Overview of 1115 Waivers: FederalState Financing Agreements

1
Overview of 1115 Waivers Federal/State Financing
Agreements

• Simple concept If you let me spend the money
  you already give me in a different way, I can try
  out something new and different. I wont spend
  any more money than I would have anyway, and if I
  do, Ill pay for it all out of my own money.

2
Cost Neutrality

• With Waiver costs cant exceed Without Waiver
  Costs
• CMS uses last 5 years of Medicaid experience to
  construct the agreement
• State must still give mandatory services to
  mandatory populations
• State goes at risk for expenditures in excess
  of the agreement

3
New Federal Money

• There isnt really any new money
• States at risk of losing money from a prior
  federal deal may do better
• Feds like 1115s as a way to cap federal thru a
  global budget (cap on total program expd) or a
  cap on pmpm growth (State not at risk for
  caseload)
• States get to spend their program savings on the
  demonstration

4
What if things dont go as planned?

• 1115 Waivers generally run for 5 years
• If the economy gets better than the deal
  anticipated caseload/costs decrease, there is
  money to spend on the demonstration
• If the economy gets worse than the deal
  anticipated and caseload/costs go up, the State
  is on the hook for the difference in cost

5
How hard is it to do an 1115?

• 1115 Waivers take time and expertise to
  construct. Require 5-8 yrs of detailed data, and
  legal, policy actuarial expertise.
• 1115 Waivers take time to negotiate. Waivers are
  granted at the discretion of HHS, time limited
  subject, without appeal, to terms conditions of
  HHS
• 1115 Waivers require enhanced administrative
  resources

6
No Free Money

• 1115 Waivers are federal/state financing
  agreements
• States go at risk for cost or caseload overruns
• States that have prior deals CMS wants out of may
  fare better
• States that have done little cost containment may
  fare better