HEALTH POLICY CENTER Section 1115 Waivers of Retroactive Medicaid Eligibility Lack of Evidence Raises Flags and Warrants Caution Brigette Courtot, Fredric Blavin, Eva H. Allen, and Diane Arnos July 2021 (updated July 12, 2021) Medicaid’s retroactive eligibility provision covers health care services received up to 90 days before the date a beneficiary applied for Medicaid coverage, provided the beneficiary would have been eligible for the program when the services were received.1 These protections underscore Medicaid’s function as a health care safety net program providing assistance when it is needed most. Congress envisioned retroactive eligibility as protecting people unaware of their Medicaid eligibility or unable to apply in a timely way because of the sudden onset of disease or injury.2 Since retroactive eligibility became part of federal Medicaid law in 1972, this mechanism has served many purposes; it has covered medical bills when an uninsured person experiences a major health event or accident, facilitated long-term institutional placements for people being discharged from the hospital who have not yet applied for Medicaid, and covered hospital charges for Medicaid-eligible newborns before their enrollment has been processed. Retroactive eligibility helps people avoid medical debt, which can negatively affect the physical and mental health—as well as the financial well-being—of low- and moderate-income people (Hamel et al. 2016). Retroactive eligibility plays an important role in hospitals and long-term care institutions, too, allowing providers to begin care as soon as needed, regardless of a patient’s date of application. Section 1115 of the Social Security Act authorizes the US Department of Health and Human Services to waive certain parts of Medicaid law and allows states to undertake demonstration projects promoting Medicaid objectives.3 Beginning in the 1990s, the department authorized Medicaid Section 1115 demonstrations waiving retroactive eligibility for certain populations, typically as part of experiments to expand eligibility and exclude traditional enrollee groups (MACPAC 2019). The nature of these experiments changed with the Trump administration; between 2017 and 2020, the executive branch approved six retroactive eligibility waivers that were not part of eligibility expansions and that applied broadly to Medicaid populations, including seniors and people with disabilities.4 In more recent Section 1115 waiver applications, state officials have asserted that waiving retroactive eligibility will familiarize beneficiaries with commercial insurance (that provides prospective coverage only), incentivize them to obtain and maintain health coverage even when healthy, and encourage them to apply for coverage as soon as they believe they meet eligibility criteria (MACPAC 2019). Despite retroactive eligibility’s long-standing role in Medicaid, little is known about how its absence affects beneficiaries and providers. Using qualitative and quantitative approaches, this study examines the effects of retroactive eligibility waivers to fill this research gap. Methods We first conducted an environmental scan of academic literature, policy briefs and reports, waiver applications and approval letters, and media coverage to identify national experts, states with current waivers, and key stakeholders. We conducted seven interviews with nine national experts between November 2019 and January 2020. Between January and August 2020, we then conducted virtual case studies in Arizona, Hawaii, Iowa, New Mexico, and Oklahoma. We focused on these states because they had an active waiver at the time or had had one recently and because they agreed to participate in our study. We conducted 18 interviews with 39 state-level stakeholders, including Medicaid officials, health care provider representatives, consumer advocacy organizations, and state policy experts. Our discussion guides addressed the purpose, design, implementation, and impacts of retroactive eligibility waivers. We recorded, transcribed, and analyzed interviews to uncover insights and common themes. Table 1 shows effective dates and other features of each study state’s waiver. 2 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY TABLE 1 Design Features of Medicaid Section 1115 Waivers of Retroactive Eligibility in Study States Effective Affected and exempt Retroactive Changes after State dates populations coverage period implementation Arizona 7/2019– ◼ Expansion and nonexpansion ◼ Coverage begins ◼ None present enrollees affected on the first day of ◼ Exemption for pregnant/ the month of postpartum women, infants, application and children younger than 19 Hawaii 1994– ◼ Expansion and nonexpansion ◼ Coverage begins ◼ In 2012, the period 98/2019 enrollees affected 10 days before of retroactive ◼ Exemption for beneficiaries the date of eligibility was eligible for long-term care application extended from 5 to services 10 days before the date of application