What Made It Into the Final NYS Medicaid 1115 Waiver $13.52B Submission
Post Written by Kalin Scott, Chief Innovation Officer
After months of public engagement, New York’s 1115 Medicaid Waiver final request has been released to federal decision makers and negotiations are likely to begin in the near future. Read on for a brief recap and five key updates in the state’s latest version.
As we shared earlier this month, New York submitted its $13.52 billion formal waiver amendment request to the Centers for Medicare and Medicaid Services (CMS) on September 2, 2022. This action puts the ball in CMS’s court, starts the clock on required approvals, an federal public comment period, and opens the door to formal negotiations between the state and CMS.
Since our last update, CMS deemed the state’s waiver amendment request ‘complete’ - meaning all required components were addressed and submitted - and opened a 30-day federal public comment period running from September 19 - October 19, 2022.
New York’s request – widely regarded by stakeholders as “DSRIP 2.0” – outlines the state’s commitment to invest in health and social care organizations serving more than 7.5 million Medicaid members across the state. The NYHER waiver amendment would amend the state’s existing Section 1115 Medicaid Redesign Team (MRT) Waiver.
Following up on the success of DSRIP in New York, the state designed its current approach to promote health equity, support safety-net providers, address the social needs of Medicaid members, and continue expansion of advanced value-based payment (VBP) models across the state.
The request outlines investments in multiple programs to advance these goals, and creates two new entities: Health Equity Regional Organizations (HEROs), and Social Determinants of Health Networks (SDHNs.) HEROs and SDHNs would be established by the state in each of nine regions. HEROs would play a key role in convening stakeholders, conducting regional assessments and planning, and outlining regional health equity and VBP funding priorities. SDHNs would be implemented to formally organize social care providers, coordinate regional social care interventions, support social needs data collection, referral and exchange, and serve as a single point of contracting for social care providers with managed care organizations (MCOs) and VBP contractors.
What’s New Here? Five Key Updates in NY’s September 2022 Request
While the majority of the state’s approach and document remains the same, several new updates were included in this version. Adjustments in proposed funding, timelines, program requirements, policy documents, and key outcome measures all reflect the state’s current thinking, and will impact on health and social care providers and stakeholders interested in participating in the program.
You can find a summary of changes along with state responses to public feedback beginning on page 58 of the September 2022 request. Want just the highlights? I’ve outlined the five most significant updates from the 80+ page document below.
Update #1: Moving Dollars Around: More Money for SDHNs
The $13.52 billion request includes a detailed funding chart reflecting where the state plans to invest funding over the proposed five-year period. The same chart was included in earlier versions - but the September 2022 update shifts some funds around, reflecting public feedback and the state’s priorities.
Notably, this new document directs more funding to SDHNs - $860 million over five years. This is an increase from the $585 million that had been previously allocated to SDHNs. Feedback from the public engagement process focused on the need for additional funding and support for SDHNs and social care providers, and the state clearly agreed. The increase also supports a new role for the SDHNs outlined in the updated document: in addition to previously-outlined responsibilities, SDHNs are now expected to identify and cover the costs of a social needs referral platform/data system within their region.
Where does the additional funding come from? The state moved dollars from funds that had previously been set aside for HERO activities (lowering total investment to $293 million), and also pulled a small amount from funding intended for VBP (lowering total investment in advanced VBP models to $6.8 billion). Significant funding is still allocated for each of these areas, but the shifting of funds clearly reflects the state’s waiver priorities.
Update #2: New Insights on Program Requirements
In this updated request, strategies outlined in earlier versions have been modified. The state indicates the change of direction in both the initiative descriptions and its responses to public feedback received. In many of its updates, the state revised language to reflect a broader list of health and social care provider and organization types that can and should be included in HERO and SDHN composition.
Most significantly, the previous versions outlined a vision for a single statewide social needs referral and data platform - to be procured by the state. This single statewide system was envisioned to support efforts addressing the social needs of Medicaid members, and providing SDHNs, HEROs, providers and plans a platform for data exchange on social needs, referrals, and service outcomes.
