GAO: HHS Not Following Budget Neutrality Requirements for Section 1115 Waivers

The Department of Health and Human Services is falling short in adhering to its policy that requires state Medicaid demonstration projects to be budget neutral, the Government Accountability Office concluded in a recent report.

The GAO report, Approval Process Raises Cost Concerns and Lacks Transparency, released July 18, found that HHS’s policy for ensuring state Medicaid demonstration projects do not increase federal spending “is outdated and does not include a process for assuring the reliability of the data used to set spending limits.”

Under Section 1115 of the Social Security Act, states may submit proposals to HHS ...