1115 Waivers - Medicaid
(1115 refers to the relevant section of the Social Security Act)
Medicaid health insurance coverage is jointly funded by state and federal governments. The federal match for the Medicaid budget varies by state, but is always at least 50%. While states can spend their own money on many types of health-related projects, if they want a federal match they need to have an agreement with the federal government about how the funding can be spent.
An underlying set of federal regulations provides basic requirements for Medicaid programs, and the rules for adjusting the state plans for spending within those requirements (for example, to add an optional service that wasn’t previously covered). Additionally, states can negotiate with the federal funders for investment in novel approaches that aren’t covered in the original Medicaid structure. These approaches, also known as Demonstration Projects, are what get addressed in the 1115 waivers. The waivers include structures for both one-time investments and changes to reimbursement structures. Waiver agreements generally last 5 years with a 3 year renewal option.
Because they are intended to test new approaches to Medicaid, the 1115 waivers often reflect policy priorities chosen by the parties elected to government at the national and state levels, as the KFF 1115 Waiver Tracker outlines. Both the Trump and the Biden administrations have highlighted addressing diet-related health concerns as a goal for this tool.
When reviewing examples of waivers used to support food and medicine initiatives, note that Vermont is different from some other states in two ways:
We do not have Managed Care Organizations (MCOs), which contract with state government to manage Medicaid benefits and make health investments, usually within a per-member per-month payment structure.
Vermont includes Home and Community Based Services in the 1115 Waiver. Other states use a separate process (1915c waiver).
While 1115 waivers set the general rules of the game for attempting new approaches to Medicaid, that doesn’t mean a state will attempt every option listed or that the federal parties will approve every project a state proposes. You need to follow current structures to see how the flexibilities are actually used. Vermont’s most recent update to the 1115 Waiver was approved in June, 2022. The approval information is here, along with the first list of approved projects for investment. The State of Vermont posts Medicaid structure information under the Global Commitment to Health; both proposed & final policy changes are listed under the Global Commitment Register.
The investment section of Vermont’s most recent waiver (Attachment R) includes examples of projects that could support food and health care integration:
Care coordination and care transition services
Alternative pain management options (see the UVMMC Culinary Medicine program for chronic pain management)
Building capacity for community based organizations to interface with traditional health care providers
Data exchange and information management systems, including for social needs
Screening for unmet social needs
Technical assistance to providers for implementing alternative care models, including incentives
It also specifically references food-related pilot projects “targeted nutritious food or meal delivery services for individuals with medical or medically-related special dietary needs.”
Because Vermont does not have MCOs, the question of flexibility to reimburse for food-related health interventions becomes more complicated. This topic falls under the expenditures authority section of the waiver. When payers approve a service as a reimbursement type of expenditure, they are pledging to pay for the service for any patient who meets the qualifying criteria - it is an ongoing commitment available to everyone who qualifies, not a one-time investment or a grant to a select group. States that cover food in Medicaid in this way currently use an “In lieu of services” mechanism (ILOS) that is available only within the MCO structure (the explanation of why is long, the short version is that ILOS requires the organization providing the coverage assuming downside risk if the intervention doesn’t work).
In lieu of services means exactly what it says - you’re replacing one already-covered service with another, novel, service. This can be very direct - for example, the New York State ILOS options include replacing a home health aid’s hours used for meal preparation with a Medically Tailored Meal (Oct 2022). The substitution can also be broader - California covers food as part of a broad authority for “whole person care” in which the service substitution looks more like a total cost of care reduction. An example of the “in lieu” component here would be an argument that Medically Tailored Meals research demonstrates a reduction in inpatient hospital admissions, and therefore the meals are in lieu of those anticipated hospital services. [Note that California invested state money in running their own demonstration projects around Medically Tailored Meals starting in 2016, so they had a specific evidence base of results within their health care system].
A general way to summarize ILOS without the details of an MCO contract is that ILOS coverage of food as part of health services addresses that group of services that can be directly connected to health outcomes, have a cost & quality calculation comparable to already-approved services, and are offered based on patients & programs meeting established criteria (vs. through grant applications, one-time investments, or project-related investments).
Vermont does not (currently) have ILOS authority. We have another option for adding services:
Expenditures for Services for Individually Assessed Cost Effective Alternate Services. Expenditures for direct health care services or other services furnished as alternatives to covered services when the state and treating health care professionals have made an assessment and determination that the service is a medically appropriate and cost-effective substitute for the corresponding state plan service or setting.
We do not know exactly what types of alternate service arrangements CMS would approve under this flexibility until Vermont submits proposals for consideration.
If you want to learn about another way that federally funded health care programs test new approaches to delivering care, check out Part 3 of our Hunger Vital Sign Explainer Series, which profiles the CMS Innovation Center.