On March 23, the Centers for Medicare and Medicaid Services (CMS) approved Section 1135 waiver requests submitted by the California Department of Health Care Services (DHCS) as part of its response to the COVID-19 pandemic.  The waiver requests were submitted by DHCS on March 16 and March 19, 2020.

As discussed in a previous blog post, Section 1135 authorizes the U.S. Department of Health and Human Services to waive federal Medicare, Medicaid, and Children’s Health Insurance Program requirements in order to respond to a public health or national emergency. As of March 24, CMS had approved Section 1135 waivers related to the COVID-19 pandemic from 13 different states.

With the approval granted by CMS, DHCS is permitted to take the following actions in regards to its Medicaid program (Medi-Cal), effective retroactively to March 1 and to extend until the end of the public health emergency:

  • Authorization Requirements
    • Temporarily suspend prior authorization requirements for benefits administered through the fee-for-service delivery system.
    • Extend pre-existing authorizations for which a beneficiary has previously received prior authorization.
  • Fair Hearings and Appeals
    • Permit enrollees to request a state fair hearing if their managed care plan does not resolve an appeal within one day.
    • Provide an additional 120 days for enrollees to request a fair hearing when the initial 120 day deadline for an enrollee occurred during the period of the current Section 1135 waiver.
  • Provider Enrollment
    • Reimburse out-of-state providers not enrolled in Medi-Cal who provide care in multiple instances to multiple participants. This would appear to support telehealth services provided by out-of-state providers.
    • Allow provisional, temporary enrollment of out-of-state providers enrolled in Medicare or with another state Medicaid program under the condition that DHCS collects certain data and identifying information.
    • Allow provisional, temporary enrollment of providers not otherwise enrolled with a state Medicaid agency or Medicare without CMS requiring certain application fees, criminal background checks, site visits, and in-state/territory licensure requirements.
    • Cease temporarily the revalidation of providers located in California or otherwise directly impacted by the emergency.
  • Provision of Services in Alternative Settings
    • Reimburse facilities for services rendered at an unlicensed facility during an emergency evacuation or due to other need to relocate residents, provided DHCS makes a reasonable assessment that the facility meets minimum standards.

DHCS now has the authority to implement changes based on these waivers and is likely to take action in the coming days.

DHCS has already been able to make some changes to the Medi-Cal program in response to COVID-19, as CMS approval for 1135 waivers is only required where federal law needs to be waived in order for the state to act. DHCS released guidance for Medi-Cal managed care plans on COVID-19 screening and testing on March 6 (updated March 16), prior to CMS’ approval of the 1135 waiver, much of which is a reminder of existing obligations relevant to the COVID-19 pandemic. Complete information about the actions being taken by DHCS in response to COVID-19 is available here.