In this update, the state removes the procurement of a single statewide system. Instead, regional systems would connect to the state’s existing data infrastructure. SDHNs are also now responsible for procuring and funding these referral systems within their region. The new approach suggests the state will retain some oversight on which systems SDHNs can use: “existing and future referral platforms/data systems supporting screening and referral processes will be qualified” - approved by the state - “to ensure interoperability.” This responsibility will be a significant focus for SDHNs - and opens the door to multiple companies and solutions that could potentially be engaged in this effort.
New York also updated Strategy #2 - replacing “Supportive Housing” with “Transitional Housing” in the strategy’s name and focus. Supportive housing typically refers to more permanent housing (New York Medicaid has invested hundreds of millions of state-only dollars in related initiatives), while transitional housing is generally more short-term. The state’s comments suggest that the initiatives outlined in this request are better aligned with the definition of transitional housing (and are therefore more likely to gain CMS approval.)
New York’s previous versions outlined a key program element: a HERO and a SDHN would be established for each of 9 regions within the state. The document still outlines this approach, but in the state’s comments later in the document, it says: the state “has decided not to finalize the regions at this time” and will “take more time to consider the best way to define the regions”, committing to sharing more information in the future. This flexibility could significantly alter the number of HEROs and SDHNs established in the future.
Update #3: What Happens When: Updated Implementation Schedule & Year 1 Focuses
Previous versions of the document outlined activities that would take place over the proposed five-year waiver period, and alluded to some activities starting before others. Still, there was not a clear outline with specifics on timing of key waiver programs.
The September 2022 update reflects a clearer outline of Year 1 and Year 2 activities – outlined below:
Year 1
HERO and SDHN procurement
Begin Development of HERO needs assessment and regional planning (Q3-4)
Workforce planning by HEROs to inform WIOs begins
VBP Roadmap will be updated
Advanced VBP arrangements focusing on health equity and social care begin
Housing assessment by HEROs begins
Pre-release services for the criminal justice-involved population begin
Transitional housing services begin
WIOs begin to make workforce investments
Telehealth investments begin
Year 2
SDHN Contracting with CBOs
CBO capacity building training begins
New York is still calling for a January 2023 start date - and has outlined a significant amount of work to take place in the first year of the waiver. Notably, the state is clear that it intends to procure and fund HEROs and SDHNs in Year 1, which will be a massive effort on its own, even without all of the other proposed initiatives.
As the state moves through discussions with CMS, we can expect to see more detail on waiver program activities broken out by year. While more detail is needed, the message here is clear - New York Medicaid intends to waste no time in the rollout and funding of these initiatives. Health and social care providers and stakeholders throughout the state that want to participate in this program will need to move fast, if and when an agreement is reached.
Update #4:New York’s Take on Measuring What Matters: Updated Evaluation Approach
Another significant revision in the state’s request is the streamlined evaluation approach. The September 2022 update outlines three key evaluation questions that will figure largely in measuring the program and investment success.
The questions are structured around the interventions and initiatives outlined in the request:
Will the 1115 Waiver Amendment proposed interventions:
decrease health disparities?
advance health equity?
support the delivery of social care?
The document outlines several example measures for each question, still yet to be finalized, and demonstrates that the bulk of data to be sourced will come from health plan data and claims.
Earlier versions of this document had more than a dozen hypotheses, tied to claims, health plan, and survey data - this updated evaluation design narrows and streamlines the state’s approach, and is intended to create a clearer analysis.
Where should health and social care providers focus? Following the state’s progress on developing and refining its evaluation process will provide insight into what key measures are likely to be most important to move the dial on over the course of the waiver program period.
While DSRIP 1.0 was all about performance-based payments, and linked funding for Performing Provider Systems to outcomes, the new approach has not been structured the same way. This leaves it open for these measures to be tied to outcomes – and potentially waiver dollars – in the future.
Update #5: Robust Changes Ahead for the State’s VBP Roadmap
While the language in the September 2022 update aligns with previous versions, VBP remains central to the state’s request. This means there are significant changes in store for the state’s VBP Roadmap, the governing document outlining state, MCO, and provider VBP requirements.
Even with funding shifts in other areas, 50% of all dollars - $6.8 billion - will still be directed toward advanced VBP arrangements. The state outlines its vision to evolve VBP in New York into “more sophisticated VBP contracting arrangements” aligned with health equity design, funding social care, adjusting risk for member health and social care needs, and rewarding providers for improving both traditional outcome measures as well as health equity measures.
