COVID-19 Medicaid Waiver Soup Explained

Over the past month there has been an explosion of Medicaid waiver activity relating to the COVID-19 pandemic.  This activity is not to be confused with the implosion of the Medicaid section 1115 work requirements waivers, which would undermine coverage.  Instead, the COVID-related waivers are designed to help state Medicaid programs respond to the pandemic, not to enable them to erect barriers to coverage.  And unlike the regular section 1115 waivers, which initially run for five years, the new waivers are temporary, linked to the public health emergency declared by Secretary Azar on January 31 (retroactive to January 27), the national emergency declared by the President on March 13, or both.

They fall into three buckets: section 1135 waivers, disaster relief state plan amendments (SPAs) tied to section 1135 waivers, and “public health emergency” section 1115 waivers.  My colleague Allie Gardner is meticulously tracking these waivers and SPAs, as are our colleagues at the Kaiser Family Foundation.  Here are the basics on each bucket.

Section 1135 of the Social Security Act authorizes the Secretary to waive or modify certain requirements of the Medicare, Medicaid, and CHIP programs to ensure that “sufficient health care items and services are available to meet the needs” of beneficiaries during an emergency period.  The requirements that can be waived relate largely to health care providers, such as conditions of participation, licensure requirements, and performance timetables.   The Secretary’s authority is triggered when both a national emergency is declared by the President and a public health emergency is declared by the Secretary of HHS.  As noted, that occurred on March 13 with the President’s national emergency declaration, six weeks after the Secretary had declared a public health emergency.  Shortly thereafter CMS issued a Medicaid and CHIP section 1135 waiver checklist; it has since approved waivers for all 50 states and D.C. (see trackers).

Section 1135 authorizes the Secretary to waive “pre-approval requirements” and to modify (but not waive altogether) “deadlines and timetables for performance of required activities.”  Based on these authorities, CMS issued a Medicaid Disaster Relief SPA template and instructions that allow states to submit SPAs to make changes to their Medicaid programs, retroactive to March 1, without meeting the usual public notice or tribal consultation requirements.  As my colleague Tricia Brooks has explained, the SPA template outlines positive steps that state Medicaid programs can take to respond to the pandemic.  The allowable SPAs are limited to those that “provide or increase beneficiary access to items and services include policies and procedures relating to COVID-19…and that would not restrict or limit payment, services, or eligibility, or otherwise burden beneficiaries and providers.”  The SPAs, like the section 1135 waivers under which they are granted, are temporary.  To date, CMS has approved Medicaid Disaster Relief SPAs for 11 states (see trackers).

Which brings us to the third bucket:  Public health emergency section 1115 waivers.  On March 20, CMS posted a letter to State Medicaid Directors announcing a new COVID-19 Public Health Emergency section 1115 demonstration “opportunity” under Medicaid.   The “opportunity” allows states to request waivers or new expenditure authority to “deliver the most effective care to their beneficiaries in light of the COVID-19 public health emergency.”  Like the section 1135 waiver authority, this section 1115 “opportunity” is temporary, expiring no later than 60 days after the end of the public health emergency, and public notice and input are not required.   Unlike the section 1135 waiver authority, this section 1115 “opportunity” applies only to Medicaid, not to CHIP, and it allows states to draw down additional federal Medicaid matching funds (at their regular matching rate) for costs that would not otherwise be matchable.  To date, CMS has approved temporary waivers and expenditure authority for one state (Washington). Most of the new authority granted to the state of Washington by CMS is in the area of long term services and supports.

The common thread running through these three buckets is “temporary.”  So just how temporary is “temporary?”   There is no time limit on the duration of a national emergency; the President has discretion as to when to declare and when to terminate it, although Congress can terminate a declaration by a joint resolution of both Houses, which does not require a Presidential signature.  (Per 50 U.S.C 1622(b), the House and Senate are required to meet once every six months to “consider a vote on a joint resolution to determine whether” the emergency should be terminated,).  In contrast, the declaration of a public health emergency is subject to a 90-day time limit.  More specifically, under section 319 of the Public Health Service Act, the declaration of a public health emergency may last only 90 days but may be renewed for additional periods, each subject to the 90-day limit.

What are the implications for our three buckets of waivers?  The Secretary’s authority to approve 1135 waivers depends upon the President’s declaration of a national emergency; once the President’s declaration is terminated, section 1135 waivers end, regardless of whether the Secretary’s public health emergency is still in effect.  The Disaster Relief SPAs are based on section 1135 waiver authority, so if that lapses because the President has terminated the declaration of a national emergency, the SPAs are no longer in effect.  The emergency 1115 demonstrations depend only on the existence of a public health emergency, not on the President’s declaration of a national emergency.   Termination of the public health emergency declaration would result in all types of the emergency waivers and SPAs ending, regardless of whether the President kept the national emergency declaration in place.

The current public health emergency was declared effective January 27 and by my count will terminate on April 25 unless renewed.  Since there is no indication that the pandemic has yet peaked, much less abated, it seems likely that the Secretary will renew the public health emergency declaration for another 90 days.  It’s just a little harder to speculate on when the President might terminate the national emergency declaration; he has reportedly expressed strong interest in “reopening” the country on May 1.  To further complicate matters, public health emergencies need not be national in scope; they can be—and have been—targeted to particular areas of the country (e.g., Florida, Georgia, South Carolina, North Carolina, and Puerto Rico when they were clobbered by Hurricane Dorian last year).

The clock is ticking.

[Editor’s Note: HHS renewed the public health emergency after this blog was published.] 

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