1. Healthier Washington Transforming Health Care in Washington State
Delivery System Reform Incentive Payment (DSRIP) Program
“Funds Flow 103” Technical Assistance Resource
August 2017

2. Presentation Goals Clarifications from Previous TA Sessions
This presentation provides updates on DSRIP Funds Flow, including:
Clarifications from Previous TA Sessions
Project Incentives:
Measurement and Payment Timing
P4R & P4P Achievement Value Calculation
Note: The Funds Flow TA series disseminates DSRIP funds flow details as they are available. Material in this presentation supersedes material from earlier Funds Flow decks, where relevant.

3. Clarifications from Previous TA

4. Review Updated Project Plan Supplemental Data Workbook
Based on discussion on the July 31 Development Council call, the Healthier Washington team reviewed the data workbook and made the following changes:
Changed “Reinvestment Funds” to “VBP Incentive Funds” for clarity
Dropped the “Estimated Project Funds” row under the “VBP Incentive Funds,” as ACHs will not likely have that information at the time of Project Plan submission
The updated Supplemental Workbook was distributed by Healthier Washington on Thursday, August 3, 2017.

5. DSRIP Program Structure: Transformation Incentives
Total Initiative 1 DSRIP Transformation Incentives ($1.12 billion*)
State Administration Funding ($52M)
VBP Incentives
($169M Max)
Design Funds (Y1 Only)
($54M Max)
Project Incentives
($847M Max)
Integration Incentives
($75M Max)
Un-earned Project Incentive funding available as DSRIP High Performance Incentives
Reinvestment Pool (Partnering Providers)
($113M Max** + Un-earned Funds)
* NOTE: Any statewide DSRIP funding cuts would be applied to Project Incentive P4P payments, proportionally across recipients.
Challenge Pool (MCOs)
($56M Max**)
Subject to Change
** Max only applicable if no regions secure Integration Incentives for integrated managed care; otherwise VBP Incentives remaining after Integration Incentives will be distributed 1/3 to the Challenge Pool (for MCOs) and 2/3 to Reinvestment Pool (for “Participating Providers”); Source: 1115 Waiver Special Terms and Conditions; DSRIP Funding and Mechanics Protocol; Discussion with HCA

6. Statewide Accountability Approach
A set percentage of authorized DSRIP funds is at risk for statewide performance on select measures, starting in Year 3:
The Funding & Mechanics Protocol indicates that statewide accountability performance will be measured using an adjusted Quality Improvement Score (QIS) methodology, similar to the approach planned for DSRIP High Performance Incentives
Total DSRIP funding available to be earned for the year may be reduced based on the statewide accountability QIS performance
Given that statewide performance is in large part based on ACH Project outcome performance, and given that the measurement, reporting and review timing are aligned, any statewide DSRIP reductions will be applied to the portion of DSRIP funds associated with Project Incentive P4P
DY 3
DY 4
DY 5
Share of DSRIP at Risk 5%
10%
20%
Note: 100% of Y4 & 5 funds at risk based on achievement of Integrated Managed Care by Jan 2020
Statewide Accountability Metrics
VBP Target Achievement
Performance on Statewide Accountability Quality Metrics:
Mental Health Treatment Penetration
Antidepressant Medication Management
Substance Use Disorder Treatment Penetration
Medication Management for People with Asthma (5 – 64 Years)
Psychiatric Hospital Readmission Rate
Outpatient Emergency Department Visits per 1000 Member Months
Controlling High Blood Pressure
Comprehensive Diabetes Care - Blood Pressure Control
Plan All-Cause Readmission Rate (30 days)
Comprehensive Diabetes Care: Hemoglobin A1c (HbA1c) Poor Control
Well-Child Visits in the 3rd, 4th, 5th, and 6th Years of Life

7. Integration Incentives Eligibility
Integration Incentives eligibility requires that regions meet both Phase 1 LOI and Phase 2 implementation deadlines.
Phase 1: Regions with all counties submitting a binding letter of intent (LOI) to integrate physical and behavioral health managed care submitted to the state Medicaid director by September 15, 2017
Eligible to receive 40% of total Integration Incentives available to the region upon receipt of LOIs
Phase 2: Regions that received Phase 1 funds and which implement integrated managed care by January 1, 2019
Eligible to receive remaining 60% of total Integration Incentives available to the region 1 2
Note: Regions that have already passed Phase 1 or 2 milestones are eligible for enhanced DY1 Project 2A valuations, as reflected in the Project Plan scoring methodology, a separate process from the Integration Incentives.

