New York State’s $8 Billion Medicaid 1115 Waiver Amendment to Improve Access, Quality and Efficiency in the State’s Health Care Delivery System

by Ropes & Gray LLP
Contact

I.          Overview

On April 14, 2014, Governor Cuomo announced that New York had finalized the terms and conditions of a Medicaid 1115 waiver amendment agreement (the “MRT Waiver”) with the Centers for Medicare and Medicaid Services (“CMS”). The waiver amendment enables the state to reinvest over a five-year period $8 billion of the approximately $17.1 billion in federal savings generated by Medicaid Redesign Team (“MRT”) reforms. The reinvestment will allow for comprehensive reform primarily through the Delivery System Reform Incentive Payment (“DSRIP”) program. 

The DSRIP program is not unique to New York. It has been approved in several other states—including Texas, New Jersey, Pennsylvania and Kansas—as an alternative to more traditional waiver-funded supplemental payment programs. Program details vary by state, but generally provide federal and local funding for projects that further the “triple aims” of better care for individuals, better population health and lower cost through improvement and innovation. Participating providers receive funding to design and implement certain projects from a pre-approved “menu” provided as part of the MRT Waiver and are eligible for incentive payments if the programs meet or exceed certain performance metrics. 

Similar to DSRIP programs already approved by CMS in other states, the New York State DSRIP program approved through the MRT Waiver utilizes a rewards-based payment structure. This structure is designed to promote community-level collaborations and system reform with the overall goal of a 25% reduction in avoidable hospital utilization over the five-year reinvestment period.

II.        The Components of the MRT Waiver Amendment

New York submitted the MRT Waiver amendment proposal to CMS in August 2012, requesting to reinvest $10 billion in MRT-generated federal savings. CMS deemed several innovative strategies initially proposed by the state “unfundable” under federal rules, including those for rental subsidies and health information technology. After much back and forth, New York and CMS negotiated several structural changes to the original proposal, which enabled New York to reinvest $8 billion in federal savings for the following funding opportunities: 

  • $6.42 Billion for the DSRIP Program. The primary focus of the MRT Waiver is a rewards-based program that provides significant funding to eligible providers through planning grants, provider incentive payments and payments to fund administrative costs and related workforce transformation costs associated with innovative reform projects. The DSRIP program shares many features with existing federal and state reform initiatives and grant opportunities, but is unique in that it encourages meaningful collaboration among providers within a geographic area. For more information on the DSRIP program, please click here.
  • $500 Million for Interim Access Assurance Fund (“IAAF”). This time-limited funding will ensure that Medicaid safety net hospitals remain financially viable as they prepare for, commit to and participate fully in the DSRIP program transformation process. For more information on IAAF, please click here.
  • $1.08 Billion for other Medicaid Redesign Purposes. Unrelated to the DSRIP program, this “other” funding provided by the MRT Waiver will support ongoing state Medicaid reform initiatives, including: (i) Health Home sustainability; (ii) investments in workforce for Medicaid Long-Term Care plans (“MLTCs”); and (iii) the transition of individuals with mental health and substance abuse diagnoses into Medicaid managed care plans. For more information on waiver funding for these other Medicaid redesign purposes, please click here.

III.       The Importance of Strategic Planning

The expansive funding opportunities available through the MRT Waiver, and specifically the DSRIP program, must be carefully reviewed by providers, as each project carries unique eligibility and application criteria. In most cases, the DSRIP program will require new or expanded collaborative efforts with other eligible providers through coalitions called “Performing Provider Systems.” As providers analyze their eligibility and desire to apply for DSRIP funding, it is important to recognize that the DSRIP program does not supplant, but mostly supplements, existing Medicare and Medicaid reform efforts. Accordingly, providers should not lose sight of other ongoing Medicare and Medicaid reform initiatives, such as the transition of virtually all Medicaid beneficiaries into “care management” through managed care plans and state-designated Health Homes, which present opportunities for collaboration regarding planned changes in service delivery. 

Providers seeking to access MRT Waiver funding through the DSRIP program will need to contemplate whether to create new or leverage existing collaborative platforms, such as a Health Home, independent practice association (“IPA”) or Accountable Care Organization (“ACO”). In describing the components of the MRT Waiver, this summary presents key legal and practical issues for consideration to enable providers to appropriately develop new, or expand upon existing, collaborative initiatives.

IV.       Links and Resources

For more information about the MRT Waiver, please click here.

For more information about the DSRIP program, please click here.

Note that New York is seeking comments on DSRIP documents as follows:

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ropes & Gray LLP | Attorney Advertising

Written by:

Ropes & Gray LLP
Contact
more
less

Ropes & Gray LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.