Medicaid Transformation Project Demonstration On behalf of the HCA and DSHS, thanks for letting us be here with you today to talk about the demonstration.

Healthier Washington It’s important to remember the larger initiative that this demonstration sits under, Healthier Washington. Essentially, Healthier Washington encompasses all the work happening at HCA and around the state that is transforming the health system to reward high-quality care, focus on whole-person health, and empower local communities to tackle their local health needs.

Effective through December 31, 2021 How we got here State Innovation Model design grant February 2013 Governor Request legislation 2014 State Innovation Model testing grant December 2014 MTP concept paper May 2015 MTP application August 2015 MTP approved January 2017 Effective through December 31, 2021

Legislation supporting transformation Washington enacted legislation furthering delivery system reform: HB 2572 (2014): Value-based purchasing reform; increasing transparency; empowering communities, standardized performance measures SB 6312 (2014): Whole-person integrated managed care by 2020 2ESHB 2376 / Subsections 213 (1)(d-g) (2016): Appropriation for Medicaid transformation demonstration waiver initiatives HB 2572: Transforming the Health Care Delivery System Increase value-based contracting, alternative quality contracting, and other payment incentives that promote quality, efficiency, cost savings, and health improvement for Medicaid and public employee purchasing. Develop and implement a process for designating communities of health SB 6312: Fully integrated Medicaid managed care By January 1, 2020, the community behavioral health program must be fully integrated in a managed care health system that provides mental health, chemical dependency, and medical care services Medicaid managed health care contracts shall include process to incentivize integration of behavioral health services in the primary care setting. Incentive payments to counties which elect to become early adopters by April 1, 2016 2376: Appropriation for Medicaid Transformation Demonstration Waiver Initiatives Initiative 1: Transformation through accountable communities of health Initiative 2: Tailored support for older adults and Medicaid alternative care Initiative 3: Foundational Community Supports

Special Terms and Conditions (STCs) The contract between the state and the Centers for Medicare and Medicaid Services (CMS) Enables Washington to operate this demonstration The information contained in the STCs outlines the conditions and limitations of the demonstration We have agreed upon Special Terms and Conditions with the Centers for Medicare & Medicaid Services. The Special Terms and Conditions set the “rules of the road” over the course of the five-year demonstration.

Medicaid Transformation demonstration

Who Medicaid serves Apple Health covers 1.9 million individuals 600,000 newly eligible adults under Medicaid expansion Populations served include children, pregnant women, disabled adults, elderly persons, and former foster care adults

People served in your region Better Health Together 32% of region covered by Medicaid 186,531 individuals 56% Adults 44% children 66,183 are newly eligible adults 33% with identified mental illness need 12% with identified substance use disorder treatment need 61% well-child visits (ages 3-6) This is the kind of information that will help the ACHs set priorities in their regions. HCA is committed to making data available to regions to help them make decisions about the projects they want to take on.

Medicaid in your region North Sound Accountable Community of Health

Medicaid transformation goals Over the five-year demonstration, Washington will: Integrate physical and behavioral health purchasing and service delivery Convert 90% of Medicaid provider payments to reward outcomes Support provider capacity to adopt new payment and care models Implement population health strategies that improve health equity Provide targeted services that address the needs of our aging populations and address the key determinants of health Goals over the next five years all focus on moving from a volume-based health system to a value-based health system. This includes addressing social determinants of health, incentivizing providers to deliver quality over quantity, and rewarding better health outcomes.

5 years from now Current system Transformed System Fragmented care delivery Disjointed care transitions Disengaged clients Capacity limits Impoverishment Inconsistent measurement Volume-based payment Transformed System Integrated, whole-person care Coordinated care Activated clients Access to appropriate services Timely supports Standardized measurement Value-based payment The long-term vision of the demonstration is that we have a system that works best for those who are served by it. Current system: Fragmented clinical and financial approaches to care delivery Disjointed care transitions Disengaged clients Capacity limits in critical service areas Individuals impoverish themselves to access needed LTSS Inconsistent measurement of delivery system performance Volume-based payment Transformed system: Integrated systems that deliver whole person care Coordinated care transitions Activated clients Optimal access to appropriate services Timely supports delay or diver need for Medicaid LTSS Standardized performance measurement with accountability for improved health outcomes Value-based payment

Elements of the demonstration The demonstration has 3 key initiatives: Transformation through Accountable Communities of Health Long-term Services and Supports Foundational Community Supports and Services We want to take some time to explain in more detail the three major elements of this demonstration.

Delivery System Reform Program

A regional approach ACHs play a critical role: Coordinate and oversee regional projects aimed at improving care for Medicaid beneficiaries. Apply for transformation projects, and incentive payments, on behalf of partnering providers within the region. Solicit community feedback in development of Project Plan applications. Decide on distribution of incentive funds to providers for achievement of defined milestones. ACHs play a critical role in overseeing transformation projects in their communities. They are responsible for managing and coordinating partnering providers, those traditional and nontraditional providers that have made a commitment to these projects in order to move the needle in health transformation. ACHs, as the conveners in their communities, help determine how these projects will be carried out. -ACHs are responsible for managing and coordinating partnering providers.

