The Medicaid Program has offered states Section 1115 waivers as an innovative way to demonstrate state-specific approaches to address important policy and implementation issues related to care delivery through shifts over the years in priorities across different administrations.
Section 1115 of the Social Security Act gives the Secretary of the Department of Health and Human Services (HHS) authority to approve experimental, pilot or demonstration projects that offer promise in promoting the objectives of the Medicaid Program.
The primary focus areas of approved state Section 1115 waivers include:
The purpose of these demonstrations, which give states additional flexibility to design and improve their programs, is to demonstrate and evaluate state-specific policy approaches to better serve Medicaid populations.
How are Section 1115 Medicaid demonstration waivers approved and renewed?
The Centers for Medicare & Medicaid Services (CMS) coordinates the application, negotiation and evaluation process for waivers. Generally, Section 1115 waivers are approved for a five-year period and then can be renewed (3–5 year renewals are provided depending on populations served).
Additionally, waivers must be budget-neutral (federal spending under a waiver must not exceed the projected federal spending in the state in lieu of the waiver).
In response to the Trump Administration’s review of Medicaid waivers, CMS posted revised criteria in November 2017, which outlines updated evaluation and reporting guidance for Section 1115 waiver applications. Furthermore, in January 2018, CMS issued new guidance for Section 1115 waiver proposals that impose work requirements (referred to as community engagement) in Medicaid as a condition of eligibility.
How are states currently using Section 1115 Medicaid demonstration waivers?
States use waivers for a variety of purposes, including expanding coverage and changing delivery systems, as well as modifying benefits and costing sharing. A full state waivers list can be foundhere.
What are the opportunities for states to leverage health information and technology through the Medicaid waivers?
The Delivery System Reform Incentive Payment (DSRIP) program, authorized through Medicaid Section 1115 waivers, is one of the existing vehicles that support states seeking to demonstrate cutting-edge delivery system reform programs at the community level with an emphasis on facilitating value-based care delivery. While CMS announced in December 2017 that they would no longer accept new or renewing proposals for Section 1115 demonstrations that rely on federal matching funding, existing demonstrations will continue receiving funding until the end of their demonstration period. CMS will no longer extend or renew DSRIP funding upon completion of the demonstrations.
Under DSRIP, states were invited to propose reforms that build upon the lessons of past demonstrations as well as novel approaches designed to promote Medicaid’s objectives, such as reforms that would:
While the future direction of the program is unclear, the current outputs have led to several significant model practices, namely in Texas and New York State, where interoperability and delivery system transformation were embraced with the goal of improving population health across care settings and provider organizations.
For example, New York State, through its DSRIP partner, Adirondack Health and Health Recovery Solutions, is implementing Unite Us software to support care coordination and collection of social determinants of health outcomes data among the partners in their five community-wide population health networks in the northern New York/Adirondack region. This effort is part of a larger effort to increase collaboration and interoperability between clinical and social service partners in communities across New York State to address patients’ social determinants of health and reduce avoidable hospital use by 25 percent over five years.
Texas, upon receiving a five-year waiver extension, is focusing on health system performance measurement and improvement for high-risk Medicaid populations. Texas, like New York State, is supporting enhanced care coordination by requiring hospitals to provide emergency department admission, discharge and transfer (ADT) data. Another goal of the Texas DSRIP program is reducing administrative burden. Texas hopes to accomplish this by combining small providers under a single project to reduce the reporting and measurement requirements.
Among the existing tools for states seeking to leverage health information and technology for delivery system reform is the 90 percent enhanced federal financial participation (FFP) for Medicaid technology investment. Many states refer to this as the 90/10 match, which is provided under 42 CFR §433.112(a) and funded through an approved advanced planning document that requires states to promote sharing, leverage, and reuse of Medicaid technologies and systems within and among states.
In April 2018, CMS issued guidance to State Medicaid Directors outlining two paths for achieving reuse: (1) they can adapt existing capabilities within the state, capabilities in use by another state, or those available from the vendor community with minimal customization; or (2) they can incorporate reuse into the design of new capabilities.
Examples of how a state can facilitate reuse in new development include:
Additionally, new provisions now lend policy support to HIEs on an ongoing basis (using 75% operational match).
CMS, in coordination with the Office of the National Coordinator for Health IT, has created a series of toolkits and resources for Medicaid initiatives (e.g., Health Home State Plan Amendment, 1115 demonstrations, and programs that advance home and community-based services) that are focused on health information exchange, health IT and interoperability.
States can use these toolkits as they are designing their Medicaid programs to help them: