Illinois medicaid 1115 waiver february 19 2014
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Illinois Medicaid 1115 Waiver February 19, 2014. What is a Medicaid 1115 Waiver?. Section 1115 of the Social Security Act. Allows states to apply for program flexibility from the Centers for Medicare & Medicaid Services to test new approaches to financing & delivering Medicaid

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What is a medicaid 1115 waiver
What is a Medicaid 1115 Waiver?

Section 1115 of the Social Security Act

  • Allows states to apply for program flexibility from the Centers for Medicare & Medicaid Services to test new approaches to financing & delivering Medicaid

  • Provides incentives to providers to develop new models of care

  • Lasts five years, but can be renewed/amended

  • Must be budget neutral, leading to overall savings

Our State’s Waiver Application

  • Called the Path to Transformation Waiver

  • Includes all services in the Illinois Medicaid program for better coordination

  • Covers all Medicaid-eligible populations

Four pathways to transformation
Four Pathways to Transformation


Better Health Outcomes

Lower Costs

Pathway 1

Pathway 2

Pathway 4

Pathway 3

  • State Draft

  • Waiver

  • Application

Population Health

Home- & Community-Based Supports

Delivery System Transformation


Waiver goals
Waiver Goals

  • Support linkages between health care delivery systems and services that directly impact key social determinants of health

  • Create incentives to drive development of integrated delivery systems

  • Promote efficient health care delivery through optimization of existing managed care models

  • Enhance ability of the health care system to engage in population management

  • Strengthen the state’s health care workforce to meet needs of Medicaid beneficiaries

  • (Goals continued on next page)

Waiver goals continued
Waiver Goals (continued)

  • Consolidate Illinois’ nine existing 1915(c) waivers under a single 1115 waiver

  • Increase flexibility and choice of long-term supports for adults and children

  • Institute a provider assessment on residential habilitation providers

  • Reduce prioritization of unmet need for services wait list

  • Promote and foster greater community-integrated, competitive employment opportunities

1st pathway delivery system transformation
1st Pathway: Delivery System Transformation

  • Waiver promotes care coordination & integrated delivery system development

  • Provides Coordinated Care Entities & Accountable Care Entities with analytics, data collection & other activities related to managing a population

  • Hospital performance & integration pool tied to hospital & health system performance measures

  • Public hospitals will have separate pool for specific projects

Delivery System Transformation

2nd pathway population health
2nd Pathway: Population Health

  • Focuses on developing regional public health hubs

  • Premium add-on payment to health plans for developing population health interventions

  • Fund regional public health hubs to provide technical assistance in addressing health disparities, social determinants of health, and evidence-based interventions, including those endorsed by the Community Preventive Services Task Force

Population Health

3rd pathway workforce
3rd Pathway: Workforce

  • Increase Physician Supply

  • Provide incentives for training physicians (primary care & high-need specialties) in community settings, treating underserved patients

  • Expand loan repayment programs, including incentive funding for hospital-sponsored loan repayment programs

  • Community Health Workers Training

  • In-home personal attendants, nurses & other providers to work on primary care provider teams

  • Establish and certify community health workers


4th pathway home community based supports
4th Pathway: Home & Community-Based Supports

  • Consolidation of nine existing home- & community-support waivers

  • Behavioral health expansion & integration

  • Increase funding & uniformity in benefits

  • Base benefits on beneficiary needs, increase choice for beneficiaries, and expand community-based options

    • Children & Young Adults with Developmental Disabilities

    • Children who are technologically dependent

    • Medically Fragile

    • Individuals with HIV or AIDS

    • Elderly

Home- & Community-Based Supports

Opportunities and challenges
Opportunities and Challenges



  • Many needs

  • Limited funding

  • Negotiatons with CMS will determine final funding allocations

  • A Waiver Provides:

  • A possible option to preserve hospital assessment program

  • New funding for:

    • Hospital quality and transformation initiatives

    • Primary care physician development in underserved areas

    • Behavioral health programs

    • Maternal child visits and medical home development

  • Loan repayment for physicians through safety-net hospitals

  • Strengthening of:

    • Community-based options

    • Public health resources



Why is the waiver an option for preserving assessment funding
Why is the Waiver an Option for Preserving Assessment Funding?

  • Upper Payment Limit (UPL) Conundrum

  • Under Federal law, states can’t make direct payments to hospitals that exceed the upper payment limit

    • Includes hospital assessment payment

  • UPL = Estimate of what would be paid under Medicare principles for persons in the Medicaid Fee-for-Service system

  • 50% coordinated care mandate by 1/1/2015




What is the access assurance pool
What is the Access Assurance Pool? Funding?

  • Option to replace current assessment (or UPL) payments

  • Maintain current assessment payment distribution method “as is” for transition period (e.g. 1st two years of the waiver)

  • Then, Access Assurance (AA) payments based on a hospital’s unreimbursed costs for Medicaid and uninsured patients

    • Can include hospital and other services (e.g. Dr., Rx)

  • Goal: AA payments to replace, as closely as possible, the current Assessment payments for each hospital

How is a waiver financed
How is a Waiver Financed? Funding?

  • Costs Not Otherwise Matchable (CNOM)

  • One of the most powerful provisions in Section 1115 allows CMS to grant approval of Costs Not Otherwise Matchable or CNOM

  • Includes services not normally qualifying as Medicaid expenditures

  • Must be budget neutral

  • Must reinvest freed-up state funds back into the Medicaid program

Budget neutrality under 1115 waiver
Budget Neutrality Under 1115 Waiver Funding?

CNOM counts toward budget neutrality gap

Transforming illinois health care
Transforming Illinois Health Care Funding?

Illinois hospitals have the infrastructure to bring together a wide range of providers

The waiver process

11/5/13 Funding?

Concept paper finalized

The Waiver Process

6-12 mos.

State negotiates with CMS


Stakeholder kick-off meeting


Draft waiver posted for comment


Final waiver with comments posted


Waiver comments due


Waiver submitted to CMS

10/18 – 12/13/13

Stakeholder meetings


Legislative hearing

For more information
For More Information Funding?


Patrick Gallagher

Group Vice President, Health Delivery & Payment Systems

(630) [email protected]

State of Illinois 1115 Waiver Web Page