Illinois Medicaid 1115 Waiver
February 19, 2014
What is a Medicaid 1115 Waiver?
Section 1115 of the Social Security Act
 Allows states to apply for program flexibility from the Centers for
Medicare & Medicaid Services to test new approaches to financing &
delivering Medicaid
 Provides incentives to providers to develop new models of care
 Lasts five years, but can be renewed/amended
 Must be budget neutral, leading to overall savings
Our State’s Waiver Application
 Called the Path to Transformation Waiver
 Includes all services in the Illinois Medicaid program for better
coordination
• Covers all Medicaid-eligible populations
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Four Pathways to Transformation
State Draft
Waiver
Goals:
Better Health Outcomes
Lower Costs
Application
Population Health
Delivery System
Transformation
Pathway 1
Workforce
Pathway 2
Pathway 3
Home- & CommunityBased Supports
Pathway 4
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Waiver Goals
Support linkages between health care delivery systems
and services that directly impact key social
determinants of health
Create incentives to drive development of integrated
delivery systems
Promote efficient health care delivery through
optimization of existing managed care models
Enhance ability of the health care system to engage in
population management
Strengthen the state’s health care workforce to meet
needs of Medicaid beneficiaries
(Goals continued on next page)
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Waiver Goals (continued)
Consolidate Illinois’ nine existing 1915(c) waivers under
a single 1115 waiver
Increase flexibility and choice of long-term supports for
adults and children
Institute a provider assessment on residential
habilitation providers
Reduce prioritization of unmet need for services wait
list
Promote and foster greater community-integrated,
competitive employment opportunities
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1st Pathway: Delivery System Transformation
Waiver promotes care coordination & integrated
delivery system development
 Provides Coordinated Care Entities
& Accountable Care Entities with
analytics, data collection & other
activities related to managing a
population
Delivery System
Transformation
 Hospital performance & integration
pool tied to hospital & health
system performance measures
 Public hospitals will have separate
pool for specific projects
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2nd Pathway: Population Health
Focuses on developing
regional public health hubs
 Premium add-on payment to health
plans for developing population health
interventions
 Fund regional public health hubs to
provide technical assistance in
addressing health disparities, social
Population Health
determinants of health, and evidencebased interventions, including those
endorsed by the Community Preventive
Services Task Force
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3rd Pathway: Workforce
Increase Physician Supply

Provide incentives for training physicians (primary
care & high-need specialties) in community
settings, treating underserved patients

Expand loan repayment programs, including
incentive funding for hospital-sponsored loan
repayment programs
Community Health Workers Training
 In-home personal attendants, nurses & other
providers to work on primary care provider teams
Workforce
 Establish and certify community health workers
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4th Pathway: Home & Community-Based
Supports
Consolidation of nine existing home- &
community-support waivers


Increase funding & uniformity in
benefits
Base benefits on beneficiary
needs, increase choice for
beneficiaries, and expand
community-based options





Children & Young Adults with
Developmental Disabilities
Children who are technologically
dependent
Medically Fragile
Individuals with HIV or AIDS
Elderly

Behavioral health
expansion &
integration
Home- & CommunityBased Supports
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Opportunities and Challenges
Opportunities
A Waiver Provides:
+
 A possible option to preserve
hospital assessment program
 New funding for:
 Hospital quality and
transformation initiatives
 Primary care physician
development in underserved
areas
 Behavioral health programs
 Maternal child visits and medical
home development
 Loan repayment for physicians
through safety-net hospitals
 Strengthening of:
 Community-based options
 Public health resources
Challenges
-
 Many needs
 Limited funding
 Negotiatons with CMS will
determine final funding allocations
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Why is the Waiver an Option for Preserving
Assessment Funding?
Upper Payment Limit (UPL) Conundrum
1. Under Federal law, states can’t make direct payments to
hospitals that exceed the upper payment limit
 Includes hospital assessment payment
2. UPL = Estimate of what would be paid under Medicare
principles for persons in the Medicaid Fee-for-Service system
Capitation
UPL
Assessment
3. 50% coordinated care mandate by 1/1/2015
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What is the Access Assurance Pool?
 Option to replace current assessment (or UPL) payments
 Maintain current assessment payment distribution
method “as is” for transition period (e.g. 1st two years of
the waiver)
 Then, Access Assurance (AA) payments based on a
hospital’s unreimbursed costs for Medicaid and uninsured
patients
 Can include hospital and other services (e.g. Dr., Rx)
 Goal: AA payments to replace, as closely as possible, the
current Assessment payments for each hospital
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How is a Waiver Financed?
Costs Not Otherwise Matchable (CNOM)

One of the most powerful provisions in Section 1115
allows CMS to grant approval of Costs Not Otherwise
Matchable or CNOM

Includes services not normally qualifying as Medicaid
expenditures

Must be budget neutral

Must reinvest freed-up state funds back into the
Medicaid program
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Budget Neutrality Under 1115 Waiver
CNOM counts toward budget neutrality gap
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Hospital-Specific Waiver Payments
1115 Waiver
Payments
Integration &
Incentive Pool
Pays Hospitals for
Achieving Metrics
Funded by CNOM
Primary Care,
GME, CommunityBased Training
Loan-Forgiveness
Funding
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Transforming Illinois Health Care
Illinois hospitals have the infrastructure to
bring together a wide range of providers
The Waiver Process
10/18/13
11/5/13
1/8/14
2/10/14
6-12 mos.
Stakeholder
kick-off
meeting
Concept
paper
finalized
Draft waiver
posted for
comment
Final waiver
with
comments
posted
State
negotiates
with CMS
10/18 –
12/13/13
Stakeholder
meetings
12/18/13
1/22/14
3/12/14
Legislative
hearing
Waiver
comments due
Waiver submitted
to CMS
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For More Information
Patrick Gallagher
Group Vice President, Health Delivery &
Payment Systems
(630) 276-5496
pgallagher@ihastaff.org
State of Illinois 1115 Waiver Web Page
http://www2.illinois.gov/gov/healthcarereform/Pages/1115Waiver.aspx
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