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Texas Hospital AssociationAnnual Conference
Steve Aragón, Chief CounselTexas Health and Human Services Commission
Stacy E. Wilson, J.D., Associate General CounselTexas Hospital AssociationFebruary 14, 2013
Medicaid 1115 Transformation Waiver: Where are We Now?
Why A Waiver?
Budget issues during the 2011 session led to need for cost savings
Upper Payment Limit Program - $2.8 billion/year (AF)
Eliminated due to statewide expansion of managed care
Need to save supplemental funding to hospitals 2
What Does This Waiver Do?
More money available?– $29 billion over 5 years vs.
$14 billion under UPL
– But budget neutral to the federal government; i.e., feds would have spent the same amount of money
– IGT capacity
Creates two funding pools– Uncompensated Care Pool
– Delivery System Reform Incentive Payment Pool 3
UC and DSRIP Funding
DY 1(2011-12)
DY 2(2012-13)
DY 3(2013-14)
DY 4(2014-15)
DY 5(2015-16)
Total
UC $3.7 B $3.9 B $3.534 B $3.348 B $3.1 B $17.582 B
DSRIP $500 M $2.3 B $2.666 B $2.852 B $3.1 B $11.418 B
Total/DY $4.2 B $6.2 B $6.2 B 6.2 B $6.2 B $29 B
% UC 88% 63% 57% 54% 50% 60%
% DSRIP 12% 37% 43% 46% 50% 40%
5
Regional Healthcare Partnerships
20 regions proposed based on UPL affiliations and feedback
Each region has:– Anchor
– Funding public entities
– Performing providers
6
Uncompensated Care Pool
Uncompensated Care– Supplements hospitals for
Medicaid underpayment and uninsured Medicaid and uninsured
shortfalls not covered by DSH
Additional categories of Medicaid & uninsured costs can be claimed
– Physicians
– Clinics
– Pharmacies 7
DSRIP Projects
TYPES OF CATEGORY 1 PROJECTSPay for Performance
• Expand Primary Care Capacity• Increase Training of Primary Care
Workforce• Implement and Use a Chronic Disease
Management Registry• Expand Urgent Care Access• Expand Dental Services• Behavioral Health Projects
TYPES OF CATEGORY 2 PROJECTSPay for Performance
• Expand/ Enhance Medical Homes• Expand Chronic Care Management
Models• Redesign Primary Care• Establish/Expand a Patient Care
Navigation Program• Implement Evidence-based Disease
Prevention Programs
TYPES OF CATEGORY 3 OUTCOMES Pay for Outcomes
• Primary Care and Chronic Disease Management
• Potentially Preventable Admissions• Potentially Preventable Readmissions• Patient Satisfaction• Cost of Care• Oral Health• Right Care, Setting
CATEGORY 4 PROJECTS Pay for Reporting
• Potentially Preventable Admissions*• 30-day Readmissions*• Potentially Preventable Complications*• Patient-centered Healthcare• Emergency Department (cycle time)• Initial Core Set of Measures for Adults
and Children in Medicaid/CHIP*Required for UC-only participants
8
SUMMARY OF DSRIP REQUIREMENTS
9
Categories 1 & 2 Category 3 Category 4
Performing Provider
Hospital and non-hospital providers
Hospital and non-hospital providers
Hospital providers only
PASS 1 PROJECTS AND REQUIREMENTS
Project Begins
DY 2 DY 2 & DY 3 DY 3 & DY 4
RHP Level Requirement Performing Provider Level Requirement
RHP Tier 1 Minimum 20 projects(at least 10 from Category 2)
Must adopt outcome measures that tie back to
projects in Categories 1 and 2
Must establish outcome targets by DY 4
6 domains of measures:• PPAs• PPRs• PPCs• Patient-centered
healthcare• Emergency department• Initial Core Set of
Measures for Adults and Children in Medicaid/CHIP
DY 2 DSRIP for status report on system changes
RHP Tier 2 Minimum 12 projects(at least 6 from Category 2)
RHP Tier 3 Minimum 8 projects(at least 4 from Category 2)
RHP Tier 4 Minimum 4 projects(at least 2 from Category 2)
DSRIP Funding – DYs 2 – 5
Pass 1 Funding– Hospitals – 75%
– Others – 25%
Pass 2 Funding– Contingent on meeting
participation requirements
– RHP reallocates unused funds for new projects
Pass 3 Funding– RHP reallocates unused
funds for new projects10
Project Valuation - Hospitals
11
DY 2 DY 3 DY 4 DY 5
Categories1 & 2
No more than 85%
No more than 80%
No more than 75%
No more than 57%
Category 3 At least 10% At least 10% At least 15% At least 33%
Category 4 5% 10% - 15% 10% - 15% 10% - 15%
DSRIP Projects
12
All RHP plans timely submitted to HHSC
HHSC has provided feedback 1,341 Category 1 and 2 projects
– Top Category 1 Project Areas:
1.1 - Expand Primary Care Capacity
1.9 – Expand Specialty Care Capacity
– Top Category 2 Project Areas:
2.9 – Establish/Expand a Patient Care Navigation Program
2.2 – Expand Chronic Care Management Models
13
Submitted RHP Plans
• All 20 RHPs submitted their complete plans to HHSC by the December 31, 2012 due date.
