CMS Approves 11 New 1135 Medicaid Demos, 25% Of States Approved

March 24, 2020 - Updated 3/27/2020: This article has been updated to reflect the most recent CMS section 1135 Medicaid demonstration waiver approvals.

On March 23, ten days after coronavirus was declared a national emergency, CMS approved 1135 Medicaid demonstration waivers for 11 more states.

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“Thanks to the decisive leadership of President Trump during this emergency, CMS has been able to swiftly remove barriers and cut red tape for our state partners,” said CMS Administrator Seema Verma. “These waivers give a broad range of states the regulatory relief and support they need to more quickly and effectively care for their most vulnerable citizens.”

National emergencies trigger 1135 Medicaid demonstration waivers. These waivers give the HHS Secretary authority to suspend certain provisions, free up resources, and ensure reimbursement, upon a state’s request.

CMS has provided a large range of requirements that states can waive through a 1135 Medicaid demonstration waiver. The five examples of potential waivers include suspending prior authorizations, extending pre-existing authorizations, changing timelines for hearings and appeals, waiving certain provider enrollment requirements, and easing up on demands for public notices and submissions. 

The day before CMS approved these 1135 Medicaid demonstration waivers, the agency released a template for the 1135 Medicaid demonstration waiver. The form is a simple checklist through which states can indicate the stipulations they would like to suspend.

Despite its simplicity, some states are taking advantage of the waivers more than others.

Alabama, a state with almost 200 coronavirus cases as of the morning of March 23, seems to have checked only one box. CMS waived certain administrative burdens related to screening requirements for admission into hospitals and transfer to nursing facilities. It was the only state to waive just one requirement.

Virginia, which has around 258 cases of coronavirus, over a third of which are shared between two counties, also chose not to make use of every waiver. It focused on the timelines for state fair hearing requests and appeals, prior authorization suspension, and extending pre-existing authorizations.

The other nine states, however, regardless of the number of cases or whether they participated in Medicaid expansion, requested most of the suggested waivers. Those states were Arizona, California, Illinois, Louisiana, Mississippi, New Hampshire, New Jersey, New Mexico, and North Carolina.

“To streamline the section 1135 waiver request and approval process, CMS has issued a number of blanket waivers for many Medicare provisions, which primarily affect requirements for individual facilities, such as hospitals, long term care facilities, home health agencies, and so on,” the approval letters explained. “Waiver or modification of these provisions does not require individualized approval, and, therefore, these authorities are not addressed in this letter.”

These 11 states were not the first to receive approval for their 1135 Medicaid demonstration waivers. Florida, which currently has over 1,400 cases of coronavirus as of March 24, and Washington, which is officially on lockdown now that the number of cases has breached 2,200, were the first two states to request the waiver. 

This announcement brings the total number of states with 1135 Medicaid demonstration waivers to 13, or about 25 percent of the states with Washington, DC.

These waivers are retroactive, applicable starting March 1, 2020. They will end with the termination of the national emergency. But when the national emergency will lift is a subject on which most experts have been hesitant to speculate.

A 100-page pandemic plan compiled by the Trump Administration and published by the New York Times was written under the expressed the assumption that “a pandemic will last 18 months or longer and could include multiple waves of illness.”

While that by no means indicates that the waivers would remain valid for the full 18 months if this projection is accurate, the timeframe does underscore that the federal government may anticipate that the waivers will remain in place for a significant period of time.

CMS continues to review and approve section 1135 Medicaid demonstration waivers. As of March 26, the agency approved another 16 states, bringing the total to 29 states with approved section 1135 waivers, which is over half of the US.