States that seek federal waivers for permission to employ new approaches to serving their Medicaid population will have to pass more rigorous tests to ensure that those new approaches are budget-neutral, the Centers for Medicare & Medicaid Services has announced.
In a detailed letter to state Medicaid directors, CMS outlines some of the current methodologies employed by states to demonstrate the budget neutrality of their waiver requests and details instances in which it will judge those methodologies differently in the future. A news release accompanying the letter explains that
….this letter marks the first time that CMS has formally outlined how states must calculate budget neutrality for demonstration projects, in order to strengthen fiscal accountability. The guidance also comes a day after Administrator Seema Verma testified before the Senate Homeland Security and Government Accountability Committee on improper payments in the Medicaid program, which often result in higher federal spending.
The news release also states that
“CMS welcomes smart new approaches to coverage and delivering care through Medicaid demonstration projects, but we won’t approve them without a careful analysis of their impact on taxpayers. Federal spending on the program has increased, growing by over $100 billion between 2013 and 2016,” said CMS Administrator Seema Verma. “Today’s guidance is a comprehensive explanation of how CMS and our state partners can ensure that new demonstration projects can simultaneously promote Medicaid’s objectives and keep federal spending under control.”
See the CMS news release on its revised approach to determining Medicaid waiver budget neutrality and go here to see CMS’s letter to state Medicaid directors on this subject.