CMS Announces Strict Budget Neutrality Requirement for Section 1115 Waivers
CMS announced Thursday it will implement a strict budget neutrality requirement for Medicaid Section 1115 demonstration waivers. The agency is providing states early notice of its intent to apply new budget neutrality standards to demonstrations. Section 1115 waivers allow states to test innovative approaches in Medicaid, including delivery system reforms and coverage expansions that often involve managed care organizations. The new standards will affect how states structure and finance waiver programs going forward.
Tighter budget neutrality rules may limit state flexibility to expand Medicaid services or implement delivery system reforms that increase MCO capitation payments or create new covered benefits.
Managed Care · Finance
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