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Over the past year, Section 1115 Medicaid demonstration waivers have been growing in popularity as state policy makers have looked for ways to implement innovative Medicaid programs to enhance the benefit and contain costs. More often than not, this has meant developing creative program provisions that stray outside the lines of existing federal rules. In recent months, the Centers for Medicare & Medicaid Services (CMS) has further strengthened its support of and encouraged the use of Medicaid waivers as a means to deliver innovation to the Medicaid program.

Waivers give states the ability to increase Medicaid program flexibility in an effort to address state-specific priorities and emerging issue, as well as improve beneficiaries' overall health and wellness. Waivers must be approved by CMS prior to implementation by a state and may address either the traditional Medicaid eligible population or the expansion population.

A majority of states are taking advantage of waivers to test the effectiveness of new and innovative Medicaid provisions, with many states having submitted multiple waivers. In fact, only 12 states have not yet submitted a waiver application.

Some of the state waivers currently pending with CMS feature drug screening and testing, while others include premiums with disenrollment for non-payment for traditional Medicaid populations. None of these options has ever before been approved or utilized in a state Medicaid program. Lifetime limits and work requirements have also become widely debated provisions many states are considering. Recently, CMS released new guidance regarding Medicaid work requirements as a condition for coverage, encouraging states to explore this option.

Indiana, an early adopter of Medicaid waivers, is exploring some of these options. The state recently received approval from CMS for an amended extension of its waiver for the Healthy Indiana Medicaid program. This approval gives Indiana the "green light" to move forward with implementing some notable provisions to its Medicaid program, including premium surcharges for tobacco users. This is the first time a provision like this has been approved by CMS. In addition, the approved waiver enables Indiana to introduce Medicaid work requirements, becoming the second state behind Kentucky to obtain approval for such an approach.

In addition, eight more states—including Maine, New Hampshire, Mississippi, Arkansas, Wisconsin, Kansas, Utah and Arizona—are currently waiting on approval for submitted waivers that feature Medicaid work requirements.

It's difficult to predict how the Medicaid program will change, but it's clear that the continued evolution of state-specific Medicaid programs—as a result of waivers or otherwise—will continue to drive evolution in eligibility rules and enrollment processes. Keeping up with these changes and understanding how they affect the local community will become even more important in preserving valuable Medicaid reimbursement revenue streams.

For those interested in closely tracking the issue of Medicaid waivers, reputable online resources, such as Kaiser Family Foundation, offer reliable updates regarding this topic.