end of this web cast. In order to save a great deal of money we have designed this web cast so that you can hear us and that if you have any questions you can jot them down and contact me following the call. Again you can reach me at 202-408-9514 or through my E-mail and I would be happy to answer your call or refer you to Jane or Sarah to get the additional assistance that you might need. Now I believe we can start. Hopefully you all can see the Powerpoints on your computer. If you cannot, you can call our office at 202-408-9514 and ask for Matt Hayden.
Jane Perkins: Good afternoon everybody this is Jane Perkins, and as Elizabeth said I am here with Sarah. We are going to talk about the sentilating topic of Medicaid waivers today. Before we get started I wanted to do a few reminders and just to say something about waivers. In addition to being an incredibly sentilating topic they can also be a frustrating aspect of Medicaid to work with. While often times waivers include innovations that are certainly people oriented. They also have had a history of being programs that are developed… I guess some people would say off the paper so that you often times… unlike where a statute is being developed or drafted or regulations are being submitted for notice and comment… with a waiver you often times don’t know what is going. You don’t hear about or know the details of what it is that the state is planning to do. Unfortunately there aren’t good requirements for requiring or including a public comment period into waiver development and so over the years what we have found that we do and have worked with people to do is to pretty much insert ourselves into the waiver process by drafting comments on whatever we can find, by doing public records act requests if necessary and getting a good contact within the state agency and making sure that the comments that we have illustrate how important it is to get the beneficiaries perspective and then also make sure that the content… that is those written comments that we are development go not only to the state agency, but also to the Federal Medicaid Agency to concerned members of your congressional delegations both at the Federal and State level and if necessary to the press. So, just because as you look at and work with waivers you are not going to find a real good process for involving the public in them does not mean that you cannot insert yourself into the development and implementation process.
Just a few reminders. Waivers are a… you know you sort of have a circle of Medicaid and waivers are kind of sitting out there on the side of the circle, but they do very much depend on an integrate with other Federal laws and your state laws as well, so it is important to just remember the structure of what you are working with. In other words what the waiver is being overlaid onto and that is what the first slide is. It is a reminder of Medicaid structure. We have talked about this already. Remember Medicaid is an entitlement program. If you meet the definition of eligible group then you are entitled to receive the care and services, the medical assistance, whatever you want to call it… that is listed in the Medicaid Act when you need it and to get it promptly. Medicaid is a cooperative federalism program which means that both the state and federal governments are working on this, are funding it, are administering it and waivers are an example of this… in particular the drive to enhance state flexibility and control as part of this cooperative federalism effort.
Two aspects of Medicaid that are traditional to the program are the notion of state wideness, that is that the Medicaid eligibility rules and service rules operate state-wide so that they are available to you if you live in Murphy, North Carolina and they are available to you if you live in Mannia, North Carolina. Murphy to Mannia by the way is the East and West parts of the state of North Carolina.
The other aspect of Medicaid is comparability and this is the idea that medical can’t be less than amount, duration and scope among similarly eligible groups so that for example you could not cover durable medical equipment for people who are disabled because they are blind, but refuse to cover durable medical equipment for people who are disabled, but not blind, which is something that the state of Missouri, by the way, attempted to do.
Sarah Somers: And continues to do. Well, not exactly.
Jane Perkins: The second reminder is one for kids. To remember that regardless what is going on with your waivers, there is the early and periodic screening diagnosis and treatment service that is mandatory for children and youth under the age of 21. Those who are categorically needy. States can offer the service, and almost all do to kids who are medically needy. Again this will ensure that they get medical, visual, hearing and dental screening at preset intervals and not just when they are sick, and also treatment for all of the services that a state can cover in its Medicaid program when they are needed to correct or ameliorate a problem that the child has.
The final reminder before we get into the details is that there are other important statutes that are out there. The constitution actually is sitting out there with due process requirements in it for Heaven’s sake. One of the important statutes is the American with Disabilities Act and Section 504 of the Rehabilitation Act as you all know these laws apply to qualified people with disabilities. They govern most healthcare facilities and providers and there are regulations that call for there to be placement of people in the least restrictive settings and the integration of them into the community and for the state to make reasonable accommodations to assure that individuals are in the least restrictive settings and not discriminated against to the extent that these do not result in a fundamental alteration of the program.
So, let’s turn to Medicaid waivers. The types of waivers that we are going to be talking about today are what are called Freedom of Choice waivers, Home and Community based Care Waivers and Experimental waivers with one example of those being health insurance flexibility and accountability waivers of the Bush Administration with question marks there because it is not really clear that they are experimenting with anything at all.
