On May 12, 2017, Massachusetts released for public comment a proposed amendment to its MassHealth Section 1115 demonstration. MassHealth is a comprehensive demonstration that applies to the State’s entire Medicaid population. It currently provides coverage to approximately 1.9 million Massachusetts residents, contributing to the State’s nationwide-low uninsurance rate. Under the most recent renewal of the waiver, Massachusetts is undertaking an ambitious restructuring of the State’s Medicaid managed care payment and delivery system by shifting it away from predominately fee-for-service provider reimbursement to a system of provider-led accountable care organizations (ACOs) operating in partnership with Medicaid managed care organizations (MCOs) and community-based organizations. A Delivery System Reform Incentive Payment (DSRIP) program is supporting this transition under the waiver.

The proposed waiver amendment would advance State objectives to align MassHealth benefits for the new adult group more closely with commercial coverage. These goals were set forth in a March 22, 2017, letter from Massachusetts Secretary of Health and Human Services Marylou Sudders to the Centers for Medicare and Medicaid Services (CMS), responding to the Trump administration’s pledge for greater state flexibility for Medicaid program administration. Secretary Sudders's letter outlined a plan to “seek a waiver that would provide flexibility in designing benefit packages … that best meet the needs of their enrollees and that more closely align Medicaid coverage with commercial health plans.” She specifically welcomed CMS’s “willingness to waive the requirement to provide non-emergency medical transportation for the Medicaid expansion population.” Secretary Sudders indicated that one factor informing intended benefit package adjustments was ongoing crowd out of private health insurance coverage in the State by increasing Medicaid coverage. She indicated that the State would seek to address this issue in part by “more closely align[ing] Medicaid benefits for non-disabled adults with those available in the commercial market,” with exceptions to address “health challenges that particularly affect Medicaid enrollees.”

MassHealth’s proposed waiver amendment includes three components:

Waiver of the Medicaid requirement to provide non-emergency medical transportation (NEMT). The State is seeking to eliminate NEMT from MassHealth “CarePlus,” the Alternative Benefit Plan provided to the majority of the State’s “new adult group”: childless, non-pregnant and non-disabled members ages 21 to 64 with incomes up to 133% of the federal poverty level (FPL).1 This population may include “medically frail” adults, who have the option of CarePlus or MassHealth Standard benefit packages. Approximately 18% of MassHealth members, over 254,800 individuals, would be affected by this change.2 The State would maintain the NEMT benefit for MassHealth CarePlus enrollees only when they are obtaining transportation to substance use disorder (SUD) services.

Elimination of 90-day provisional eligibility for adults age 21 and older. Massachusetts currently has expenditure authority to grant provisional Medicaid eligibility to all populations covered under the demonstration. Currently, the State designates individuals as “provisionally eligible” for 90 days if their self-attested eligibility factors besides disability status, immigration status and citizenship status cannot be verified or are not reasonably compatible with information available through the federal and state data hubs.3 During the provisional eligibility period, individuals receive the full benefits package of the eligibility category they would fall in based on their self-attested information, including mandatory managed care enrollment if applicable. If verification of the self-attested eligibility factor is not received within the 90-day period, enrollment is terminated. If verification is received, individuals are also eligible for the relevant amount of retroactive coverage prior to their application date applicable for their eligibility category.4 The provisional eligibility period is the same length as the reasonable opportunity period for individuals to verify citizenship or immigration status.

Under the proposed waiver amendment, the State would eliminate provisional eligibility for adults ages 21 and older whose income is unverified, except for the following populations: 1) pregnant women; 2) HIV-positive adults with incomes less than 200% of the FPL; and 3) individuals under the age of 65 with breast and cervical cancer who have incomes less than 250% FPL. The State would also retain provisional eligibility for children under age 21 whose income is unverified as well as provisional eligibility for all populations for non-income eligibility criteria.

Transition of coverage for some former foster care youth to the demonstration. Based on guidance from CMS in a November 2016 bulletin, the State is seeking to transition authority from the State Plan to the MassHealth demonstration for coverage of former foster care youth currently residing in Massachusetts who lived in a different state when they “aged out” of foster care. Enrollees subject to this change would continue to receive full State Plan benefits.

All other components of the MassHealth Section 1115 waiver would remain unchanged by the proposed waiver amendment.

Moving Forward

Massachusetts is the latest in a growing number of states seeking flexibility from the Trump administration to modify provisions of coverage in its Medicaid program. Massachusetts is pursuing greater alignment between its Medicaid coverage and plans offered in the private market. Compared to other states, Massachusetts is requesting a relatively narrow set of changes to achieve this objective—specifically seeking a waiver of NEMT for much of the new adult group and limiting its demonstration’s existing provisional eligibility feature. However, Secretary Sudders's letter to CMS suggests that the State may seek additional flexibility in the future, such as lifting of the 15-day limit on managed care coverage of treatment in Institutions for Mental Disease (IMDs); the ability to manage Medicare funding for dual-eligible beneficiaries participating in integrated Medicare/Medicaid programs in the State; and changes related to rate setting, network adequacy, drug rebates and closed formularies.