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Setting the Record Straight: Medicaid Waivers, Medicaid Expansion, Medicaid Transformation

Note: The following is a primer on several issues happening at the same time in our Medicaid system. For background information on Medicaid as a whole, and how Medicaid works in North Carolina, please refer to the “Medicaid Basics” information at the end of this post, content re-published from our public policy papers available on our website

For the latest on Medicaid Transformation, please visit this post

Medicaid is a complicated health care program, so it’s not unusual for there to be confusion over the many programs, services, and policy changes that are happening in North Carolina around it. There are three main topics where we see the most confusion: Waivers, Expansion, and Transformation. These things ARE NOT the same and they each help people with autism in very different ways.

Medicaid Waivers

North Carolina has numerous Medicaid “waivers.” These are special programs with very specific funding that are part of Medicaid but operate with slightly different rules. The “waiver” in a Medicaid waiver program means that the state of North Carolina has gotten permission from the federal government’s Center for Medicare and Medicaid Services (CMS) to do something different in order to serve a very specific population of people.

NC has a Home and Community Based Waiver (HCBS) called the Innovations Waiver that that serves people with intellectual and/or developmental disabilities that “waives” the usual Medicaid income limitations so that people with Intellectual Developmental Disabilities (IDD) can opt for community-based services instead of institution-based living. Innovations Waiver services are very specific to helping people with IDD live in their communities: they help with skill-building or retention, with daily living activities, with finding or holding a job, with participating in community life.

There are currently over 14,000 people in our state who are on a waitlist for community-based services like the Innovations Waiver and the wait time is on average ten years or longer. Because of that, you will often hear people talk about “expanding the waiver” or “expanding waiver services.” This refers to needing more funding from the North Carolina General Assembly to fund more (expanded) slots for the Innovations waiver. More slots mean 14,000 people won’t wait ten years or longer for services.

Need help accessing services and understanding how services are funded? Click here.


Expanding waiver slots IS NOT the same as what is called “Medicaid Expansion.”  


Medicaid Expansion

So, to repeat, expanding (funding) waiver slots for people with IDD is NOT the same as what is called “Medicaid Expansion.” Medicaid Expansion refers to allowing more low-income people to be eligible for health care through the Medicaid program. Expansion is meant to fill the health care coverage gap for people who do not have health care through their employers, are not eligible for “regular” Medicaid, and also make too little money to get tax subsidies that make buying health care coverage on the Health Care Marketplace more affordable.

Medicaid Expansion services look almost exactly like traditional health care that you might get on the Health Care Marketplace or through an employer. This type of Medicaid health coverage helps pay for prevention/wellness visits to a doctor; for care when you get sick; or need a rehabilitative service like physical therapy; or end up in an emergency room. They cover traditional behavioral care like brief visits to a mental health professional or treatment for substance abuse. Expansion services DO NOT cover specialized, long-term, habilitative care for people with IDD/Autism, nor do they typically cover specialty behavior therapy like ABA/RBBHT (Applied Behavioral Analysis/Research-Based Behavioral Health Treatment).

Adults with autism who no longer qualify for health care under their parent’s insurance, or who do not get health care from an employer often have no affordable health insurance options. ASNC believes that its is important for all people to have affordable health care. We continue to advocate for all health care to offer specialized autism services, but at a minimum, people should be able to afford to go to the doctor or get care when they are sick.

Medicaid Expansion will also not fund more waiver slots. Waiver slots serve people with IDD with daily services for their entire lifetime and must be funded through a specific appropriation by the NC General Assembly. Expanding Medicaid to those in the health care coverage gap would also need to be authorized by the NCGA.

ASNC supports funding more waivers and funding Medicaid expansion. It is possible and affordable to do both.


Medicaid Transformation


Medicaid Transformation in North Carolina has the goal of integrating physical and MHDDSAS care (mental health care, intellectual and developmental disability services and supports, and substance use treatment) under Medicaid, ending the fee for service model, and replacing it with a managed care model starting in 2021.

North Carolina has long operated its Medicaid physical health services under what is called a fee-for-service system. Health care providers who take care of people with Medicaid coverage would bill the state, aka “NC Medicaid,” directly for care, based on the allowed fee for that service.

Behavioral and developmental services, which includes mental health care, intellectual and developmental disability services and supports, and substance use treatment under Medicaid are separate from physical health care services. MHDDSAS Medicaid services are operated using a government-based managed care model in which an LME-MCO* gets a per member per month fee to make sure people on Medicaid get access to behavioral and developmental services. Please read the Medicaid Basics info below to learn more about how Medicaid serves people with IDD.

Under Transformation, people on Medicaid would be grouped into one of two types of plans: the Standard Plan or the Tailored Plan. Standard Plans will be operated by private managed care companies and would serve people on Medicaid with an array of health and behavioral services that look similar to those in a standard health insurance plan. The standard plan also includes autism behavior therapies (RBBHT) for children under 22. The Tailored plans would be operated by the current LME-MCOs for the first four years and would serve those with more intense or long-term developmental, mental health, or substance use needs. Individuals who are in the Innovations Wavier program would be included in the Tailored plan, as would anyone seeking to access state-funded or specialty Medicaid services. The Tailored plan also includes autism behavior therapies (RBBHT) for children under 22.


