Illinois Medicaid 1115 WaiverFebruary 19, 2014

What is a Medicaid 1115 Waiver?

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Allows states to apply for program flexibility from the Centers for Medicare & Medicaid Services to test new approaches to financing & delivering Medicaid

Provides incentives to providers to develop new models of care Lasts five years, but can be renewed/amended Must be budget neutral, leading to overall savings

Section 1115 of the Social Security Act

Our State’s Waiver Application

Called the Path to Transformation Waiver

Includes all services in the Illinois Medicaid program for better coordination

• Covers all Medicaid-eligible populations

Four Pathways to Transformation

State Draft

Waiver

Application

3Pathway 4Pathway 1 Pathway 2 Pathway 3

Goals:

Better Health Outcomes Lower Costs

Delivery System

Transformation

Population Health

Workforce

Home- & Community-

Based Supports

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Waiver Goals

Support linkages between health care delivery systems and services that directly impact key social determinants of health

Create incentives to drive development of integrated delivery systems

Promote efficient health care delivery through optimization of existing managed care models

Enhance ability of the health care system to engage in population management

Strengthen the state’s health care workforce to meet needs of Medicaid beneficiaries

(Goals continued on next page)

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Waiver Goals (continued)

Consolidate Illinois’ nine existing 1915(c) waivers under a single 1115 waiver

Increase flexibility and choice of long-term supports for adults and children

Institute a provider assessment on residential habilitation providers

Reduce prioritization of unmet need for services wait list

Promote and foster greater community-integrated, competitive employment opportunities

1st Pathway: Delivery System TransformationWaiver promotes care coordination & integrated delivery system development

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Provides Coordinated Care Entities & Accountable Care Entities with analytics, data collection & other activities related to managing a population

Hospital performance & integration pool tied to hospital & health system performance measures

Public hospitals will have separate pool for specific projects

Delivery System

Transformation

2nd Pathway: Population Health

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Focuses on developing regional public health hubs Premium add-on payment to health

plans for developing population health interventions

Fund regional public health hubs to provide technical assistance in addressing health disparities, social determinants of health, and evidence-based interventions, including those endorsed by the Community Preventive Services Task Force

Population Health

3rd Pathway: Workforce

Increase Physician Supply Provide incentives for training physicians

(primary care & high-need specialties) in community settings, treating underserved patients

Expand loan repayment programs, including incentive funding for hospital-sponsored loan repayment programs

Community Health Workers Training In-home personal attendants, nurses & other

providers to work on primary care provider

teams

Establish and certify community health workers8

Workforce

4th Pathway: Home & Community-Based Supports

Consolidation of nine existing home- & community-support waivers

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Home- & Community-

Based Supports

Increase funding & uniformity in benefits

Base benefits on beneficiary needs, increase choice for beneficiaries, and expand community-based options Children & Young Adults with

Developmental Disabilities Children who are

technologically dependent Medically Fragile Individuals with HIV or AIDS Elderly

Behavioral health expansion & integration

Opportunities and Challenges

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Opportunities + Challenges

Many needs Limited funding Negotiatons with CMS will

determine final funding allocations

-A Waiver Provides: A possible option to preserve

hospital assessment program New funding for:

Hospital quality and transformation initiatives

Primary care physician development in underserved areas

Behavioral health programs Maternal child visits and

medical home development Loan repayment for physicians

through safety-net hospitals Strengthening of:

Community-based options Public health resources

Why is the Waiver an Option for Preserving Assessment Funding?

Upper Payment Limit (UPL) Conundrum

1. Under Federal law, states can’t make direct payments to hospitals that exceed the upper payment limit

Includes hospital assessment payment

2. UPL = Estimate of what would be paid under Medicare principles for persons in the Medicaid Fee-for-Service system

3. 50% coordinated care mandate by 1/1/2015

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Capitation AssessmentUPL

What is the Access Assurance Pool?

Option to replace current assessment (or UPL) payments

Maintain current assessment payment distribution method “as is” for transition period (e.g. 1st two years of the waiver)

Then, Access Assurance (AA) payments based on a hospital’s unreimbursed costs for Medicaid and uninsured patients

- Can include hospital and other services (e.g. Dr., Rx)

Goal: AA payments to replace, as closely as possible, the current Assessment payments for each hospital

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How is a Waiver Financed?

Costs Not Otherwise Matchable (CNOM) One of the most powerful provisions in Section

1115 allows CMS to grant approval of Costs Not Otherwise Matchable or CNOM

Includes services not normally qualifying as Medicaid expenditures

Must be budget neutral

Must reinvest freed-up state funds back into the Medicaid program

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Budget Neutrality Under 1115 Waiver

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CNOM counts toward budget neutrality gap

Hospital-Specific Waiver Payments

1115 Waiver PaymentsIntegration & Incentive Pool

Pays Hospitals for Achieving Metrics

Funded by CNOM

Primary Care, GME, Community-Based Training

Loan-Forgiveness Funding

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Transforming Illinois Health Care

Illinois hospitals have the infrastructure to bring together a

wide range of providers

The Waiver Process

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10/18/13

Stakeholder kick-off meeting

2/10/14

Final waiver with comments posted

1/8/14

Draft waiver posted for comment

11/5/13

Concept paper finalized

1/22/14

Waiver comments due

3/12/14

Waiver submitted to CMS

10/18 – 12/13/13

Stakeholder meetings

12/18/13

Legislative hearing

6-12 mos.State negotiates with CMS

For More Information

@Patrick GallagherGroup Vice President, Health Delivery & Payment Systems

(630) 276-5496 pgallagher@ihastaff.org

State of Illinois 1115 Waiver Web Pagehttp://www2.illinois.gov/gov/healthcarereform/Pages/1115Waiver.aspx

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