At a congressional hearing Wednesday, CMS officials countered claims that favoritism plays a role when reviewing and approving Medicaid demonstration waivers and that the entire process is opaque.
The House Energy and Commerce Committee's Subcommittee on Health hearing on Wednesday occurred two weeks after the CMS skipped a June hearing related to assertions of inconsistent oversight of Section 1115 demonstrations.
Claims of favoritism were reiterated Wednesday during a hearing that was scheduled to commemorate the 50th anniversary of Medicaid's founding.
“It's well known that some states get CMS approval for a specific proposal, while the CMS will deny another state for a very similar proposal,“ said Rep. Joe Pitts (R-Pa.), chairman of the subcommittee.
CMS Medicaid Chief Vikki Wachino disagreed with the characterization. “We approach that process consistently across the states,” she said. She later added that specific state circumstances also play a part in the agency's decisionmaking.
In fiscal 2011, Section 1115 demonstrations accounted for about one-fifth of Medicaid expenditures, rising to nearly one-third of total federal Medicaid expenditures in fiscal 2014, an estimated $89 billion in federal funds.
The waivers allow states to experiment in their Medicaid programs to improve services to beneficiaries. Waivers must be budget-neutral, meaning the CMS is spending the same amount of money on a state that it would have spent without a waiver.
The GAO has issued multiple reports going back into the 1990s in which it noted that the CMS process for approving state spending for demonstrations is opaque and doesn't ensure that demonstrations will be budget-neutral.
Another key issue during Wednesday's hearing was the speed in which the CMS reviews waiver requests, even renewal applications for initiatives proven to work. Lawmakers say it's unfair to states that work under strict submission deadlines.
“The CMS doesn't hold themselves to this same standard and it takes forever to get an answer,” Rep. Marsha Blackburn (R-Tenn.) said.
Wachino responded that the agency is working toward streamlining the review process, but didn't provide specifics.
In the past year, the CMS has stepped up its transparency efforts around 1115 decisionmaking, Wachino added.
A key part of this strategy has been more clearly stating rational for approving waivers in documents posted on Medicaid.gov.
Wachino also said several new policies are aimed to improve application review and ensure transparency.
Lawmakers found it puzzling they were just hearing this, and when asked her thoughts, Katherine Iritani, director of healthcare at the GAO, said she had not seen these new policies but committed to doing so and following up on her thoughts with Congress at a later date.
Members of Congress also appeared to be thrown by Wachino's response to how the CMS ensures the demonstrations are budget neutral.
The GAO has claimed there are numerous cases in which states overspent by billions. For example, in 2013 and 2014, five demonstrations reviewed by the agency spent $33 billion more than what documentation would have supported.
Wachino said the CMS has improved monitoring of the issue and noted there is a posted template to help states prove neutrality.
“You can put all this stuff out there, but it's not a strong enough signal, we've proved its not working,” said Rep. John Shimkus (R-Ill.).
The lawmaker added that he has drafted legislation that would require CMS' actuaries to personally sign off on the neutrality of waivers.