Iowa 11/2017– ◼ Expansion and nonexpansion ◼ Coverage begins ◼ Exemption for present enrollees affected on the first day of those residing in ◼ Exemption for pregnant/ the month of nursing facilities at postpartum women, infants, application the time of children younger than 19, and application took nursing facility residents effect in 2018 ◼ Exemption for children younger than 19 took effect in 2020 New 12/2018– ◼ Expansion and nonexpansion Phase-out approach: ◼ Waiver reversed by Mexico 2/2020 managed-care enrollees ◼ In 2019, coverage governor via affected began one month amendment ◼ Exemption for pregnant/ before the date of request to CMS in postpartum women, children application June 2019 younger than 19, Native ◼ Starting in 2020, ◼ Second phase Americans (unless they opt into coverage begins never implemented managed care), and people on the first day of eligible for institutional care the month of application Oklahoma At least ◼ Nonexpansion enrollees ◼ Coverage begins ◼ Exemption for 2010– affected on the date of pregnant women presenta ◼ Exemption for pregnant/ application and children took postpartum women, infants, effect in August and children younger than 19, 2018 Tax Equity and Fiscal Responsibility Act enrollees, and aged, blind, and disabled populations Source: Urban Institute interviews with Medicaid officials, health care provider representatives, consumer advocacy organizations, and state policy experts. Notes: CMS = Centers for Medicare & Medicaid Services. Expansion enrollees are people made eligible for Medicaid through expansion of the program under the Affordable Care Act; nonexpansion enrollees were eligible for Medicaid before the state expanded the program. a The exact date Oklahoma implemented a Section 1115 waiver is unknown. SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 3 For the quantitative analysis, we used data on fiscal years 2011–18 from the Centers for Medicare & Medicaid Services (CMS) Healthcare Cost Report Information System (HCRIS) to assess waiver effects on hospitals’ uncompensated care costs as a percentage of total costs and on Medicaid revenue as a percentage of total revenue. We compared hospital outcomes in states that have expanded eligibility under the Affordable Care act (hereafter Medicaid expansion states) and had retroactive eligibility waivers that took effect between 2014 and 2018 (Arkansas, Indiana, Iowa, and New Hampshire) with outcomes in Medicaid expansion states that did not have retroactive eligibility waivers. We restricted our sample to hospitals in Medicaid expansion states because the implementation of retroactive eligibility waivers coincided with Medicaid expansion. We did not assess the effects of retroactive eligibility waivers that took effect before the Affordable Care Act because these waivers were much more limited in scope than recent waivers. See the data and methods section for additional details (e.g., construction of comparison group and parallel trend tests). Limitations Though the information we gleaned from national experts is based on knowledge of retroactive eligibility across the country, our case studies were limited to five states and may not represent the broader set of states with waivers. To assess the effects of retroactive eligibility waivers on Medicaid enrollment and costs, we requested aggregate data on retroactive eligibility claims from five states with waivers and five states without waivers. However, we could not obtain these data, because states declined to participate upfront, were unable to provide data because of competing demands related to the COVID-19 pandemic, or were unable to identify retroactive claims in their data systems. For example, one state reported that because the Department of Social Services handles eligibility determinations, the Medicaid agency did not have access to data showing whether someone had requested or been deemed eligible for retroactive coverage. Additionally, all study states’ Medicaid applications include a question about needing help paying for medical services in the prior three months; this could allow states to track how many beneficiaries who need retroactive coverage are not receiving it, but none of the study states were analyzing these data at the time of our study. In addition, the quantitative HCRIS analysis had limited power to detect statistical differences between hospitals in the retroactive eligibility states and those in the comparison states. This is most problematic in New Hampshire, where only 25 hospitals on average were represented in the data each year. The average sample sizes for Arkansas (67), Indiana (106), and Iowa (115) were larger but still limited the analysis. Key Findings Many stakeholders believed the premise for retroactive eligibility waivers is faulty. In the study states’ waiver applications, officials commonly suggested that restricting or eliminating retroactive eligibility would promote beneficiaries’ “personal responsibility” to