Medicaid Home and Community Based Services Waivers

Medicaid

Medicaid is a partnership between the federal government and the states with shared authority and financing, created by Congress in 1965 (Title XIX of the Social Security Act) alongside Medicare. The program was designed to jointly fund health care coverage for eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid has become the nation’s largest source of funding to provide health services to low-income people. Medicaid is administered by states, according to federal requirements.

State participation in Medicaid is optional. However, the federal government’s financial share of Medicaid financing creates an incentive for the states. To date, no state has declined to participate. All 50 states, the District of Columbia, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands participate and administer their own Medicaid plans. Although all states participate, eligibility varies widely because the states can choose to cover additional people and services above and beyond the federal minimum requirements.

The Children’s Health Insurance Program (CHIP) was signed into law in 1997 and provides federal matching funds to states to provide health coverage to children in families with incomes too high to qualify for Medicaid, but who cannot afford private coverage.

KanCare

Kansas administers Medicaid through the program known as KanCare. The current KanCare contracts began in January 2013 and will end December 31, 2024. A request for proposal was announced October 2, 2023, for procurement of the next KanCare contract which will begin January 1, 2025. Some of the services provided under KanCare include doctor’s office visits, including wellness and sick; hospital care; pregnancy, birth, and newborn care; behavioral health services; prescription drug coverage; nursing facility services; mental health services; substance use disorder treatments; dental care; and contractor specific value-added services such as dental care, farmers market vouchers, and transportation assistance.

Historically, KanCare had around 415,000 members. However, during the Public Health Emergency (PHE) for COVID-19, states were not permitted to conduct their annual renewal reviews to determine eligibility. This resulted in members remaining in KanCare. The PHE ended in early 2023, and beginning in April 2023, the “unwinding” or a return to annual eligibility reviews was reinstated. Kansas will complete the renewal process for all members of KanCare over a 12-month period ending in March 2024. As of August 2023, KanCare beneficiaries for the calendar year totaled 496,402, which is a decrease from the same time period in 2022 which had 500,490 beneficiaries.

The Kansas Department of Health and Environment (KDHE) and the Kansas Department for Aging and Disability Services (KDADS) administer the KanCare program.

KDHE maintains financial management and contract oversight as the single state Medicaid agency. KDADS administers the Medicaid waiver programs for disability services, mental health, and substance abuse and operates the state hospitals and institutions. Kansas contracts with three managed care organizations (MCOs) to coordinate health care for nearly all Medicaid members. In June 2018, KDHE awarded contracts to Sunflower State Health Plan, UnitedHealthcare Community Plan of Kansas, and Aetna Better Health of Kansas, Inc., to serve as the State’s MCOs. These contracts began January 1, 2019, and were scheduled to end December 31, 2023; however, a one-year extension was granted and the contracts will now end December 31, 2024.

Each KanCare member is enrolled with one of the KanCare MCOs. Members have the option during the annual open enrollment period to select a different MCO or remain with their current MCO.

History of Home and Community Based Services

The federal government enacted Medicaid in 1965. Prior to Medicaid, states often housed individuals with mental health, intellectual, or developmental disabilities in large institutional settings. After the passage of Medicaid, and throughout the second half of the 20^th century and into the 21st century, states began to shift toward a model of care that prioritized home and community settings. In 1982, Kansas received authorization to start its Home and Community Based Services (HCBS) waiver program.

The Kansas Mental Health Reform Act of 1990 mandated that community mental health centers (CMHCs) serve as the primary points of entry into the mental health system, including state institutions. [Note: During the 2021 Legislature, a new certification for CMHCs was enacted – Certified Community Behavioral Health Clinics (CCBHCs). See memorandum The Differences between CMHCs and CCBHCs.]¹

In 1990, President George H. W. Bush signed into law the Americans with Disabilities Act (ADA), which prohibits discrimination based on disability. Title II of the ADA prohibits discrimination against individuals with disabilities by public entities, including state and local governments.

In 1999, the U.S. Supreme Court ruled in Olmstead v. L.C. 527 U.S. 581 (1999) that the ADA protected the right of individuals with mental disabilities to live in their community rather than institutional settings. The Court wrote that Title II of the ADA required states “to provide community-based treatment for persons with mental disabilities when the State’s treatment professionals determine that such placement is appropriate, the affected persons do not oppose such treatment, and the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities.”

In response to Olmstead, the Centers for Medicare and Medicaid Services (CMS) issued letters that stipulated states should take reasonable steps to accommodate individuals if treatment professionals determine an individual could live in a community setting with appropriate support services. In one of those letters, CMS also issued guidance that said states can limit the number of individuals who receive services under a HCBS waiver.

