Medicaid waivers: What are they anyway?
States have flexibility for special populations
Providers considering Medicaid waivers may wonder exactly what's involved. The more than 200 programs vary from state to state. There are three kinds of Medicaid waivers:
1. home and community-based service (HCBS) (Section 1915.c);
2. freedom of choice (FOC) (Section 1915.b) waivers;
3. research and demonstration (Section 1115) waivers.
States receive federal matching funds for these services, from which they have been exempted from various Medicaid requirements. First granted in 1981, waivers give states leeway to develop and implement creative alternatives to institutionalizing Medicaid-eligible individuals.
Under HCBS waivers, states may change Medicaid community income and resource rules and equal statewide service requirements. FOC waivers additionally allow states to limit beneficiaries' right to select Medicaid providers.
HCBS waivers usually cover seven services:
4 case management;
4 homemaker care;
4 home health aide care;
4 personal care;
4 adult day health;
4 habilitation;
4 respite care.
With Health Care Financing Administration (HCFA) approval, states may also provide transportation, in-home support services, meal services, special communication services, and minor home modifications. States may also qualify to provide patients with chronic mental illness day treatment, psychosocial rehabilitation services, and clinic services.
FOC waivers allow states to place beneficiaries in primary care case management programs, which are run on a managed fee-for-service basis using a gatekeeper role or under capitated arrangements.
States use demonstration waivers to enact an array of initiatives, ranging from small-scale pilot programs to test new reimbursement methods to overhauls of state Medicaid programs.
Both HCBS and FOC waiver services may be provided statewide or in geographic or population-specific subdivisions. HCBS waivers are usually initially funded for three years and renewed in five-year increments. FOC waivers are usually approved for two years and renewed for two years.
For providers who want to learn more about the Medicaid waiver programs in their state, HCFA maintains a comprehensive summary of state waiver programs on its Web site. Providers can download the file, which HCFA updates monthly, by going to the following Web address: http://www.hcfa.gov/medicaid/ltc8.htm and following the "click here" instructions in the middle of the screen.
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