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State Utilization of 1135 Waivers

The Coronavirus is causing many changes and uncertainties about how our healthcare is treated. With the utilization of 1135 waivers, states can assist enrollees in Social Security Act programs in obtaining sufficient health care items and services. Under the Stafford Act or National Emergencies Act, the President has the authority to declare a national disaster or emergency. The Secretary of the Department of Health and Human Services (“HHS”) can then temporarily waive or modify certain Medicare, Medicaid, and Children’s Health Insurance Program (“CHIP”) requirements. Under these waivers, providers are expected to act in good faith, can be reimbursed for, and be exempted from sanctions—absent any determination of fraud and abuse.

1135 waivers last up until the termination of the emergency period, or 60 days from the date the waiver was approved, whichever comes first. The Secretary may extend the waiver for additional periods of up to 60 days if it is deemed necessary. While the 1135 waivers only apply to Federal program requirements, states should also consider altering their licensure or conditions or participation requirements.

On March 16, 2020, Florida was the first state to have an 1135 waiver approved by the Centers for Medicare and Medicaid Services (“CMS”). Florida addressed concerns of federal requirements hindering the state’s ability to continue to deliver proper health care. The 1135 waiver changed five main things. First, Florida is temporarily allowed to enroll providers who are not currently enrolled with another State Medicaid Agency (“SMA”) or Medicare if the state meets some minimum requirements. Second, CMS is temporarily waiving all pre-approval requirements. Third, pre-admission screening and annual resident reviews (“PASRR”) for both Level 1 and Level 2 can be waived for the next 30 days. Fourth, facilities are temporarily allowed to be fully reimbursed for services rendered during an emergency evacuation to an unlicensed facility. And lastly, the fifth waiver is the temporary delay of scheduling Medicaid Fair Hearings and the issuance of Fair Hearing Decisions during the emergency period.

On March 19, 2020, Washington State was the second state to have an 1135 waiver approved by CMS. The same five waivers that were applied in Florida were also applied to Washington, with the addition of a waiver of public notice for state plan amendments that provide or increase beneficiary access to items and services related to COVID-19.

While only two states have received the 1135 waiver from CMS, CMS is planning on reviewing waiver requests for other states. CMS Administrator Seema Verma stated, “CMS is committed to removing all unnecessary administrative and bureaucratic barriers that may hinder an effective response to this public health emergency, and I have directed my team to expeditiously process these requests.” As such, state health departments should consider submitting 1135 requests in the wake of the COVID-19 pandemic.

For over 30 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding changes in laws and regulations during the current COVID-19 pandemic. Wachler & Associates will continue to stay up to date with other COVID-19 information, as well as other current news.  If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.