8. Project Incentives: Measurement & Payment Timing

9. Project Incentive P4R and P4P Payment Approach
P4P / P4R annual split applied to each Project
P4R: Because P4R is based on the ACH’s semi- annual reports, P4R-based payments may be earned twice a year, with P4R amount in a given year evenly split across each 6-month reporting period
P4P: Because P4P is based on annual HCA data compilation, P4P-based payments may only be earned 1x per year and will be paid once the data are calculated
Project Payment Accountability by Year
25%
Example: ACH eligible to earn $8 million total in Y4 Project Incentives, of which $2 million is accountable to Project X performance
50% ($1m) tied to P4R and 50% ($1m) tied to P4P
$500k may be earned for the project based on P4R- based AVs at mid-year and another $500k at year-end
$1m may be earned based on P4P-based AVs, with payment timing based on measurement / data timing

10. Project Incentives: Measurement and Payment Timing
DY 1
2017
DY 2
2018
DY 3
2019
DY 4
2020
DY 5
2021
Post Demo. Y1
2022
PD Y2
2023 Q1 Q2 Q3 Q4
ACH Semi-Annual Reports
DY3 P4P Baseline
DY4 P4P Baseline
DY5 P4P Baseline
P4P measurement conducted during relevant demonstration year to allow time for Project implementation to take effect.
DY3 P4P Meas. Year
DY4 P4P Meas. Year
DY5 P4P Meas. Year
Annual P4R potential funds evenly split across 2 reporting & payment cycles
Project Incentive Payments to FE Y1
100% Y2
50% Y2
50% Y3
37.5% Y3
37.5% Y4
25% Y4
25% Y5
12.5% Y5
12.5%
Y1 funds paid in 1 installment, adjusted based on Project Plan score Y3
25% Y4
50% Y5
75%
Each P4P payment includes:
P4P performance-adjusted ACH payments
Adjustments based on statewide accountability
DSRIP High Performance Incentive earnings
P4R
P4P
As of August 2017

11. P4R Measurement and Payment Timing
DY 2
2018
DY 3
2019 1 2 3 4 5 6 7 8 9 10 11 12
P4R Reporting Period
P4R Reporting Period
ACH Semi-Annual Report: Due July 31
ACH Semi-Annual Report: Due January 31
IA Scoring
IA Scoring
Review: HCA has up to 30 days to review and request additional information if needed
Review
Clarification: ACH has 15 days to respond to request and HCA has additional 15 days to review
Clarification
Adjusted Payment to FE: Within 30 days of report approval
Adjusted Payment to FE
As of August 2017

12. P4P Measurement and Payment Timing
DY 3
2019
DY 4
2020
DY 5
2021 1 2 3 4 5 6 7 8 9 10 11 12 10 11 12
Up to 2 months for processing / verification
P4P Measurement Year 3
6 mo. Data Lag
1 month to: (1) run QIS on statewide measures; (2) draft CMS report
P4P measurement conducted during relevant demonstration year to allow time for Project implementation to take effect.
Y3 P4P Results Known
Year 3 State QIS Report to CMS
CMS 90-day Review
Y3 P4P Total Funds Known
IA: (1) Scores P4P Achievement Values; (2) calculates ACH QIS for High Performance funds
Y3 ACH P4P AV Results Known
Up to 4 mo. to: (1) adjust total Project Incentives based on statewide performance; (2) apply AVs to adjust ACH funds; (3) identify total unearned funds; (4) apply ACH QIS to identify ACH-level DSRIP High Performance Incentives; and (5) align payment timing with 2nd DY4 P4R payment Y3
As of August 2017

13. Project Incentives: P4R and P4P Achievement Values

14. P4R DSRIP Project Incentives Process
PROVIDERS
ACH
FINANCIAL EXECUTOR
HCA
Implement demonstration Projects and related VBP and workforce initiatives with ACH
Collaboratively design demonstration Projects and submit Project Plan
Receive incentive funds
Prepare and submit semi-annual reports on Project progress
Provide direction on Project Incentive distribution to Financial Executor
Receive funds for administrative expenses
Distributes funds to recipients as and when instructed by ACHs
Approves Project Plan
Independent Assessor provides ACH Achievement Value score
Releases achievement-adjusted funds to Financial Executor

15. P4R Achievement Value Calculation
ACHs provide a semi-annual report every 6 months reporting on P4R metrics
P4R metrics include progress milestones and P4R “project metrics” in Toolkit
Each P4R metric is assigned an AV of either 1.0 or 0.0, with an AV of 1.0 provided based on:
Providing evidence of completion of Project milestones by the quarter indicated in the ACH’s Project Plan
Reporting on the P4R project metrics for the year in each semi-annual period
“Report against QIP measures” is worth one AV in aggregate
Milestone AVs will be applied based on the quarter indicated in the Project Plan. This determines the timing of the AV for that milestone, but does not shift funding timing, which is fixed and based on annual funds available for the Project as a whole
If needed, an ACH may request to shift a milestone from the time reflected in their Project Plan, as long as the new timing is still before the quarter required in the Toolkit