Types of Medicaid Waivers Approved by CMS

Sections 1115 and 1915(b) and (c) of the Social Security Act give the U.S. Secretary of Health and Human Services (HHS) authority to waive provisions of the law to encourage states to test new or existing ways to deliver and pay for health care services in Medicaid and the Children’s Health Insurance Program (CHIP). A state must apply for and receive approval from CMS in order to operate a waiver.

Section 1115 Experimental, Pilot, or Demonstration Projects

Section 1115 of the Social Security Act gives the Secretary of HHS authority to approve experimental, pilot, or demonstration projects that are found by the Secretary to be likely to assist in promoting the objectives of the Medicaid program. With a 1115 proposal, a state receives additional flexibility to design and improve their programs while demonstrating and evaluating state-specific policy approaches to better serve Medicaid populations. The proposal must be “budget neutral” or during the course of the project, federal Medicaid expenditures will not be more than federal spending without the demonstration. CMS policy requires the demonstration’s budget ceiling to be rebased using recent cost data and growth trends at every extension and will also limit carry-forward of accumulated savings from one approval period to the next. In general, Section 1115 waivers are approved for an initial five-year period and can be extended for an additional three to five years.

CMS performs a case-by-case review of each proposal to determine whether its stated objectives are aligned with those of Medicaid. CMS also considers whether proposed waiver and/or expenditure authorities are appropriate and consistent with federal policies, including the degree to which they supplant state-only costs for existing programs or services and can and should be supported through other federal and non-federal funding sources.

Kansas was initially approved December 27, 2012, with an effective date of January 1, 2013. The current expiration date is December 31, 2023. KDHE submitted a renewal of the State’s 1115 Waiver on December 28, 2022. Per CMS as of November 3, 2023, it remains pending.

Section 1915(c) Waivers

The HCBS waiver program is authorized under Section 1915(c) of the Social Security Act. Through the HCBS waiver program, a Medicaid beneficiary can receive a wide range of services designed to allow the individual to live in their home or community rather than receive institutionalized care. Section 1915(c) waivers must:

• Demonstrate that providing waiver services will not cost more than providing these services in an institution;
• Ensure the protection of people’s health and welfare;
• Provide adequate and reasonable provider standards to meet the needs of the target population; and
• Ensure that services follow an individualized and person-centered plan of care.

KanCare HCBS Waivers

KanCare allows the State to provide all HCBS through managed care by seven separate 1915(c) waivers. Under the HCBS waiver program, Kansas is able to waive certain Medicaid program requirements, allowing the state to provide supports and services for people who might not otherwise be eligible under Medicaid. Through the waivers, Kansas targets services to people who need long-term services and supports. Individuals receive services through individual providers, contracted through the MCOs. Providers are reimbursed through KanCare for their services.

The seven 1915(c) waivers are Autism (AU), Frail Elderly (FE), Intellectual and Developmental Disability (I/DD), Physical Disability (PD), Serious Emotional Disturbance (SED), Technology Assisted (TA), and Brain Injury (BI). KDADS regularly publishes the number of recipients of each waiver, as well as the AU, I/DD, and PD waitlists on its website.

KDADS has available an HCBS Access Guide that explains the process to apply for a waiver, as well as a HCBS Service Summary that highlights the services available for each waiver.

Eligibility

To be eligible for any HCBS waiver, the individual must be financially and functionally eligible for Medicaid. Individuals with income above the limitation per month must share in the cost of care, called the “client obligation,” which is paid by the client to a medical provider. The consumer’s share of cost (client obligation) is based on the consumer’s gross monthly income and the protected income limit (PIL) for the program. [Note: The PIL is a Medicaid eligibility pathway that enables individuals with income above the Medicaid limit to become HCBS eligible.] Deductions, income allocation, and expenses may be applied to reduce the share of cost. If the consumer’s income is over 300 percent of the SSI (Supplemental Security Income) one person standard, the cost of care or cost of services for the consumer must be higher than the share of cost or the consumer may be reviewed for a different program.

Autism Waiver

The AU waiver provides intensive early intervention treatment to children with autism and respite for their primary caregivers for children up to age six who have been diagnosed with autism spectrum disorder, Asperger’s syndrome, or a pervasive developmental disorder not otherwise specified.

As of October 13, 2023, 67 individuals were eligible to receive services under the AU waiver, and 524 were proposed recipients of the waiver as of September 30, 2023.

