A new report to Congress on the transparency of Medicaid demonstration waivers is doing little to quell concerns that the CMS needs to beef up its oversight of the policy experiments.
Experts say the document fails fully to explain how the federal government decides whether to approve or reject a state's application.
“Given the significance of several demonstrations approved to date, this omission is striking,” said Sara Rosenbaum, a professor of health policy at George Washington University.
The oversight of Medicaid's 1115 waivers was the topic of two hearings this past summer and multiple Government Accountability Office reports.
The waivers, which must be budget-neutral, allow states to experiment with Medicaid policy to improve services to beneficiaries. As of September 2015, there were 55 approved Section 1115 demonstration projects in operation in 38 states. They accounted for nearly one-third of all Medicaid expenditures In fiscal 2014, about $89 billion, up from one-fifth in fiscal 2011.
“Critical Medicaid questions continue to be raised through the waiver process so this issue remains of utmost importance, and there are always ways in which the process could continue to improve,” said Joan Alker, executive director of the Georgetown Center for Children and Families.
The GAO, in reports dating into the 1990s, has criticized the CMS process for approving state spending for demonstrations as opaque. The CMS also has failed to ensure the experiments don't add to Medicaid spending, according to the GAO.
On Oct. 16, the CMS sent a report to Congress that was required by the Affordable Care Act as a means to ensure the public has notice, information and opportunity to provide input on the experimental approaches.
The document is largely a recap of guidance the CMS issued over the last decade related to Medicaid waivers.
“Although the report to Congress is long on process reforms, HHS has provided no insight as to the criteria the secretary will use in making such a determination, the principles on which such criteria rest, or the necessary evidence on which her decision to either start or continue a demonstration necessarily must be based,” Rosenbaum, of George Washington University, said.
Experts also questioned why the report to Congress indicates that the CMS notified state Medicaid directors in an April 2012 letter that they must subject amendments to a demonstration waiver to the same public comment process as the initial application. The actual letter describes the comment period as optional.
“The big picture here is that a state could change absolutely everything via an amendment and not get stakeholder feedback,” said Leonardo Cuello, director of health policy for the National Health Law Program.
The report also did little to address how the CMS determines that a waiver is budget-neutral.
“We remain concerned that improvements are needed in the HHS criteria, policy and process for approving states' spending on demonstrations to potentially prevent billions of dollars in unnecessary federal spending,” said Katherine Iritani, director of healthcare at the GAO.
A CMS spokesperson did not immediately return a request for comment.
