View all blogs

Washington 1115 Demonstration Waiver Approved by CMS

This week, we reviewed the agreement-in-principle between the State of Washington Health Care Authority (HCA) and the Centers for Medicare & Medicaid Services (CMS) on a new section 1115 demonstration waiver, which will further the state’s Healthier Washington initiative across three major dimensions. The agreement will provide up to $1.5 billion in federal funding for delivery system reform incentives, expanded options for long-term services and supports, and supportive housing and employment. HCA and CMS hope to finalize the special terms and conditions of the waiver in the coming months.

Accountable Communities of Health

In 2015 and 2016, nine Accountable Communities of Health (ACHs) were formed across the state, bringing together public health entities, community organizations, and health leaders in each region. ACHs are tasked with addressing the health needs of their region and, through the waiver, will be critical in implementing the Delivery System Reform Incentive Payment (DSRIP) program. The waiver authorizes up to $1.125 billion in funds for the establishment and implementation of DSRIP projects. Each regional ACH will be able to propose and pursue DSRIP projects around health system capacity building, care delivery redesign, and prevention and health promotion. Where approved, ACHs will coordinate the projects and will be eligible, along with their partners, to receive incentive payments for meeting process milestones and improvements in DSRIP outcomes measures. Additionally, ACHs will serve a significant role in working with Medicaid managed care organizations (MCOs) to expand value-based purchasing (VBP) in MCO contracts, with a target of 90 percent of Medicaid payments being value-based by the end of the five-year waiver.

Expanded LTSS Options

The second major initiative of the waiver addresses the state’s long-term services and supports (LTSS) delivery system. Despite ranking high in LTSS performance and low in LTSS costs, Washington is preparing its LTSS delivery system for what the waiver refers to as the “age wave,” in which the number of residents ages 65 or older will more than double in the next 25 years. The waiver includes two new benefit packages and one new eligibility category around LTSS. The two benefits described below provide additional home and community based services (HCBS) options that support individuals and families, with a goal of avoiding or delaying the need for more intensive Medicaid LTSS.

  • Medicaid Alternative Care (MAC). The MAC benefit will provide support for unpaid family caregivers who support Medicaid beneficiaries not utilizing Medicaid-funded LTSS. The MAC benefit includes training, support groups, respite services, as well as support for housework, errands, and home-delivered meals.
  • Tailored Supports for Older Adults (TSOA). The TSOA eligibility category of benefit package targets individuals who are not eligible for Medicaid due to financial status and who have been determined to be at risk of future Medicaid LTSS use. The TSOA option provides similar supports and benefits to unpaid family caregivers without forcing individuals or families to spend down to Medicaid eligibility.

It is important to note that Medicaid LTSS is primarily delivered outside of managed care, through fee-for-service, and that nothing in the waiver proposes shifting LTSS into managed care.

Supportive Housing and Employment Services

The third initiative under the waiver seeks to address the impact on health outcomes of lack of stable housing and employment through a package of supporting housing services and supported employment services. Both housing and employment initiatives will be coordinated through exiting behavioral health organizations (BHOs), Medicaid MCOs, and the Department of Social and Health Services, and Area Agencies on Aging.

Supportive Housing Benefits. While CMS has not approved funding for room and board, the waiver instead will provide services to help Medicaid beneficiaries achieve stable housing. The benefits specifically target:

  • individuals who are chronically homeless individuals, as defined by the U.S. Department of Housing and Urban Development (HUD);
  • individuals with frequent or lengthy institutional care;
  • individuals with frequent or lengthy adult residential care or treatment stays;
  • individuals with LTSS and frequent turnover of in-home caregivers or providers; and
  • individuals at highest levels of risk for expensive care and negative outcomes, defined by a Predictive Risk Intelligence SysteM (PRISM) risk score of 1.5 or higher.

Individuals will be deemed eligible for supportive housing benefits if they fall into one of the above categories and exhibit a medical or functional need for the benefit. The state anticipates an average caseload of around 3,000 individuals receiving supportive housing benefits.

Supported Employment Services. The waiver will also provide job coaching and training, employer relations assistance, and job placement services to individuals on Medicaid with physical, behavioral, or LTSS needs that limit their employment opportunities. The waiver addresses four specific populations with a targeted outcome for each.

  • Helping Medicaid members who are older or have a disability, or those with the potential to be enrolled in the Housing and Essential Needs program, remain engaged in the labor market.
  • Preventing an escalation in behavioral health needs for individuals with severe and persistent mental illness, multiple episodes of inpatient substance abuse treatment, and/or co-occurring mental illness and substance use disorder.
  • Supporting individuals with a traumatic brain injury (TBI) or a physical disability and significant LTSS needs.
  • Supporting working age youth with a behavioral health diagnosis.

Again, the state anticipates an average caseload of around 3,000 individuals.

Link to Waiver Approval, More Information

Link to CMS Waiver Approval Letter:

Subscribe to the Weekly Roundup

[text-blocks id=”2075″ slug=”full-width-cta-hma-weekly-roundup”]