JUNE/JULY 2003

Question:

Medicaid has something called waivers. What are waivers? Why are they important for children's mental health services?

Answer:

Medicaid is a federal-state partnership in which the federal government provides matching funds to the states to operate their programs. State Medicaid agencies are responsible for the day-to-day management of the program. However, states are required to comply with federal legislative, regulatory, and guideline requirements. These requirements can be waived to expand services, provide more cost-effective services, and, in one case, expand eligibility for services under Medicaid. The most commonly discussed waivers under Medicaid are the 1915(b), 1915 (c), and 1115 waivers.  

To obtain a waiver, the Medicaid state agency must apply through the federal government's Centers on Medicare and Medicaid Services (CMS). In the case of 1915 waivers, states must apply through their CMS Regional Office, of which there are nine in the country. States must apply for 1115 waivers through the CMS Central Office in Baltimore, Maryland.

The 1915 (b) and (c) waivers allow states to waive specific requirements of the Medicaid statute. Most commonly, states can request waivers of state wideness, comparability of services, and freedom of choice providers.

The state wideness requirement basically mandates that the same set of services must be provided throughout the state regardless of location. Comparability of services mandates that a state must provide the same set of services to Medicaid-eligible individuals. However, depending on the eligibility category (i.e., mandatory versus optionally eligible), states must provide the same set of services within the group of eligible individuals but can vary the set of services provided, depending on the category. In other words, states can choose to provide a less broad set of services to those in the optionally eligible groups than to those in the mandatory group, but within the group, there must be consistency. Finally, the freedom of choice provision mandates that Medicaid-eligible individuals have the right to choose from any institution or agency qualified to perform the service. A state Medicaid agency can request a waiver of these requirements but generally must provide additional services, such as case management and wrap-around services, from their cost savings.

The 1115 waivers must be of national significance and have the potential to change Medicaid policy throughout the nation. Unlike the 1915 waivers, 1115 waivers can expand Medicaid eligibility to additional groups of people who might not otherwise be eligible.Over the next several months, each type of waiver will be discussed in greater depth. The discussion will include the 1915 (b), the 1915(c), and the 1115 waivers.