CMS scraps ‘fast-track’ process for certain Medicaid waivers

 CMS has rescinded a decade-old “fast-track” review process for certain Medicaid Section 1115 demonstration waiver extensions as the agency prepares to implement new federal budget neutrality requirements that take effect in 2027.

The July 7 informational bulletin formally withdraws 2015 guidance that allowed eligible states to use an expedited review process when renewing some Section 1115 demonstrations. CMS said the change is necessary because new statutory requirements will require the agency’s chief actuary to certify that Medicaid demonstrations will not increase federal spending before they can be approved, renewed or amended beginning Jan. 1, 2027.

Six things to know:

1. The 2015 “fast-track” guidance has been rescinded. CMS formally withdrew its July 24, 2015, guidance and accompanying application templates that created an expedited federal review process for certain Section 1115 Medicaid and CHIP demonstration extensions.

2. New budget neutrality rules prompted the change. CMS said the current fast-track process “could make it difficult” to evaluate demonstration renewal applications under new budget neutrality requirements established under HR 1, which CMS refers to as the “Working Families Tax Cut Legislation.” Under the law, the CMS chief actuary must certify that a demonstration is not expected to increase federal Medicaid spending.

3. The new requirements take effect Jan. 1, 2027. Beginning Jan. 1, 2027, CMS may not approve, renew or amend a Medicaid Section 1115 demonstration unless the chief actuary certifies that the project is budget neutral compared with what federal spending would have been without the demonstration. The requirement applies to all states, the District of Columbia and U.S. territories.

4. States will still be able to renew demonstrations. CMS emphasized that it will continue reviewing all Section 1115 demonstration renewal applications under existing statutory and regulatory requirements. However, the agency said the expanded review process means it is “no longer feasible” to offer a fast-track option for renewals.

5. Additional guidance and rulemaking are expected. CMS previously notified state Medicaid directors that it intends to propose new budget neutrality policies and expects to issue additional implementation guidance. The agency said it remains committed to working with states to support Medicaid and CHIP innovation while complying with the new statutory requirements.

6. The practical effect is slower, tighter reviews. Longer adjudication timelines will apply to the extension applications the rescinded guidance once expedited. Under the coming framework, there would be no hard spending caps, but demonstrations projected to raise federal Medicaid spending would not move forward, and states would face corrective action if actual expenditures do not closely track projections. The treatment of savings also tightens: only savings from a demonstration’s current period — or its most recent five years — could carry to the next renewal, not to later ones. CMS would also remove the 15% cap on rollover savings during the transition.

https://www.beckershospitalreview.com/finance/cms-scraps-fast-track-process-for-certain-medicaid-waivers-6-things-to-know/