Frail Elderly Waiver

The FE waiver provides services to Kansas seniors as an alternative to nursing facility care. Services include personal care, household tasks, and health services. The program promotes independence within the community and helps to offer residency in the most integrated environment. The waiver is for people who are at least 65 years of age and meet requirements for long-term care. The FE waiver has approximately 12 service categories, which generally represent various personal care services and life management services. Services vary in reimbursement frequency and range from 15-minute increments for personal care services to once-a-month for more specialized services. As of October 13, 2023, 7,052 individuals were eligible to receive services under the FE waiver.

Intellectual/Developmental Disability Waiver

The I/DD waiver serves people with intellectual and/or developmental disabilities. Services are designed to help people with I/DD maintain their physical and mental health in their home and community. People age five or older who have an I/DD or are eligible for care in an intermediate care facility for individuals with developmental disability may be eligible for the I/DD waiver. In general, those with intellectual disabilities may be eligible if they have a diagnosed intellectual disability resulting in impaired function in at least two adaptive skills areas. Those with a developmental disability may be eligible if their disability started before age 22 and they have a substantial limitation 3 areas of life functioning.

Services for the I/DD waiver are divided into approximately 14 service categories, which generally represent various personal care services and life management services. Services vary in reimbursement frequency and range from 15-minute increments for personal care services to once-a-month for more specialized services. As of October 13, 2023, 8,902 individuals were eligible to receive services under the I/DD waiver, and 5,137 were on the waiver waitlist.

Physical Disability Waiver

The PD waiver serves people ages 16 to 64 who meet the level-of-care criteria for nursing facility placement, need assistance to accomplish the normal tasks of daily life, and have been determined disabled by the Social Security Administration. The PD waiver has 7 service categories, which generally represent personal care and life management services. Services vary in reimbursement frequency and range from 15-minute increments for personal care services to once-a-month for more specialized services. As of October 13, 2023, 6,100 individuals were eligible to receive services under the PD waiver, and 2,352 were on the waiver waitlist.

Serious Emotional Disturbance Waiver

The SED waiver provides children who have some mental health conditions with special intensive support so they may remain in their homes and communities. The waiver is for individuals ages 4 to 18 who have a diagnosed mental health condition that substantially disrupts their ability to function socially, academically, and/or emotionally and are at risk of inpatient treatment. The SED waiver has approximately six service categories, which representvarious therapy types and short-term respite care. As of October 13, 2023, 3,306 individuals were eligible to receive services under the SED waiver.

Technology Assisted Waiver

The TA waiver provides community-based services to people through age 21 who require substantial and ongoing daily care comparable to the care provided in a hospital. The TA waiver has approximately seven service categories, which represent various attendant care services. As of October 13, 2023, 774 individuals were eligible to receive services under the TA waiver.

Brain Injury Waiver

The BI waiver provides services for people who have an acquired or traumatic brain injury to ensure they can stay in their homes and be as independent as possible in a safe, healthy environment. The BI waiver is for people ages 0 to 65 who have a brain injury that has caused temporary or permanent impairment to their behavioral, cognitive, or physical functions and would otherwise require institutionalization in a rehabilitation facility. The BI waiver has approximately nine service categories, which generally represent various personal care services and life management services. Services vary in reimbursement frequency and range from 15-minute increments for personal care services to once-a-month for more specialized services. As of October 13, 2023, 965 Kansans were eligible to receives services under the BI waiver.

Recent Changes to HCBS Provider Reimbursement Rates

Appropriation highlights may be found in the Kansas Legislative Research Department’s annual publication “Fiscal Facts.” In recent years, multiple rate increases have been appropriated for various HCBS waivers.

During the 2023 Session, the Legislature:

• Added $17.7 million, including $7.1 million from the State General Fund (SGF), to standardize rates across waivers for FY 2023 to match the FE waiver rate increase approved by the 2022 Legislature;
• Added $13.0 million, including $5.2 million SGF, to increase the HCBS FE waiver reimbursement rates by 10.0 percent for FY 2024;
• Added $11.2 million, including $4.5 million SGF, to increase the Targeted Case Management (TCM) rate for individuals with I/DD from $43.24 per hour to $75.00 per hour for FY 2024;
• Added $9.3 million, including $3.8 million SGF, to increase the traumatic brain injury rehabilitation facility rates from $700 per day to $1,400 per day for FY 2024; and
• Added language requiring the agency to submit to CMS an application for a community support waiver for individuals with I/DD for FY 2024.

1. https://klrd.gov/2023/11/30/community-mental-health-centers-and-certified-behavioral-health-clinics/ ↩︎

by Elizabeth Cohn
Senior Research Analyst
785-296-4382