CMS administrator signals big changes to Medicaid

States will have more flexibility to change their Medicaid programs, CMS Administrator Seema Verma said in a speech that criticized the Affordable Care Act (ACA)’s expansion of eligibility and called opposition to work requirements for able-bodied beneficiaries “soft bigotry” from the last administration.

Speaking to the fall conference of the National Association of Medicaid Directors (NAMD), Verma listed ways Medicaid has become overregulated, expensive and inflexible for states. Her goal, she said, was to “reset the federal-state relationship” by focusing on more flexibility in Section 1115 waivers for state Medicaid requirements, additional accountability for improving outcomes for beneficiaries and more resources to fight fraud and abuse.

The ACA, she argued, didn’t address those problems but “just put more people into the program” beyond the population Medicaid was originally intended to serve.

“The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve working age, able-bodied adults does not make sense, but the prior administration fought state led reforms that would’ve allowed the Medicaid program to evolve to meet the needs of these new individuals, and they did this, even when increased coverage was at stake,” Verma said.

CMS would now approve previously-rejected ideas like work or “community engagement” requirements for Medicaid beneficiaries, she said, which had been included in Republican proposals to repeal the ACA and have been considered by several states, including Indiana, where Verma helped to craft its Section 1115 waiver request.

Such requirements were opposed by CMS under the Obama administration, and a Kaiser Family Foundation study released in Feb. 2017 said a majority of Medicaid enrollees are already working. Verma defended the inclusion of work requirements, saying her predecessors’ positions were “a tragic example of the soft bigotry of low expectation.”

“We owe our fellow citizens more than just giving them a Medicaid card, we owe a card with care, and more importantly a card with hope,” Verma said. “Hope that they can achieve a better future for themselves and their families. Hope that they can one day break the chains of generational poverty and no longer need public assistance, and the hope that every American, no matter their race, creed, or origin, can reach their highest potential. We will approve proposals that accomplish this goal.”

Beyond work requirements, Verma said approvals for demonstration projects and waivers for Medicaid would be completed more quickly under her watch, reporting requirements would be scaled back and the projects may be allowed to last 10 years instead of the typical five.

“Strong evaluation components” will be expected in these projects, she said, specifically mentioning the need to track birth outcomes as well as narrowing disparities in per-beneficiary spending between states. Those results would be displayed in a state-by-state Medicaid and CHIP scorecard.

“The public deserves transparency from us,” Verma said. “They deserve to know if we are spending their hard-earned tax dollars appropriately and our beneficiaries deserve to know if the $558 billion spent on Medicaid is producing positive results.”

For new fraud and waste prevention efforts, she promised CMS would partner more closely with states on Medicaid program integrity programs, working to “refine budget neutrality calculations and the use of designated state health program.”

Supporters of the ACA and Medicaid expansion were quick to bash Verma’s proposals. Protect Our Care, a coalition of healthcare and social justice activist organizations, called Verma’s speech “offensive” and said her criticism of Medicaid expansion was “an Orwellian statement.”

“These changes are shameful, harmful and wreak of the kind of right-wing rhetoric and policy choices that for decades have demeaned and stereotyped people who need health care but can’t afford it,” the group’s director Brad Woodhouse said in a statement.