​​​How Are Waivers Authorized?

The Department of Health Care Services must obtain approval from the federal government to administer Medi-Cal waivers.  Requests for new waivers usually require prior State Legislative authorization.

The criteria used by the federal government for approval of Medicaid waivers are generally based upon policy – DHHS’ and particularly CMS’ interpretations and applications of Medicaid law and regulations – rather than solely on the law.  The most significant requirement is that of cost-effectiveness or budget neutrality.  The proposed changes must not cost the federal government more than the expected Medicaid costs for the traditional Medicaid population under the same time period.

Section 1915 waivers must not exceed fee-for-service equivalent costs.  These waivers do not need to result in cost savings to be budget neutral during the waiver period as long as the costs do not exceed the federal fee-for-service equivalency. 

Section 1115 waivers must demonstrate that actual costs will be reduced or the rate of growth in spending will be slower over the period of the waiver than it would be without the waiver.  

Waivers at a Glance