The Changing Healthcare Environment: 1115 Waiver Implementation in Texas

1. The Changing Healthcare Environment:1115 Waiver Implementation in Texas Alliance for Healthcare Excellence Dr. Ron Anderson, M.D Sue Pickens, M.Ed.

2. Waiver Goals • Expand risk-based managed care statewide. • Support the development and maintenance of a coordinated care delivery system. • Improve outcomes while containing cost growth. • Protect and leverage financing to improve and prepare the health care infrastructure to increase access to services. • Transition to quality based payment systems in managed care and in hospital payments. • Provide a mechanism for investments in delivery system reform including improved coordination in the current indigent care system in advance of health care reform. 1115 Waiver

3. Waiver’s impact is state and local, rather than federal • Works whether the healthcare reform law remains intact or not • Milestones • Expansion of primary care • Behavioral health goals • Specialty care access goals • DSRIP and UC more than doubles the former UPL annual payment 1115 Waiver

4. Under the waiver, additional new funds are distributed to hospitals through two pools: • Uncompensated Care (UC) Pool : Costs of care provided to individuals who have no third party coverage for the services provided by hospitals or other providers (beginning in first year). • Delivery System Reform Incentive Payments (DSRIP): Support coordinated care and quality improvements through Regional Healthcare Partnerships (RHPs) to transform care delivery systems (beginning in later waiver years). 1115 Waiver

5. Proposed RHP Map

6. CMS Expectations • Planning process that demonstrates regional collaboration. • Projects selected address community needs identified through a Community Needs Assessment (DFWCH) • Projects selected are the most transformative for the region. • RHP Plan includes projects that tie into four categories established y HHSC to demonstrate outcomes • Infrastructure • Innovation • Quality • Reporting 1115 Waiver – CMS Expectations

7. Anchor Hospital (IGT Entity) – Provides funds to HHSC for match • Hospitals apply directly using a state designed tool to receive UC payments to include: • Physician costs related to direct patient care services • Mid-level professional costs related to direct patient care services • Pharmacy costs related to he “Texas Vendor Drug” program • Excess “Medicaid DSH” costs not reimbursed via the Medicaid DHS program • Specific tool for submitting reimbursement provided by HHSC through TexNet (not yet available) Uncompensated Care Pool

8. DSRIP Pool – Funding Flow Reporting • Public Hospital • In areas with no public hospital: • Hospital District • Hospital Authority’ • County • State University with HSC or medical school Anchor RHP Administrative Functions Performing Subcontractor Reports performance to performing provider HHSC Approves performance Performing Provider Reports Performance IGT Entity Reviews performance • Examples:Examples: • Public Hospital Public Hospital • Public Hospital Private Hospital • Public Hospital Private Hospital Clinic • LMHA LMHA Funding Source HHSC Requests IGT from IGT Entities IGT Entity Provides IGT to the State Payments HHSC Requests federal match from CMS CMS Approves Federal match and sends to HHSC Performing Subcontractor Receives payments from performing provider. HHSC Provides payments to performing provider Performing Provider Receives payments

9. Texas Healthcare Transformation and Quality Improvement ProgramSection 1115 Waiver ProgramRegion 9 RHP Organization Ensuring Regional Collaboration • Anchors development of the Dallas RHP and the RHP Plan: • Develops the Dallas RHP Plan • Designates Dallas Regional Healthcare Partners (Dallas RHPs) • Performs a community needs assessment that serves as basis for the RHP plan • Approves Dallas Intergovernmental Transfer (IGT) contributions • Approves selected Dallas regional DSRIP projects from the State approved menu of projects • Allocation of funds to UC and DSRIP projects • Provides an opportunity for public input and review of the RHP Plan • Provides ongoing Dallas RHP plan administration and reporting. • Partner with DCHD to develop the Dallas RHP and RHP Plan: • Serve as a forum for the work group and task forces to develop required elements for the RHP/RHP plan. • Assure range of Dallas stakeholders are involved • Assist in project management and ensure project transparency • Assist in coordinating Dallas’ input to DHHS on statewide elements of waiver program Centers for Medicare and Medicaid Services (CMS) Texas Health and Human Services Commission (HHSC) • A work group designated by DMR and DCHD will serve as the project steering committee responsible for: • Developing recommendations to the DCHD Board of Managers on the Dallas Regional Healthcare Partners Plan Dallas County Hospital District Board of Managers (DCHD – Dallas Anchor) Dallas Medical Resource Oversight Work Group Co-Chairs Tom Royer MD and Joel Allison (Dr. Royer was replaced by Ted Shaw) Regional Healthcare Partnership (RHP) • Develop Dallas Regional Health Partnerships Plan: • Designating Dallas Regional Healthcare Partners • Community Needs assessment • Identify and approve IGT contributions • Approve selected Dallas regional DSRIP projects • Approve allocation of funds to UC and DSRIP projects • Provide opportunity for public Input and review of the RHP Plan • Ongoing Dallas RHP Plan administration and reporting 1115 Waiver Steering Committee Tom Royer MD (Dr. Royer replaced by Ted Shaw) Uncompensated Care Pool Task Force Co-Chairs John Dragovits and Fred Salvelsbergh(John Dragovits replaced by Jody Springer) Delivery System Redesign Incentive Pool Task Force Co-Chairs Ron Anderson MD and David Ballard MD Committee replaced with the Plan Writing Committee

