1. Section 1115 Medicaid Waiver Renewal Plan/Provider Incentive Programs Expert Stakeholder Workgroup Framing Our Discussion Wendy Soe and Sarah Brooks Department of Health Care Services November 12, 2014

2. Section 1115 Medicaid Waivers  Allow states flexibility to design demonstration projects that promote the objectives of the Medicaid program  Typically approved for 5 years; States may submit request for waiver renewal for 3 -5 years  Must be budget neutral Integrity Service Accountability Innovation 2

3. CA BTR Waiver  Current Waiver sunsets on October 31, 2015  Waiver renewal request must be submitted to the Centers for Medicare and Medicaid Services (CMS) at least 6 months before the end of the current waiver Integrity Service Accountability Innovation California’s Bridge to Reform Waiver (2010-2015) 3

4. 2015 Waiver Renewal Initial Concepts Integrity Service Accountability Innovation 4

5. Purpose of Section 1115 Medicaid Waiver Renewal To further delivery of high quality and cost efficient care for our beneficiaries To ensure long-term viability of the delivery system post-ACA expansion To continue California’s momentum and successes in innovation achieved under the “Bridge to Reform” Waiver Shared Goals with CMS Integrity Service Accountability Innovation 5

6. Objectives Strengthen primary care delivery and access Avoid unnecessary institutionalization and services by building the foundation for an integrated health care delivery system that incentivizes quality and efficiency Address social determinants of health Use California’s sophisticated Medicaid program as an incubator to test innovative approaches to whole-person care Integrity Service Accountability Innovation 6

7. Initial Waiver Concepts Federal/ State Shared Savings Payment/ Delivery Reform Incentive Payments Safety Net Payment Reforms FQHC Payment/ Delivery Reform Successor DSRIP CCS Program Redesign Shelter for Vulnerable Populations Workforce Development Integrity Service Accountability Innovation 7

8. Plan/Provider Incentives Integrity Service Accountability Innovation 8

9. Current Incentive Structures Assigns beneficiaries who do not choose a Medi-Cal managed care health plan (MCP) to an MCP An assignment percentage is calculated for all MCPs (non-COHS) based on a combination of safety net and HEDIS measures http://www.dhcs.ca.gov/provgovpart/Pages/MMCDAAIncentive.aspx Auto-Assignment Incentive Program (default algorithm) A majority of MCPs have implemented pay for performance incentive programs Type, structure and funding vary by MCP Medi-Cal Managed Care Health Plans (MCPs) Integrity Service Accountability Innovation 9

10. Current Incentive Structures 3 To incentivize high quality care and quality improvement, a portion of the capitated rate paid to Cal MediConnect plans will be withheld each year of the demonstration 1% - Year 1 2% - Year 2 3% - Year 3 The withheld amounts will be repaid retrospectively subject to participating plan performance consistent with established quality benchmarks These benchmarks are based on a combination of certain core national quality withhold measures, as well as State-specified quality measures Cal MediConnect (California’s duals demonstration) Integrity Service Accountability Innovation 10

11. Current Incentive Structures 2 Year 1 Quality Withhold Measures: Submission of encounter data as required Completed HRAs within 90 days Beneficiary input on program management and enrollee care Access to appointments & needed care Behavioral Health Shared Accountability Process Measures Percent of enrollees with documented discussions of care goals Ensuring physical access to buildings, services and equipment Percent of members who have an IHSS case manager and have at least one case manager contact during the measurement year Cal MediConnect Integrity Service Accountability Innovation 11

12. Current Incentive Structures 4 Years 2 & 3 Quality Withhold Measures: Hospital readmissions within 30 days Annual flu vaccination Follow-up after a mental health-related hospitalization Screening for clinical depression & follow-up Reducing the risk of falling Controlling blood pressure Diabetes medication adherence Reduction in emergency department use for seriously mentally ill and substance use disorder enrollees Discussing care goals with enrollees IHSS case manager contacts Cal MediConnect Integrity Service Accountability Innovation 12

13. Current Incentive Structures 5 Implemented to incentivize cost effectiveness in 2-plan and GMC counties Prior to implementation in 2011, each plan’s capitation rate was based 100% on the plan’s own cost experience. Data revealed significant differences within a county in terms of plan costs and therefore plan rates. DHCS implemented incorporating into the final plan rate a component that was based on a risk-adjusted county average rate In 2011, 20% of the final rate was based on a risk-adjusted county average, with the remainder based on plan-specific costs. The percentage has increased over time and is currently 50%. By including the risk-adjusted county average in a plan’s rate, plans that are lower cost (accounting for differences in population risk) are rewarded and plans with higher cost are penalized, therefore incentivizing plans to be as cost-effective as possible County Average Rate Setting Integrity Service Accountability Innovation 13

14. Potential Incentive Constructs Under the new Waiver, several different incentive constructs are possible DHCS to Medi-Cal managed care health plans (MCPs) MCPs to plan providers MCPs to county behavioral health Pay for performance Shared savings/Accountable care arrangements Integrity Service Accountability Innovation 14

15. Questions / Comments: WaiverRenewal@dhcs.ca.gov WaiverRenewal@dhcs.ca.gov Integrity Service Accountability Innovation 15