Michelle Apodaca, J.D.Stacy E. Wilson, J.D.April 20, 2012

Medicaid Section 1115 Waiver Overview

Why A Waiver?

Upper Payment Limit Program - $2.7 billion/year

Eliminated due to statewide expansion of managed care

Need to save supplemental funding to hospitals

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Why This Waiver?

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California received a waiver as a pathway to health reform

HHSC negotiated a waiver that both saves UPL payments and incentivizes change and improvement to healthcare delivery system

What Does This Waiver Do?

Brings the opportunity for more money ($29 billion over 5 years vs. $14 billion under UPL)

Budget neutral to the federal government

Creates two funding pools– Uncompensated Care Pool– Delivery System Reform

Incentive Payment Pool4

Overview

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Waiver Pool

Hospitals eligible for funding must

commit to investing in

system transformation

Uncompensated Care Pool

Delivery System Reform Incentive

Pool

Pays hospitals for cost of care not compensated by Medicaid directly or through DSH

Pays hospitals for achieving metrics that move toward the triple aim

Inpatient

Outpatient

Physician

Pharmacy

Clinic

Category 1 – Infrastructure Development

Category 2 – Program Innovation & Redesign

Category 3 – Quality Improvements

Category 4 – Population Focused Improvements

Hospitals must participate in a

regional healthcare

partnership to receive funds from

either pool

Regional Partnerships

19 regions proposed based on UPL affiliations and feedback

Each region will have– Anchor– Funding public

entities– Participating hospitals

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RHP Participants

Duties– Anchors

Administrative functions Interface between RHP

and HHSC Do not dictate how

transferring entities spend their money

– Transferring entities Fund waiver payments Help select DSRIP

projects 7

Participating Hospitals

Be an RHP member

Work on incentive projects

Provide expense alleviation for public entity to create IGT capacity

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Uncompensated Care Pool

Uncompensated Care– Supplements hospitals

for Medicaid underpayment and uninsured

– Additional categories of costs can be claimed Physicians Clinics Pharmacies

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DSRIP Pool

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Project categories– Infrastructure Development

• Enhance access to care– Program Innovation &

Redesign• Medical homes

– Quality Improvements• Preventable readmissions

– Population-Focused Improvement• Diabetes, preventive care

RHP Plans

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Draft template released by HHSC– RHP Organization– Executive Overview– Community Needs

Assessment– Stakeholder Engagement– Incentive Projects– Allocation of Funds– Affiliation Agreements

Public input into plan

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State Fiscal Year 2012 – transition payments based on prior UPL payments

March 2012 – HHSC submitted UC Tool to CMS April – HHSC has distributed DSRIP draft project menu May 1 – RHPs to submit RHP areas and participants to

HHSC August 31 – HHSC to submit RHP areas and participants and

DSRIP project menu to CMS Sept. 1 - RHPs to submit plans to HHSC October 31 – HHSC to submit final RHP Plans to CMS

OpportunitiesScorecard on Local Health System Performance

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Challenges

Aggressive timeline Many vital pieces still

under development IGT capacity - sufficient

local dollars to access available federal funds

Politics Balance between

structure and flexibility

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Resources

HHSC website: http://www.hhsc.state.tx.us/1115-waiver.shtml

THA website: http://www.tha.org/waiver Harris County Hospital District’s waiver

website: http://www.1115waiver.com

Stacy E. Wilson - 465-1027; swilson@tha.org

Michelle Apodaca – 465-1506; mapodaca@tha.org