Medicaid Demonstrations and State Innovation Waivers: Federal - PowerPoint PPT Presentation

Medicaid Demonstrations and State Innovation Waivers: Federal Oversight and Fiscal Implications Jasleen Modi, United States Government Accountability Office

Learning Objective: Fiscal Implications For the Intersection of 1115 and 1332 Waivers § 1115 Demonstrations: § 1332 Waivers: Budget Deficit Neutrality Neutrality

Overview:  Section 1115 Demonstrations  Section 1332 Waivers

The Evidence: Section 1115 Demonstrations Cost-Control Weaknesses  Demonstration spending limits set too high based on inappropriate o baseline costs and o growth rates(see GAO-08-87, GAO-13-384)  Demonstration expenditures were not consistently clearly linked to promoting Medicaid objectives (see GAO-15-239)

The Evidence: CMS allowed states to accrue unspent funds under the spending limits and use those funds to finance expansions of the demonstration (see GAO-17-312). Comparison of Actual Expenditures to Spending Limit in One State Over Three Demonstration Years

The Evidence: Section 1332 Waiver Approval Criteria Per PPACA, state 1332 proposals are required to meet four approval criteria: • Coverage of a comparable number of people: proposal must provide coverage to at least a comparable number of residents as would be receiving coverage absent the waiver. • Comprehensiveness of benefits: the scope of health benefits under the waiver must be at least as comprehensive as qualified health plans, which are required under PPACA to cover certain benefits, including hospitalization, laboratory, and mental health services. • Affordability: coverage and out-of-pocket spending for state residents is at least as affordable as it would have been absent the waiver. • Deficit Neutrality: the waiver must not increase the federal deficit. (see GAO-16-637R)

Health Policy Implications:  Controlling costs for other health care programs: By requiring states to consider the effect of 1332s on other federal costs, including Medicaid, it avoids a potential cost shift to other federal programs.  Preserving fiscal integrity: by excluding estimated savings from a Medicaid waiver, any control weaknesses underlying these estimated savings would not affect the deficit neutrality determination under a 1332 waiver.

Why This Matters: ?

Additional Information  www.gao.gov  MEDICAID DEMONSTRATIONS: Federal Action Needed to Improve Oversight of Spending, GAO-17-312.  PATIENT PROTECTION AND AFFORDABLE CARE ACT: Information on Approval Process for State Innovation Waivers, GAO-16-637R.  MEDICAID DEMONSTRATIONS: Approval Criteria and Documentation Need to Show How Spending Furthers Medicaid Objectives, GAO-15-239.  MEDICAID DEMONSTRATION WAIVERS: Approval Process Raises Cost Concerns and Lacks Transparency, GAO-13-384.  MEDICAID DEMONSTRATION WAIVERS: Recent HHS Approvals Continue to Raise Cost and Oversight Concerns, GAO-08-87.