Sarah Somers: Except cutting costs.
Jane Perkins: If you want to say that is an experiment.
Sarah Somers: I am just being cynical.
Jane Perkins: Sarah is being cynical here today. I am surprised at that.
Sarah Somers: I know it is awful.
Jane Perkins: One of the things to keep in mind when you are looking at waivers is that many of the waivers that we are talking about today have a cost neutrality requirement in them. It is a long-standing federal policy that may be written directly in the statute as with some home and community based care waivers or may just be enforced in practice as with these 1115 waivers. When you see 1115, that is the Provision of the Social Security Act that authorizes experimental waivers. Under the cost neutrality requirement the cost of the federal match or whatever amount of money that the Federal government is putting into the waiver can’t exceed the amount that the Federal government would have spent without the waiver, so any additional cost that you are incurring as a result of the waiver, whether it be by expanding coverage or expanding eligibility groups has to be offset somehow with savings, so if you see from the next slide that the savings historically have come from moving Medicaid beneficiaries into managed care or case managed arrangements where the Case Manager or care provider has a handle on the services that the individual is using and is monitoring and ensuring that the services are being used most efficiently. Another big source of savings outside the home and community based care context is by shifting disproportionate share hospital dollars from hospitals to coverage and that we don’t need to go into today. Suffice it to say that dish funding is big bucks. Other sources of funding, more recent ones… again not so much with home and community based waivers, but with other waivers is to take state child health insurance program funding and transfer it into the waiver to cut existing services and/or coverage and/or benefits and to impose increased cost sharing on Medicaid beneficiaries.
Let’s talk a little bit about Freedom of Choice waivers. These are also sometimes called managed care waivers. We are not going to talk a lot about these today because we covered them previously when we were talking about services, but you can see here the authorization for this type of waiver is in the Medicaid Statute itself at 42 USC section 1396 NB and in regulations at 42 CFR Section 431.55. What occurs with the Freedom of Choice waiver is that the secretary of the Department of Health and Human Services is authorized to waive provisions on section 1396A and as you all know when you have looked at the Medicaid Act there is … I think it runs like… there are sections that run from 1396-1396B. 1396A is a very long provision that has about 70-75 elements of what the state has to do to get the Federal funding and they include things like state-wideness and comparability which I mentioned before. So what the Freedom of Choice waivers allow is pretty broad authority for the secretary to waive provisions of section 1396A and then require recipients to obtain the services that are subject to the waiver through typically capitated managed care plans such as HMOs, primary care case management systems or primary care providers are paid on a fee for service basis and receive a small monthly case management fee to provide primary care and handle referrals to needed specialty care. There are some exceptions to this mandatory enrollment. That is the requirement that recipients receive their services through these types of plan arrangements and two of the biggest ones are that you can get your emergency care from the nearest provider and whether you are in an emergency will be determined by a prudent lay person’s standard, not by what the HMO or managed care plan determines after the fact and also family planning services and this is very important to assure that all people have access to family planning services as generally as possible and they are not required to just get them through their managed care plan or primary care case management provider.
One of the things that happened in 1997 was that states were given quite a bit of flexibility to use these capitated and primary care case management arrangements, but for our purposes today it is important to keep in mind that states still have to get a Freedom of Choice waiver if they want to require children under the age of 19 with special needs dually eligible recipients or Native Americans to obtain their care through these managed care arrangements. The requirements for that is that 42 USC Section 1396U-2. One of the other things that is important about these and any waiver is that the provisions of the federal law that are not waived continue to be in effect. Remember this because one of the things that we have seen over the years repeatedly is that states often times forget that what is happening is that an otherwise mandatory requirement of the federal law is being waived. Under the law the presumption is… or the statutory construction rule is that the waiver is construed narrowly to apply only to the express provisions or the express permissions that the state has obtained. It is not a broad authority to go beyond exactly what the state has requested permission to do.
