Medicaid Waiver Approval Can Take Four Years

NCPA August 18, 2014

Angela Boothe of the American Action Forum has released a report detailing just how burdensome the Medicaid waiver approval process is. It can take years for the Centers for Medicare and Medicaid Services (CMS) to approve a state's waiver proposal.

When the Medicaid program was established in 1965, it established a number of federal requirements but gave states the option to seek a waiver. With federal approval, a waiver allows states to tweak the program in order to fit the needs of their residents. There are three types of waivers:

• Section 1115 Demonstration Waivers: These give states the opportunity to do things like focus on specific geographic regions, create enrollment caps or remove or add additional services.
• Section 1915(b) Waivers: These allow states to create managed care programs and do away with restrictions on provider choice.
• Section 1915(c) Waivers: These focus on the use of Home and Community Based Services, which allow states to keep Medicaid beneficiaries in their homes rather than move into institutional care.

Waivers can be comprehensive or targeted at a specific element of Medicaid. A state must submit its waiver proposal to CMS for review, and, as Booth explains, it is not a short process:

• On average, it takes CMS 190 days to approve a waiver, though it can take up to 1,637 days (more than four years!) to receive approval.
• Receiving approval for an original waiver takes the longest amount of time: 337 days on average. A renewal waiver takes an average of 199 days, while an amendment takes 177 days.
• Section 1115 waivers take much longer than Section 1915 waivers: an average of 234 days compared to 76.

It is important to remember, Boothe notes, that CMS approval is just a small part of the waiver process; states must spend hours and hours developing their waivers, gathering input and drafting the proposal itself.

Once a state receives waiver approval, it has to go through the process again, as a waiver lasts for only three to five years and requires renewal approval from CMS.

Source: Angela Boothe, "Breaking Down Barriers to Medicaid Innovation: Rethinking Medicaid Waiver Approval," American Action Forum, August 14, 2014.