enroll in or renew Medicaid when they are healthy, rather than during a health crisis. However, national experts rejected the notion that waiving retroactive eligibility would encourage beneficiaries to enroll in or renew coverage in a timely manner; 4 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY instead, they argued few Medicaid-eligible individuals are even aware of the provision. As one key informant explained, “The baseline assumption of most people is that you get Medicaid coverage when you apply. And if that’s what most people think, and they’re still not applying, taking [retroactive eligibility] away isn’t going to be a motivating factor.” Most stakeholders believed cost savings were a key driver of waivers, even if not publicly acknowledged. Officials from some states identified additional motivations for implementing retroactive eligibility waivers; those in Hawaii suggested their waiver was implemented to encourage hospitals and health care providers to promptly enroll eligible people in Medicaid. The populations affected by the waivers and the extent to which retroactive eligibility was restricted varied across the five study states. Except for Oklahoma, which implemented the ACA’s Medicaid expansion after our analysis,5 all study states included both Medicaid expansion and nonexpansion enrollees in their retroactive eligibility waivers (table 1). However, the waivers had some exemptions; CMS required exemptions for pregnant and postpartum women, infants, and children under 19. Except for Arizona, the study states also opted to exempt the aged, blind, and disabled Medicaid population or those receiving long-term care services and supports. Oklahoma eliminated the full retroactive eligibility period, whereas other study states retained some coverage but reduced the applicable period. In Arizona and Iowa, for instance, Medicaid coverage begins on the first day of the month in which the application was submitted (i.e., the retroactive coverage period could be between 1 to 31 days versus the standard 90 days). Stakeholders shared concerns about the waivers’ effects on beneficiaries and providers, but impact data are limited because of lagging and insufficient evaluation efforts. Many speculated that the waivers increased uncompensated care costs for providers and medical debt for beneficiaries. But no interviewees could share evidence of this, and some expressed frustration over the lack of relevant data. Several referred to Indiana Medicaid data collected from 2015 to 2016 that indicated beneficiaries had an average of $1,561 in health care costs during the retroactive eligibility period.6 When asked about the waivers’ effects on Medicaid enrollment or renewal rates, stakeholders noted difficulty distinguishing waiver effects from those of other policies, such as restrictive renewal processes (box 1). In early 2019, CMS released evaluation design guidance for Section 1115 demonstrations with specific recommendations for retroactive eligibility waivers. The design guidance’s recommended hypotheses were that the waivers would increase the likelihood of enrollment (particularly when people are healthy) and increase coverage continuity, improve health outcomes, and have no adverse financial impacts on consumers (CMS 2019). Some experts we spoke with were concerned about lacking or weak evaluation designs. None of the study states reported monitoring the effects of their waivers at the time of our interviews, and some did not have formal evaluation plans. Since then, however, Arizona officials have released an evaluation plan using CMS’s recommended hypotheses.7 Oklahoma’s evaluation plan (also public) includes examining the effects of restoring retroactive eligibility for pregnant women and children and how the waiver affects beneficiaries still subject to it (Oklahoma Health Care Authority 2019). SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 5 BOX 1 Florida’s Retroactive Eligibility Waiver Evaluation Findings In January 2021, Florida published findings from an evaluation of the retroactive eligibility waiver the Statewide Medicaid Managed Care program implemented in 2019. Evaluators found the waiver had minimal effects on renewal rates and no clear positive or negative effects on the provision of uncompensated care. The state also reported that hospitals and nursing facilities increased Medicaid enrollment assistance for patients after the waiver took effect, and most beneficiaries were unaware of how retroactive eligibility worked or that Florida’s policy had changed. Source: Final Report: The Impact of the Waiver of Retroactive Eligibility on Beneficiaries and Providers, University of Florida College of Medicine, Florida State University College of Medicine, and University of Alabama at Birmingham, January 11, 2021. Long-term care stakeholders had unique concerns about eliminating retroactive eligibility. In states where long-term care recipients were included in waivers, stakeholders’ most