The next type of waiver that we wanted to discuss today is experimental waivers. They are also sometimes called demonstration project waivers or 1115 waivers after the provision of the Social Security Act that authorizes them. If you look in the United States code you will see that they are found at 42 USC Section 1315 and what that section of the law does is to authorize the secretary of the Department of Health and Human Services to approve states request to implement experimental pilot or demonstration project the Secretary finds are likely to assist in promoting the objective of the Medicaid Act and if such a project is submitted then the Secretary may wave compliance with the requirements of Section 1396A to the extent and for the period needed. Now the difference between this and the Freedom of Choice waiver that we were talking about before is that Freedom of Choice waivers are only… for our purposes today are only to allow individuals… to allow the state to require individuals to enroll in and receive their Medicaid services from selected providers. By contrast the experimental waiver authority very broadly allows the Secretary to waive compliance with the requirements of 1396A to do things far beyond or outside the scope of a managed care arrangement where somebody is just being told that you have to go to this HMO to get all of your services except emergency and family planning services. Some examples of 1115 waivers are, first of all, cost sharing. Keep in mind… it is important to keep in mind that they Section 1115 authority actually predates the Medicaid Act. Section 1115 was implemented in 1962 and Medicaid didn’t come along until 1965. one of the very first things that states experimented with was cost sharing, so the very earliest Medicaid 1115 waivers are to implement copayment programs, for example in Georgia. That is what is interesting about cost sharing, because not only was that the earliest type of Medicaid waiver, but is also is the most heavily studied aspect of the Medicaid Program. I am telling you that because we are going to come back to it in a minute. Historically after this wave of cost sharing waivers the 1115 authority was not used often until the Clinton Administration and at that time the Clinton Administration and President Clinton having been a governor was very receptive to the state governor’s request for flexibility. There was a whole handful of Medicaid expansion and managed care waivers. Attend Care in Tennessee is an example. The Hawaii Quest program in Hawaii is an example. What is significant about these waivers, and this sort of cynical, but states were so anxious to quickly and broadly get managed care programs in place that they agreed to expand their Medicaid Program to cover additional populations that they weren’t then covering. Maybe for example, children above 100% of poverty or single adults or couples without children. The idea is that states really wanted to do managed care and they really wanted to do it broadly and quickly and the expansion was sort of tacked on as an element of these and it is also what made them novel. Again you have a Medicaid provision which we just talked about, Section 1396NB that authorizes managed care and there are detailed Federal statutes and regulations regarding how those Freedom of Choice managed care waivers have to work, so the question obviously is how can it be an experimental demonstration or pilot program when it is so well used and well known that there are extensive rules that govern it.
Sarah Somers: Jane, I don’t know if this is what you are talking about, but the entirety of Arizona’s Medicaid Program is the Arizona Healthcare Cost Containment System. That is an 1115 waiver and that has been in effect for more than 25 years hasn’t it?
Jane Perkins: Yes, Arizona was the last state to have a Medicaid Program and it is the program that Sarah is talking about. It came in 1982 as an entire waiver program, so access is another one of these 1115 waivers.
Sarah Somers: Jane, when you were involved in the case in Arizona, what did the judge… didn’t the judge repeatedly ask the state, “How long is this experiment going to go on?”
Jane Perkins: Oh yeah. Yes that is a good point. He did. We have a case in Arizona that is challenging the very accepted high heightened cost sharing amounts, copayments that are being imposed upon people with incomes below the federal poverty level. One of the things that the state was arguing is we have this 1115 Demonstration waiver and the court was saying, “Wait a second this program has been in place over 20 years, how long is this experiment going to go on?”, which is a damn good question if you ask me. So, back to the overheads. Back to the example of one sort of broad category of 1115 waiver is Medicaid Expansion and managed care waivers. Again in the 1990s with these which actually a Clinton Administration Cookie Cutter waiver, which also contributed to our argument that how can something be experimental pilots or demonstration if it is Cookie Cutter. Another example of 1115 waivers is family planning waivers. 25 states have these family planning waivers. They are generally one of two types of waivers, or set up would be the better way to say it. The first type of family planning waiver is one that expands services to women of reproductive age up to a certain income. Sometimes men are included too. They also are part of the reproductive cycle. So, what you are doing is increasing the income eligibility for women and then limiting the services that are available to them at these increased income levels to family planning services. Another way that states are implementing or the other major way that states are implementing family planning waivers is by providing extended family planning services to women who have been eligible for Medicaid because they became pregnant for example or were a parent. These waivers are… sometimes we don’t pay enough attention to disability advocates, but obviously people have sex regardless of whether they have disabilities or not, so family planning waivers are very important. We do have some concerns with some of the recent approvals and renewals of family planning waivers and so they are very important for us to monitor. For example, some of the services that have been available through family planning waivers have been narrowed. Some of the service sites and providers for family planning waivers have also been narrowed. In other words, what the states have done is to go to CMS and this is an example of the under the table stuff that you don’t know how or what causes something to be, whether it was the state seeking it or someone with CMS suggesting it, but at any rate the upshot is that we are seeing requests for these waivers come in with narrowed services and narrowed service ____ 26:38.