Medicaid Section 1115 Waiver Overview

1. Medicaid Section 1115 Waiver Overview Michelle Apodaca, J.D. Stacy E. Wilson, J.D. April 20, 2012

2. 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

3. Why This Waiver? • 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

4. 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 Pool

5. Overview Waiver Pool Hospitals eligible for funding must commit to investing in system transformation Uncompensated Care Pool Delivery System Reform Incentive Pool Pays hospitals for achieving metrics that move toward the triple aim Pays hospitals for cost of care not compensated by Medicaid directly or through DSH Hospitals must participate in a regional healthcare partnership to receive funds from either pool Inpatient Category 1 – Infrastructure Development Outpatient Category 2 – Program Innovation & Redesign Pharmacy Category 3 – Quality Improvements Clinic Physician Category 4 – Population Focused Improvements

6. Regional Partnerships • 19 regions proposed based on UPL affiliations and feedback • Each region will have • Anchor • Funding public entities • Participating hospitals

7. 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

8. Participating Hospitals • Be an RHP member • Work on incentive projects • Provide expense alleviation for public entity to create IGT capacity

9. Uncompensated Care Pool • Uncompensated Care • Supplements hospitals for Medicaid underpayment and uninsured • Additional categories of costs can be claimed • Physicians • Clinics • Pharmacies

10. DSRIP Pool • Project categories • Infrastructure Development • Enhance access to care • Program Innovation & Redesign • Medical homes • Quality Improvements • Preventable readmissions • Population-Focused Improvement • Diabetes, preventive care

11. RHP Plans • 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

12. 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

13. Opportunities Scorecard on Local Health System Performance

14. 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

15. 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