KFF Brief Analyzes CMS's New 1115 Waiver Budget Neutrality Rules
A new KFF brief examines CMS's June 2026 guidance that reinterprets Section 1115 waiver budget neutrality requirements following their codification in federal statute. The analysis highlights how these more rigorous financial standards, including new rules for 'hypothetical' expenditures and administrative costs, may create significant hurdles for states seeking to renew or implement initiatives like health-related social needs (HRSN) services.
HNH Insight
The article underscores that while nutrition and other social needs services were previously authorized under 1115 waivers, the new, stricter budget neutrality framework—mandated by the 2025 reconciliation law—now threatens the sustainability and renewal of these programs by requiring states to demonstrate more robust offsetting savings.
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