How States Leveraged COVID-19 Medicaid Emergency Authorizations

COVID-19 Medicaid emergency authorization usage has differed most from past crises in regards to states’ utilization of Section 1115 demonstration waivers, according to a Kaiser Family Foundation (KFF) issue brief.

Researchers found that Medicaid programs leveraged Medicaid emergency authorities in a variety of ways in response to the coronavirus pandemic.

As of July 1, 2021, 50 states and the District of Columbia had adopted a disaster-relief state plan amendment. A disaster-relief state allows states to activate flexibilities such as presumptive eligibility. 

Every state and the District of Columbia also adopted a Section 1915(c) Appendix K waiver, which are waivers for emergency preparedness and response for Home and Community Based (HCBS).

All states plus the District of Columbia also used Section 1135 waivers to handle the coronavirus pandemic’s impact. This waiver gives the Secretary the authority to waive or alter public payer regulations related to provider reimbursement and protection from sanctions as well as the availability of healthcare products and services.

While the disaster-relief state plan amendment, Section 1135 waiver, and Section 1915(c) had the most widespread adoption, a handful of Medicaid programs also implemented traditional state plan amendments (six programs) and Section 1115 demonstration waivers (twelve programs).

The researchers found that states’ utilization of the Section 1115 demonstration waiver differed during the coronavirus pandemic than in previous crises.

Normally, states use this waiver to address uncompensated care and heightened demands for access to coverage in Medicaid and the Children’s Health Insurance Program (CHIP). However, in this crisis, Medicaid programs tended to use the authority to bolster their HCBS programs. This was primarily as a result of CMS approvals and guidance, more than states’ applications.

These waivers could have a particularly strong influence on coronavirus vaccination rates due to the unique role of HCBS providers, a separate KFF issue brief discovered.

In other ways, however, Medicaid emergency authority usage aligned with previous crises.

Some Medicaid programs used these waivers to change or broaden their eligibility guidelines. As a result of these measures and others, Medicaid and CHIP added a total of nearly 10 million new enrollees to their populations by June 2021.

The states also stretched their long-term services and supports benefits and eligibility in order to provide maximum support to group home settings that were particularly susceptible to coronavirus surges.

In some states, beneficiaries struggling with gaining access to their medications had more flexibility to receive them due to a Medicaid emergency authority that relaxed prescription rules. Some states allowed beneficiaries to receive a higher quantity of their medications, earlier refills, or speedier access by eliminating prior authorizations or covering mail delivery.

States also waived restrictions on telehealth to expand access to care during the pandemic.

Medicaid emergency authorities have not served to support consumers solely. The pandemic clearly has taken an emotional and physical toll on the provider community, but it has had a fiscal cost as well. Before the Delta variant became widespread, experts estimated that coronavirus-related hospital revenue losses would hit $122 billion in 2021 alone.

Medicaid programs used Medicaid emergency authorities to alleviate providers’ financial burdens through boosting Medicaid reimbursement rates and offering retainers.

The coronavirus vaccine seemed to signal the beginning of the end of the coronavirus pandemic in the US. As a result, Medicaid programs began to end their emergency authorizations.

However, summer brought a new surge in coronavirus cases as the Delta variant found a foothold in the country. As of August 2021 when KFF published this issue brief, the White House was expected to extend the public health emergency (PHE) though the end of 2021 and possibly into 2022.

“If states have terminated emergency Medicaid flexibilities that increased access to coverage and care, they may have reduced ability to address the effects of the Delta variant on providers and individuals,” the KFF researchers warned.

“Increased case levels due to coronavirus variants may result in the Biden Administration continuing to extend the PHE into 2022, which would also have implications for maintenance of effort requirements for states, further extending the time which they must provide continuous Medicaid coverage and keeping many emergency authorities in place longer.”