In 2022, New York streamlined the state’s VBP Roadmap. The waiver amendment documents detail future plans for the state to update the Roadmap to reflect health equity-driven advanced arrangements and requirements for MCOs and VBP contractors. The current waiver request commits the state to updating the VBP Roadmap in Year 1 of the waiver program, and previews the updates that are in store:
“NYS will develop a comprehensive range of advanced VBP arrangements for the HEROs, SDHNs and MCOs to consider adopting based on the specific populations and needs within each region. As NYS developed for its DSRIP waiver, NYS would develop a menu of options within a new VBP Roadmap, with services that will be included in each VBP model, the members eligible for attribution for each model, selection and specifications of quality and outcome measures for each model, and methods to calculate the risk-adjusted cost of care and benchmarks.”
Even if the state’s waiver request is not granted, providers and stakeholders should interpret this document as a reflection of New York Medicaid’s strategic agenda and commitment to the future of VBP.
What Remains the Same: Overall Framework and 4 Key Strategies
While several key updates to previous drafts have been made, the formal waiver amendment document largely reflects the goals, strategies, and programs shared in earlier versions.
New York’s request of $13.52 billion over five years (currently proposed by the state as January 2023-December 2027) aims to reinvest federal dollars to fund waiver amendment programs that incorporate lessons learned from DSRIP 1.0 along with addressing “inextricably linked health disparities and systemic health care delivery issues that have been both highlighted and intensified by the COVID-19 pandemic.”
The Medicaid program would fundamentally redefine how it “integrates and pays for social, physical health, and behavioral health care” in the state. In addition, the waiver amendment’s focus on addressing racial, disability-related and socioeconomic health disparities supports the state’s overall goal of improving health equity through measurable improvement of clinical quality and outcomes.
The state outlines four key strategies to achieve these goals:
Strategy 1: Health Equity-Focused System Redesign: Building a more resilient, flexible, and integrated delivery system that reduces health disparities, advances health equity, and supports the delivery of social care;
Strategy 2: Transitional Housing: Developing and strengthening transitional housing services and alternatives for the homeless and long-term institutional populations, and those at risk for institutionalization;
Strategy 3: System Redesign & Workforce: Redesigning and strengthening system capabilities to improve quality, advance health equity, and address workforce shortages; and
Strategy 4: Digital Health & Telehealth: Creating statewide digital health and telehealth infrastructure.
Each of these areas is addressed in detail in the state’s request. The bulk of funding - 64% of the total request - would be invested in Strategy 1.
Where Can You Learn More About Previous Versions, DSRIP 1.0 and the 1115 MRT Waiver?
The road to this formal submission has been a long one – get up to speed by reading these previous updates:
April 2022 Overview of $13.52 Waiver Request: a high-level overview and analysis of the state’s draft proposal released earlier this year for public comment
Additional Detail on New York’s DSRIP 2.0 Proposal: Detail on 1115 waiver implementation timelines and likelihood of approval
The Path to NY’s Waiver Ask: DSRIP Success: an overview of the state’s previous DSRIP program and context leading up to its current ask
State Releases New VBP Roadmap: summary and overview of the state’s VBP Roadmap and January 2022 updates.
Blueprint for Change: key takeaways and indicators of success from DSRIP 1.0.
What’s Next? How Can You Stay Engaged?
CMS has deemed New York’s request to be complete, meaning that all required elements have been addressed and submitted. Interested parties can now submit written feedback from September 19 - October 19, 2022 at the CMS webpage for New York’s 1115 waiver. CMS will review and consider all feedback in its discussions with the state.
Submission of this formal request does not guarantee that New York will receive approval. CMS will review the state’s documents and proposed approach, along with the public feedback submitted throughout the comment period. If CMS agrees to consider the request and negotiate with the state, you can expect that a final approved program will look significantly different than what’s been submitted. It’s likely that the total program investment will be less than $13.52 billion and that currently proposed strategies and initiatives will be added, removed or significantly changed with CMS input.
Understanding the forthcoming 1115 waiver program in New York and its implications on your institution’s future will be key to your Medicaid strategy in 2023. If you’re an entity looking to participate in “DSRIP 2.0,” reach out to our team to learn more about how we can support your goals.
About the Author: Kalin Scott is a Senior Advisor at HSG.