10. Texas Healthcare Transformation and Quality Improvement ProgramSection 1115 Waiver ProgramRegion 10 RHP Organization Ensuring Regional Collaboration Region 10 DRAFT Regional Healthcare Partnership Planning Approach Regional Healthcare Partnership Planning

11. Pool Funding DistributionTransformation is the Goal

12. RHP Category 1 and 2 Minimum Number of Projects • Four Tiers based on share of the statewide population under 200 percent of the federal poverty level (FPL)

13. RHP Plans include: • Regional health assessments • Participating local public entities • Public engagement • Identification of hospitals receiving incentives and of yearly performance measures • Incentive projects by DSRIP categories • RHPs and RHP plans do not: • Require four-year local funding commitments • Determine health policy, Medicaid program policy, regional reimbursement, or managed care requirements RHPs and DSRIP

14. The following regional priorities were identified as primary community health needs and are recommended for consideration as context for identification of strategies and recommended actions of the regional plan: Capacity - Primary and Specialty Care • The demand for primary and specialty care services exceeds that of available medical physicians in these areas, thus limiting healthcare access for many low level management or specialized treatment for prevalent health conditions. Behavioral Health - Adult, Pediatric and Jail Populations • Behavioral health, either as a primary or secondary condition, accounts for substantial volume and costs for existing healthcare providers, and is often utilized at capacity, despite a substantial unmet need in the population. Chronic Disease - Adult and Pediatric • Many individuals in North Texas suffer from chronic diseases that present earlier in life, are becoming more prevalent, and exhibit more severe complications. Patient Safety and Hospital Acquired Conditions • Continued coordinated effort is needed to improve regional patient safety and quality. Emergency Department Usage and Readmissions • Emergency departments are treating high volumes of patients with preventable conditions, or conditions that are suitable to be addressed in a primary care setting. Additionally, readmissions are higher than desired, particularly for those with severe chronic disease or behavioral health. Dallas Fort Worth Hospital Council Community Needs Assessment Report.: RHP 9 – Findings (DRAFT)

15. Stakeholder Engagement • RHP Participant Engagement • Information for Performing Providers including hospitals, Community Mental Health Centers, Academic Health Science Centers and Local Health Departments. • Public Engagement • Processes used to solicit public input into RHP Plan and public review prior to plan submission, including county medical societies. • Must include a description of public meetings and posting of RHP Plans for input. • Plan for ongoing engagement with public stakeholders. Stakeholder Engagement

16. Transparent planning process that demonstrates regional collaboration and public input. Projects selected address community needs and regional goals. Projects selected are the most transformative for the region RHP Plan includes projects that tie to the four DSRIP categories together to demonstrate outcomes RHP Plan includes broad UC and DSRIP participation. RHP Plans and CMS Expectations – Regional Transformation

17. Funds Flow Mechanics DSRIP Pool The allocation of the DSRIP Pool is quite complex with respect to both the allocation to regions and the allocations within each region

18. Eligibility for “Pass 2” Major Safety Net Hospital Participation • A minimum number of major safety net hospitals must participate in DSRIP as Performing Providers based on Tier level. For RHP 9, Major Safety Net hospitals include: Parkland, Baylor University Medical Center, Methodist Medical Center, Medical City and Children’s Medical Center

19. DSRIP Category 1:Infrastructure Development

20. DSRIP Category 2:Program Innovation and Redesign

21. DSRIP Category 3:Quality Improvements CMS Outcomes Definition: “…..Measures that assess the results of care experienced by patients, including patients’ clinic events, patient’s recovery and heath status, patient’ experiences in the health system, and efficiency/cost.” All Category 1 & 2 projects must have one or more associated Category 3 outcomes. Outcomes measured are based on specific patient population served by the project. • Encouraged by CMS to pursue a common, regionally-based Category 3 outcome • A list of Category 3 outcomes is still under development