significant concerns were that access to long-term care would be reduced for Medicaid-eligible patients and uncompensated care costs would increase for nursing facilities. Beneficiaries and their families may need weeks to gather the necessary documentation to apply for Medicaid, during which costly nursing facility charges accumulate. In Arizona and Iowa, representatives from the long-term care community suggested that their retroactive eligibility waivers would reduce access to nursing home care for Medicaid-eligible patients and increase uncompensated care costs for nursing facilities. In Iowa, these stakeholders estimated the waiver would lead to $7 million in lost revenue for long-term care providers. Long-term care advocacy efforts reportedly factored into the state’s decision to reinstate retroactive coverage for nursing facility residents in 2018. Study states usually amended retroactive eligibility waivers after they were implemented. Similar to Iowa, other states expanded exemptions, most often to pregnant and postpartum women and children, considering that CMS required this for waivers renewed in recent years. When CMS officials asked for these populations to be exempt in Hawaii in 2018, state officials ended the waiver rather than implement such a large exemption. Finally, though New Mexico had begun phasing in implementation of its retroactive eligibility waiver in January 2019, a change in state leadership resulted in the end of that state’s waiver in early 2020.8 None of the study states with effective waivers considered or implemented any changes to retroactive eligibility in response to the pandemic.9 Medicaid eligibility and enrollment policies may mitigate the negative impacts of the waivers, but such policies are not a substitute for full retroactive-eligibility protections. State-level stakeholders identified several policies in their Medicaid programs that facilitated beneficiaries’ access to care (e.g., presumptive eligibility) or coverage continuity (e.g., automated renewal and 90-day redetermination grace periods). Stakeholders believed these policies and others that had not been implemented in our study states, such as 12-month continuous eligibility for adults, could alleviate harmful effects on beneficiaries’ access to care and providers’ finances. However, multiple stakeholders cautioned that such policies do not equate to the full 90 days of retroactive eligibility included in Medicaid statute. 6 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY Hospitals’ uncompensated care costs did not significantly change following the implementation of retroactive eligibility waivers. We find no significant changes at the 5 percent level in uncompensated care costs as a percentage of total costs among hospitals in Arkansas, Iowa, and New Hampshire, relative to hospitals in their respective comparison groups (table 2). We also find no significant changes in Medicaid revenue as a percentage of total revenue among hospitals in each treatment state relative to those in comparison groups. Further, we find no evidence that average uncompensated care costs increased in high-Medicaid-revenue hospitals relative to low-Medicaid-revenue hospitals following implementation of retroactive eligibility waivers (table 3). TABLE 2 Estimated Changes in Hospitals’ Mean Uncompensated Care Costs and Medicaid Revenue before and after Implementation of Retroactive Eligibility Waivers, by State Percentage of Hospital Revenue Difference-in-Differences Coefficient p Prewaiver Postwaiver Difference (%) value Arkansas Uncompensated care costs Treatment 5.5 5.0 −0.5 Comparison group 3.8 3.6 −0.2 −0.3 0.507 Medicaid revenue Treatment 11.0 11.0 0.0 Comparison group 15.1 15.5 0.4 −0.4 0.736 Indiana Uncompensated care costs Treatment 5.7 5.0 −0.7 Comparison group 2.7 2.5 −0.2 –0.5 0.053 Medicaid revenue Treatment 8.1 8.8 0.7 Comparison group 8.8 10.6 1.7 –1.0` 0.127 Iowa Uncompensated care costs Treatment 2.7 2.4 −0.3 Comparison group 3.7 3.7 −0.1 –0.3 0.507 Medicaid revenue Treatment 10.0 10.9 1.0 Comparison group 15.3 15.1 -0.2 1.2 0.321 New Hampshire Uncompensated care costs Treatment 4.9 3.5 −1.4 Comparison group 4.0 3.5 −0.5 –0.9 0.184 Medicaid revenue Treatment 6.4 6.9 0.5 Comparison group 14.7 15.6 0.9 –0.4 0.857 Source: 2011–18 Centers for Medicare & Medicaid Services Healthcare Cost Report Information System. Notes: For New Hampshire, Arkansas, and Iowa, the comparison group consists of hospitals in states that expanded Medicaid in 2014 but did not implement a waiver. For Indiana, the comparison group consists of hospitals in Pennsylvania, the only other state that expanded Medicaid in the beginning of 2015 but did not implement retroactive eligibility waivers. The before/after SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 7 periods for New Hampshire, Arkansas, Indiana, and Iowa are 2014–15/2016–18, 2014–16/2017–18, 2011–14/2015–18, and 2014–17/2018, respectively. TABLE 3 Changes in Mean Uncompensated Care Costs