Texas Healthcare Transformation & Quality Improvement Program

Medicaid Section 1115 DemonstrationAka “The Waiver”

Leslie Carruth, MBAOffice of Health Affairs

CS&E

September 26, 2013

Through the Storm

Health Care Reform

Public Policy

Medicaid

• State-federal partnership enacted in 1965 to provide health insurance coverage to eligible persons

• CMS issues policy & rules for State Plans• Minimum guidelines for eligibility, services• States may expand coverage • FMAP average = 57%; Texas 58.5%

• Texas Medicaid agency is HHSC

Texas Perspective

• Escalating cost burden

• Highest rate of uninsured in US

• Frayed or non-existent safety net

• Political philosophy

Federal perspective

Escalating cost burden

Affordable Care Act - March 2010 Expanding Medicaid eligibility in 2014 Supreme Court decision June 2012

– Medicaid expansion is optional for states

Health Care Reform:Triple Aim

• Improving the patient experience of care Including quality & satisfaction

• Improving the health of populations

• Reducing the per capita cost of health care

Dr. Don Berwick– CMS Administrator, July 2010 to December 2011

Medicaid waivers

Section 1115 Research & Demonstration Projects

Section 1915(b) Managed Care Waivers

Section 1915(c) Home & Community-Based Services Waivers

Texas has a 1915(b) and 8 1915(c) waivers All states: about 400 current/pending waivers

Section 1115 Demonstrations

HHS Secretary may approve demonstration projects that give States additional flexibility to design & improve their programs

Purpose: demonstrate & evaluate policy approaches such as

Expanding eligibility to individuals who are not otherwise Medicaid or CHIP eligible

Providing services not typically covered by Medicaid

Using innovative service delivery systems that improve care, increase efficiency, and reduce costs

• Must be “budget neutral” to the federal government

HHSC Proposal to CMS

Dual purpose Expand existing Medicaid managed care programs, STAR

and STAR+PLUS, statewide

Establish two funding pools to assist providers with uncompensated care costs and promote health system transformation

– Improve care delivery systems and capacity while emphasizing accountability and transparency, and requiring demonstrated improvements at the provider level for the receipt of such payments

No mention of expanding coverage

Budget Neutral Proposal June 2011

Projected Texas Medicaid Costs FY 2012-2016 ($Billions)

Budget Neutral?

Without Waiver With WaiverPatient Care $146.92 $112.24Supplemental pmts $7.91 $42.59Total $154.83 $154.83

Financing SourceFederal (FMAP = 58.5%) $90.57 $90.57State General Revenue $60.97 $46.58Local IGT $3.28 $17.67$ bil l ions

CMS Approves Texas 1115

HHSC gets the news December 12, 2011

Waiver period is Oct 1, 2011 to Sept 30, 2016

Planning Year, DY 1, ends Sept 30, 2012

– Develop new UC tools based on cost reporting

– Organize into RHPs

– Program Funding & Mechanics Protocol August 2012

– DSRIP Planning Protocol (projects menu)

DSRIP and UC Pools

RHPs

20 Regional Healthcare Partnerships

Vary in size: 2 to 47 counties

Tier 1 to 4

DSRIP allocated by formula

Anchor – Not the Banker– Guides, coordinates, administers

Critical variance in IGT capacity

Players

• Performing Providers

• IGT Entities

• Inherent conflicts

– Transformation by Hospitals?– Public vs Private Entities– Integrating primary and behavioral care

o Who leads?

• Critical variance in IGT capacity (worth saying twice)

DSRIP Categories

Category 1 Infrastructure development

Category 2 Program innovation and redesign

Category 3 Population-focused improvement

Category 4 Clinical improvements in care

Project Design

• Responsive to community need

• Strategic

• Sustainable

• Impact on target population Medicaid and low-income uninsured

Milestones & Metrics

• Primarily menu driven in Category 1, 2 & 3

• Standardized for Category 4• Pay for reporting; data from HHSC

Quality Issues

Metrics – appropriateness, baselines

Process or Outcome

Time Horizon

Project Valuation

• NOT cost-based reimbursement

• Incentive payments

• Project impact on waiver aims

• Quantifiable Patient Impact (summer 2013)

Art rather than science

Learning Collaboratives

Added requirement by CMS

RHP level and state-wide

Implications for CS&E Your expertise will be an asset

UT’s Role

•Convened Academic Medicine/HHSC meetings

•Code Red 2012

•UTMB and UTHSC Tyler serve as Anchors

•UTHSCSA in South Texas

•White paper to include GME projects

•Participated in UC Tools development

UT’s DSRIP Participation

The University of Texas System

UTSW UTMB* UTHSC H UTHSC SA UTMDACC UTHSC T* UTHSC SA UT SystemRHP 9 RHP 2 RHP 3 RHP 6 RHP 3 RHP 1 RHP 5 STX Net Federal

* Anchor * Anchor

DY 1 Payment $6.47 $6.76 $5.66 $2.80 $1.64 $5.70 $4.13 $33.16(based on Proposed DY 2-5)

Proposed (DY 2-5)Category 1 $82.76 $57.80 $81.81 $48.78 - $25.85 $20.85 $317.85Category 2 $49.30 $31.97 $54.59 $17.70 $25.41 $47.72 $16.66 $243.35Category 3 $22.17 $18.71 $17.85 $8.88 $15.57 $17.19 $5.65 $106.01Category 4 $3.36 $11.13 $0.00 $0.00 $3.77 $0.00 $0.00 $18.26Total $157.59 $119.60 $154.25 $75.36 $44.76 $90.75 $43.16 $685.47 % of Total RHP Proposed $ 19% 51% 12% 12% 3% 36% 25%

Assume FMAP = 58.5% ($ mi l l ions)

Proposed DSRIP Project Valuations - Net Federal Amounts

There’s no such thing as a free lunch.

Progress report

DY 2 ends Monday. Time to report metrics Projects are not yet fully approved thru DY 5 Initial approval received May 2013 QPI required in July Resubmissions approved a few weeks ago Category 3 metrics not yet clearly defined Bright spot – late achievement allowable

Questions?

Thank you!