Holding out for a HERO: When Will We See Movement on NY’s $17B Waiver Ask?

Post Written by Kalin Scott, Chief Innovation Officer

Stakeholders across New York have been eagerly awaiting news on the state’s $17B Medicaid 1115 waiver request since last August, when the Department of Health (DOH) released a thorough concept paper reflecting its approach.

Since then, while DOH has indicated it remains committed to pursuing the request, and conversations with CMS are ongoing, no new documents, updates, or timelines have been formally released.

As we wait for more information, a number of questions continue to be raised, including: what is the status of the state’s waiver concept? And, how soon will the $17B reach providers and communities? 

The short answer: the soonest any new waiver program could be in place is January 2023. That said, New York must follow a thorough transparency process, meet CMS requirements, and negotiate the nuanced details of a hugely complex program, making the timeline likely to extend to later in 2023. 

In this post, I’ll explain:

 ·  The current status of the state’s ask,

·  The required timeline & activities for state 1115 waiver requests,

·  What is an 1115 waiver, anyway?

·  What you should watch for, and

·  How you can stay up-to-date.

What is the current status of New York’s $17B Medicaid waiver request?

In August 2021, DOH submitted a concept paper to the Centers for Medicare and Medicaid Services (CMS) outlining a Medicaid 1115 waiver demonstration request for $17 billion over 5 years. You can find my overview and key takeaways of the state’s approach here.

Concept papers are intended to socialize ideas with CMS and allow the state and CMS to begin discussions on the state’s ask and approach. To continue to move forward, the state must build out their approach in much more granular detail, and at some point, the state will submit a formal waiver/waiver amendment request.

If approved, (a big ‘if’ – as even the state’s Medicaid Director has indicated that CMS has suggested this amount may be too large to ask for), this would be the biggest infusion of federal funds into delivery system reform in the nation’s history.

To formally request this investment from CMS, New York will have to prepare a formal waiver amendment request document, outlining its approach in much greater detail, and reflecting key policy, program, financial, and evaluation components that would be implemented.

Earlier this month, Medicaid Director Brett Friedman reported that the state Medicaid team is translating the August 2021 concept paper into a formal 1115 waiver amendment submission and is planning to move forward with  CMS public comment and transparency requirements.

DOH aims to submit the request to CMS by August of this year and the Medicaid Director suggested that in a best-case scenario, the state could have the waiver amendment in place by January 2023.

What is an 1115 Waiver?

1115 waivers are authorized under Section 1115 of the Social Security Act, and granted by the federal government to allow state Medicaid programs to test innovative health care coverage and/or delivery programs that promote the objectives of the Medicaid program. 1115 waivers must be budget neutral, which means that expenses with the waiver will not exceed expenses had the waiver not been granted.

The Secretary of Health and Human Services approves 1115 waivers, and delegates CMS to work with states to review, negotiate and finalize waiver demonstration requests.

What’s in New York’s 1115 Waiver?

New York has had an approved Section 1115 Waiver – the Medicaid Redesign Team Waiver (previously known as the Partnership Plan) -  for nearly 25 years. More than 80% of New York’s 7.4 million Medicaid members are served by managed care, which is authorized through the waiver. 

The MRT Waiver has also served as a platform on which the state has built innovative policy and programmatic initiatives through periodic amendments. One notable example is the state’s Delivery System Reform Incentive Payment (DSRIP) program, which was approved in 2014, and expired in early 2020. An evaluation released in December 2021 outlined the significant success of New York’s DSRIP program in reducing avoidable hospital use, moving toward value-based payment and transforming healthcare in New York.

What are the required public comment and transparency activities and timeline?

 States are not allowed to formally submit an 1115 waiver amendment request to CMS without following the federal transparency regulations. Technically, these guidelines only apply to new waiver requests, but the agency has consistently applied these regulations to waiver amendments as well, and New York has followed these regulations for all of its previous waiver amendments.

 Required activities under the transparency regulation include:

•  Public Notice: states are required to publish public notice – New York uses the State Register – and the notice includes key details about the proposed request, along with information on upcoming public hearings.

• State Public Comment Period: States are required to hold 2 public hearings at least 20 days apart, and provide opportunity for written public comment for at least 30 days.

• Tribal Notice: States must notify tribal representatives of proposed changes at least 30 days prior to submission of the request, and 60 days prior to implementation. States are also encouraged to consult with tribal representatives, outline the approach, and take feedback.

• CMS Review for Completeness: After the state formally submits its application, CMS has 15 days to confirm the application is complete.

• Federal Public Comment Period: After CMS’s confirmation, the state’s application must be posted on Medicaid.gov for at least 30 days for public input.

Some of these activities may run concurrently, but typically, it can take 90-120 days to complete all requirements. This means, that once New York releases its waiver amendment proposal for public comment, it will be three to four months before CMS will even formally review the request.

If CMS chooses to negotiate with the state, the process can take months, if not years. As a negotiator on the state’s 2014 MRT Waiver Amendment and DSRIP program, I can remember how our approach evolved over the two years from our first correspondence with CMS until full approval. Once we were focused on a DSRIP approach, it still took months of negotiations until we reached an agreement in principle in February 2014. Even then, it took two more months of daily negotiations with CMS before we reached an agreement and were granted approval for an $8B federal investment.

What should you be watching for?

The Governor’s State of the State briefing book signaled a March release of waiver amendment documents and the Medicaid Director’s recent comments underline this approach. DOH could begin the public process any day now.

Keep an eye out for the state’s announcement of its public comment process and release of a comprehensive set of materials comprising the formal amendment request. Once those documents are made public, you can expect that the state will plan to make a formal submission to CMS within 60-90 days. After the formal submission, it will still take 45 days for federal review & comment periods before the application will be considered.

If you haven’t already reviewed the state’s current concept paper, that’s a great place to start.

The concept paper outlines the key goals and elements outlined above but doesn’t provide specific detail on the financial breakout of the $17B -- how the funding would be spent -- or sources of funding for the local match. As negotiations between CMS and the state begin, these details will be hashed out.

How can you stay up-to-date?

The state shared its most recent concept paper with stakeholders in August through its MRT listserv and provided context on the overall ask. At this time, the state is not requesting public feedback. When the waiver amendment materials are released, stay tuned here - we’ll break down the state’s documents on our blog. You can also sign up to receive updates directly from the state’s listserv.

Have other questions or additional feedback? I’d love to hear more - send me a note at kalin.scott@hsg.global.

About the Author: Kalin Scott is the Chief Innovation Officer at HSG. Follow her on Twitter and connect with her on LinkedIn.