22. DSRIP Category 4:Population-focused Improvement Potentially preventable admissions 30-day readmissions Potentially preventable complications Patient-centered healthcare, including patient satisfaction and medication management ED admissions time

23. Hospitals receiving uncompensated care (UC) payments must report on a subset of Delivery System Reform Incentive Payment (DSRIP) Category 4 measures. • Potentially Preventable Admissions (PPAs) • Potentially Preventable Readmissions (PPRs) • Potentially Preventable Complications (PPCs) • Failure to report on the requirement measures by the last quarter of the year (with a six-month extension) will result in forfeiture of UC payments in that quarter. UC an DSRIP Participation

24. Category Allocations Hospital Performing Providers Non- Hospital Performing Providers

25. 1115 Waiver as a Foundation for Reform • Supreme Court decision allowing states to opt out of Medicaid Expansion • $155 Billion being eliminated from Hospitals as Health Care Reform is Implemented • Lessons learned from Massachusetts • Newly covered individuals not able to find care (infrastructure not developed to handle increase in covered individuals) • Without expansion of Medicaid, many Texas Hospitals will have a difficult challenge ahead • 1115 Waiver offers the opportunity to transform the delivery system to provide more than cover – the opportunity to reach the Triple Aim Goals

26. Institute for Healthcare Improvement, 2007 • 3 critical objectives: • Improve the health of the population • Enhance the patient experience of care (including quality, access, and reliability) • Reduce, or at least control, the per capita cost of care Ultimately we must move beyond Coverage and Care to the Prevention and the Social Determinants of Health Triple Aim

27. “Twas a dangerous cliff, as they freely confessed, Though to walk near its crest was so pleasant; But over its terrible edge there had slipped A duke, and full many a peasant; So the people said something would have to be done, But their projects did not at all tally. Some said, “Put a fence around the edge of the cliff”; Some, “An ambulance down in the valley.” Fence or Ambulance? The poem “Fence or Ambulance?” by Joseph Malins that was published in the 1913 Bulletin of the North Carolina State Board of Health opens this way: “Better guide well the young than reclaim them when old, For the voice of true wisdom is calling; To rescue the fallen is good, but ‘tis best To prevent other people from falling; Better close up the source of temptation and crime Than deliver from dungeon or galley; Better put a strong fence ‘round the top of the cliff, Than an ambulance down in the valley”. Prevention is better than cure. Desiderius Erasmus 1466-1536 Malins J. Fence or ambulance? Bulletin of the North Carolina State Board of Health 1913;27(10):16 Available at: http://www.archive.org/stream/bulletinofnorthc27nort#page/16/mode/1up.

28. New delivery models are as important as insurance reform • Rationalizing delivery models - Primary medical care homes - Care management - Addressing socioeconomic determinants of health - Addressing disparities adequately • Shift from volume-driven to value-driven (outcomes vs. thru-put) • Access is as fundamentally important as coverage • Evidence-based practice and policy are critical • Must deal with variations in practice that are not bringing value • Must promote comparative effectiveness research and its applications • Must balance “sticks and carrots” Elements Needed in the Changing Environment

29. Needs to expand upstream and deal with the determinants of health at the community level: • Prevention • Health promotion • Care management • Population-driven medicine • The Safety Net may need to be redefined: • More adaptable and flexible • More accountable • More upstream interventions Safety Net in the Changing Environment

30. Investment in public infrastructure may be the best way for many urban areas to provide the elements necessary for reform to succeed, especially in these areas: • Physician, nurse and other provider training • Outcomes studies for comparative effectiveness and disparities • Population medicine • Provision of regional tertiary/quaternary services • Rethinking the health delivery model, moving from individual medicine to population health • Need incentives to improve collaboration among hospitals, public health and community-based services • Meet as a community to determine how to harvest the synergy of education, housing, police, fire, etc. Safety Net in a Changing Environment

31. Restore our sense of community • Re-tap our energy to solve our own problems • Rediscover the strengths of ad hocracies • De Tocqueville — early 1800s • Effects will be seen in areas other than health care Recreate “the Commons”

32. Managing the In-Betweens Health in All Policies • We must manage the In-Between, or the Common Ground that benefits the whole infra-structure but is not managed by any one part • Important for accountability, stewardship and outcomes • Promotes synergism with one success building upon another

33. To improve quality, safety & access: • Goals for Dallas to bring us together – Healthy Dallas Goals for United Way Strategic Plan • Collaborative Dialogue • Community Driven Process • (Managing the In-Betweens) • Regional Health Partnerships – • Planning for Health Among Competitors • (1115 Medicaid Waiver) Call to Action