The Project Toolkit Care Continuum Community Priorities Financial Sustainability through Value-Based Payment Workforce Systems for Population Health Management Care Continuum Community Priorities Domain 1: Health Systems and Community Capacity Building Financial sustainability through value-based payment Systems for population health management Domain 2: Care Delivery Redesign Bi-directional integration of care and primary care transformation Community-based care coordination Transitional care Diversion interventions Domain 3: Prevention and Health Promotion Addressing the opioid use public health crisis Maternal and child health Access to oral health services Chronic disease prevention and control There are three domains – Domain 1 is the foundational layer for each of the project areas. They’re the elements that should be considered when planning projects. Within Domain 2, Bi-directional integration of care is required. Within Domain 3, addressing the opioid use public health crisis is required. There are a total of 4 required projects – 2 already identified, and 2 determined by regions

Resources and relationships Domains and Projects should not be implemented in isolation from one another. Projects will be highly interrelated and interdependent Transformation projects must: Be based on community-specific needs for the Medicaid population Avoid redundancy and duplication Regional projects will be assessed based on achievement of defined milestones and metrics. ACHs don’t have to start from square one. -Leverage existing resources, optimize existing beneficiary-provider relationships -While if you look at the toolkit, it might be easy to think of projects as its own initiative siloed off from others, but they are not meant to be separate. Need to identify links to other community priorities, working together. -Where is there the opportunity to make the most progress? -Focus on areas where there is work to be done.

Project milestones Project planning progress milestones – “Pay for Planning” Initial planning activities and partnerships that establish foundational structure and capacity for transformation project goals Project implementation planning – “Pay for Reporting” Action steps taken by participating providers specified in the project’s initial planning activities Scale and Sustain – “Pay for Outcomes” Demonstrable progress towards project outcomes made by participating providers due to the implementation of the project plan Three categories of milestones can trigger incentive payments under a transformation project

Independent assessor State-contracted vendor Will serve as independent assessor for delivery system reform activities under the demonstration The state will develop the tool that the vendor will use in evaluating project plans. Cannot have an affiliation with Accountable Communities of Health or their partnering providers Independent assessor responsibilities Reviewing Accountable Communities of Health Project Plan applications Providing recommendations to state regarding approval, denial, or recommended changes to ACH Project Plans Assessing project performance throughout the demonstration The independent assessor is not the same state-contracted vendor as the financial executor

What to expect in Year One Protocol development ACH certification process Phase 1 Phase 2 ACH project plan development and submission Independent assessor review/approval of project plans State procurements for vendors It will be a busy next five years. Currently we’re in protocol development – all of the elements that HCA will provide to CMS within the next 60 to 120 days.

Long-term Services and Supports

Unprecedented demand for LTSS Projected Growth of Older Population in WA State as % of 2012 Population Washington is a national leader in providing LTSS that help people remain in their homes and communities – but our population is aging. We will continue to provide more intensive services to those who need them, but we must prepare for the “age wave” by testing new services that support unpaid family caregivers and provide targeted supports to people who may or may not qualify for Medicaid.

Caregiving: Impacts on family In Washington State, approximately 80% of the care statewide is provided by family members and other unpaid caregivers Unpaid caregiving has an economic impact on families: Loss of earning potential Decreased savings for retirement Impacts on ability to provide for their own children’s needs Increased health care costs due to stress and burden If just one-fifth of unpaid caregivers stopped providing care, it would double the cost of long-term services and supports in Washington The LTSS System of the Future Must: Provide effective services for individuals before they spend down to Medicaid Provide effective supports to unpaid family caregivers Promote the right service at the right time and place Have the capacity to meet the needs of a growing population Strategically target LTSS Medicaid investments to slow the growth rate of public expenditures

Services designed to delay & divert need for more intensive interventions Medicaid Alternative Care (MAC) A new choice designed to support unpaid caregivers in continuing to provide quality care Tailored Supports for Older Adults (TSOA) A new eligibility group to support individuals who need Long-term Services and Supports and are at risk of spending down to impoverishment Number of individuals served at full ramp up (based on 1.20.16 model): TSOA 4200 MAC 2800 Total population approximately 8000 clients Benefits: Caregiver Assistance Services: Services that take the place of those typically performed by unpaid caregiver. Training and Education: Assist caregivers with gaining skills and knowledge to care for recipient. Specialized Medical Equipment & Supplies: Goods and supplies needed by the care receiver. Health maintenance & therapies: Clinical or therapeutic services for caregivers to remain in role or care receiver to remain at home. Personal Assistance Services: Supports involving the labor of another person to help recipient (TSOA only).

Medicaid Alternative Care (MAC) A new benefit package that will: Provide support for unpaid family caregivers who support individuals eligible for Medicaid but not currently accessing Medicaid-funded LTSS Provide necessary supports to unpaid caregivers to enable them to continue to provide high-quality care and focus on their own health and well-being An alternative to traditional Long-term Services and Supports: Unpaid family caregiver support to Medicaid-eligible individuals who choose it No estate recovery Earlier interventions decrease health impacts to caregivers and allow individuals to stay at home longer. Financial supports decrease financial burden on the family.

