Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Section 1115 Waivers


Of all the Medicaid authorities that states can use to offer MLTC, §1115 waivers offer the greatest flexibility. However, they also have the most rigorous approval criteria and generally take longer to obtain than other waivers. Section 1115 allows the Secretary of Health and Human Services to waive any of the requirements of §1902 of the Social Security Act for purposes of researching innovative approaches to delivering Medicaid benefits and services, including both managed care and fee-for-service innovations. Section 1902 includes the basic requirements for operating a Medicaid program, making the §1115 waiver the most comprehensive available.

To be approved, a §1115 demonstration must test a new idea to improve the Medicaid program. The budget test is more rigorous than those for other waivers and the Federal Office of Management and Budget reviews for budget neutrality. There is no limit on the amount of time CMS may take to review the application. In short, this waiver can do the most, but can only be used to test a true innovation. See Table 8-2 for an example of the use of this authority.

TABLE 8-2. Arizona Long-term Care System (ALTCS)
Start Date 1988–89
Target Group Older persons, persons with physical disabilities, or persons with intellectual or other developmental disabilities, all of whom must be clinically certified to need an institutional level of care. Enrollment is mandatory. However, dually eligible persons continue to receive their Medicare benefits through the fee-for-service system, a Medicare Advantage Plan, or a Special Needs Plan.
Service Area Statewide
Scope of Medicaid Capitation All Medicaid services, including primary and acute health care, long-term care services (institutional and HCBS), and behavioral services.15
Authorities Section 1115 waiver. Arizona has operated its entire Medicaid program under a §1115 waiver from its inception in 1982. ALTCS was truly experimental when it was implemented in 1988--no state had undertaken any significant MLTC, and Arizona was proposing it statewide on a mandatory basis. The population is similar to that served in §1915(c) waiver programs. If ALTCS were proposed today, a §1915(b) and (c) waiver combination would likely be considered.
More information is available at: http://www.azahcccs.gov/reporting/default.aspx.

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