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Section 1135 Waiver Flexibilities - California 2025 Wildfires Disaster Relief

Department of Health & Human Services      
Centers for Medicare & Medicaid Services      
601 East 12th Street, Room 355      
Kansas City, Missouri 64106-2898     

Medicaid and CHIP Operations Group

January 17, 2025

Tyler Sadwith, State Medicaid Director
Department of Health Care Services
Attn: Director’s Office
P.O. Box 997413, MS 0000
Sacramento, California 95899-7413

Re: Section 1135 Flexibilities Requested on January 14, 2025

Dear State Medicaid Director Tyler Sadwith:

On January 8, 2025 the President of the United States issued a proclamation retroactive to January 7, 2025, that the 2025 Southern California Wildfires constitutes an emergency by the authorities vested in the President by the Constitution and the laws of the United States, including sections 201 and 301 of the National Emergencies Act (50 U.S.C. 1601 et seq.), and consistent with section 1135 of the Social Security Act (the Act). On January 7, 2025, pursuant to section 1135(b) of the Act, the Secretary of the United States Department of Health and Human Services (HHS) declared a public health emergency (PHE), invoking the authority to waive or modify certain requirements of titles XVIII, XIX, and XXI of the Act. During a PHE, the Centers for Medicare and Medicaid Services (CMS) may approve the use of section 1135 authority to help ensure that sufficient health care items and services are available to meet the needs of individuals enrolled in CMS programs and to ensure that health care providers that furnish such items and services in good faith, but are unable to comply with one or more of such requirements, may be reimbursed for such items and services and exempted from sanctions for such noncompliance, absent any determination of fraud or abuse. This authority took effect as of January 10, 2025, with a retroactive effective date of January 7, 2025. The emergency period will terminate, and section 1135 waivers will no longer be available, upon termination of the PHE, including any extensions.

Your submission to CMS on January 14, 2025 detailed federal Medicaid requirements that pose issues or challenges for the health care delivery system in California. Below, please find a response to each of your requests for waivers or modifications, pursuant to section 1135 of the Act, to address the challenges posed by the 2025 Southern California Wildfires. To the extent the requirements the state requested to waive or modify apply to the Children's Health Insurance Program (CHIP), the state may apply the approved flexibilities to CHIP.

We appreciate the efforts of you and your staff in responding to the needs of the residents and health care community in California. Please contact your state lead if you have any questions or need additional information.

Sincerely,

Courtney Miller             
Director

cc: Courtney Miller, Anne Marie Costello, Daniel Tsai

 

STATE OF CALIFORNIA
APPROVAL OF FEDERAL SECTION 1135 WAIVER REQUESTS

CMS Response: January 17, 2025

To the extent applicable, the following waivers and modifications also apply to CHIP.

Provider Enrollment

With respect to providers not already enrolled with another State Medicaid Agency (SMA) or Medicare, pursuant to section 1135(b)(1) and (b)(2) of the Act, CMS waives the following screening requirements: criminal background checks, licensing requirements, and site visits, so the state may provisionally, temporarily enroll the providers for the duration of the PHE.

CMS is granting this waiver authority to allow the state to temporarily enroll providers who are not currently enrolled with another SMA or Medicare so long as the state meets the following minimum requirements:

  1. Must collect minimum data requirements in order to file and process claims, including, but not limited to NPI.
  2. Must collect Social Security Number, Employer Identification Number, and Taxpayer Identification Number (SSN/EIN/TIN), as applicable, in order to perform the following screening requirements:
    a. OIG exclusion list
    b. State licensure – provider must be licensed, and legally authorized to practice or deliver the services for which they file claims, in at least one state/territory
  3. The state must also:
    a. Issue no new temporary provisional enrollments after the date that the PHE is lifted,
    b. Cease payment to providers who are temporarily enrolled within six months from the termination of the PHE, including any extensions, unless a provider has submitted an application that meets all requirements for Medicaid participation and that application was subsequently reviewed and approved by the state before the end of the six-month period after the termination of the PHE, including any extensions, and
    c. Allow a retroactive effective date for provisional temporary enrollments that is no earlier than January 7, 2025.

Pause revalidation deadlines

Pursuant to section 1135(b)(1)(B) of the Act, CMS is approving the state’s request to temporarily pause revalidation for providers located in the state or are otherwise directly impacted by the emergency.

If the state pauses revalidation for providers with revalidation due dates that fall during the PHE, the state would recalculate the provider’s revalidation due date by adding six months plus the length of the PHE to the provider’s original revalidation due date. For instance, if the provider’s revalidation due date was April 1, 2021 and the PHE lasted 12 months, the provider’s new revalidation due date would be October 1, 2022 (April 1, 2021 + six months + 12 months).

