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Medicaid Freedom of Choice Waivers - Overview

This topic provides an overview of the Medicaid Freedom of Choice waivers. These are also known as 1915(b) waivers.

Purpose

Freedom of Choice Waivers are generally used for four purposes, in order to:

· Mandatorily enroll beneficiaries into managed care programs, although States have the option, through the Balanced Budget Act of 1997, to enroll certain beneficiaries into mandatory managed care via a State Plan Amendment.

· Create a "carveout" delivery system for specialty care. For example, a Managed Behavioral Health Care Plan.

· Create programs that are not available statewide.

· Provide an enhanced service package. This allows the State to provide additional services to Medicaid beneficiaries via savings from managed care product.

General Features

States are permitted to waive statewideness, comparability of services, and freedom of choice. 1915(b) waivers are limited in that they apply to existing Medicaid eligible beneficiaries, and authority under this waiver cannot be used for eligibility expansions. There are four 1915(b) Freedom of Choice Waivers:

· 1915(b)(1) Mandates Medicaid Enrollment into managed care.

· 1915(b)(2) Utilizes a "central broker".

· 1915(b)(3) Uses cost savings to provide additional services.

· 1915(b)(4) Limits the number of providers for services.

Scope

A State cannot use 1915(b) waivers to serve beneficiaries beyond Medicaid State Plan Eligibility

Application

Once Centers for Medicare and Medicaid Services (CMS) receives the application for a 1915(b) waiver (submitted by the State Agency), the program will be deemed approved unless it is acted upon within 90 days. Within this time frame, CMS can approve, disapprove, or stop the 90-day clock on the process if additional information about the program is needed. The waiver programs are approved for two-year periods, and can be renewed on an ongoing basis if the State applies.

Requirements

A 1915(b) waiver program cannot negatively impact beneficiary access or the quality of the care services. The waiver must be cost effective; it cannot cost more than what the Medicaid program would have cost without the waiver.

Evaluation And Reporting Requirements

1915(b) waivers do not carry the evaluation requirements necessary for 1115 waivers. However, an independent assessment is required for the first two waiver periods.

Current Waivers

Specific details of each waiver in every state is available at: http://www.cms.hhs.gov/medicaid/1915b/default.asp?.

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