CMS Grants Iowa ACA Waiver That Could Hurt Hospitals

The CMS has approved an ACA Medicaid Waiver for Iowa that will remove the retroactive coverage period for Medicaid enrollees.

An ACA rule which required Medicaid to begin providing coverage for patients on the day that they apply for coverage, also known as the “three month retroactive eligibility period,” allowed hospitals to bill Medicaid for health care services if the patient applied for Medicaid within 3-months of the services.

Iowa stated that waiving this rule would free up $36.8 million in Medicaid spending and deter around 3,344 members from enrolling in Medicaid annually. The retroactive billing period will still apply for pregnant women and pediatric patients aged younger than 1 year.

“The approval of the waiver… encourage[s] beneficiaries to obtain and maintain health coverage, even when healthy,” Brian Neale, JD, deputy administrator and director for the center for Medicaid at the CMS, wrote in a letter to Iowa. “This will increase continuity of care by reducing gaps in coverage when beneficiaries churn on and off Medicaid or sign up for Medicaid only when sick. Specifically, for those who are aged, blind or disabled, or who may need long-term services and supports through Medicaid, this waiver will encourage beneficiaries to apply for Medicaid expeditiously when they believe they meet the criteria for eligibility to ensure primary or secondary coverage through Medicaid to receive these services if the need arises.”

However, hospitals have argued that this waiver will increase the financial burden on hospitals—ultimately acting to destabilize care in Iowa.

“This amendment will place a significant financial burden on hospitals and safety-net providers and reduce their ability to serve Medicaid patients,” Natalie Ginty, director of government relations and staff legal counsel for the Iowa Hospital Association, said in a press release. “It will likely translate into increased bad debt and charity care for Iowa's hospitals and will affect the financial stability of Iowa's hospitals, especially in rural communities.”

—David Costill

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