December 09, 2019
Health Care Alert
Health Care Alert
The New York State Department of Health submitted a 1115 Medicaid Waiver amendment request to the Centers for Medicaid and Medicare Services seeking additional time and funds to expand value-based care in the state.
On November 27, 2019, the New York State Department of Health (DOH) submitted a 1115 Medicaid Waiver amendment request to the Centers for Medicaid and Medicare Services (CMS) seeking additional time and funds to expand value-based care in the state. New York State has operated under its current 1115 Medicaid waiver since 2014, which allotted $8 billion in federal funding to invest in a Medicaid transformation, in large part through the engagement of 25 performing provider systems (PPSs) that were approved to participate in the Delivery System Reform Incentive Payment (DSRIP) program. New York is seeking the extension of the 1115 Medicaid Waiver for an additional one-year period to end on March 31, 2021 (Phase One). New York is also seeking a three-year renewal of the 1115 Medicaid Waiver that would provide additional opportunities for value-based payment (VBP) contracting from April 1, 2021, through March 31, 2024 (Phase Two). In all, the state seeks a combined full four-year extension/renewal period (one-year extension and three years of renewal).
Phase One is proposed to be a continuation of the current 1115 Medicaid Waiver efforts, but “streamlined,” i.e., with “performance rewards going out exclusively through pay-for-performance on a narrower set of higher priority performance measures.” This extension phase does not include any additional funding and, instead, will allow New York to roll over and spend unused DSRIP funds, which New York estimates to be $625 million. Funding will be distributed through two pools, with 80% of the funds allocated to the base-performance pool and the remaining 20% allocated to the high-performance pool. Funds will continue to be paid out in the same manner, but performance will be ranked to ensure all the remaining funds are expended during this extension period.
To take advantage of the performance rewards during this extension period, each PPS would be expected to submit a Phase Two implementation plan to the state that demonstrates ongoing readiness to continue transformation efforts, including a description of how the PPS will focus its efforts on the Promising Practices categories and begin readying stakeholders for Phase Two (renewal). The state has identified the following Promising Practices categories, which will be carried through to Phase Two:
Phase Two seeks a three-year renewal period of the 1115 Medicaid Waiver, which includes a request for additional funding totaling $7.375 billion and proposes to focus on identified high-priority areas, including long-term care, maternal mortality, children’s health, and opioid/substance use disorders. In the renewal phase, the state will assess existing stakeholders with the goal of “building new or reconstituting entities to permanently sustain promising practices (including SDOH) through more robust VBP contracting.”
The state will pivot from the original 1115 Medicaid Waiver initiative and advance new structures that include Value Management Organizations (VMOs) and regional Social Determinant of Health Networks (SDHNs) while transitioning away from PPSs. As described by DOH, “VMOs will provide technical support to their stakeholders (MCOs, clinical and SDOH providers, such as LHDs and [community care-based organizations (CBOs)]) as they collectively build new VBP contracting models and implement clinical and social interventions to meet the needs of different patient populations.” “The state envisions that the VMO will be constituted as a legal entity (e.g., not-for-profit corporation, limited liability company, etc.), which may be either newly formed or modified from an existing PPS structure under the original waiver to include a network that, at a minimum, is composed of providers, MCOs, and CBOs as part of the governance, management[,] and operational structure of the VMO.”
Further, SDHNs would be designed to “1) organize a wide range of non-clinical providers needed for SDOH interventions, 2) support these providers to engage in VBP contracting, and 3) deliver socially focused interventions linked to VBP ...” The state proposes to select a lead applicant for an SDHN within the designated regions across the state, which could be a CBO or a network entity (e.g., an IPA) composed of CBOs, that would be expected to “use evidence–based interventions to coordinate and address housing instability, food insecurity, transportation, interpersonal safety, and toxic stress.”
In addition to the introduction of VMOs and SDHNs in Phase 2, the disbursement of waiver funds will also change, with the state using a VMO Performance Pool and a VBP incentive pool.
(See diagram for proposed funding disbursement in Phase 2.)
It remains unclear at this time whether the federal government will approve New York State’s request for the one-year extension and/or the three-year renewal. We will continue to monitor these developments.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.
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