The Department of Health Care Services (DHCS) unveiled more information about the Medicaid Section 1115 Waiver renewal at a stakeholder meeting on February 11. 

Since most of the stakeholder workgroups on the waiver concluded last month, DHCS has been working on crafting its waiver renewal proposal. DHCS has also begun high level conversations with the federal Centers for Medicare and Medicaid Services (CMS). DHCS’s goal is to get early agreement with CMS on a conceptual framework and funding level for the waiver renewal. DHCS will be submitting its formal proposal to CMS no later than March 31, 2015. The department anticipates releasing a draft with a very short public comment period prior to the formal submission to CMS in March. Once formal discussions begin, negotiations will require weekly meetings between the state and federal government as the two entities collaborate on program development and the Special Terms and Conditions (STCs). The STCs will include the programmatic detail (reporting requirements, protocols, metrics) and evaluation design. The goal remains to implement the next waiver on November 1, 2015.

DHCS acknowledged that the Legislature will play a role in the crafting and implementation of the next waiver. The Legislature recesses on September 11, 2015, likely well before negotiations between California and CMS are complete. One approach may be to adopt a statutory framework in September and to come back in 2016 to fill in some of the detail that may be negotiated after the Legislature recesses.

For the time being, DHCS has dubbed the waiver renewal “Medi-Cal 2020,” denoting their focus on utilizing the waiver to align the program with their vision and goals for the future. DHCS’s vision for 2020 include continuing to build capacity in ways that better coordinate care and align incentives to improve beneficiary outcomes. Their vision also includes bringing together the state, federal government, plans, providers and safety net programs to share accountability for beneficiary health outcomes.

DHCS is in the process of developing metrics to demonstrate to CMS that California is measuring and achieving its goals for 2020. The department is currently conceiving of the metrics in different ways – some metrics would be statewide, some would be regional or county-specific, some would relate to health plans, and some would be provider-specific. The metrics will not be submitted to CMS in March with the waiver proposal but will part of the ongoing conversation between DHCS and CMS, with a more formal proposal coming later in the process.

DHCS’s presentation provided a more developed framework and narrative about the waiver renewal and more explicitly linked elements of the stakeholder waiver workgroups. The department identified three strategies to achieving their vision:

1. $15-20 billion in federal investment in the waiver’s comprehensive delivery system alignment and innovation
2. Advance quality improvement and improved outcomes through expanded delivery system transformation and alignment incentive programs, including:
   1. Delivery System Reform Incentive Program (DSRIP) 2.0
   2. Regional incentives among managed care plans, county behavioral health systems and providers
   3. Fee-for-service (FFS) quality improvement incentives
   4. Workforce development initiatives
   5. Access to housing and supportive services
   6. Whole Person Care pilots
3. Transform the safety net for the remaining uninsured by unifying Disproportionate Share Hospital (DSH) and Safety Net Care Pool funding streams into a county-specific global payment system

Of note, the FFS and Whole Person Care proposals were newly highlighted and were not explicit proposals heading into the workgroup process. On the FFS side, DHCS is interested in looking at hospital incentives for maternity care improvement. Sixty percent of Medi-Cal deliveries occur through the FFS systems (that number is relatively static). DHCS would like to reduce non-medically necessary early elective Caesarean-Sections and promote efficient maternal and child health. Additionally, the department would like to focus on FFS dental incentives to expand dental services.

CSAC is very pleased that the department included a proposal on Whole Person Care pilots. CSAC has been working with county affiliates, health plans, labor, individual counties, and housing advocates to craft a whole person care pilot for inclusion in the waiver. The pilots offer the opportunity for non-hospital counties to participate in the waiver.

The Whole Person Care pilot proposal outlined by DHCS would be an opportunity to locally innovate in delivery and financing strategies to improve health outcomes of target populations. DHCS’s proposal as outlined on Wednesday is a good first step and was met with support across a number of health system stakeholders. Local partnerships would include Medi-Cal managed care plans, counties (physical health, behavioral health, social services, etc.), providers, and non-traditional supportive providers and services. CSAC will continuing working with other stakeholders and DHCS to refine the proposal.