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January 2009

CMS Approves Rhode Island’s Medicaid “Global Waiver”

In August 2008, Rhode Island Governor Donald Carcieri submitted the Rhode Island Consumer Choice Global Compact Waiver application to the Centers for Medicare and Medicaid Services (CMS).  The Governor reported that it was approved by the agency on December 19, 2008.  The state legislature has 30 days to review and reject the plan; otherwise, it is deemed approved. Rhode Island’s global waiver would give the state significant authority to make changes in its Medicaid program in exchange for a cap on federal funding of the program.

The proposal calls for the state to operate its Medicaid program under a Section 1115(a) demonstration waiver and would limit total Medicaid spending (state and federal) over the waiver period.  CMS approved a $12.075 billion spending cap through 2013, about $350 million less than the state requested. 

In exchange for the spending cap, the state will gain significant flexibility in changing eligibility levels, services, and cost sharing. The waiver would use global budgeting as the funding mechanism for all Medicaid populations in the state across all settings. The state’s Medicaid reform plan focuses on three elements:

  1. Enhancing availability of home- and community-based programs as alternatives to long-term care institutional settings
  2. Building on current programs such as Rite Care to utilize managed care approaches across all Medicaid populations
  3. Adopting approaches that link reimbursement to performance and quality-of-care improvements

The waiver application also proposed greater care management across all Medicaid populations to ensure better coordination of care and to establish Healthy Choice Accounts to encourage preventive care and healthy lifestyles. Rhode Island estimates that the waiver could save the state $358 million over five years, including savings that the state is already counting on to help close its FY 2009 budget gap of $430 million.