Medical-Cal 1115 Waiver Approved–December 31, 2015

The DHLF is pleased to share the below Department of Health Care Services notice about the approval of the Medi-Cal 1115 Waiver, “Medi-Cal 2020.”  There is a link that will take you to the Special Terms and Conditions (plus attachments) which governs the implementation of the waiver. As you know, the component affecting district/municipal hospitals is the PRIME program.
Staff is reviewing the documents and will be prepared to discuss on our monthly conference call, January 7.  Additionally, as you review, if questions come to mind, please send those to me so that we may add them to our running list to raise with DHCS.
Happy New Year!
From: Williams, Norman (OPA)@DHCS [mailto:Norman.Williams@DHCS.CA.GOV] Sent: Wednesday, December 30, 2015 11:34 AM To: DHCSSTAKEHOLDERS@MAILLIST.DHS.CA.GOV Subject: [GRAYMAIL] CMS Approves Medi-Cal 1115 Waiver Renewal
The Department of Health Care Services (DHCS) is pleased to share this important announcement with you. Thank you.
Federal Government Approves Medi-Cal 1115 Waiver Renewal
The Department of Health Care Services (DHCS) is pleased to announce that today the federal government approved California’s 1115 waiver renewal, which includes $6.2 billion of initial federal funding to support the state’s Medi-Cal program and its health care coverage of more than 12.8 million individuals. This approval extends the waiver from January 1, 2016 through December 31, 2020.
The waiver renewal, called Medi-Cal 2020, builds on the successes of the state’s Bridge to Reform waiver in 2010, a critical piece of the state’s implementation of the Affordable Care Act. More than 4 million of the state’s current Medi-Cal members have enrolled since California implemented the ACA in January 2014.
The Medi-Cal 2020 waiver opens the door to innovative changes in the way Medi-Cal provides services to its members, all with the goals of improving efficiency, access and quality of care.
This final Medi-Cal 2020 renewal reflects the overall construct announced at the end of October. It includes initial federal funding over the five years of $6.2 billion, with the potential for additional federal funding in the Global Payment Program (GPP) after the initial year of the waiver.
Some of the key programmatic elements of Medi-Cal 2020 are:

  • Public Hospital Redesign and Incentives in Medi-Cal (PRIME) — This program builds on the success of the state’s Delivery System Reform Incentive Program (DSRIP), which was the first such transformation effort in the nation. Under PRIME, Designated Public Hospital (DPH) systems and District Municipal Public Hospitals (DMPHs) will be required to achieve greater outcomes in areas such as physical and behavioral health integration and outpatient primary and specialty care delivery.  Additionally, PRIME requires DPHs to transition managed care payments to alternative payment methodologies, moving them further toward value-based payment structures over the course of the waiver. PRIME offers incentives for meeting certain performance measures for quality and efficiency. Over the course of the five-years, federal funding for PRIME for DPHs is $3.27 billion, and for DMPHs is $466.5 million.
  • Global Payment Program (GPP) — A new program aimed at improving the way care is delivered to California’s remaining uninsured. GPP transforms traditional hospital funding for DPHs from a system that focuses on hospital-based services and cost-based reimbursement into a value-based payment structure. Under the GPP, DPHs are incentivized to provide ambulatory primary and preventive care to the remaining uninsured through a value-based payment structure that rewards the provision of care in more appropriate settings.  This new and innovative approach to restructuring these traditional hospital-focused funds allows California to better target funding for the remaining uninsured and incentivize delivery system change –  focusing on the provision of primary and preventive care, and shifting away from avoidable emergency room and hospital utilization. The federal funding for GPP will be a combination of the DSH funding for participating DPHs and $236 million in federal funding for the first year from the prior SNCP.  The non-DSH funding for years two through five will be determined following an independent assessment of uncompensated care due to be completed in the spring of 2016.
  • Dental Transformation Initiative (DTI) — For the first time, California’s Waiver also includes opportunities for improvements in the Medi-Cal Dental Program.  The DTI provides incentive payments to Medi-Cal dental providers who meet certain requirements and benchmarks in critical focus areas such as preventive services and continuity of care. Over the course of the waiver, up to $750 million in annual funding is available under DTI. The non-federal share for DTI will be funded through State General Fund savings achieved through limited continuation of Designated State Health Program (DSHP) funding.
  • Whole Person Care (WPC) Pilots — Another innovative component of Medi-Cal 2020 will allow for county-based pilots to target high-risk populations. The overarching goal of the WPC pilots is the integration of systems that provide physical health, behavioral health, and social services to improve members’ overall health and well-being, with the goals of improved beneficiary health and wellbeing through more efficient and effective use of resources.  WPC Pilots may also choose to expand access to supportive housing options for these high-risk populations. The waiver renewal authorized up to $1.5 billion in federal funding over the five-years; WPC Pilot lead entities will provide the non-federal share.In addition to these programs, Medi-Cal 2020 continues authorities for the Medi-Cal managed care program, Community-Based Adult Services, the Coordinated Care Initiative (including CalMediConnect), and the Drug Medi-Cal Organized Delivery System.The renewal also contains several independent analyses of the Medi-Cal program and evaluations of the waiver programs, including an assessment of access in the Medi-Cal managed care program and studies of uncompensated care in California hospitals. DHCS will convene a stakeholder webinar to walk through the requirements of Medi-Cal 2020 and answer questions on January 25th from 3 p.m. to 4:30 p.m., additional information relating to the webinar will be forthcoming.The formal waiver approval letter and Special Terms & Conditions are available on the DHCS website.