October 2003

What is a 1115 waiver?

Answer:

Section 1115 of the Social Security Act gives the Secretary of Health and Human Services (Secretary) broad authority to authorize experimental, pilot, or demonstration projects that, in the judgment of the Secretary, are likely to promote the objectives of the Medicaid statute.

GENERAL FEATURES OF 1115 WAIVERS: One advantage of the 1115 waiver is its broad flexibility, which permits states to test substantially new ideas of policy merit. States commit to a policy experiment that will be evaluated and that should demonstrate something that has not been demonstrated on a widespread basis. The specific research or demonstration finding will be drawn from the project's results.

ELIGIBILITY/ADDITIONAL SERVICES: The authority provides the flexibility, under the Secretary's discretion, to provide services for which state Medicaid agencies are not otherwise allowed to obtain federal matching funds. It allows expanding eligibility for those who would otherwise not be eligible for the Medicaid program.

EVALUATION/REPORTING REQUIREMENTS: The Commission on Medicare and Medicaid Services (CMS) is responsible for evaluating the project. This evaluation includes state-specific and cross-state analyses of impact on utilization, insurance coverage, public and private expenditures, quality, access, and satisfaction.

TIME: States can discuss potential demonstration project concepts with CMS early in the process. Projects are generally approved to operate for a 5-year period.

HEALTH CARE REFORM DEMONSTRATIONS: States can expand managed care to include HMOs, partially capitated systems, primary care case managers, or other variations. Often savings are achieved from managed care arrangements and are used to finance coverage to individuals previously ineligible for Medicaid.

FINANCIAL: The demonstration must be budget neutral over the life of the project (generally 5 years) and is subject to OMB, CMS, and departmental approval. The demonstration cannot be expected to cost the federal government more than it would cost without the waiver.

An SOCC project interested in developing and applying for a 1115 waiver must partner with the state Medicaid agency, which is the only entity that can apply for it.