in Hospitals with High versus Low Medicaid Revenue before and after Implementation of Retroactive Eligibility Waivers, by State Percentage of Revenue Difference-in-Differences Average number of hospitals per year Prewaiver Postwaiver Diff. Coefficient (%) p value Arkansas High Medicaid 33 6.5 5.9 −0.6 Low Medicaid 34 4.5 4.2 −0.3 −0.28 0.815 Indiana High Medicaid 52 6.5 5.3 –1.2 Low Medicaid 54 4.8 4.6 –0.2 −0.96 0.05 Iowa High Medicaid 57 3.2 2.6 −0.6 Low Medicaid 58 2.1 2.1 0.0 −0.64 0.077 New Hampshire High Medicaid 13 5.2 3.8 −1.4 Low Medicaid 12 4.6 3.3 −1.3 −0.12 0.875 Source: 2011–18 Centers for Medicare & Medicaid Services Healthcare Cost Report Information System. Notes: Diff. = difference. The high Medicaid group includes hospitals with Medicaid revenue (as a percentage of total revenue) above the median within the state. The before/after periods for New Hampshire, Arkansas, Indiana, and Iowa are 2014– 15/2016–18, 2014–16/2017–18, 2014–17/2018, and 2011–14/2015–18, respectively. Discussion and Policy Implications State Medicaid programs have been using Section 1115 authority to waive retroactive eligibility protections for several decades, and the scope of the waivers has grown significantly in recent years. Yet, little is known about their effects on beneficiaries, providers, and Medicaid programs. Our quantitative analysis of data from the HCRIS had a limited sample of states and sample size and excluded institutional long-term care facilities. A future study examining the impacts of retroactive eligibility on nursing facilities could be instructive, given stakeholders’ concerns about waiving retroactive eligibility for this population. Qualifying for long-term care Medicaid coverage is a complex process, and retroactive eligibility waivers could disrupt an essential source of revenue for nursing facilities and make it more difficult for beneficiaries to access long-term care. Medicaid officials have suggested that restricting retroactive eligibility will encourage beneficiaries to enroll in and renew coverage promptly, and CMS approved waivers using this rationale. But, to our knowledge, no evidence shows waivers have had this effect, which is predicated on beneficiaries’ awareness of retroactive eligibility protections and the consequences of its elimination. 8 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY The state Medicaid officials we spoke with could not specify how they planned to evaluate retroactive eligibility waivers. Though some states have since released their plans, evaluations are often years behind waiver implementation. Even in states where retroactive eligibility waivers were in place for decades, state officials were unable to provide any information about the policy’s impact. Some national experts expressed that the lack of evaluation data and weak federal enforcement of evaluation requirements undercut the purpose of Section 1115 waivers as experimental demonstrations meant to improve Medicaid. The effects of Medicaid demonstrations must be properly documented and analyzed by early- implementation states before new states are granted permission to implement similar provisions, especially if people are concerned that a demonstration will adversely affect beneficiaries and providers. To appropriately protect beneficiaries and providers, CMS could consider requiring that states have a detailed evaluation plan prepared by an independent evaluator for their Section 1115 waivers to be approved. Further, CMS might stop the demonstrations if evaluations are not being conducted or if evaluation findings indicate negative effects in violation of the Social Security Act. Additional Information about Data and Methods for the HCRIS Analysis The HCRIS, which is updated quarterly, contains annual cost reports submitted by all Medicare- certified hospitals and provides hospital financial information for constructing key outcome measures. The HCRIS has known limitations with item nonresponse and data quality, though it is widely used by the federal government and other entities to track critical components of hospitals’ finances. To improve the quality of these data, we coded some erroneously reported values as missing, as we have done in prior analyses (Blavin 2016; Blavin and Ramos 2021). Our sample is limited to nonfederal, general medical and surgical hospitals. We use descriptive difference-in-differences models to estimate changes in outcomes associated with the retroactive eligibility waivers. We also estimate multivariate models that yield findings consistent with the descriptive estimates. Multivariate models control for hospital fixed effects, a set of fiscal-year-specific dummy variables, and hospital-level controls that could vary over time and influence each financial outcome. The key right-hand side variable in these models is a dummy variable set to 1 in the years a hospital was exposed to the retroactive eligibility waiver. Because fiscal and calendar years do not overlap, this