Last week, I wrote about the states with approved work requirements and more generally, the effect of the non-traditional Medicaid expansion (see Managing The New Medicaid Work Requirements). While completing our research on this topic, our market intelligence team noticed another trend affecting eligibility and covered services—the increased approval of 1115 demonstration waivers that include a waiver of Medicaid retroactive eligibility.
Before, we dive too far into the trends, I want to provide a quick overview of retroactive eligibility. Under federal statute, all states are required to provide Medicaid retroactive eligibility. Retroactive eligibility pays for Medicaid-covered services furnished 90 days before a Medicaid application was submitted (or the month submitted, depending on the state) if an individual can show they would have been eligible for Medicaid during that period (see State Plans For Medical Assistance Section 1902(a)(34). The original intent of Medicaid retroactive eligibility was to safeguard individuals who may have experienced a catastrophic illness, or who may need long-term services and supports (LTSS). Retroactive Medicaid eligibility differs from presumptive eligibility, which allows hospitals (and other designated entities, in some cases) to immediately enroll low-income individuals in Medicaid who are presumed to be eligible based on income. Individuals then submit a full application to Medicaid for a final determination on eligibility (see Hospital Presumptive Eligibility).
Waivers of retroactive eligibility are not new. For example, Arizona had a waiver of retroactive eligibility from 2001 to 2013 (see Arizona Health Care Cost Containment System). What is new, however, is the number of states that are choosing to pursue these waivers, typically as part of a non-traditional Medicaid expansion.
We took a look at the 1115 demonstration landscape and found that there are currently 17 states with waivers of Medicaid eligibility for at least some populations. More strikingly, all seven states which have implemented work requirements have a waiver of retroactive eligibility that applies at a minimum to their Medicaid expansion population. Across the 17 states, the waivers vary – both in terms of the populations included under the waiver of retroactive eligibility and the length of time for which the retroactive eligibility is waived.
For example, some states have completely eliminated retroactive eligibility. States such as Arkansas and New Hampshire limit the waiver of retroactive eligibility to the Medicaid expansion population. Other states, like Iowa and Florida, have much more comprehensive waivers that include the aged, blind, and disabled population. The length of time for the waiver also varies with Arizona completely eliminating the 90-day retroactive eligibility period, while Hawaii and Massachusetts limit retroactive eligibility to 10 days prior to submission of the Medicaid application. For a complete listing of the states with waivers of retroactive eligibility and a description of the waiver, check out our new report: State-By-State Analysis Of Medicaid Retroactive Eligibility Waivers: An OPEN MINDS Reference Guide.
The good news is that, according to the Kaiser State Medicaid Survey, 40 states were able to make real-time Medicaid eligibility determinations in 2018 (see Medicaid Eligibility Determinations, Applications, and Online Accounts). And for consumers whose eligibility is determined by modified gross adjusted income (MAGI), about 30% of applications are actually processed in less than 24 hours (see Medicaid MAGI and CHIP Application Processing Time Report).
What do these waivers of retroactive eligibility mean? For provider organization management teams, the changes in waiver rules have implications for the consumer benefits eligibility verification process, charitable care policies, and organizational finances. The eligibility verification process for consumers seeking treatment needs to be adjusted for the state-specific Medicaid policies regarding both presumptive eligibility and retroactive eligibility. As the window for retroactive eligibility narrows, assumptions about possible third-party (Medicaid) coverage for services delivered before Medicaid eligibility is granted need to be adjusted and the financial implications communicated to consumers. Provider organizations in states with these waivers should be prepared to educate consumers about their health care options and help them fill out Medicaid applications because coverage is backdated to the day the application was filed.
These changes also affect provider organization policies about charitable care. If consumers are not currently eligible for Medicaid and retroactive eligibility is not possible or unlikely—and the consumer indicates they cannot pay for services—will the organization provide services at no charge? And for what services and what consumers? This change in policy is going to put the pressure on provider organization to absorb the cost of more services. The financial implications are clear. In states that limit retroactive eligibility, provider organization revenue is likely to drop and demands for free services are likely to increase. For mission-focused non-profit organizations in states that are rolling back Medicaid retroactive eligibility, the financial and policy implications need to be addressed at executive team and board level.
For more, join us in New Orleans on June 6 for The OPEN MINDS Consumer Engagement Technologies Summit featuring:
- Chris Thompson, MHA, Chief Operating Officer, Monarch
- Larry Smith, CPRSS, Chief Operating Officer, Grand Lake Mental Health Center, Inc.
- Andrea Auxier, Ph.D., Senior Vice President, Product Development, New Directions
- Davis Park, Executive Director, Front Porch Center for Innovation & Wellbeing
- Neal A. Bowen, Ph.D., Chief Mental Health Officer, Hidalgo Medical Services
During this seminar, executives will have the opportunity to review emerging trends in consumer treatment technologies, explore the new digital treatment options, hear case study presentations from organizations that have successfully incorporated consumer and technologies into their programming, and discuss how they can incorporate new technologies into their strategy for the future.