NYAPRS Note: The news below about a federal waiver submission from Illinois healthcare authorities indicates that the national trend toward non-traditional funding for expanded Medicaid services is set to continue. This proposal looks similar to the NYS resubmission of the 1115 waiver amendment, yet pushes even further to build incentives into care initiatives. The most progressive aspect of the plan is a proposal to incentivize managed care plans to invest in housing for members experiencing homelessness. Policy makers around the country in states seeking to expand Medicaid funding will be keeping their sights on NY and Illinois in the coming months, waiting for CMS feedback or approval. Both proposals could set significant precedents for how payers and providers are permitted to innovate with financial resources for increased savings and improved outcomes.
Illinois Medicaid To Ask Feds to Approve ‘Sea Change’ In How It Spends Money
Crain’s Chicago Business; Kristen Schorsch, 1/16/14
Illinois Medicaid has a bold plan to use federal matching dollars for everything from job training to repurposing nursing homes to help cut costs in the financially strapped program.
The Illinois Department of Healthcare and Family Services, which administers Medicaid, revealed the details last week as part of a proposal that would give the state more flexibility in how it uses federal matching dollars for Medicaid, the joint health insurance program for the poor and disabled.
“What’s being submitted is a sea change,” said Margie Schaps, executive director of the Chicago nonprofit Health & Medicine Policy Research Group and a member of the group that drew up the proposal. “It’s about providing care really differently.”
Meanwhile, Gov. Pat Quinn’s Office of Management and Budget is looking for an organization that can manage the major transformation in how health care is delivered and paid for in Illinois. To implement the plan, the state will need the federal government to waive various rules governing how matching Medicaid dollars are spent. In March, the state Department of Healthcare and Family Services plans to submit a request for a five-year waiver to the federal Centers for Medicare and Medicaid Services. A spokeswoman for the federal agency declined to comment.
The lengthy list of initiatives outlined in the state’s draft of the proposed waiver could require millions of dollars in upfront investment from the state — it’s unclear precisely how much — for a Medicaid program that was on the verge of collapse in 2012.
“I think a lot of (the success of the proposed changes) will depend on will they have adequate resources to devote to implementing it,” said MaryBeth Musumeci, a Washington-based associate director at the Kaiser Commission on Medicaid and the Uninsured.
The initiative comes as Medicaid, which covers 2.8 million recipients, expects to add several hundred thousand more people to the rolls under a program expansion that began Jan. 1 under the Affordable Care Act.
The idea of applying for the waiver, which would allow the state to use Medicaid matching dollars in ways now not allowable under federal law, was developed by a group of health care officials and advocates that formed last spring with a $2 million federal grant to develop new ways to provide and pay for health care in Illinois.
Insurers, hospitals, advocacy groups and government officials met for six months and created a multipronged approach. Their goals involved changing how providers are paid, enhancing public health efforts and ensuring there are enough adequately trained people in the workforce to meet the demands of keeping patients healthy rather than waiting for them to get sick.
A LIST OF SPECIFICS
According to the draft of the waiver, the ideas include:
� Providing financial incentives to hospitals to reduce expensive ER visits and readmissions and increase outpatient care.
� Providing money to long-term care facilities that want to close or convert their space for another use as the state encourages placing more people in community-based settings such as group homes.
� Imposing a fee on community-based home providers where people with developmental disabilities live to be used to expand access to those services. (Nursing homes and hospitals already pay similar fees.)
� Providing funds to train community health care workers, in-home specialized personal assistants, physicians and others in a state with a primary care provider shortage.
� Repaying loans of providers that commit to serving Medicaid patients in rural or underserved areas and giving bonus payments to so-called safety-net hospitals that create their own loan repayment programs for employees.
� Providing financial incentives for health plans to invest in housing for homeless patients among others.
The state also is seeking federal matching dollars outside of Medicaid for aspects of care now paid for with other state funds.
The draft of the proposed waiver, which is posted on the Department of Healthcare and Family Services’s website, does not provide cost estimates. But it says the state cannot receive more federal dollars than it would have without the waiver. Medicaid has a roughly $17 billion annual budget.
The state anticipates an undisclosed amount of savings over the five years of the waiver, the proposal said.
A spokesman for the Illinois Department of Healthcare and Family Services said state officials are conducting a financial analysis to determine the cost of implementation and any potential savings. The analysis is projected to be finished in February.
The Office of Management and Budget has begun the process of looking for an organization to design, plan, manage and execute the state’s vision in partnership with various public agencies and other participants. The ideal candidate would have an expertise in Medicaid reimbursement, data analytics, measuring patient outcomes and consulting.
The state does not intend to award a contract based solely on the responses from interested organizations. Responses are due Jan. 24.