variable may be specified as the share of the fiscal year that the hospital was exposed to the retroactive eligibility waiver. Robust standard errors are clustered at the hospital level to correct for possible heteroscedasticity and autocorrelation. We do not assess the effects of retroactive eligibility waivers that took effect before the Affordable Care Act, because these were more limited in scope than recent waivers. In addition, many of these early waivers were in effect before 2011, and we cannot compare hospital cost report data before 2011 with subsequent years because the cost report forms have changed. SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 9 For New Hampshire, Arkansas, and Iowa, the comparison group consists of hospitals in states that expanded Medicaid in 2014 but did not implement a waiver. For Indiana, the implementation of the retroactive eligibility waiver coincided with Medicaid expansion in 2015. Our Indiana comparison group therefore consists of hospitals in Pennsylvania, the only other state that expanded Medicaid in the beginning of 2015 but did not implement retroactive eligibility waivers. In this instance, we compare the combined effect of Medicaid expansion and retroactive eligibility waivers in Indiana with the effect of Medicaid expansion alone in Pennsylvania. The periods before and after states implemented waivers vary to account for when the Medicaid expansion and waivers took effect in each treatment state, as shown in table 4. TABLE 4 Medicaid Expansion and Retroactive Eligibility Waiver Implementation Dates and Comparison Groups, by State Implementation Date Retroactive Medicaid eligibility Comparison Prewaiver State expansion waiver group period Postwaiver period Arkansas 01/2014 01/2017 Hospitals in 2014–16 2017–18 Iowa 01/2014 11/2017 states that 2014–17 2018 New 08/2014 01/2016 expanded 2014–15 2016–18 Hampshire Medicaid in 2014 but did not implement a waiver Indiana 02/2015 02/2015 Hospitals in 2011–14 2015–18 Pennsylvania Source: Urban Institute analysis of data from the Healthcare Cost Report Information System. We conducted tests to determine if average uncompensated care costs in the treatment and comparison groups had parallel trends before retroactive eligibility waivers were implemented. We also assessed whether hospitals that served a higher share of Medicaid patients (i.e., those with Medicaid revenue as a percentage of total revenue above the state median) experienced a larger increase in uncompensated care costs than hospitals that served a lower share of Medicaid patients. As noted, we find no evidence that high-Medicaid-revenue hospitals experienced a larger increase in average uncompensated care costs than low-Medicaid-revenue hospitals following implementation of retroactive eligibility waivers (table 3). Additionally, figure 1 shows that trends in uncompensated care costs were similar among hospitals in each treatment state and their comparators leading up to the implementation of retroactive eligibility waivers (and after Medicaid expansion). For Indiana, we find that that prewaiver trends were similar to those in Pennsylvania but differed from those in all other Medicaid expansion states. For each state-specific model, we do not reject the null hypothesis of parallel trends at the 1 percent level. (The p value for the Arkansas test is 0.048. For all other models, the p value exceeds 0.10). However, 10 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY differential pretrends could be present but undetected because of our small sample size, limited years of prewaiver implementation data, or both. FIGURE 1 Trends in Mean Annual Uncompensated Care Costs as a Share of Total Expenses for Hospitals in Study and Comparison States, Fiscal Years 2011–17 New Hampshire Indiana New Hampsire Comparison states Indiana Comparison states PA 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 Iowa Arkansas Iowa Comparison states Arkansas Comparison states 6% 10% 8% 4% 6% 4% 2% 2% 0% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 URBAN INSTITUTE Source: Urban Institute analysis of data from the Healthcare Cost Report Information System. Note: PA = Pennsylvania. Notes 1 See 42 U.S.C. § 1396a (a) (34) (2010). The provision says, “A state plan for medical assistance must provide that in the case of any individual who has been determined to be eligible for medical assistance under the plan, such assistance will be made available to him for care and services included under the plan and furnished in or after the third month before the month in which he made application (or application was made on his behalf in the case of a deceased individual) for such assistance if such individual was (or upon application would have been) eligible for such assistance at the time such care and services were furnished.” 