Medicaid and MERC—Background
May 12, 2015
There is approximately $79 million in Medicaid funds (state and federal share combined) that flow
through the MERC fund.
All of that $79 million is authorized by two federal authorities:
1) The State plan governs fee-for-service payment rates, and accounts for $7,575,000.
2) The PMAP+ waiver governs managed care payments and accounts for the vast majority-$71,265,729.
Both authorities cap Medicaid spending at current levels.
PMAP+ Waiver
This is a “demonstration project” waiver, which is authorized under section 1115 of the Social Security
Act. This type of waiver allows us to make payments that aren’t normally allowed under Title XIX
All demonstration project waivers require an evaluation, which is intended to test empirically whether
or not the federal authority is accomplishing its intended goal.
Historically, the primary purpose of the PMAP waiver was to allow Medicaid coverage for the people
enrolled in the MinnesotaCare program. MinnesotaCare is now a “Basic Health Plan” and no longer
Medicaid effective 1/1/2015. So beginning 1/1/15, the waiver no longer is needed for MinnesotaCare.
MERC is the biggest component remaining in the waiver.
The waiver generally runs for three years at a time, but was renewed for two one-year intervals for 2014
and 2015, due to all of the program changes related to expansion and the Affordable Care Act.
As a result, we owe CMS two new evaluation plans: one for CY 2015, and another evaluation plan for
2016 through 2018, both due on June 30, 2015.
In renewing the waiver for 2015, CMS made clear that they want evaluation of all of the remaining
elements of the waiver (prior to this, the evaluation DHS provided was really about the quality of care
provided in MinnesotaCare compared to all other Medicaid). Since MinnesotaCare is no longer part of
the equation, MERC becomes the primary focus of this waiver.
See Mark’s notes for the terms and conditions of the evaluation design.
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