Medicaid Section 1115 Waiver
Overview
Michelle Apodaca, J.D.
Stacy E. Wilson, J.D.
April 20, 2012
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?
 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
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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
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Overview
Waiver Pool
Uncompensated
Care Pool
Pays hospitals for
cost of care not
compensated by
Medicaid directly or
through DSH
Inpatient
Outpatient
Pharmacy
Clinic
Physician
Hospitals eligible
for funding must
commit to
investing in
system
transformation
Hospitals must
participate in a
regional
healthcare
partnership to
receive funds from
either pool
Delivery System
Reform Incentive
Pool
Pays hospitals
for achieving
metrics that
move toward
the triple aim
Category 1 – Infrastructure
Development
Category 2 – Program
Innovation & Redesign
Category 3 – Quality
Improvements
Category 4 – Population
Focused Improvements
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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
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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
 Project categories
– Infrastructure Development
• Enhance access to care
– Program Innovation &
Redesign
• Medical homes
– Quality Improvements
• Preventable readmissions
– Population-Focused
Improvement
• Diabetes, preventive care
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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
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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
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Opportunities
Scorecard on Local Health System Performance
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
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