Summary and Additional Resources

ASNC supports all these different Medicaid initiatives. Transformation is intended to better serve people through integrated care. Funding (aka expanding) Innovations HCBS waivers will serve children and adults waiting years for specialty in-home and in-community supports, and funding Medicaid Expansion makes sure adults who fall into the health care coverage gap do not go without needed physical and mental health care. It’s important to do all these things; and we do not have to sacrifice one for the other.

Need help understanding or navigating the services system? We can help.


*Local Management Entities Managed Care Organizations (LME – MCOs) are agencies of local government (multi-county area authorities overseen by county appointed boards), who are responsible for managing, coordinating, facilitating, and monitoring the provision of mental health, developmental disabilities, and substance abuse services in the catchment area served. LME-MCO responsibilities include offering consumers 24/7/365 access to services, developing and overseeing providers, handling consumer complaints and grievances, and managing all Medicaid and state dollars associated with MHDDSAS services. LME MCOs now manage Medicaid services using a managed care model: they are paid a set amount of money to manage care for individuals with mental illness, developmental disabilities, and addictive disease in a geographic region of NC.



Medicaid Basics: The Federal government’s Medicaid program was designed to assist low-income individuals in accessing health care services by matching state funds with Federal funds for approved health services. To qualify, people must meet income and asset criteria, as well as fit certain categorical requirements such as: be on the Temporary Assistance for Needy Families Program, be a low income pregnant woman, be disabled, be a child from a low income family. Most adults, unless they have a significant disability, do not qualify for Medicaid. Some states have expanded their Medicaid programs as allowed under the Affordable Care Act to include low income adults. North Carolina has not yet expanded Medicaid.

Medicaid classifies services and populations as “optional” and “mandatory.” The Federal government only requires that states cover limited populations and with limited services. For example, low income pregnant women for pre-natal care and childbirth, children in foster care for physical health care – these and others are classified as mandatory populations and services. In addition, states may choose to cover “optional” populations and “optional” services using the same matching fund formula. Every state chooses which optional populations and optional services they will get; every state Medicaid plan and program are different. The Federal government through the Center for Medicare and Medicaid Services (CMS) approves those plans for how states will provide those services. Medicaid covers health services and supports that are medically necessary; it does not for example cover room and board in facilities, transport to school, and many other related supports.

Once a state Medicaid plan is approved, those populations identified under the plan are usually “entitled” to the services outlined in the plan – they get them regardless of any circumstances. This is one of the reasons states struggle with Medicaid budgets in difficult economic times; more low-income people are eligible and entitled to health care. To confuse things more, some programs under Medicaid, such as “waivers,” are not an entitlement.  States in conjunction with the Federal government determine who and how many will be served in programs like the home and community-based waiver; when the slots are full, they do not usually open more to serve all who qualify. For people with developmental disabilities, there is a waiting list to get into IDD specific services/waivers. There is typically no waiting list to access other health care services.

North Carolina has numerous Medicaid “waivers:” some of these are set up to manage and oversee the Medicaid system like 1115 managed care waivers and 1915 b/c waivers for the LME MCOs. Other waivers are to deliver specialized services to very specific populations like Innovations (home and community-based services for people with intellectual and/or developmental disabilities); TBI waiver (services for people with traumatic brain injuries); CAP -DA (community-based services for disabled adults); and CAP – C (community-based services for children with significant medical care needs).

ALL services for treatment and support of people with MH, DD, and SA are considered optional under Medicaid, as are all those populations, with some exceptions.  Children under 22 who qualify for services under EPSDT, Early Periodic Screening Diagnosis and Treatment laws are entitled to care. Enforcing services for kids under EPSDT has been proven to be difficult for children with autism and other developmental disabilities because the program does not cover habilitative services, but rehabilitative ones. The Centers for Medicaid and Medicare Services issued a memo in 2015 requiring that states cover services for autism under EPSDT but does not list specific services that must be used. It allows states flexibility to determine what changes if any, they need to make in their array of services and their state plan for Medicaid. North Carolina Medicaid plans for children currently cover RBBHT, an intensive behavior treatment service for children with autism, as well as diagnostics, allied health services, personal care, and durable medical equipment.

Other optional Medicaid services are dental, orthopedics, vision, etc. Sometimes the NC Legislature will suggest eliminating optional services because we are not required to provide them.  They have yet to do so, though other states have. Advocates regularly make the argument that these Medicaid services are an important option because they prevent future problems, people stay in communities/at home, and they cost less than institutional settings. That does not change the fact that the Federal government does not require states to offer these options.


For more information, contact Jennifer Mahan at jmahan@autismsociety-nc.org.

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