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

Structural Overview

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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%

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Regional Healthcare Partnerships

20 regions proposed based on UPL affiliations and feedback

Each region has:– Anchor

– Funding public entities

– Performing providers

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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

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SUMMARY OF DSRIP REQUIREMENTS

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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

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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

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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

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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.

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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

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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)

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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

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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

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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)

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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).

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Resources

HHSC website: http://www.hhsc.state.tx.us/1115-waiver.shtml

THA website: http://www.tha.org/waiver