Texas Healthcare Transformation &
Quality Improvement Program
Medicaid Section 1115 Demonstration
Aka “The Waiver”
Leslie Carruth, MBA
Office of Health Affairs
CS&E
September 26, 2013
Through the Storm
Public
Policy
Health
Care
Reform
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?
Patient Care
Supplemental pmts
Total
Financing Source
Federal (FMAP = 58.5%)
State General Revenue
Local IGT
$ billions
Without Waiver
$146.92
$7.91
$154.83
With Waiver
$112.24
$42.59
$154.83
$90.57
$60.97
$3.28
$90.57
$46.58
$17.67
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
Art rather than science
(summer 2013)
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
Proposed DSRIP Project Valuations - Net Federal Amounts
UTSW
UTMB*
UTHSC H
UTHSC SA
UTMDACC
UTHSC T*
UTHSC SA
UT System
RHP 9
RHP 2
RHP 3
RHP 6
RHP 3
RHP 1
RHP 5 STX
Net Federal
* Anchor
DY 1 Payment
* Anchor
$6.47
$6.76
$5.66
$2.80
$1.64
$5.70
$4.13
$33.16
$82.76
$49.30
$22.17
$3.36
$157.59
$57.80
$31.97
$18.71
$11.13
$119.60
$81.81
$54.59
$17.85
$0.00
$154.25
$48.78
$17.70
$8.88
$0.00
$75.36
$25.41
$15.57
$3.77
$44.76
$25.85
$47.72
$17.19
$0.00
$90.75
$20.85
$16.66
$5.65
$0.00
$43.16
$317.85
$243.35
$106.01
$18.26
$685.47
19%
51%
12%
12%
3%
36%
25%
(based on Proposed
DY 2-5)
Proposed (DY 2-5)
Category 1
Category 2
Category 3
Category 4
Total
% of Total RHP
Proposed $
As s ume FMAP = 58.5% ($ mi l l i ons )
There’s no such thing as a free lunch.
Progress report
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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!