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Utah Medicaid Waivers

August 28, 2019

McDermott+Consulting

Throughout the course of 2019, Utah has proposed and submitted a series of Section 1115 Medicaid Demonstration waivers to the Centers for Medicare and Medicaid Services (CMS). On March 29, 2019, CMS approved a Utah 1115 waiver, which implemented a partial Medicaid expansion, Medicaid work requirements, and waived the Medicaid institution for mental disease (IMD) exclusion. This was considered a “bridge plan’” while the state submitted additional waivers.

Following that, on May 31, 2019, Utah released a proposal for another 1115 waiver application (read our full summary of the initial proposal here). On July 31, 2019, the state formally submitted this wavier application to CMS. Provisions of the waiver include implementing a per capita cap, seeking enhanced Federal Medical Assistance Percentages (FMAP) for the state’s partial Medicaid expansion, implementing a Medicaid lock-out for intentionally violating Medicaid eligibility rules, requesting federal funding to provide housing-related services and supports, and preventing hospitals from making presumptive eligibility determinations for the expansion population. The waiver also requests to continue provisions that were approved in the March 29 waiver, such as waiving the Medicaid IMD exclusion and implementing work requirements. CMS is accepting comments on the application through September 15, 2019.

While this most recent waiver application is still under review, CMS weighed on two elements of the proposal already. On August 16, 2019, CMS sent a letter to the state saying they would not approve Utah’s request for enhanced FMAP for partial Medicaid expansion and will not approve enhanced FMAP if enrollment caps are implemented. Remaining provisions, such as the per capita cap proposal, may still be approved.

Below is a summary of the key elements of this latest waiver application along with background on the previously approved March 29 waiver.

Per Capita Cap

One of the most controversial proposal in Utah’s most recent waiver application is the per capita cap funding mechanism. If approved, Medicaid funding will be set at a per enrollee base for each of three enrollment groups: adults with dependent children, adults without dependent children, and Targeted Adults (adults age 19-64 with incomes at or below 5 percent of the federal poverty line (FPL) and who are homeless, justice-involved, or in need of substance abuse or mental health treatment). Expenditure caps will be set annually and reconciled with actual expenditures and enrollment. The per member per month (PMPM) rate for year one (2020) for adults with dependent children is $649.72. For adults without dependent children it is $755.12, and for targeted adults and members residing in an IMD primarily to receive substance use treatment it is $1,882.06. The state also proposes to use a 4.2 percent growth rate for per capita caps from demonstration year one to demonstration year two. While several Republican-led states have advocated for per capita caps as a way to lower Medicaid spending, Utah would be the first to implement such a program.

Expansion and Enhanced FMAP

Back in April, we reported that Utah became the first state to receive CMS approval of a partial Medicaid expansion. The ACA expanded Medicaid to individuals with incomes up to 138 percent of the FPL. However, Utah only expanded Medicaid to individuals with incomes up to 100 percent FPL.

Under the March 29 approved waiver, the state received a 70 percent federal match for the expansion population. That approval outlined that the state would follow-up with a second waiver to receive the enhanced 90 percent federal match for the expansion population. The waiver that was submitted on July 31 did just that. It requests to allow the state to receive the full FMAP allowable, which is 93 percent for 2019 and 90 percent for 2020 and each year thereafter, for the expansion population.

However, in the letter released on August 16, 2019, CMS announced that it will not approve Utah’s request for enhanced FMAP for partial Medicaid expansion, in keeping with existing policy.

Enrollment Caps

The waiver approved in March also outlined that should the projected costs for the expansion population exceed annual state appropriations, the state could close enrollment. According to the waiver, when enrollment closed, the state would continue to accept and review applications to determine whether applicants are eligible for Medicaid on any other basis. However, if that individual was only eligible for Medicaid through the expansion, they would be denied (there was no waitlist or system for communicating to individuals when to enroll again). The July 31 waiver application asked to continue these caps.

However, in the August 16th letter, CMS said that will not approve enhanced FMAP if enrollment caps are implemented, as this would be tantamount to partial expansion.

