1115 Waiver Renewal Approval
On Dec. 21, 2017, the Centers for Medicare and Medicaid Services approved a five-year renewal of the Texas 1115 Transformation Waiver from October 2017 to September 2022, Demonstration Years 7-11. The renewal continues Medicaid managed care statewide along with the Uncompensated Care pool and the Delivery System Reform Incentive Payment program pool.
The DSRIP funding pool has been extended four years, through Sept. 30, 2021. Pool sizes are $3.1 billion in DY7-8, $2.91 billion in DY9, $2.49 billion in DY10, and $0 in DY11.
Information on the Texas 1115 Waiver Renewal can be found at the Texas Health & Human Services Waiver Renewal.
Overview of the Medicaid 1115 Waiver Program
In December 2011, the Texas Health and Human Services Commission (HHSC) received approval from the Centers for Medicare & Medicaid Services (CMS) for a section 1115 Demonstration waiver that allows the state to expand Medicaid managed care while preserving hospital funding, provides incentive payments for health care improvements, and directs more funding to hospitals that serve large numbers of uninsured patients. The Texas 1115 Waiver is a five-year demonstration program.
The Texas Healthcare Transformation and Quality Improvement Program (the 1115 Waiver) allows the state of Texas to expand Medicaid managed care while preserving federal hospital funding historically received as Upper Payment Limit (UPL) payments — supplemental payments to make up the difference between what Medicaid pays for a service and what Medicare would pay for the same service. Replacing the UPL payment methodology are two funding pools now worth $29 billion (all funds) over five years. Funding from the pools will be distributed to hospitals and other providers to support the following objectives: (1) an uncompensated care (UC) pool to reimburse for uncompensated care costs as reported in the annual waiver application/UC cost report; and (2) a Delivery System Reform Incentive Payment (DSRIP) pool to incentivize hospitals and other providers to transform their service delivery practices to improve quality, health status, patient experience, coordination, and cost-effectiveness.
- Uncompensated Care Pool Payments are designed to help offset the costs of uncompensated care provided by the hospital or other health care providers.
- DSRIP Pool Payments are incentive payments to hospitals and other health care providers that developed programs or strategies to enhance access to health care, increase the quality of care, improve the cost-effectiveness of care and benefit the health of the patients and families served.
Under the transformation waiver, eligibility to get Uncompensated Care or DSRIP payments will require participation in a regional healthcare partnership (RHP). Within a partnership, participants include governmental entities providing public funds known as intergovernmental transfers (IGT), Medicaid providers and other stakeholders. Participants will develop a regional plan identifying partners, community needs, the proposed projects, and funding distribution. Each partnership must have one anchoring entity, which acts as a primary point of contact for HHSC in the region and is responsible for seeking regional stakeholder engagement and coordinating development of a regional plan. The RHP Plans must be consistent with regional shared mission and quality goals of the RHP and CMS’s Triple Aims to improve care for individuals (including access to care, quality of care, and health outcomes); improve health for the population; and lower costs through improvements (without any harm whatsoever to individuals, families, or communities).
HHSC has defined 20 regions in Texas that define the geographic boundaries of regional health care partnerships. RHP 9 consists of three counties — Dallas, Denton and Kaufman. In RHP 9, Parkland Health & Hospital System has been designated as the anchoring entity.