Medicaid 1115 Waiver Amendment Approved by CMS

Governor Hochul announced on Jan. 9, 2024 the approval of the State's long-sought amendment to its Medicaid 1115 waiver. The amendment will invest $7.5 billion in health and social care over three years, focusing on health equity, safety net hospitals, and workforce shortages. According to State Medicaid Director Amir Bassiri, the amendment "will allow the state to advance health equity, reduce health disparities, support the delivery of health-related social needs, sustain critical safety net hospitals, and establish career pathways training programs for front-line health and social care professionals that will target workforce shortages throughout the state.”

The waiver amendment has four key elements and also includes substance use disorder waiver authority. The following are some highlights of the four elements:

(1) Health-Related Social Needs (HRSN): The waiver amendment will address HRSN through Social Care Networks (SCNs), which will be contracted entities in each of the state’s regions. The SCNs will provide HRSN screening and referral services to Medicaid beneficiaries in targeted populations. The Centers for Medicare and Medicaid Services (CMS) is authorizing infrastructure spending of up to $500 million to support HRSN services and $3.173 billion for increased coverage of HRSN services.

HRSN services will be delivered through two tiers of benefits: (i) Level 1 services will be available to all Medicaid beneficiaries and will include referrals to existing public programs that are separate from the newly authorized HRSN services; (ii) Level 2 services will be provided to targeted beneficiaries enrolled in Medicaid managed care who meet certain criteria (e.g., high utilizers; individuals enrolled in a Health Home; individuals with substance use disorders or serious mental illness; individuals with intellectual and developmental disabilities; homeless individuals; pregnant persons, up to 12 months postpartum; post-release criminal justice-involved individuals with serious chronic conditions; youth involved in the juvenile justice or foster care systems, and those under kinship care; children under the age of 6; and children under the age of 18 with one or more chronic conditions).

The HRSN approval will enable, among other benefits, provision of up to six months of short-term pre-procedure and post-hospitalization housing, which may be renewed annually (on a rolling 12-month basis) during the approved demonstration period.

(2) Health Equity Regional Organization (HERO): CMS is authorizing up to $125 million in expenditure authority for the creation of one HERO. The HERO is a contracted statewide entity designed to develop regionally focused approaches to reduce health disparities, advance quality and health equity for overall populations, and support the delivery of HRSN services. In support of the demonstration amendment’s aim of reducing health disparities, the HERO will conduct the following five activities: (1) data aggregation, analytics, and reporting; (2) conduct a regional needs assessment and planning; (3) convene regional stakeholder engagement sessions; (4) make recommendations to support advanced value-based arrangements and develop options for incorporating HRSN into value-based payment (VBP) methodologies; and (5) conduct program analysis, such as publishing initial health equity plans and health factor baseline data on Medicaid populations. The HERO will assist NY in developing and designing VBP goals to address HRSN and the most impactful health equity priorities.

(3) Medicaid Hospital Global Budget Initiative: CMS is authorizing up to $2.2 billion over approximately three and a half years (date of amendment approval through March 31, 2027) or $550 million annually to fund the Medicaid Hospital Global Budget Initiative. This initiative will support financially distressed safety net hospitals to transition to a global budget alternative payment model, in order to incentivize population health and health equity, improve quality, stabilize finances, and advance accountability. This initiative will provide funding to certain private not-for-profit hospitals that are located in the Bronx, Kings, Queens, and Westchester counties and are financially distressed due to their significantly adverse health risk factors and health outcomes and Medicaid and Uninsured Payor Mix of at least 45 percent.

(4) Strengthen the Workforce: CMS is authorizing up to $694 million over three years to support workforce recruitment and retention through two initiatives: Student Loan Repayment for Qualified Providers and Career Pathways Training (CPT). The student loan repayment program will provide loan repayment for health care professionals working in certain health care workforce shortage professions (psychiatrists, dentists, primary care physicians, nurse practitioners, and pediatric clinical nurse specialists), who make a four-year, full-time work commitment to a practice panel that includes at least 30 percent Medicaid and/or uninsured members.

The CPT program is designed to build up the allied health and other health care workforce by funding training and education that focuses on career advancement and unemployed individuals. The CPT program will be organized into no more than three regions to support statewide implementation. CPT participation is conditioned on a three-year commitment of service to health care providers enrolled in the Medicaid program that serve at least 30 percent Medicaid members and/or uninsured individuals. The State will contract with Workforce Investment Organizations (WIOs) to implement the CPT program. WIOs will provide participant recruitment, coordination of training, supportive services, and meaningful case management support of the individuals to ensure successful completion of their programs and job placement.

Provider Rate Increases

The waiver includes, as a condition of approval, a requirement that the State increase and (at least) sustain Medicaid fee-for-service provider base payment rates and Medicaid managed care payment rates in primary care, behavioral health, and obstetrics care, in the event that the State’s Medicaid-to-Medicare provider rate ratio dips below 80 percent in any of these categories. It also requires a 2 percent provider payment increase; however, the scope of that increase is unclear. In addition, the State is required to invest approximately $199 million in rate increases over the term of the demonstration. CMS expects the State to prioritize primary care, behavioral health, and obstetrics care for increases, but authorizes the State to invest in specialty rates, such as dental services, if those three services already have rates close to Medicare.

The full text of the waiver amendment is here. LeadingAge NY is still analyzing the 200-page document and will provide additional information as appropriate.

LeadingAge NY advocated vociferously and repeatedly for a stronger focus in the waiver on older adults, people with disabilities who use long term care services, and the providers that serve them. The association submitted five comment letters to State and federal authorities, testified in public hearings, and met with the Department of Health (DOH). Unfortunately, our concerns and recommendations were not heeded. We will continue to advocate for older adults and individuals in need of long term care services and their providers, as the Department rolls out its plans for implementation of the waiver amendment.

Contact: Karen Lipson, klipson@leadingageny.org