CMS Unsurprisingly Concludes Georgia Demonstration Extension Request Is… An Extension Request

On December 22, CMS sent Georgia a letter confirming that the state’s section 1115 demonstration extension request was being reviewed as an extension request. This straightforward conclusion, which the state was trying to avoid, has some important consequences for the state’s on-going Medicaid expansion debacle. But let’s start with the background.

In February 2023, Georgia filed a somewhat misleading request to “amend” its section 1115 demonstration called Pathways to Coverage (“Pathways”). The request was misleading because the only thing being amended was the effective dates of the demonstration. In other words, it was really just a very straightforward extension request. The state may have been angling for the request to be classified as an amendment because the law clearly requires extensions to go through a stringent transparency process that CMS may not need to apply to an amendment request – and Georgia’s extension request never went through that transparency process.

On October 5, 2023, CMS sent the state a letter saying it could not approve the extension request, because the application never went through the transparency process required for extensions. On November 16, 2023, the state sent a letter asking CMS to reconsider its decision. CMS’s December 22 letter reiterated CMS’s conclusion that the request is an extension, and as such, could not be approved without transparency. In addition, CMS’s December 22 letter makes a few other key points:

  • Georgia argued that it should get extra time because the state was unable to implement its demonstration for the full five years of the approval due to time lost in litigation with CMS; however, CMS explained that there is no expectation for states to get the full five years of implementation, and that states often do not.
  • CMS notes the state still has plenty of time to file a proper extension request—the current demonstration doesn’t expire until September 30, 2025.
  • Georgia argued it needed more time to evaluate the demonstration, but CMS clarified that it expects to have sufficient valuable demonstration data by the end of the current approval period.
  • Finally, CMS noted that Georgia’s request would also have been incomplete as an amendment request, since it was missing several elements needed for an amendment request.

CMS’s decision here was plainly correct and, crucially, protects the integrity of the transparency process. The state was only attempting to extend the timeline of the demonstration, and as such it must be reviewed as a demonstration extension request, subject to full transparency. Since the current waiver is approved through September 2025, CMS’s decision will also cause no harm to the state, which has plenty of time to go through the proper process.

This result means that, if the state decides to continue with Pathways, it would need to file an extension request, likely later in 2024. At this point, however, it is clear the state should not do that. The Pathways demonstration is poorly designed; it is only a partial Medicaid expansion and has a lamentable work reporting requirement that massively suppresses enrollment. As we have previously reported, this red tape the state has built into the demonstration has made it an extraordinary failure, enrolling a mere 2,344 people (as of December 15) out of about half a million Georgians potentially eligible for a standard expansion. This pales in comparison to North Carolina, a state with  nearly an identical population size that started a clean Medicaid expansion months after Pathways, in December 2023, and has already enrolled 310,000 people. If every 50,000 enrolled were a touchdown, North Carolina would be winning this football game 42-0. Say it ain’t so Bulldogs!

For this reason, it is also foreseeable that CMS might deny any eventual extension request the state files. Section 1115 demonstrations are required to promote coverage, and Pathways has quickly become the only failing Medicaid expansion in the country.

So what should Georgia do? Luckily, Georgia has a very simple way out of this mess: the state should simply continue its expansion while dropping the harmful work reporting requirements and premiums. If it did that, hundreds of thousands of Georgians would quickly get covered – and North Carolina would have a game on its hands!

Leonardo Cuello is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.