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Section 1115 Demonstration Waivers

  • Section 1115 of the Social Security Act provides states with the authority to request a waiver from any of the requirements under section 1902 of the Social Security Act, which governs the Medicaid program, as long as it promotes the objectives of the Medicaid program. States must apply to the Secretary of HHS for approval of such waivers, which are intended to serve as demonstration projects and will be evaluated by HHS over the course of the demonstration. There are general criteria CMS uses to determine whether Medicaid/CHIP program objectives are met. These include whether the demonstration will:
    • Increase access to, stabilize, and strengthen providers and provider networks available to serve Medicaid and low income populations in the state;
    • Improve health outcomes for Medicaid and other low income populations in the state;
    • Increase the efficiency and quality of care for Medicaid and other low income populations through initiatives to transform service delivery networks; and
    • Maintain budget neutrality.
  • States are increasingly using section 1115 waiver demonstrations to test new approaches that include connecting people to social services and, to some extent, allow for flexible funding of social services that directly affect health.However, states may only use pay for medical services, limiting the breadth of potentially innovative approaches to address social determinants. For example, CMS released guidance in 2015 outlining how states may fund certain supportive housing services, but specifically notes the funding limitations
  • States have also used section 1115 demonstration waivers to implement large-scale delivery system reform initiatives, known as Delivery System Reform Incentive Payment (DSRIP) programs. Funding available through DSRIP has been used to support infrastructure development and/or care innovation and redesign among hospitals and other providers. States have also used such payments to support efforts to address social determinants of health.

Examples of State Use of 1115s

Washington State – Accountable Communities of Health

Washington State established nine regional Accountable Communities of Health (ACHs), which are multi-sector coalitions that aim to improve the health of their regions by integrating health and other community services. ACHs are composed of managed care organizations, providers, and community organizations, and are tasked with assessing community population health needs and integrating service delivery and accountability. In January 2017, CMS approved an extension of Washington’s section 1115 waiver, which aims to, among other things, implement population health strategies that improve health equity and provide targeted services that address the needs of the state’s aging populations and address key determinants of health.

Oregon – Coordinated Care Organizations

Oregon established Coordinated Care Organizations (CCOs), local networks of payers, providers, and community organizations that are paid a fixed rate by the state to provide physical, mental and oral healthcare to beneficiaries. The CCOs are held accountable for healthcare outcomes, and are strongly encouraged to use alternative services and interventions focused on improving population health by targeting social determinants of health, however such so-called coordinated services are not considered state plan services and must be paid for from CCO’s savings. The CCOs use individual patient care plans to identify and connect beneficiaries to necessary health-related supportive services. The state does reimburse the CCOs for community health workers, personal health navigators, or peer support specialists.

California – Whole Person Care Pilots

As part of its Medi-Cal 2020 DSRIP Waiver, California is implementing Whole Person Care (WPC) Pilots. The 18 pilots are supported by $3 billion in funding over five years and are generally led by a county government, in collaboration with health plans, providers and other entities. Pilots are required to target certain high-need Medicaid beneficiaries through care coordination, wrap-around services, and housing support interventions. While the pilots represent a hugely ambitious strategy to address social determinants, the state is again limited by current funding and programmatic constraints. In fact, to get around CMS’ limitation on funding non-medically necessary housing services, the state established flexible housing pools, where pilot funding may be braided with external housing and housing support funding

New York –Medicaid Redesign Team

New York also received approval for a DSRIP waiver, which is “intended to reduce avoidable hospital use by 25 percent through transforming the New York State health care system into a financially viable, high performing system.” Under the model, Medicaid providers and community based organizations formed integrated delivery networks, known as Performing Provider Systems (PPSs), that are responsible for a range of projects including building care management and population health infrastructure, enhancing disease management program, and improving population health

Section 1915(c) – HCBS Waivers

In addition to the State Plan Option for Home and Community-based Services, Section 1915(c) provides waiver authority for states to waive certain Medicaid program requirements – including state wideness, comparability of services, and income and resource rules applicable in the community – in order to meet the needs of people who prefer to get long-term care services and supports in their home or community, rather than an institutional setting. The waiver authorizes coverage of a range of medical and nonmedical services to address long-term care needs in a home and community-based setting, including many of the housing-related, habilitation, peer support, and care management services that are needed to address social, emotional, and economic issues.Nearly all states and DC offer services through HCBS waivers. States can operate as many HCBS Waivers as they want – currently there are more than 300 active nationwide