Update: This story has been updated to include a response from the HHS’ Centers for Medicare & Medicaid Services.
As Washington state grapples with what may be the country’s worst outbreak of novel coronavirus, the absence of a COVID-19 emergency declaration from President Trump has hamstrung its ability to respond to the crisis.
The state would like to apply for a Medicaid waiver that would let Washington give people more options for where to receive care, so that it can lessen the pressure on its already overtaxed health system.
The problem for the state is that one of the types of waivers currently under discussion — a waiver known as 1135 — can be triggered only by the President declaring an emergency or a disaster under the Stafford Act, something he has notably failed to do, despite all signs indicating that the coronavirus outbreak stands to be a major public health crisis.
Sue Birch, director of the Washington State Health Care Authority, told TPM that the state was discussing a 1135 and 1115 waiver with Centers for Medicare & Medicaid Services. While the agency had been receptive, Birch said, the 1135 waiver comes with a built-in limitation: it cannot go through absent an emergency declaration from President Trump.
“We’re having discussions with CMS about all paths forward,” Birch told TPM. “We are looking at how we leverage and optimize all flexible ways of getting funded for this sort of outbreak and the massive impact to our entire system.”
Birch described the waivers as needed to increase capacity, ranging from adding doctors and other health care workers to streamlining procedures to increasing those eligible for treatment.
Birch added that what the state wanted to avoid above all else was adding crowds to hospitals that are already overflowing with sick patients. The waivers, Birch argued, would allow the state to create new options for those recovering from mild cases of COVID-19 or who were sick with other, similar respiratory illnesses.
According to the CDC, 647 cases have been detected in the U.S. since the first patient was diagnosed on Jan. 21. That includes 25 total deaths to date. Washington State has reported 162 cases so far with 22 deaths, in one of the country’s largest outbreaks.
A spokesperson for the Department of Health and Human Services’ Centers for Medicare & Medicaid Services confirmed to TPM that CMS has been in discussion with Washington state about the “flexibilities available” to the state “through the Medicaid program.” CMS also confirmed that 1135 waivers would require both an emergency declaration from President Trump and a public health emergency declaration from HHS Secretary Alex Azar. Azar issued that kind of declaration nationwide in January, the spokesperson noted.
The spokesperson deferred questions about the lack of a declaration from the President to the White House and HHS. Neither responded to TPM’s inquiry.
Outside health experts told TPM that, by not making the declaration yet, the Trump administration was leaving on the table powerful tools for helping states slow the spread of the virus.
“It’s ridiculous there’s no declaration,” Nicholas Bagley, a professor specializing in health care law at University of Michigan Law School, told TPM. “It’s unconscionable at this stage.”
Creating ‘Relief Valves’
Medicaid funding is a crucial government tool for helping states respond quickly and creatively to emergencies impacting public health. Because the federal government matches state funding on Medicaid programs — and in the case of states that have expanded Medicaid, under the Affordable Care Act, covers 90 percent for a certain segment of lower income people — it can take the financial burden off of states grappling with a crisis. Unlike several states, the U.S. government is not required to balance its budget by the end of the year and by design, can ramp up spending when the situation calls for it.
One of the waivers Washington state is interested in, known as a 1135 waiver, is available under a provision of the Social Security Act that gives HHS the authority to modify certain rules about Medicaid once the President declares an emergency or disaster.
The 1135 provision also applies to Medicare and the Children’s Health Insurance Program.
Once an emergency is declared, HHS can move quickly to approve waivers states are seeking or even issue its own guidelines on what Medicaid rules it’s willing to relax for those affected by the crisis.
Among the Medicaid rules that can be modified under 1135 is the requirement providers face in order to participate in federal health programs and how they enroll in the programs.
“1135 waiver authority allows health care professionals from other states to practice medicine or provide health care services in areas where there is an outbreak and local health care professionals need assistance,” said Jessica Schubel, a former CMS official now at the Center on Budget and Policy Priorities. Schubel was not aware of the specifics of Washington’s request.
Birch, the Washington State health care official, told TPM the state was looking at providing resources outside of hospitals and facility-type settings for its residents to go to seek information about how to deal with their health issues.
Birch added that the waivers were being sought to create “relief valves” that would divert people who would otherwise go to overcrowded hospitals. These would allow the state to fund stations for people recovering from COVID-19 who did not require hospitalization, or people suffering from illnesses with similar symptoms like the flu.
That, Birch argued, would take the pressure off of overflowing hospitals and other medical facilities.
“They are pretty inundated as we speak,” she told TPM. “If we can negotiate with our federal partners, that’s the hope, to get the kinds of flexibilities that are needed.”
But before the state can start considering taking these steps, it needs the President to declare an emergency so that it can start going formally through the waiver process.
“This is the time when you want all the potential options to be on the table,” Bagley said. “An emergency declaration gives states and federal policymakers more options, and right now, you want all options on the table.”
‘It’s Up to the White House to Declare an Emergency.”
Washington state health officials told TPM that discussions with HHS were ongoing. But without an emergency declaration from the President, the state can’t move forward with applying for any Medicaid waiver.
According to Bagley, the HHS officials on the frontline of dealing with states can help states draft waiver requests that the department be willing to approve once a declaration is issued. Bagley was skeptical that those lower level officials could give Washington any guidance on when the President would declare an emergency triggering the process.
“Do the line folk know when the White House is going to declare an emergency? Does Secretary Azar? I frankly doubt it.” Bagley said. “I am not surprised that parts of the bureaucracy are trying to think around corners here, but it’s up to the White House to declare an emergency.”
Whether the President issues the declaration that would open up federal funding is one of several tests facing the administration as it grapples with the outbreak. There are other ways Trump’s HHS, if it wanted to, could encourage states to seek Medicaid waivers that would boost federal funding for coronavirus-related coverage. While CMS did release a fact sheet last week about Medicaid coverage, the release was notably lacking in any guidance for states on how they could seek waivers to address the crisis. Congress might also need to step in to increase the match rate the federal government is willing to pay for Medicaid coverage, health care experts told TPM.
A CMS spokesperson told TPM it was in the process of preparing a “frequently asked questions” release and said that it has been “in ongoing discussions with all states about the flexibilities available to them through the Medicaid program.”
In past emergencies, Medicaid waivers, which could also be issued under 1115, have been useful tools for helping states to react to evolving situations.
The Bush administration approved Medicaid waivers to expand health coverage for New Yorkers after the 9/11 attacks and, after Hurricane Katrina, to streamline the process for Gulf coast states to cover people who had to evacuate from Louisiana.
But for now, declaring an emergency, either on the national level, or at minimum, in the states hardest hit by the outbreak, is a crucial next step, experts told TPM.
It’s not just Washington that may find such waivers useful. A spokeswoman for New York State’s Department of Health told TPM that the state was “taking proactive steps to clarify Medicaid coverage policies.” It noted in the statement that a 1135 waiver would only be possible “when the President issues a declaration of emergency or disaster and the Secretary of HHS declares a public health emergency.”
“The dithering that we’re seeing is enormously harmful,” Bagley said.
