Understanding the 1115 Waiver: Terminology Guide

1115 Waiver | Accountable Care Organization (ACO) | Capitation Financing | COMPASS | Council on Quality and Leadership (CQL) | Dual Eligibles / Integrating Care for Dual Eligible Individuals | Global Budgets | Health Home | Individualized Budgets | National Core Indicators Project | NYS Managed Long Term Care Program | PACE | Quality Improvement, Continuous Quality Improvement | Safety Net Pool

1115 Waiver – Section 1115 of the federal Social Security Act allows the Secretary of HHS to enter into research and demonstration projects with States that allows for the testing of “substantial new ideas of policy merit.”  Under this section of law the Secretary has vast discretion to give States a waiver of almost any section of Medicaid law or regulation to accomplish its objectives.  Waivers are granted for a 5-year period and may be renewed. 
Further info:

Safety Net Pool – This is a term frequently used in connection with 1115 waivers wherein the federal government agrees to provide federal Medicaid revenue to cover costs delineated by the State in its “safety net pool.”  Another term used in this regard is CNOM or Costs Not Otherwise Matchable.  In the case of New York’s OPWDD proposal, the assumption is that the State will define a Safety Net Pool that will be used to continue to capture the revenue that is now associated with DC and other State Operated Medicaid billings that generate Medicaid revenue in excess of the costs associated with the delivery of those services. 
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Capitation Financing – This is a method of payment for health services in which a health care provider is paid a fixed amount per enrollee to cover a defined scope of services for a defined population set (aka covered lives) for a defined period of time, regardless of actual number or nature services provided.  In recent meetings of the fiscal design team, OPWDD has stated that capitation financing will be the method of reimbursement that will be used in the 1115 Waiver.

  • Full Capitation/Partial Capitation – Capitated payments paid through managed care may cover the full spectrum of eligible services or only a subset of services.  Typically in managed health care, partial capitation contracts cover all medical services except hospitalization and certain medical specialty services.  Conceivably, in the OPWDD 1115 waiver a partial capitation contract could cover all or part of the long-term care services but not include any acute or primary health care.
  • Risk based payments – Capitation financing implies risk based reimbursement.  The payment to a provider is expected to cover all needed services.  The provider takes on the financial risk should more service be required than is covered in the payment.  Various strategies can be employed by the provider to manage the amount of risk. Federal regulations impose certain requirements for financial solvency and reserves on any Medicaid entity that operates as a Managed Care Organization that accepts full or comprehensive risk.
  • PMPM – Per Member Per Month is the typical periodicity of payment in managed care.
  • Provider Network – A managed care organization contracts with specific providers to deliver services to its members. These contractors are referred to as the MCO’s network. Under Medicaid rules, MCOs must contract with sufficient numbers of providers to assure access to services on par with services provided to those who are not in managed care.  MCOs may pay its contractors in a variety of different ways so long as they can attract enough providers and the services provided are of sufficient quality.  In the recent Q&A document that OPWDD sent to CMS, providers in managed care networks were referred to as “down-stream providers.”

Individualized Budgets – This method of financing is an alternative to fee for services billing in which an individual is allocated a fixed budget amount that is then made available through a fiscal intermediary agent to purchase supports and services for the individual consistent with an approved plan of care (ISP).  The amount of the individual budget is typically negotiated but based on an assessment and allocated relative to what a similar person might cost in the fee-for-service environment.  New York OPWDD has employed individual budgets through its HCBS Waiver under Consolidated Supports and Services (CSS). 
Further info:

Global Budgets – A global budget is a fixed maximum expenditure, typically set by government, for a defined set of services. The size of the budget may be set by an assessment of projected needs or determined relative to an objective metric (a percentage of payments made in a prior period).  In the health care field, institutional providers such as hospitals may be given individual budgets each year and be required to work within them.
Further info:  http://www.mass.gov/Eeohhs2/docs/dhcfp/pc/2009_03_13_Global_Budgets_final-C5.pdf

PACE – Programs of All-inclusive Care for the Elderly is a federally recognized program (Medicare and Medicaid) that provides community-based cared and services to people who would otherwise need nursing home care.  Participants must be at least 55 years of age and meet SNF level of care.  PACE programs serve specific geographic areas.  This is a full risk capitated program and the PACE program receives a Medicare and a Medicaid per member per month reimbursement that is inclusive of all services. There are 7 PACE programs in NY State serving some 3660 people.  The typical core of services is an adult day care program supplemented with personal care, home care services and transportation.  The PACE provider typically contracts out all of the associated acute care, hospitalization, and nursing home services.  OPWDD (in response to CMS questions) has stated that the intent of the 1115 waiver is to “initiate a PACE-like program model that incorporates the full spectrum of medical and developmental disability services into a single, integrated comprehensive delivery system which integrates Medicare and Medicaid financing.
Further info: http://www.npaonline.org/website/article.asp?id=4 and  http://www.cms.gov/pace/

