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CMS Extends Two Section 1115 Waivers

The Centers for Medicare & Medicaid Services (CMS) on Sept. 28 extended Section 1115 demonstration waivers in Massachusetts and Oregon that aim to test improvements in coverage, access, and quality and target unmet health-related social needs (HRSN).

CMS granted both states the ability to continue Medicaid coverage for select populations for extended periods of time without undergoing redeterminations. Massachusetts will provide 12 months of coverage for individuals experiencing homelessness and those recently released from incarceration. After initial eligibility determination, Oregon will allow continuous Medicaid enrollment for children through age 6 and for all others for two years.

Both waivers authorize coverage for non-traditional services to address HRSN. Massachusetts received approval to establish a Hospital Quality and Equity Initiative that provides $490 million per year to incent hospitals to improve care and reduce health inequities.

In a preliminary step to address low provider base rates, CMS has tied funding in both waivers to the state’s commitment to increasing or maintaining fee-for-service and managed care rates in primary care, behavioral health care, and obstetrics care at a minimum of 80 percent of Medicare rates. Further, CMS is moving away from its previous budget neutrality policy to provide states expanded flexibility to implement innovative programs with a focus on advancing health equity. CMS has signaled it will consistently apply this approach to budget neutrality in similarly situated states going forward.

State-Specific Elements

The Massachusetts waiver:

  • extends the Safety Net Care Pool, including a $125 million annual increase in Safety Net Provider Payments;
  • invests $43 million over five years in loan repayments and residency training programs to bolster and diversify the primary care and behavioral health workforces;
  • invests $115 million per year in primary care for a new value-based subcapitation model that requires providers to meet specific standards while allowing more flexibility in care delivery; and
  • expands programs to target and integrate HRSN, including housing and nutritional support, and funds infrastructure investments to support HRSN programs.

Additionally, the Hospital Quality and Equity Initiative will hold accountable care organizations (ACOs) and ACO-participating hospitals accountable for reducing inequities in health care quality and access, including by requiring providers to improve data collection methods and report demographic factors and HRSN. Provider payments authorized through this initiative will not count as patient care revenue.

The Oregon waiver:

  • allows continuous Medicaid enrollment for children up to 6 years old and two years of continuous enrollment for those older than age 6.
  • provides up to six months of food and housing support, including rental assistance for high-need groups as well as medically necessary air conditioners, heaters, humidifiers, air filtration devices, generators, and refrigeration units to individuals with high-risk clinical needs in regions with extreme weather events;
  • authorizes up to $535 million in federal matching funds for Designated State Health Program (DSHP) expenditures, despite 2017 guidance announcing a termination of DSHP funding; and
  • terminates the state’s waiver of retroactive eligibility.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions

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About the Author

Julie Kozminski is a policy manager at America's Essential Hospitals.

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