Tailored Supports for Older Adults (TSOA) A new eligibility group that will: Provide a benefit package for individuals at risk of future Medicaid LTSS use Help individuals and their families avoid or delay impoverishment and the future need for Medicaid-funded services while providing support to individuals and unpaid family caregivers Offering help earlier: Higher asset levels enable individuals to access services earlier without spending down to Medicaid levels ($53,100). No estate recovery Earlier interventions decrease health impacts to caregivers Financial supports decrease financial burden on the family TSOA offers a small personal care benefit to individuals without an unpaid caregiver who would not otherwise be eligible.

Implementation Currently we are engaged in: Ramp up work including preparing eligibility, assessment, and payment systems Financial WAC – Public comment March 2017 Development of client materials – April 2017 Program WAC – Public review May 2017 Implementation July 1, 2017

Foundational Community Supports (FCS)

Foundational Community Supports What it is Targeted Medicaid benefits that help eligible clients with complex health needs obtain and maintain housing and employment stability. Supportive housing services Supported employment services What it isn’t Ongoing payments for housing, rent, or room & board costs Wages or wage enhancements for clients Entitlement Foundational Community Supports are not an entitlement; rather, support is targeted to those with the greatest and most immediate needs

Supportive housing Community Transition Services (NEW) One-time supports for individuals transitioning out of institutions or at imminent risk of becoming institutionalized Includes rental deposit, move-in costs, necessary furnishings and other necessary supports Community Support Services Housing assessment and development of a plan to address barriers Assistance with applications, community resources, and outreach to landlords Education, training, coaching, resolving disputes, and advocacy Supportive housing services do not include funds for room and board or the development of housing.

Supported employment Individual Placement and Support (IPS) model Principles of supported employment: Open to anyone who wants to work Focus on competitive employment Rapid job search Client preferences guide decisions Individualized long-term supports Integrated with treatment Benefits counseling included

What’s new? – Third Party Administrator Single administrative entity for supportive housing & supported employment What is a Third Party Administrator (TPA)? A single, statewide entity responsible for contracting with providers and authorizing and distributing service payments What does it mean? Services will no longer be administered by multiple systems Services and target populations remain the same There are a few notable, but positive, changes in the FCS program since approval, notably that supportive housing and supported employment are to be framed as Home and Community Based services (or HCBS), which are typically allowable under different Medicaid authorities, including 1915c waivers and 1915i state plan amendments. This still gives us the authority we need to provide the services, plus it allows for the Community Transition Services mentioned earlier. In addition, we have decided to change our administrative approach to a single administrative entity, or Third Party Administrator, for both supportive housing and supported employment benefits. We believe this will streamline funds flow and administration, as well as better support the transition to a sustainable model by the end of the demonstration.

Initiative 3: Medicaid funds flow – previous model HCA MCOs SH/SE – Physical Health Conditions BHA BHOs SH/SE – Behavioral Health Conditions ALTSA HCS/AAAs SH/SE - LTSS Tribes SH/SE – Tribal Members Program oversight Payer Some of you may be familiar with this slide. This represents the previous model that we are no longer pursuing Provider 32

Initiative 3: Medicaid funds flow – current model HCA – DBHR – ALTSA TPA SH/SE – CBOs SH/SE – Health care providers SH/SE – Comm. BH agencies SH/SE – LTSS providers SH/SE – Tribal providers Program Oversight Benefits administrator This funds flow model represents the current approach. It remains a joint effort across HCA, DBHR and ALTSA, with a single TPA administering the benefits. HCA will hold the contract with the TPA, while DBHR and ALTSA will lead network development and provider support. Provider 33

Foundational Community Supports Next steps Foundational Community Supports protocol Protocol must be approved before services can be provided TPA Procurement will begin shortly State rules Will be sent out for external review soon Webinar: March 10 at 10 a.m. Register online at www.hca.wa.gov/hw

What’s Next?

Implementation timeline This snapshot of implementation includes both state and ACH responsibilities. State Responsibilities include: Protocol development defined by STCs Fund flow/Incentive Payment methodology Finalize Project Toolkit Project Plan Application Template Procure necessary vendors Develop “How to Guides” Strategic support for ACHs to guide project plan development Finalize benefit specifications for initiatives 2 and 3 ACH Responsibilities include: Completion of certification process/criteria Developing project plan application Authentic community/consumer engagement Adoption of tribal engagement protocol

Learn more at www.hca.wa.gov/hw Communications Library features: Demonstration video Fact sheets Timeline Presentation slide deck How to prepare: Engage, Inform, Communicate We recognize that you have questions and you have your own stakeholders to communicate with. To meet this need, we have prepared a Communications Library. You can access the library right now by visiting our website hca.wa.gov/hw From our website you can download our video, fact sheets, the timeline and more. This is designed to be your direct line to resources to help you with engagement.

Send questions to: medicaidtransformation@hca.wa.gov Join the Healthier Washington Feedback Network. Sign up at: hca.wa.gov/hw Send questions to: medicaidtransformation@hca.wa.gov Thank you for participating today. Please join our feedback network to stay in-the-know about Healthier Washington. 38