May 06, 2022
State’s proposed 1115 waiver amendment request, “Strategic Health Equity Reform Payment Arrangements,” seeks $13.5 billion to continue transformation of Medicaid program with emphasis on social determinants of health.
The NYS Department of Health hosted its second public hearing this week on the State’s proposed 1115 waiver amendment request, titled “Strategic Health Equity Reform Payment Arrangements: Making Targeted, Evidenced-Based Investments to Address the Health Disparities Exacerbated by the COVID-19 Pandemic” (SHERPA). The public comment period on the proposal ends May 13, 2022. The draft waiver amendment can be found here.
For those unfamiliar with 1115 waivers, the “1115” refers to Section 1115 of the Social Security Act. Under Section 1115, state Medicaid programs can request that CMS waive certain federal laws that govern the medical services and healthcare-related activities that are eligible for federal Medicaid funds and that qualify as appropriate uses of the required state matching funds. CMS is not obligated to approve the application; however, history has demonstrated that CMS can be persuaded to fund novel approaches to healthcare delivery, when such proposals are backed up by data and a solid implementation plan.
The proposal seeks to build upon the experience and lessons learned from the recently concluded DSRIP program. The State is seeking $13.5 billion over five (5) years from the federal government to address “health disparities and systemic health care delivery issues that have been both highlighted and intensified by the COVID-19 pandemic.”
The four goals of SHERPA are:
To achieve these goals, the State plans to utilize the federal funds to make investments in (1) regional planning through new Health Equity Regional Organizations (HEROs); (2) Social Determinant of Health Networks (SDHNs), comprised of community based organizations (CBOs) engaged to address social care needs (SCNs); (3) Advanced Value Based Payment (VBP) Models that fund the coordination and delivery of social care via an equitable, integrated health, and social care delivery system, (4) supportive housing services, with a focus on the homeless and long-term institutional populations; (5) the creation of a COVID-19 Unwind Quality Restoration Pool for financially distressed hospitals and nursing homes; (6) the expansion of workforce capacity; and (7) building digital and telehealth infrastructure and care models to expand access to care.
As set forth in the draft waiver, there would be 8–9 regional HEROs whose primary purpose would be regional planning. The State has earmarked $65 million annually or $325M over five years to support the HEROs’ regional planning, data collection, reporting, and coordination activities. Unlike a DSRIP Performing Provider System, a HERO would not receive and distribute waiver funds. A HERO entity could be an existing entity, or a new entity formed by regional participants, including managed care organizations, primary care and other clinical and community based providers, IPAs including behavioral health IPAs, QEs, SDHNs, and others.
Similarly, the State is planning for 8–9 regional SDHNs, consisting of a network of CBOs. The SDHNs are expected to align with the regional HEROs and would be charged with providing evidence-based interventions to address a range of SCNs of individuals enrolled in Medicaid.
The SDHN in each region would be responsible for:
SDHNs would receive funding to support the development of their networks, including to develop IT and other business processes and capabilities. The CBOs in these networks would also receive payment for their services. A VBP incentive pool would use an established fee schedule to pay CBOs for interventions on a per service basis. As described in the draft waiver, the fee schedule would be similar to North Carolina’s Healthy Opportunities Pilot Program, which includes a standardized service name, rate, and service definition for each evidence-based intervention.
The State is seeking $1.57B over five years to fund supportive housing initiatives including community transitional services, tenancy supports, and medical respite programs.
The State’s pitch to build upon its past efforts to partner MCOs and housing providers and link Medicaid members to available housing units. The application cites a 47% reduction in Medicaid costs associated with these past efforts, although it is unclear whether this statistic incorporates results from additional Medicaid initiatives that are not directly related to supportive housing.
The State has taken a strong position that supportive housing is a key component to improving population health. Under this proposal, HEROs would inventory supportive housing in their respective regions, focusing on the Medicaid member population; identify housing solutions by coordination with local, state, and federal agencies; and link high Medicaid utilizers who do not have housing to housing resources.
Additionally, the State proposes to use federal and state Medicaid dollars to fund an Enhanced Supportive Housing Pool. The funds would be used to:
The application proposes to ramp up supportive housing over the course of the five-year demonstration, from $63 million in Demonstration Year (“DY”) One to $601 million by DY Five, a ten-fold increase. The State proposes to prove the efficacy of the initiative by measuring (1) the change in the number of referrals to supportive housing, and (2) the change in the rate that persons who were formerly homeless receive permanent housing. These measurements are not based on the more traditional claims data, and rely instead upon a proposed statewide social needs data platform that would uptake data from the HEROs and SDHNs.
The draft waiver also details various initiatives to expand the use of telehealth, earmarking $300M over five years to support these initiatives. Initiatives include, but are not limited to:
The application includes requests to use Medicaid funds for several additional initiatives, some of which are less detailed than those described above. These funding requests include:
After considering the testimony received at the two public hearings and public comment, the State is expected to submit the 1115 waiver amendment to CMS for approval. If approved, the State is planning for most provisions of the waiver amendment to take effect January 1, 2023. Additional time and planning will be needed to select and set up the HEROs and SDHNs and the VBP arrangements associated with these entities.
Nixon Peabody will monitor and provide future updates on the 1115 waiver amendment.
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