Illinois Medicaid 1115 Waiver February 19, 2014 IHA 4/12/2017 Illinois Medicaid 1115 Waiver February 19, 2014

What is a Medicaid 1115 Waiver? IHA What is a Medicaid 1115 Waiver? 4/12/2017 Allows states to apply for program flexibility from the Centers for Medicare & Medicaid Services to test new approaches to financing & delivering Medicaid Provides incentives to providers to develop new models of care Lasts five years, but can be renewed/amended Must be budget neutral, leading to overall savings Section 1115 of the Social Security Act Our State’s Waiver Application Called the Path to Transformation Waiver Includes all services in the Illinois Medicaid program for better coordination Covers all Medicaid-eligible populations

Four Pathways to Transformation IHA Four Pathways to Transformation 4/12/2017 Pathway 4 Pathway 1 Pathway 2 Pathway 3 Goals: Better Health Outcomes Lower Costs State Draft Waiver Application Population Health Home- & Community-Based Supports Delivery System Transformation Workforce

Waiver Goals Support linkages between health care delivery systems and services that directly impact key social determinants of health Create incentives to drive development of integrated delivery systems Promote efficient health care delivery through optimization of existing managed care models Enhance ability of the health care system to engage in population management Strengthen the state’s health care workforce to meet needs of Medicaid beneficiaries (Goals continued on next page)

Waiver Goals (continued) Consolidate Illinois’ nine existing 1915(c) waivers under a single 1115 waiver Increase flexibility and choice of long-term supports for adults and children Institute a provider assessment on residential habilitation providers Reduce prioritization of unmet need for services wait list Promote and foster greater community-integrated, competitive employment opportunities

1st Pathway: Delivery System Transformation IHA 1st Pathway: Delivery System Transformation 4/12/2017 Waiver promotes care coordination & integrated delivery system development Provides Coordinated Care Entities & Accountable Care Entities with analytics, data collection & other activities related to managing a population Hospital performance & integration pool tied to hospital & health system performance measures Public hospitals will have separate pool for specific projects Delivery System Transformation

2nd Pathway: Population Health IHA 2nd Pathway: Population Health 4/12/2017 Focuses on developing regional public health hubs Premium add-on payment to health plans for developing population health interventions Fund regional public health hubs to provide technical assistance in addressing health disparities, social determinants of health, and evidence-based interventions, including those endorsed by the Community Preventive Services Task Force Population Health

3rd Pathway: Workforce Increase Physician Supply IHA 3rd Pathway: Workforce 4/12/2017 Increase Physician Supply Provide incentives for training physicians (primary care & high-need specialties) in community settings, treating underserved patients Expand loan repayment programs, including incentive funding for hospital-sponsored loan repayment programs Community Health Workers Training In-home personal attendants, nurses & other providers to work on primary care provider teams Establish and certify community health workers Workforce

4th Pathway: Home & Community-Based Supports IHA 4th Pathway: Home & Community-Based Supports 4/12/2017 Consolidation of nine existing home- & community-support waivers Increase funding & uniformity in benefits Base benefits on beneficiary needs, increase choice for beneficiaries, and expand community-based options Children & Young Adults with Developmental Disabilities Children who are technologically dependent Medically Fragile Individuals with HIV or AIDS Elderly Behavioral health expansion & integration Home- & Community-Based Supports

Opportunities and Challenges IHA Opportunities and Challenges 4/12/2017 Challenges Many needs Limited funding Negotiatons with CMS will determine final funding allocations - Opportunities + A Waiver Provides: A possible option to preserve hospital assessment program New funding for: Hospital quality and transformation initiatives Primary care physician development in underserved areas Behavioral health programs Maternal child visits and medical home development Loan repayment for physicians through safety-net hospitals Strengthening of: Community-based options Public health resources

Why is the Waiver an Option for Preserving Assessment Funding? IHA Why is the Waiver an Option for Preserving Assessment Funding? 4/12/2017 Upper Payment Limit (UPL) Conundrum Under Federal law, states can’t make direct payments to hospitals that exceed the upper payment limit Includes hospital assessment payment UPL = Estimate of what would be paid under Medicare principles for persons in the Medicaid Fee-for-Service system 50% coordinated care mandate by 1/1/2015 Capitation UPL Assessment

What is the Access Assurance Pool? IHA What is the Access Assurance Pool? 4/12/2017 Option to replace current assessment (or UPL) payments Maintain current assessment payment distribution method “as is” for transition period (e.g. 1st two years of the waiver) Then, Access Assurance (AA) payments based on a hospital’s unreimbursed costs for Medicaid and uninsured patients Can include hospital and other services (e.g. Dr., Rx) Goal: AA payments to replace, as closely as possible, the current Assessment payments for each hospital

How is a Waiver Financed? IHA How is a Waiver Financed? 4/12/2017 Costs Not Otherwise Matchable (CNOM) One of the most powerful provisions in Section 1115 allows CMS to grant approval of Costs Not Otherwise Matchable or CNOM Includes services not normally qualifying as Medicaid expenditures Must be budget neutral Must reinvest freed-up state funds back into the Medicaid program

Budget Neutrality Under 1115 Waiver IHA Budget Neutrality Under 1115 Waiver 4/12/2017 CNOM counts toward budget neutrality gap

Hospital-Specific Waiver Payments IHA Hospital-Specific Waiver Payments 4/12/2017 1115 Waiver Payments Integration & Incentive Pool Pays Hospitals for Achieving Metrics Funded by CNOM Primary Care, GME, Community-Based Training Loan-Forgiveness Funding

Transforming Illinois Health Care IHA Transforming Illinois Health Care 4/12/2017 Illinois hospitals have the infrastructure to bring together a wide range of providers

The Waiver Process 10/18/13 2/10/14 1/8/14 11/5/13 1/22/14 3/12/14 IHA The Waiver Process 4/12/2017 10/18/13 Stakeholder kick-off meeting 2/10/14 Final waiver with comments posted 1/8/14 Draft waiver posted for comment 11/5/13 Concept paper finalized 1/22/14 Waiver comments due 3/12/14 Waiver submitted to CMS 6-12 mos. State negotiates with CMS 10/18 – 12/13/13 Stakeholder meetings 12/18/13 Legislative hearing

State of Illinois 1115 Waiver Web Page For More Information @ Patrick Gallagher Group Vice President, Health Delivery & Payment Systems (630) 276-5496 pgallagher@ihastaff.org State of Illinois 1115 Waiver Web Page http://www2.illinois.gov/gov/healthcarereform/Pages/1115Waiver.aspx 18