Enacted in the same 1981 legislation as Section 1915(b) freedom-of-choice waivers, Section 1915(c) allows states to obtain waivers of comparability requirements, in order to offer home- and community-based services (HCBS) to limited groups of enrollees as an alternative to institutional care. These waivers also allow states to cap the number of individuals who can receive HCBS.
A few other provisions of the Medicaid statute can be waived as well. For example, under usual state plan rules, an applicant’s family income includes the spouse’s income unless the applicant is institutionalized. By waiving §1902(a)(10)(C)(i)(III), states can exclude the spouse’s income in order to keep individuals eligible for Medicaid and enrolled in HCBS, without requiring institutionalization.
To be eligible, individuals must meet level-of-care requirements—that they would require institutionalization in the absence of HCBS (§1915(c)(1)). Coverable HCBS are the services needed to avoid institutionalization; these include case management, home health aide and personal care, adult day health, habilitation, and respite care (§1915(c)(4)(B)).
Because a separate Section 1915(c) waiver is generally required for each eligible population, states typically operate multiple waivers under this authority. States may offer home- and community-based services under their state plan but often choose waiver authority instead due to the greater flexibility. In its March 2018 report, MACPAC recommended that Congress revise Section 1915(c) waiver authority to allow for waivers of freedom of choice and selective contracting. As states must complete both Section 1915(b) and Section 1915(c) waiver applications to implement an HCBS waiver program, this change would better align timing of the waivers and simplify the application process and reporting requirements for states.
Process and requirements
CMS encourages states requesting a Section 1915(c) waiver to use a preprint application form, but does not require it. Section 1915(c) waivers have a cost neutrality requirement, meaning that states must provide assurances that the average per capita expenditures for covered HCBS services will not exceed 100 percent of the average per capita expenditures that would have been made for the level of care provided in an institution. If states’ aggregate spending exceeds their projections, however, the Secretary cannot limit federal Medicaid payments or deny a waiver renewal, so long as the waiver is still cost neutral on a per capita basis (§1915(c)(6)).
The approval process for Section 1915(c) waivers has the same 90-day clock as state plan amendments and Section 1915(b) waivers. When a state requests a waiver, it sends to CMS an application with an official transmittal form (Form CMS-179). Once a Section 1915(c) waiver application is submitted, the Secretary has 90 days to make a decision; otherwise the proposed change automatically goes into effect. However, the Secretary (or CMS, operating under the Secretary’s delegated authority) can stop the clock by writing to request additional information. Once the state submits the requested information, a new 90-day clock begins. CMS may stop the clock only once per waiver (§§1116 and 1915(f)(2), 42 CFR 430.16).
Section 1915(c) waivers are initially approved for three years, with renewals of up to five years. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) authorized the Secretary to approve Section 1915(b) and (c) waivers, as well as Section 1115 waivers, for five years if they enroll individuals dually eligible for Medicare and Medicaid (§1915(h)(2)).