APRIL/MAY 2003

Question: What Medicaid waivers are most important for child and adolescent behavioral health programs?   

Answer: The following Medicaid waivers are pertinent to behavioral health services.

1115 Waivers

Section 1115 of the Social Security Act provides the Secretary of Health and Human Services (HHS) with broad authority to authorize demonstration projects of national significance that are likely to assist in promoting the objectives of Medicaid. They must be determined to test substantially new ideas related to Medicaid policy and have widespread implications. They provide States with flexibility for the expansion of the provision of services that are normally not eligible for reimbursement and for the expansion of eligibility for individuals who would normally not be eligible for Medicaid. The waivers are approved through the Central Office of the Centers for Medicare and Medicaid Services in Baltimore. These waivers have extensive evaluation requirements. Waivers are generally approved for a period of 5 years. All program expansions must be budget neutral over the life of the project.

1915 (b) Waivers

The primary purpose of this waiver is to promote cost-effectiveness and efficiency within Medicaid state programs. Section 1915(b) of the Social Security Act (Medicaid) allows HHS to waive certain requirements of Medicaid. It allows the implementation of primary care or specialty care case management systems, share through provision of additional services with Medicaid enrollees cost savings resulting from the program and/or to restrict the providers from whom individuals may receive services. Specific examples include the requirements include Freedom of Choice of Providers which can mandate enrollment in managed care programs, creating a "carve-out" delivery system for specialty services such as managed behavioral health care, create programs that are not available on a statewide basis to all Medicaid eligible individuals and provide an enhanced service package. It does not allow the expansion of eligibility of individuals who would not normally be eligible for Medicaid, and the expansion of services is much more circumscribed than in the 1115 waiver process. A 1915 (b) waiver can be approved by the CMS Regional Office rather than by Central Office. Unlike 1115 waivers, there is a 90-day clock on the notification of approval/disapproval. The evaluation requirements are not as extensive as the 1115 waivers. Finally, these waivers must be budget neutral.

1915 (c) Waivers

Section 1915 (c) waivers, also known as Home and Community Based waivers, afford States the flexibility to develop creative alternatives to placing individuals in hospitals, nursing facilities, and residential treatment facilities. The law allows homemaker/home health services, day treatment, partial hospitalization, psychosocial rehabilitation services, respite care, and clinic services for persons with chronic mental illness. It does not include room and board, special education services, and vocational rehabilitation services that are otherwise available through such programs. Federal regulations permit waiver programs to serve a broad array of individuals, including elderly persons with physical disabilities, developmental disabilities, mental retardation, and mental illness.  

In addition, States may target waiver programs by specific illness or conditions, such as technology-dependent children, individuals with AIDS, and individuals with mental illness and provide home and community-based services to individuals who would not qualify for Medicaid services except that they or a family member were in an institutional setting and would have had to pay for care out of pocket.