Work Requirements

In the March 29 waiver approval, CMS approved Utah’s request to implement work requirements for certain Medicaid populations. In the July 31 waiver application, the state proposes to continue to implement these requirements. The waiver requires that within the first three months of being notified of enrollment in the program the individual complete the following activities:

  • Registering for work through the state’s online system
  • Completing an online assessment of employment training needs
  • Applying for employment, either directly or through the state’s automated employment application submission process, with at least 48 potential employers
  • Completing online job training modules

Note there is not a specific work hour requirement, unlike other state 1115 waivers with work requirements.

Once the work requirement is satisfied, the individual will be eligible for the program for the remainder of the 12-month eligibility period. If an individual is disenrolled from the program, they are able to reapply for coverage after completing the above mentioned requirements. At that time the individuals begins a new 12-month eligibility period.

The following populations are exempt from the work requirements:

  • Age 60 or older
  • Pregnant or up to 60 days postpartum
  • Physically or mentally unable to meet the requirements as determined by a medical professional or documented through other data sources
  • A parent or other member of household with the responsibility to care for a dependent child under age six
  • Responsible for the care of a person with a disability as defined by the ADA, section 504 of the Rehabilitation Act, or section 1557 of the Patient Protection and Affordable Care Act
  • A member of a federally recognized tribe
  • Has applied for and is awaiting an eligibility determination, or is currently receiving unemployment insurance benefits, and has registered for work at Department of Workforce Services (DWS)
  • Participating regularly in a SUD treatment program, including intensive outpatient treatment
  • Enrolled at least half time in any school (including, but not limited to, college or university) or vocational training or apprenticeship program
  • Participating in refugee employment services offered by the state, which include vocational training and apprenticeship programs, case management, and employment planning
  • State Family Employment Program (FEP) recipients who are working with an employment counselor
  • Beneficiaries in compliance with or who are exempt from Supplemental Nutrition Assistance Program (SNAP) and/or Temporary Assistance for Needy Families (TANF) employment requirements
  • Working at least 30 hours a week or working and earning at least what would equal the federal minimum wage earned working 30 hours a week
Medicaid Lock-Outs for Intentional Violation

The July 31 waiver proposes to apply a six-month ineligibility period if an individual commits an intentional program violation to become or remain eligible for Medicaid. An intentional violation includes, but is not limited to, knowingly making false or misleading statements, misrepresenting, concealing or withholding facts, violating program regulations, posing as someone else, or not reporting a required change within 10 days after the change occurs. Additionally, the state will investigate if there was Medicaid overpayment due to an intentional program violation.

An individual can request to receive continued benefits if they decide to appeal the intentional program violation decision. If the decision is upheld, and the individual requested continued benefits, an overpayment of Medicaid benefits will be assessed for the months the individual continued to receive Medicaid.

Housing Services

The waiver also requests authority to provide housing supports for the Targeted Adult Population, who meet needs based criteria. Specific services the state intends to provide include:

  • Tenancy Support Services
  • Community Transition Services
  • Supportive Living/Supportive Housing Services

It is important to note that none of these include room and board, for which Medicaid reimbursement is not allowed.

12-Months Continuous Eligibility

Currently, Utah provides 12-month continuous eligibility for the Targeted Adult Population. This application requests to continue 12-month continuous eligibility to the Targeted Adult Population and also expands 12-month continuous eligibility to the expansion population.

Changes that occur during the certification period will not affect eligibility during the period of continuous eligibility, except when a beneficiary:

  • Turns age 65
  • Moves out of state
  • Fails to apply for other benefits
  • Becomes institutionalized
  • Is determined eligible for another Medicaid program
  • Fails to comply with the community engagement requirement during the three-month participation period
  • Faces closure due to lock-out for committing an intentional program violation
  • Commits fraud
  • Fails to enroll in employer-sponsored insurance
Presumptive Eligibility

Utah also proposes through the waiver to not allow a hospital to determine presumptive eligibility for the adult expansion population. (Currently, Utah does not allow presumptive eligibility determinations for the Targeted Adult Population, which includes the chronically homeless, individuals involved in the justice system and in need of substance use or mental health treatment, and individuals needing substance abuse or mental health treatment.)

Waiving IMD Medicaid Exclusion for SUD and Opioids

The March 29 waiver approval gave Utah the authority to provide Medicaid benefits for beneficiaries residing in an IMD primarily to receive short-term residential treatment for treatment and withdrawal management services for substance use disorders (SUD) and opioid use disorders. The July 31 application asks to continue this program.

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