2 Senate Report No. 92-1230, at 209 (Sept. 26, 1972) (discussing section 255 of H.R. 1). SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 11 3 “About Section 1115 Demonstrations,” Medicaid.gov, accessed June 23, 2021, https://www.medicaid.gov/medicaid/section-1115-demonstrations/about-section-1115- demonstrations/index.html. 4 “Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State,” Kaiser Family Foundation, accessed June 23, 2021, https://www.kff.org/medicaid/issue-brief/medicaid-waiver-tracker-approved-and- pending-section-1115-waivers-by-state/. 5 Oklahoma expanded Medicaid via a June 2020 ballot measure and coverage became effective July 1, 2021. See “Status of State Medicaid Expansion Decisions: Interactive Map,” Kaiser Family Foundation, June 24, 2021, https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/. 6 These data come from Indiana’s prior claims program, which was created as a condition of implementing the state’s retroactive eligibility waiver and required providers to be reimbursed for services received up to 90 days before the effective Medicaid coverage date for low-income parents not determined presumptively eligible. Nearly 13.9 percent of Medicaid beneficiaries in 2016 were eligible for the program. See Vikki Wachino (director, Center for Medicaid and CHIP Services), letter to Tyler Ann McGuffee (insurance and healthcare policy director, Office of Governor Michael R. Pence) regarding issues related to the Healthy Indiana Plan 2.0 Section 1115 demonstration, July 29, 2016, https://www.medicaid.gov/Medicaid-CHIP-Program- Information/By-Topics/Waivers/1115/downloads/in/Healthy-Indiana-Plan-2/in-healthy-indiana-plan-support- 20-lockouts-redetermination-07292016.pdf. 7 Danielle Daly (director, Division of Demonstration Monitoring and Evaluation, Centers for Medicare & Medicaid Services), letter to Jami Snyder (director, Arizona Health Care Cost Containment System) regarding approval of evaluation design for Arizona’s Arizona Health Care Cost Containment Section 1115 demonstration, November 19, 2020, https://www.medicaid.gov/medicaid/section-1115- demonstrations/downloads/az-hccc-appvd-eval-des-2016-2021.pdf. 8 Angela D. Garner (director, Division of System Reform Demonstrations, Centers for Medicare & Medicaid Services), letter to Nicole Comeaux (director, Medical Assistance Division, New Mexico Human Services Department) regarding approval of New Mexico’s Centennial Care 2.0 Section 1115 demonstration, July 21, 2020, https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By- Topics/Waivers/1115/downloads/nm/nm-centennial-care-ca.pdf. 9 At least one state not in our study, Massachusetts, has reinstated retroactive eligibility in response to the COVID-19 public health emergency. See “Medicaid Waiver Tracker,” Kaiser Family Foundation. Most of our case study data were collected before the public health emergency, when the Medicaid maintenance-of-effort rule was not in effect. That rule stipulates that states cannot disenroll Medicaid beneficiaries while the public health emergency is in effect in order to receive enhanced federal matching dollars to support their Medicaid programs. The rule influences beneficiaries’ rates of disenrollment and churn in and out of the program, which in turn influences the proportion of beneficiaries who could be affected by retroactive eligibility waivers. However, we did not explore the effects of the maintenance-of-effort rule during our interviews. References Blavin, Fredric. 2016. “Association between the 2014 Medicaid Expansion and US Hospital Finances.” JAMA 316 (14): 1475–83. https://doi.org/10.1001/jama.2016.14765. Blavin, Fredric, and Christal Ramos. “Medicaid Expansion: Effects on Hospital Finances and Implications for Hospitals Facing COVID-19 Challenges.” Health Affairs 40 (1). https://doi.org/10.1377/hlthaff.2020.00502. CMS (Centers for Medicare & Medicaid Services). 2019. “Appendix to Evaluation Design Guidance for Section 1115 Eligibility and Coverage Demonstrations: Retroactive Eligibility Waivers.” Washington, DC: US Department of Health and Human Services and the Centers for Medicare & Medicaid Services. Hamel, Liz, Mira Norton, Karen Pollitz, Larry Levitt, Gary Claxton, and Mollyann Brodie. 2016. “The Burden of Medical Debt: Results from the Kaiser Family Foundation/New York Times Medical Bills Survey.” Menlo Park, CA: Kaiser Family Foundation. 12 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY MACPAC (Medicaid and CHIP Payment and Access Commission). 2019. “Medicaid Retroactive Eligibility: Changes under Section 1115 Waivers.” Washington, DC: MACPAC. Oklahoma Health Care Authority. 