A Cross-State Policy Analysis of Medicaid Appendix K Waivers for Medically Complex Children during COVID-19

Background and purpose: Children with medically complex conditions require consistent, coordinated care that is often provided through Medicaid Home and Community-Based Services (HCBS) waivers. These programs have long faced challenges related to access, administrative burden, and workforce instability. The COVID-19 pandemic amplified these barriers, creating urgent service disruptions. In response, states utilized Appendix K, a federal authority that permits temporary modifications to 1915(c) waivers during public health emergencies. While Appendix K provided a mechanism for flexibility, the nature and implementation of these adjustments varied across states. This study examines how seven states adapted their Medicaid HCBS waivers for medically complex children during the COVID-19 public health emergency. The objectives were to identify the types of emergency flexibilities adopted under Appendix K and to compare policy responses across states in relation to service delivery, caregiver compensation, and provider stability.

Methods: A total of 36 Appendix K amendment documents were collected from the Centers for Medicare & Medicaid Services for seven states: Alaska, Illinois, Utah, New Mexico, South Carolina, Texas, and North Dakota. Using a comparative policy mapping approach, the documents were coded across six domains: respite and in-home care supports, family caregivers as paid providers, telehealth use, financial incentives, service setting flexibility, and administrative streamlining. Coded data excerpts were analyzed to trace patterns, depth, and duration of state-level policy adaptations over time.

Results: All seven states implemented administrative flexibilities such as electronic signatures and delayed reassessments. Illinois doubled its annual respite hour cap. Telehealth was authorized across core services in Utah, New Mexico, and Illinois but was curtailed early in South Carolina and North Dakota. Five states including Alaska, Illinois, Texas, New Mexico, and Utah authorized family members as paid caregivers. Financial supports differed across states. Alaska legislated a 10 percent permanent rate increase with acuity-based adjustments. Texas capped temporary rate add-ons at 26.9 percent, and South Carolina implemented short-term American Rescue Plan Act-funded supplements. New Mexico applied phased rate increases between 15 and 5 percent. All states expanded allowable service settings, including hotels, shelters, and temporary housing.

Conclusions and implications: Findings demonstrate that Appendix K enabled critical flexibility during crisis conditions and supported continued access to care for many families. While states adopted similar categories of modifications, the design and duration of these flexibilities reflected different administrative strategies and capacities. Continued federal and state collaboration can help translate these lessons into long-term improvements for children with complex medical needs and their families.