Dual Eligibles / Integrating Care for Dual Eligible Individuals – Individuals who are eligible for both Medicaid and Medicare are a significant focus of both federal and state policy makers as a potential area to achieve cost saving and improved health outcomes.  The number of people with developmental disabilities who are dual eligible has grown significantly in recent years and is estimated to include approximately 60% of all adults served by OPWDD.  Recently federal CMS opened a separate Office for Medicare-Medicaid Coordination.  That office awarded contracts to 15 states including New York for dual eligible demonstration projects.  Under the State Demonstrations to Integrate Care for Dual Eligible Individuals, selected states will be awarded up to $1 million ­­to design strategies for implementing person-centered models that fully coordinate primary, acute, behavioral and long-term supports and services for dual eligible individuals.  After federal review of the proposals, CMS will work with states to implement the plans that hold the most promise. 
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NYS Managed Long Term Care Program – The NYS Medicaid Reform Task Force report included a provision which requires enrollment of individuals 21 and older who require community based long term care services for more than 120 days in a MLTCP or other care coordination model.  Currently DOH has three different approaches for accomplishing the mandate; PACE programs, managed long-term care partial capitation contracts, and Medicaid Advantage Plans. 
Further info:
http://www.health.ny.gov/facilities/long_term_care/managed_long_term_care.htm  and  http://www.icsny.org/

Health Home – The federal Affordable Care Act included provisions for establishing enhanced Medicaid federal financial participation for certain health care services that are delivered consistent with the precepts of a Health Home.  NYS has filed a Medicaid State Plan Amendment to establish health Homes.  Health home services support the provision of coordinated, comprehensive medical and behavioral health care to patients with chronic conditions through care coordination and integration that assures access to appropriate services, improves health outcomes, reduces preventable hospitalizations and emergency room visits, promotes use of Health Information Technology (HIT) and, avoids unnecessary care. 
Further info:
http://www.health.ny.gov/funding/rfp/1106211121/  and https://www.cms.gov/smdl/downloads/SMD10024.pdf

Accountable Care Organization (ACO) is a model that was formally introduced into health reform through the Patient Protection and Affordable Care Act, and will officially become part of Medicare through the Medicare Shared Savings program in 2012.  An ACO is group of health care providers who give coordinated care and chronic disease management, and thereby improve the quality of care people get. The organization’s payment is tied to achieving health care quality goals and outcomes that result in cost savings.  ACOs create incentives for health care providers to work together to treat an individual across care settings – including doctor’s offices, hospitals, and long-term care facilities. Because providers receive a share of the savings beyond a predetermined threshold level, steps that achieve better outcomes with less resource use – such as care coordination services and wellness programs – result in greater provider reimbursement.
Further info:
http://www.healthcare.gov/news/factsheets/accountablecare03312011a.html and http://www.acolearningnetwork.org

Quality Improvement, Continuous Quality Improvement – These terms imply an approach to quality management that goes beyond basic standards compliance and looks at internal systems that are built into programs that result in quality outcomes.  Critical to most QI efforts is careful measurement and feedback loops that lead to management intervention and program improvement. 
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National Core Indicators Project – Core indicators are being used in many states as uniform approach to measuring system outcomes in State developmental disabilities systems.  The project establishing Core Indicators was initiated in 1997 by the National Association of State Directors of Developmental Disability Services with assistance from Human Services Research Institute.  NCI is being used in 25 states.  The NCI framework includes approximately 100 performance and outcome indicators organized across five broad domains: Individual Outcomes, Family Outcomes, Health Welfare & Rights, Staff Stability & Competency, and System Performance.  New York has been using NCI since 2007. 
Further info: 
http://www2.hsri.org/nci  and http://www.opwdd.ny.gov/wt/publications/wt_publications_ncireport.pdf

COMPASS is an OPWDD initiative that recognizes provider agencies that have progressed beyond minimal regulatory compliance, and achieved excellence in service delivery. COMPASS agencies engage their entire organization by encouraging Board members, management, staff, and service recipients to work together in a person-centered environment with the goal of promoting and achieving valued outcomes for people. Upon admission, DQM suspends all routine survey activity at the agency, (with the exception of ICF surveys and Willowbrook visits.) The new COMPASS agency assumes the task of surveying its own programs to determine regulatory compliance. Thereafter, new COMPASS agencies submit a written status report to DQM on a semi-annual basis. On an annual basis, DQM conducts a visit to each COMPASS agency.  There are 7 agencies with COMPSASS status.
Further info:  http://www.opwdd.ny.gov/hp_about_compass.jsp

Council on Quality and Leadership (CQL) is a national organization that works with public and private organizations with a commitment to person-centered services and supports by defining, measuring and improving quality.  CQL offers technical assistance, training, and support for organizations that seek to move from theory to practice in achieving person-centered outcomes for those they support.  CQL offer an accreditation program based on personal outcome measures and continuous quality improvement.  Three NYSARC Chapters have CQL accreditation:  Chemung, Franklin-Hamilton, and Montgomery.
Further info: http://thecouncil.org

For more information, please visit the OPWDD People First Waiver page: