Section 1135 Waiver Flexibilities During California's Fall 2018 Wildfire Public Health Emergency

Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mai l Stop S2-26- l2
Baltimore, MD 21244-1850

November 21, 2018

Mari Cantwell
Chief Deputy Director, Health Care Programs
California Department of Health Care Services
1501 Capitol Avenue, 6th Floor, MS 0000
Sacramento, CA 95814

Re: Section 1135 Waiver Flexibilities during California' s Fall 2018 Wildfire Public Health Emergency

Dear Ms. Cantwell:

I am responding to your request for additional Section 1135 administrative flexibilities to respond to California's wildfires as detailed in your letter dated November 16, 2018.

Secretary of the Department of Health and Human Services, Alex Azar, declared a public health emergency in California on November 13, 2018 retro-effective to November 8, 2018 for the affected geographic areas and has authorized the Centers for Medicare & Medicaid Services (CMS) to exercise authority under Section 1135 of the Social Security Act to waive certain requirements of the Medicare, Medicaid, and Children's Health Insurance programs during the emergency period.

Attached, please find a response to your request for waivers, pursuant to CMS authority, under Section 1135 of the Social Security Act, to address the challenges posed by the wildfires.

Please contact me at 410-786-3870 or by email at mary.mayhew@cms.hhs.gov if you have any questions or need additional information. We appreciate the efforts of you and your staff in responding to the needs of California's health care community.

Sincerely,

Mary C. Mayhew
Deputy Administrator, Director
Center for Medicaid & CHIP Services

cc: Dzung Hoang, Acting Associate Regional Administrator, Region IX

State of California 1135 Waiver

November 2018

1. Provider participation, billing requirement and conditions for payment:
   • Waiver/flexibility to allow evacuating facilities (such as Intermediate Care Facilities for the Developmentally Disabled or Skilled Nursing Facilities) to receive payments for services provided to affected beneficiaries in alternative physical settings, such as temporary shelters or other care facilities.
     
     Response: CMS approves the waiver to allow Nursing Facilities (NFs) to be fully reimbursed for services rendered during an emergency evacuation to an unlicensed facility (where the evacuating NF continues to render services). The NF would be responsible for determining how to reimburse the unlicensed facility. This arrangement would only be effective for the duration of the 1135 waiver. However, after the initial 30 days CMS would require that the unlicensed facility either seek licensure or the evacuating facility would need to seek new placement for the individuals. The duration time for the 1135 waiver will allow the state to accommodate these changes.
   • Waiver/flexibility to allow Federally Qualified Health Centers (FQHC) and Rural Health Clinics (RHC) providers to bill for their Prospective Payment System (PPS) rate, or other permissible reimbursement, when providing services from alternative physical settings, such as a mobile clinic or temporary location in the event the clinic facility was damaged or destroyed.
     
     Response: The 1135 waiver authority is not available for this request. However, CMS will work with the state to identify the most appropriate authority.
2. Service authorization and utilization controls
   • Waiver of prior authorization requirements for accessing covered State plan and waiver benefits in recognition of various circumstances which makes submission of medical necessity documentation difficult, impractical or impossible. Such circumstances include but are not limited to: relocation of Medi-Cal beneficiaries; damage to or destruction of prescription medications, prosthetics, Durable Medical Equipment (DME), dentures, and other covered 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.
     
     Response: Prior authorization and medical necessity processes in fee-for-service delivery systems are established, defined and administered at state/territory discretion and may vary depending on the benefit. The State of California may have indicated in their approved state plan specific requirements about prior authorization processes (42 CPR §440.230(b)) for benefits administered through the fee-for-service delivery system. We interpret prior authorization requirements to be a type of pre-approval requirement for which waiver and modification authority under Section l l 35(b)(1)(C) is available. If prior authorization processes are outlined in detail in the State of California's state plan for particular benefits, CMS is using the flexibilities afforded under Section 1135(b)(l)(C) that allow for waiver or modification of pre-approval requirements to permit services provided on or after November 8, 2018 through the termination of the emergency declaration for at least 90 days and up to 180 days (up to the last day of the emergency period under Section 1135(e) of the Social Security Act), which could be as late as May 7, 2019 (180 days), for beneficiaries with a permanent residence in the geographic area of the public health emergency declared by the Secretary.
     
     The state may also submit an Appendix K amendment for 1915(c) waivers.
   • Waiver of State plan- and waiver-imposed utilization controls on covered benefits to the extent such limits cannot be exceeded based on medical necessity in the relevant approved State plan or waiver authority.
     
     Response: Utilization controls in fee-for-service delivery systems are established, defined and administered at state/territory discretion and may vary depending ort the benefit. Each service must be sufficient in term of amount, duration and scope to reasonably achieve its purpose. The State of California may have indicated in their approved state plan specific utilization controls (42 CPR §440.230(b) and 42 CPR §440.230(d)) for benefits administered through the fee-for-service delivery system. We interpret utilization controls to be a type of pre-approval requirement, for which waiver and modification authority under Section 1135(b)(l)(C) is available. If utilization controls including limits on services that cannot be exceeded based on medical necessity are outlined in detail in the State of California's state plan for particular services, CMS is using the flexibilities afforded under Section 1135(b)(l)(C) that allow for waiver or modification of pre-approval requirements to permit services provided on or after November 8, 2018 through the termination of the emergency declaration for at least 90 days and up to 180 days (up to the last day of the emergency period under Section 1135(e) of the Social Security Act), which could be as late as May 7, 2019 (180 days), for beneficiaries with a permanent residence in the geographic area of the public health emergency declared by the Secretary.
   • Waiver of limitations on who can prescribe certain covered Medi-Cal benefits, such as: nonemergency medical transportation (42 CPR §440.170, to allow licensed practitioners to prescribe in accordance with instead of only a physician, podiatrist, or dentist); home health services (42 CPR §440.70, to allow licensed practitioners to prescribe services such as DME, medical supplies, enteral nutrition and home health agency services instead of only a physician; physical, occupational and speech therapies (42 CPR §440.110, to allow licensed practitioners to prescribe); orthotics and prosthetics (42 CFR §440.120, to allow licensed practitioners to prescribe within their scope of practice).
     
     Response: Provider prescribing practices are a pre-approval requirement and covered pursuant to individual benefit requirements as specified in at 42 CFR §440.70 for home health (including home health services and medical supplies, equipment and appliances), 42 CFR §440.110 for physical, occupational and speech therapies and 42 CFR §440.170 for non-emergency medical transportation. In addition to scope of practice, each provider must follow prescribing rules pursuant to Medicaid statute, regulation and/or in California's approved Medicaid state plan by benefit category. CMS is using the flexibilities afforded under Section ll 35(b)(l)(C) that allow for waiver or modification of pre-approval requirements to permit services provided on or after November 8, 2018 through the termination of the emergency declaration for at least 90 days and up to 180 days (up to the last day of the emergency period under Section l 135(e) of the Social Security Act), which could be as late as May 7, 2019 (180 days), for beneficiaries with a permanent residence in the geographic area of the public health emergency declared by the Secretary.
3. State fair hearing requests and appeal deadlines for managed care enrollees
   • Modification of the timeframe for managed care entities to resolve appeals under 42 CFR §438.408(1)(1) before an enrollee may request a State fair hearing to zero days.
   • Modification of the timeframe under 42 CFR §438.408(1)(2) for enrollees to exercise their appeal rights to allow an additional 120 days to request a fair hearing when the initial 120th day deadline for an enrollee occurred during the authorized period of the immediate Section 1135 waiver.
     
     Response to 3a and 3b: 42 CFR 438.408(1)(1) establishes the requirement that an enrollee may request a State fair hearing only after receiving a notice that the MCO, PIHP, or PAHP is upholding the adverse benefit determination but also permits, at §438.408(c)(3) and (f)(l)(i) that an enrollee's appeal maybe deemed denied and the appeal process of the managed care plan exhausted (such that the State fair hearing may be requested) if the managed care plan fails to meet the timing and notice requirements of §438.408. Section 1135 of the Social Security Act allows CMS to authorize a modification to the timeframes for required activities under Section 1135(b)(5). CMS authorizes the state to modify the time line for managed care plans to resolve appeals to zero days. If the state uses this authority, it would mean that all appeals filed between November 8, 2018 and May 7, 2019 are deemed to immediately satisfy the exhaustion requirement in 42 CFR 438.408(1)(1) and allow enrollees to proceed directly to the state fair hearing.
     
     In addition, CMS approves a modification of timeframe, under 42 CFR 438.408(1)(2), for managed care enrollees to exercise their appeal rights. Specifically, any managed care enrollees for whom the 120th day deadline described in 42 CFR 438.408(1)(2) would have occurred between November 8, 2018 through May 7, 2019, are allowed more than 120 days, and up to an additional 120 days to request a State Fair Hearing provided that they make the request no later than May 7, 20I9.