Allow out-of-state provider reimbursement 

Your State Medicaid Agency (SMA) currently has the authority to rely upon provider enrollment screenings performed by other SMAs and by Medicare. This guidance can be found in section 1.5.3.B. of the Medicaid Provider Enrollment Compendium (MPEC) https://www.medicaid.gov/sites/default/files/2021-05/mpec- 3222021.pdf (PDF, 903.54 KB) 

As a result, your SMA is authorized to provisionally, temporarily enroll providers who are enrolled with another SMA or Medicare for the duration of the PHE.

As described in section 1.5.1.B.2.c of the MPEC, your SMA may reimburse otherwise payable claims from out-of-state providers not enrolled with your SMA if the following criteria are met:

  1. The item or service is furnished by an institutional provider, individual practitioner, or pharmacy at an out-of-state/territory practice location– i.e., located outside the geographical boundaries of the reimbursing state/territory’s Medicaid plan,
  2. The National Provider Identifier (NPI) of the furnishing provider is represented on the claim,
  3. The furnishing provider is enrolled and in an “approved” status in Medicare or in another state/territory’s Medicaid plan,
  4. The claim represents services furnished, and
  5. The claim represents either:
    a. A single instance of care furnished over a 180-day period, or
    b. Multiple instances of care furnished to a single participant, over a 180-day period.

For claims for services provided to Medicaid participants enrolled with your SMA, CMS waives the fifth criterion listed above under section 1135(b)(1) of the Act. Therefore, for the duration of the PHE, your SMA may reimburse out-of-state providers for multiple instances of care to multiple participants, so long as the other criteria listed above are met.

 

CALIFORNIA     
FEDERAL SECTION 1135 WAIVER REQUESTS UNDER REVIEW

CMS Response:

Please see below for the items that remain under CMS review.

Waive two-year claiming limit for impacted claiming units and budget units under Local Governmental Agencies (LGAs) and for impacted local educational agencies (LEAs) under Local Educational Consortia (LECs)

This extension of the two year claiming limit applies to County- and School-Based Medicaid Administrative Activities program, and the Targeted Case Management Program. It allows only the impacted entities to submit their invoices and claims beyond the two-year limit.

Use the 2023-24 Direct Medical Services Percentage for the Los Angeles region.

The Direct Medical Services Percentage (DMSP), derived from the Random Moment Time Study (RMTS) is a key part of the payment methodology for the Local Educational Agency Medi-Cal Billing Option Program (LEA BOP). RMTS is calculated on a regional basis. The absence of responses from impacted local educational agencies (LEAs) will negatively impact all LEAs in the impacted vicinity.

Modify technical requirements or timelines for interim and final reconciliations.

In case of missing documents/information or delayed submissions, modify requirements and timelines for making available cost report, internal records or supporting documents for completing interim and final reconciliations, as required by SPAs. In case of destruction of documents/information, allow case-by-case modifications to program requirements and/or exemptions from reconciliation requirements.

Flexibility to waive, extend timeframes for, or allow resubmissions associated with data reporting for 1115 and 1915(b) waivers that rely on timely data submissions by plans, delegates, or providers.

There may be delays in data reporting, or loss of data, from MCPs, BHPs, risk-bearing organizations, and providers. Flexibility to amend previously submitted monthly/quarterly/annual reporting to CMS, or to extend data reporting due to missing data, would facilitate compliance with waiver reporting requirements. Examples may include data reporting for subcontractor MLRs and ILOS cost effectiveness. For example, the 1915(b) STC 14 report includes critical incident reporting which is derived from LTC facilities. The 1115 Waiver reporting includes Community Supports and Providing Access and Transforming Health (PATH) data that is aggregated from managed care plans (for Community Supports) and local providers (for PATH).

Waive the one-year claiming limit for impacted budget units under Local Governmental Agencies (LGAs) in the Targeted Case Management program

This extension of the one year claiming limit applies to the Targeted Case Management Program. It allows only the impacted entities to submit their claims beyond the one-year limit.

Provider Enrollment – Waive collection of disclosure information

Reduces administrative burden for providers and streamline provider enrollment application processing.

Flexibility to allow extension of 42 CFR 438 Subpart scoring methodology in EQR Tech Report

Flexibility to allow extension of 42 CFR 438 Subpart scoring methodology in EQR Tech Report.

Flexibility to allow extension of Managed Care Program Assessment Report (MCPAR)

Modify submission timeframes for impacted counties to submit the CMS MCPAR data requirements to DHCS and DHCS to submit CMS.

Flexibility to grant hardship waivers for affected members with personal injury settlements without having to reimburse FFP.

