How States are Funding Better Care with Medicaid 1115 Waivers

How States Are Funding Better Care With Medicaid 1115 Waivers

This article was originally published by Healthcare Intelligence Network.

As healthcare transitions to value-based care models, optimal health system performance is being defined as enhancing the experience and outcome of the patient, improving the health of populations, and reducing the per capita cost of healthcare, also known as the triple aim in healthcare.

As a result of this shift, states are designing and implementing innovative programs to reform how healthcare is delivered and paid for. To fund innovation and provide more resources for collaboration and care management, many states have leveraged funds available under federal Section 1115 Medicaid demonstration waiver programs.

Many states such as California and New York have enacted successful initiatives to improve population health outcomes through better care coordination, population health, and patient engagement. Known as Delivery System Reform Incentive Payment (“DSRIP”) Programs, many states are requesting funds under the 1115 waiver and are starting the process of encouraging enhanced collaboration to meet outcomes and satisfaction performance incentives. Following the passage of the Affordable Care Act in 2010, the federal government approved the first DSRIP initiatives in California.

As of February 2018, 10 states are using Section 1115 waivers to implement DSRIP initiatives.

As more states look to reduce unnecessary and costly healthcare utilization and improve patient outcomes through delivery reform, there are many ways that the funds can be used to drive success. From augmenting community resources such as affordable housing and transportation services to incentivizing better care management and coordination of health services, state organizations are taking positive steps to improve their community’s health. While taking these steps can be challenging, the potential rewards are massive.

Current DSRIP Programs are Improving Patient Care

States further along in their DSRIP journeys are seeing great success. To date, the funds have been used to deploy care management programs, such as in the case of New York State’s popular DSRIP program, 2di, healthcare coaching and navigation. Under this program, providers are helping provide patients with the tools necessary to take control of their care. With community referrals and care navigators, patient care is better managed and tailored to each individual’s needs.

Meanwhile, in California, project funds have already been shown to drive success in preventive care measures such as increasing cancer screening and flu vaccination rates among the older DSRIP-eligible patients. These early success indicators provide a baseline for what other states can achieve. As new states such as Texas and Washington take advantage of the 1115 waiver, there are many possibilities for how Medicaid patients may benefit from the grants and investments provided to participating providers.

What States Can Do to Take Full Advantage of the Waiver

As new states begin their own DSRIP journeys, understanding what criteria is most beneficial to meet, how to meet them, and how to report on them is critical. Specifically, there are three things that states should consider when implementing their programs—develop data-driven insights, manage implementation processes, and scale care coordination.

1. Manage Implementation Processes with a Goal for Sustainability: Many of the DSRIP initiatives encourage providers and community partners work together to align local needs and priorities. Since there is a significant administrative lift involved in reaching DSRIP initiatives, time and resources are key investments to ensure long-term success. This includes fostering stakeholder engagement and education; establishing IT, reporting, and reimbursement infrastructure; allocating resources dedicated to legal and financial administration of DSRIP entities; allocating appropriate resources for project selection, implementation, and ongoing management to support sustainability; and identifying and funding new services to empower partners in achieving their DSRIP goals. Although initial phases of DSRIP projects focus on building infrastructure, it is important to develop these processes with a focus on the long-term measurement and improvement of clinical processes and value-based payment models.

2. Engage Patients in a New Way: To encourage preventive health efforts, reduce avoidable hospitalizations and readmissions, and improve healthcare outcomes for low-income patients, providers need to engage patients in a new way while optimizing available resources. Enhancing communication and connectivity between patients and their care teams and improving the ability to navigate and obtain needed clinical and social services is critical for changing the Medicaid healthcare landscape. Simultaneously, it is essential that systems consider available resources (and constraints) and optimize available technologies. Through embracing workflow enhancements and innovation, systems will enhance their ability to outreach and engage high and at-risk patient populations.

3. Scale Care Coordination: Participating providers will need to work with multiple provider types across the care continuum to optimize project design, implementation, and funds flow. Since care management services and providers traditionally operate in silos, DSRIP entities must establish effective integrated care management systems with partners. This will mean needing to face interoperability issues head-on to effectively coordinate care and promote collaboration across different regional providers. As processes are created, it is key to develop clearly-defined roles for each partner type, expected activities, appropriate metrics and outcomes, and reimbursement methodology to promote interoperable communication and documentation systems.

In this era of value-based care, successful transformation of healthcare at the system and state levels requires trusted partnership across the care continuum. Healthcare organizations across the country can make the most of the funds through the 1115 waiver by putting the right people, processes, and technologies in place early on. It will be exciting to see over time how these programs aim to improve access, quality, and coordination of care for at-risk patient populations by enhancing care transitions between healthcare systems and community support services.


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