2019. Evaluation Design for the SoonerCare §1115(a) Waiver Demonstration 11- W-00048/6. Baltimore: Centers for Medicare & Medicaid Services. Errata This brief was corrected July 12, 2021. The period covered by retroactive eligibility is the 3 months before the month in which a Medicaid application is submitted. A previous version said the period covered is 90 days before the date on which an application is submitted. About the Authors Brigette Courtot is a principal research associate in the Health Policy Center at the Urban Institute, where she focuses on maternal and child health, women’s health, and access to care for underserved populations. She is currently managing group learning for the Centers for Disease Control and Prevention’s Partnering for Vaccine Equity program and leading qualitative data collection for the national evaluation of the Maternal Opioid Misuse model. She is an expert on Medicaid and Children’s Health Insurance Program policies related to eligibility, enrollment, and managed care and has studied Affordable Care Act implementation extensively. Her interests extend across public policy areas, and she has been involved in Urban Institute cross-center projects such as study of how communities have responded to the public charge rule, an analysis of retention in the Supplemental Nutrition Assistance Program, and the evaluation of Work Support Strategies, an initiative to streamline the delivery of key economic supports for low-income working families. Before joining Urban, Courtot was senior policy analyst for health and reproductive rights at the National Women’s Law Center, where she examined women’s access to care, insurance coverage for reproductive health services, implementation of the federal health reform law, and how various public policies affect women’s health outcomes. She holds an MPH from the Johns Hopkins Bloomberg School of Public Health. Fredric Blavin is a principal research associate in the Health Policy Center with expertise on a wide range of topics, including private health insurance markets, health care reform, health information technology, provider supply, health care spending, child and maternity health, Medicaid/Children’s Health Insurance Program (CHIP) policy, and the Health Insurance Policy Simulation model. In addition, Blavin has extensive survey development experience, including Urban’s Health Reform Monitoring Survey and the National Ambulatory Medical Care Survey Physician Workflow Supplements. Before joining Urban, Blavin worked as an economist at the Office of the National Coordinator for Health Information Technology within the US Department of Health and Human Services. Blavin has published widely in peer-reviewed journals on various topics, including the impact of express-lane eligibility programs on Medicaid/CHIP enrollment, trends in health care financial burdens and prescription drug spending, measuring and forecasting electronic health record adoption, value-based insurance design, the role of private health insurance in developing countries, and the SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY 13 cost and coverage implications of various state and national health reform policies. Blavin received his PhD in managerial science and applied economics from the University of Pennsylvania in 2011. Eva H. Allen is a senior research associate in the Health Policy Center, where her work focuses on the effects of Medicaid policies and initiatives on disadvantaged populations, including people with chronic physical and mental health conditions, pregnant and postpartum women, and people with substance use disorders. Allen has played a key role in several federal demonstration evaluations, as well as research projects on a range of topics, including opioid use disorder and treatment, long-term care services and supports, and health care partnerships with other sectors to address health and social needs of communities. Her current work also includes a focus on incorporating health and racial equity in research and policy analysis. Allen is experienced in qualitative research methods and adept at communicating complex policy issues and research findings to diverse audiences. Allen holds an MPP from George Mason University, with emphasis in social policy. Diane Arnos is a former research analyst in the Health Policy Center. Before joining Urban, she interned at the Massachusetts General Hospital Center for Global Health and volunteered as a case manager with the AIDS Action Committee of Massachusetts. Arnos graduated magna cum laude from Tufts University with degrees in biology and community health. She received highest honors for her senior thesis in community health, which focused on the role of homelessness and gender in indicators of substance use disorder severity. 14 SECTION 1115 WAIVERS OF RETROACTIVE MEDICAID ELIGIBILITY Acknowledgments This brief was funded by the Commonwealth Fund. We are grateful to them and to all our funders, who make it possible for Urban to advance its mission. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine research findings or the insights and recommendations of Urban experts. Further information on the Urban Institute’s funding principles is available at urban.org/fundingprinciples. We thank study participants who shared their valuable time and insights with us, as well as Genevieve M. Kenney and Sara Rosenbaum for their helpful comments and suggestions. 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