• HHSC received 1,335 Category 1 and 2 projects, totaling $7.6 billion. (Updated from 1,341 projects)
• RHPs proposed Delivery System Reform Incentive Payment (DSRIP) valuation for Categories 1, 2, 3, and 4 for DYs 2-5 of $9.9 billion.
• Providers estimated $19.5 billion in Uncompensated Care (UC) for DYs 2-5.
14
Projects and Outcomes
• Category 1: 655 projects, totaling $4.0 billion– RHPs ranged from 7 to 91 projects
– Project average value of $6.1 million, range of $44,000 to $57 million
• Category 2: 680 projects, totaling $3.6 billion– RHPs ranged from 7 to 80 projects
– Project average value of $5.3 million, range of $43,000 to $32 million
• Category 3: 1810 outcomes, totaling $1.7 billion – RHPs ranged from 14 to 253 outcomes
– Outcome average value of $922,000, range of $2,300 to $19 million
15
Selected Project Areas
Top Category 1 Project Areas:• 1.1 – Expand Primary Care Capacity (202
projects)• 1.9 – Expand Specialty Care Capacity (140
projects) Top Category 2 Project Areas:• 2.13 – Provide an intervention for a targeted
behavioral health population to prevent unnecessary use of services in a specified setting (92 projects)
• 2.9 – Establish/Expand a Patient Care Navigation Program (82 projects)
16
Performing Providers
383 RHP Participants:– 224 Hospital Performing Providers
46 Safety Net Hospitals 121 Private Hospitals
– 82 UC-only Hospitals 69 Private Hospitals
– 38 Community Mental Health Centers (CMHCs)– 20 Local Health Departments (LHDs)– 12 Physician Practices affiliated with an Academic
Health Science Center (AHSCs)– 6 Physician Practices not affiliated with an AHSC– 1 Other
17
Projects by Performing Provider
Type of Provider
# of Cat. 1 & 2 projects
Average Project Value
Total Cat. 1 & 2 Project Values
Hospitals 791 $6.03 M $4.77 B
Private 398 $4.85 M $1.93 B
CMHCs 297 $4.21 M $1.25 B
LHDs 74 $4.93 M $365 M
AHSCs 157 $7.06 M $1.11 B
18
DSRIP Allocation vs. Valuation
Public Hospitals
27%
CMHCs10%
AHSCs10%
LHDs5%
Private Hospitals
48%
Public Hospitals
41%CMHCs
15%
LHDs4%
Private Hospitals
27%
AHSCs13%
Pass 1 DSRIP Allocation($10.9 B)
Proposed DSRIP Valuation($9.8 B)
19
Funds Available for Plan Modifications
• $793 million available for additional projects through plan modifications in DYs 3-5.
• Eight regions used total allocation or have less than $100,000 remaining.
• Three regions have $100 million or more in remaining funds (RHP 5 - $342 million, RHP 9 - $129 million, RHP 17 - $100 million).
20
Resources
HHSC website: http://www.hhsc.state.tx.us/1115-waiver.shtml
THA website: http://www.tha.org/waiver