Medicaid’s Critical Role in Addressing the COVID-19 Pandemic

By Stacie Weeks, Principal, Medicaid Policy and Marie Zimmerman, Vice President, Medicaid Transformation and Financing, and Jennifer Ryan, Executive Vice President

As the spread of COVID-19 continues to unfold, maximizing limited resources will be critical, especially for state Medicaid programs. The Secretary of Health and Human Services has the opportunity to utilize its emergency powers to the maximum extent possible to help state Medicaid programs in this time of crisis. This includes the Secretary’s special powers under section 1135 of the Social Security Act which went into effect upon the President’s declaration of a national emergency on March 13, 2020.

According to recent guidance from the Centers for Medicare & Medicaid Services (CMS), the Secretary is permitting several “blanket” 1135 waivers for Medicare in response to COVID-19. The guidance also provided examples of a few limited waivers for Medicaid.  On March 17, Florida became the first state to receive an 1135 waiver approval of certain Medicaid flexibilities, including a temporary suspension of prior authorization rules, changes to streamlined provider enrollment, coverage of care if provided in alternative settings (including unlicensed facilities), waiver of nursing home screening requirements, and extended deadlines for state fair hearing requests and appeals.  A number of other states – including Washington and California – are following suit.

While the initial flexibilities offered under the 1135 waivers are positive, they are likely to be insufficient in meeting the needs of state Medicaid programs, and, more importantly, health care providers on the front lines of COVID-19. States need further flexibility in their Medicaid programs to ensure access to care is maintained and that our health care system is nimble enough to respond to the expected surge of patients needing inpatient care. CMS provided additional helpful information for states on its COVID-19 resource page for Medicaid and the Children’s Health Insurance Program (CHIP).

To ensure preparedness for the months ahead, CMS should work with states and providers to use the broadest application of 1135 authority to facilitate and maximize access to Medicaid services and reimbursement. CMS’ guidance points to the State Plan Amendment process to make changes in conjunction with 1135; however, CMS could also offer expedited 1115 waivers to help states meet the immediate needs of affected enrollees, similar to the process it used during Hurricane Katrina to ensure sufficient health care services were available for evacuees.

Other flexibilities states should consider requesting under the Secretary’s emergency powers for the Medicaid program include:

  • Maximum flexibility for providers to utilize telemedicine. CMS should give state Medicaid programs maximum flexibility to use telemedicine for COVID-19, as was provided for Medicare beneficiaries in CMS guidance released on March 17. While states have considerable authority to determine how telemedicine is covered, a clear statement of flexibility from CMS is needed. CMS should offer states a quick path to approval of strategies like a temporary suspension of face-to-face requirements for certain types of providers, permitting Medicaid reimbursement of ‘e-visits’ and visits by telephone, and interprofessional consultations through e-consults by clinic providers for new and established clinic patients. CMS should also provide flexibility to quickly expand telemedicine coverage to other services and provider types, such as behavioral health treatment and counseling if these services are not currently eligible for telemedicine coverage in certain states.
  • Delay or suspend Medicaid eligibility renewals and terminations. The Medicaid statute requires enrollees to periodically renew their eligibility for coverage. However, states have flexibility in how they manage their renewal processes.  In response to COVID-19, states can provide enrollees with more time for people to respond to renewal information requests, accept self-attestation of income, temporarily waive certain verification requirements, or allow for post-eligibility verification to allow coverage to continue while people respond. These exceptions were outlined in a Medicaid and CHIP Flexibilities Toolkit in 2018 and recently addressed in a set of Frequently Asked Questions (FAQs) focused on the COVID response.  However, CMS could also offer states the opportunity to temporarily suspend eligibility renewals to ensure Medicaid coverage continues for people with COVID-19 and for others at risk of acquiring the virus without having to document exceptions on a case-by-case basis. This will help prevent people from not seeking care due to concerns about the status of their health coverage. It will also help ensure the provider system receives reimbursement for services delivered to patients impacted by this crisis.
  • Expand use of presumptive eligibility. Presumptive eligibility is an important tool that allows qualified entities, such as hospitals and federally-qualified health centers, to provide temporary Medicaid coverage to individuals likely eligible for Medicaid. States could seek a waiver to expand the list of qualified entities to include off-site locations in non-traditional settings that may be established in response to COVID-19. States could also request that CMS allow an expedited and/or abbreviated patient application process for Medicaid to allow sufficient time for qualified entities to file records of presumptive eligibility with state agencies.
  • Waive “four-walls” requirement for Indian Health Service (IHS) and tribal providers. States with tribal nations should seek a waiver of the “four-walls” rule under 42 C.F.R. §440.90, which requires tribal providers to furnish services within the four walls of a clinic setting to be eligible for Medicaid reimbursement. During this crisis, this rule could serve as a harmful barrier for tribal providers rendering screening and treatment to tribal residents impacted by COVID-19.
  • Allow additional time for state fair hearings and appeals. Flexibility for state fair hearings and appeals is an important element to ensure due process rights are met in a time of crisis. Like Florida, other states should consider seeking authority to extend deadlines for hearings and appeals and the power to suspend adverse coverage actions for individuals for whom the state has completed a determination, but the state believes may not have received proper notice.

Several states are also taking further actions beyond the Medicaid system, such as seeking additional authority to help support the health care system and the people in need of care during COVID-19, such as:

  • Prohibiting cost-sharing and prior authorization by insurance companies for people tested and/or treated for COVID-19;
  • Extending open enrollment periods for state-based health insurance exchanges
  • Mandating paid sick leave policies;
  • Requiring insurance companies to cover an additional one-time early refill of prescriptions to ensure access to medications;
  • Requiring insurance companies to cover the cost of vaccinations for COVID-19 once they become available; and
  • Requiring insurance companies to pay fair rates to all in-network providers who utilize telemedicine for COVID-19 efforts without limitations on audio-only modalities or requirements for live video technologies.

Stay tuned for additional updates on state best practices and CMS guidance as it evolves.