16. Example: P4R Achievement Value Calculation
Example: $500k tied to P4R for Project X each 6 months in Year 4
First 6 months
Second 6 months
Milestones
Project Metrics
# Metrics
1 (due Q2) 3
3 (each due Q4)
P4R Status
Incomplete
Reported
2 complete;
1 incomplete AV
0.0 (1)
1.0 (3)
1.0 (2); 0.0 (1)
Total AV
3.0
5.0
Percent AV
3.0 / 4.0 = 75%
5.0 / 6.0 = 83.3%
Earned P4R Funds
$500k * 75% = $375k
$500k * 83.3% = $416.5k
Unearned
$208.5k cumulative unearned P4R in DY4 
DY4 DSRIP High Performance Incentives

17. P4P DSRIP Project Incentives Process
PROVIDERS
ACH
FINANCIAL EXECUTOR
HCA
Implement demonstration Projects and related VBP and workforce initiatives with ACH
Collaboratively design demonstration Projects and submit Project Plan
Receive incentive funds
Provide direction on Project Incentive distribution to Financial Executor
Receive funds for administrative expenses
Distributes funds to recipients as and when instructed by ACHs
Approves Project Plan
Compiles outcome measure data
Independent Assessor provides ACH Achievement Value score
Releases achievement-adjusted funds to Financial Executor

18. P4P Achievement Value Calculation
There are two types of P4P metrics in the Project Toolkit: Gap-to-Goal and Improvement-Over-Self. For each metric, an ACH-specific P4P Improvement Target will be identified annually.
P4P Components
Anticipated Timing
Gap-to-Goal Measures
Improvement-Over-Self Measures
For ACH Reference: Historical ACH Performance*
Early September 2017*
Absolute Benchmark Selection
n/a
Early September 2017
Determination of % Gap Closure by Metric
Determination of % Improvement Over Self by Metric
Mid-September 2017
For ACH Reference: 2016 Benchmark Value
2017 Benchmark Value
October 2017
Final Measure Specifications
December 2017
Measurement Manual: Draft for Public Comment
January 2018
Final Measurement Manual
March 2018
P4P Year 3 Baseline Year (2017) Measurement
October 2018
ACH-Specific DY3 P4P Improvement Target
Components in italics do not directly determine the ACH-Specific P4P Improvement Target
*Depending on the metric, will include separate rates for up to 3 years of data ( ). Refresh of metrics already provided to include Calendar Year 2016 (where possible). Remaining metrics not yet provided to date (primarily related to oral health, maternal/child and reproductive health projects) will be delivered December 2017.
As of August 2017

19. P4P Achievement Value Calculation
Once a year, HCA will compile P4P metric performance, which the IA will use to calculate P4P Achievement Values (AVs)
Each metric is then assigned an AV based on ACH performance against their ACH-Specific Improvement Target
AVs for each Project are summed to determine the P4P Total Achievement Value (TAV) for the year for the Project
TAV is then divided by the # of metrics (total possible Project AVs), to calculate the Project’s Percentage Achievement Value (PAV) for the year
The PAV is multiplied by the potential P4P value for the project for the year to determine the P4P portion of the year-end performance-adjusted payment
% of Improvement Target Attained
100%
75 – 99%
50 – 75%
25 – 50%
< 25% Threshold AV
1.0
0.75
0.5
0.25

20. Example: P4P Achievement Value Calculation
Example: $1 million tied to P4P for Project X in DY 4; Project X has 10 P4P outcome metrics in DY4
AVs Earned
100% of Improvement Target attained on 2 metrics
1.0 AV (2)
Between 75 and 99% of Improvement Target attained on 6 metrics
0.75 AV (6)
Between 50 and 75% of Improvement Target attained on 1 metric
0.5 AV (1)
Below 25% of Improvement Target attained on 1 metric
0.0 AV (1)
Total AV
7.0
Percent AV
7.0 / 10.0 = 70%
Earned P4P Funds
$1m * 70% = $700k
Unearned Funds
$300k  DY4 DSRIP High Performance Incentives

21. Q&A

22. Upcoming Funds Flow TA Topics
Additional Funds Flow TA Sessions Will Cover:
VBP Incentives Methodology
DSRIP High Performance Incentives:
Additional details on QIS methodology
Final list of High Performance metrics

23. Thank You!