Chairman Guthrie Releases Statement in Response to GAO’s Findings on an Expensive History of Section 1115 Demonstration Waivers in Medicaid

WASHINGTON, D.C. - Congressman Brett Guthrie (KY-02), Chairman of the House Committee on Energy and Commerce, issued the following statement in response to a newly released Government Accountability Office (GAO) report. The report references GAO's long-standing recommendations for the Centers for Medicare & Medicaid (CMS) to fully enforce budget neutrality requirements for Section 1115 waiver demonstrations. The Working Families Tax Cuts law, signed by President Trump on Independence Day, includes new requirements for the CMS Office of the Actuary to certify budget neutrality for all new state waivers, in order to ensure that CMS and states follow the law.

"Section 1115 waiver demonstrations are integral to allowing states to lead the way in modernizing the Medicaid program. However, these demonstrations cannot be a burden to taxpayers and must be budget neutral, as required under law. The GAO's work yesterday highlights a decade of lax enforcement of the law-which was grossly taken advantage of during the Biden-Harris Administration-and shows the need for stronger oversight.

"Congressional Republicans have led the charge in tackling the waste, fraud, abuse in mismanaged waiver programs through our Working Families Tax Cuts law. While Congressional Democrats continue to peddle lies about the effects of the law, yesterday's GAO report confirms a known truth: our work is ridding waste, fraud, and abuse from the Medicaid program," said Chairman Guthrie.

Background:

• In a new report, GAO has recommended that CMS enforce budget neutrality requirements for Section 1115 waiver demonstrations since 2002. CMS's failure to do so led demonstration spending to double from 2013 to 2023.
• The Biden-Harris Administration further weakened the budget neutrality requirements, allowing for spending to increase by an estimated $17 billion in just two years and across only three demonstrations.
• Signed into law on Independence Day, the Working Families Tax Cuts law includes a provision that requires that both the HHS Secretary and CMS's Chief Actuary certify that demonstration projects do not result in greater federal spending than would have occurred without the waiver.
• Our provision in the Working Families Tax Cuts law is projected to save $3.2 billion over ten years, according to the Congressional Budget Office (CBO).

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