Typically, when a full or partial hardship waiver is granted on a personal injury case, DHCS must reimburse CMS the Federal Financial Participation on the amount waived. When considering a hardship waiver, DHCS may grant waiver if collection would result in undue hardship. For example, a member has medical needs not covered by Medi-Cal. Since CalAIM considers housing a need that impacts health, loss of a residence due to wildfires covered by the declaration of disaster and PHE could be considered a medical need. Granting hardship waivers could help members secure, maintain, or render livable housing, which would directly contribute to positive health outcomes. This flexibility would allow DHCS to grant hardship waivers without having to reimburse FFP for the amount granted. 42 USC 1396a

Provider Enrollment – Waive monthly LEIE and EPLS monitoring

Reduces administrative burden and allows focus to be on enrollment of impacted providers.

Provider Reimbursement - Allow Evacuating Facilities (such as ICF-DDs, SNFs) to be fully reimbursed for services rendered to affected beneficiaries in alternative physical settings, such as temporary shelters or other care facilities.

Provider Reimbursement - Allow Evacuating Facilities (such as ICF-DDs, SNFs) to be fully reimbursed for services rendered to affected beneficiaries in alternative physical settings, such as temporary shelters or other care facilities. Allowing evacuated facilities, to be fully reimbursed for facilities is needed to ensure: Continuity of Care: Ensures that beneficiaries continue receiving necessary services without interruption, even in alternative physical settings, during emergencies or evacuations. Support for Vulnerable Populations: Protects individuals in Intermediate Care Facilities for Developmental Disabilities (ICF-DDs), Skilled Nursing Facilities (SNFs), subacute facilities, congregate living health facilities, Residential Care Facilities for the Elderly (RCFEs) enrolled as Assisted Living Waiver (ALW) providers, and Adult Residential Facilities (ARFs) enrolled as ALW providers, by maintaining access to care regardless of location. Incentivizes Provider Participation: Encourages providers to take proactive measures to evacuate and care for beneficiaries during emergencies, knowing they will be reimbursed for services rendered. Adaptability in Crisis Situations: Allows Medicaid to respond flexibly to unforeseen circumstances, including natural disasters, ensuring system resilience. Cost Efficiency: Reduces the risk of more expensive health complications arising from delayed or interrupted care, ultimately saving Medicaid resources. Compliance with Federal and State Emergency Plans: Aligns with broader emergency response frameworks to ensure care continuity for displaced Medicaid beneficiaries. Prevention of Financial Hardship for Providers: Avoids undue financial strain on facilities providing care in non-traditional settings, enabling them to sustain operations during emergencies.

Flexibility to allow extension of Network Adequacy and Access Assurances Reporting (NAAAR).

Certain NAAAR processes require Plans to collect information directly from providers and in some cases, conduct outreach directly to providers for the purposes of securing contractual agreements. Information gathering and coordination will be significantly impacted by the ongoing emergency in Southern California. DHCS respectfully requests a 3 month extension on the NAAAR in response to the emergency. This extension will allow Plans and DHCS to focus resources to prioritize disaster relief and ongoing delivery of health care services in addition to meeting federal reporting requirements.

Waive any signature requirements for the dispensing of drugs during the emergency period

Requested this in past disasters for any mailed prescriptions.

Use the 2023-24 Quarter 3 Random Moment Time Study (RMTS) Percentage for the Los Angeles region's 2024-25 Quarter 3 RMTS percentage. If needed, do the same thing for Quarter 4.

The Random Moment Time Study (RMTS) percentage is a key part of the payment methodology for the School-Based Medi-Cal Administrative Activities (SMAA) Program. RMTS is calculated on a regional basis. The absence of responses from impacted local educational agencies (LEAs) will negatively impact all LEAs in the impacted vicinity. Request permission to use the prior year's corresponding quarters RMTS percentage for the Los Angeles region.

Modify technical requirements or timelines for State Plan approved payment methodologies supported by intergovernmental transfers from the County of Los Angeles.

In case of funding or operational delays preventing LA County from providing IGTs, modify technical requirements and timelines for quarterly or annual payments, as required by SPAs.

Waiver pre-approval of prior authorization requirements, utilization controls and face-to-face requirements for accessing covered State plan and/or waiver benefits

Waiver of prior authorization requirements for accessing covered State plan and/or waiver benefits (for example outpatient drugs pursuant to 42 U.S.C. 1396r-8(d)(5)in recognition of various circumstances which make submission of medical necessity documentation difficult, impractical or impossible. Such circumstances include: relocation of Medi-Cal beneficiaries; damage to or destruction of prescription medications, prosthetics, Durable Medical Equipment (DME), dentures, and other items; loss of or damage to pharmacy and/or medical records; damage to or destruction of health care facilities and/or resources provided by the facilities (pharmacies, medical offices, clinics, public health facility, etc.); relocation of pharmacy staff, primary care prescribers and staff, and/or specialty prescribers and staff in the affected areas. During the authorized period, DHCS intends for providers to submit uniquely identified manual claims for services that typically require prior authorization to the fiscal intermediary (FI). The FI will process the claims without regard to prior authorization requirements or documentation for medical necessity of the service. Waiver of state plan utilization controls on covered benefits.

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