Building off Success — Looking Ahead to New York’s DSRIP 2.0

Written by Kalin Scott

Yesterday, the New York State Department of Health released its proposed request for extension of the state’s Delivery System Reform Incentive Payment (DSRIP) program. DSRIP in New York has been incredibly successful — since 2014, it has delivered a 21% statewide reduction in avoidable hospitalizations, and more than 60% of Medicaid managed care spending is now in value-based arrangements.

The release of this request marks an opportunity to reflect on the collective success of the DSRIP program, and the tens of thousands of providers and stakeholders through the state responsible for the success of this effort. DSRIP has been a catalyst for change at the state and local levels and has generated interest and inspired similar initiatives around the world.

The request will amend the state’s existing section 1115 Medicaid Redesign Team waiver, will be formally submitted to the Centers for Medicare and Medicaid Services (CMS) later this year, and is ultimately subject to CMS approval. (Section 1115 waivers allow the Secretary of Health and Human Services to waive certain provisions of the Medicaid program and enable states to test new policy approaches to better serve Medicaid members.)

1115 waivers, while complex and wonky, are fantastic vehicles for improving a state’s Medicaid program and benefits to Medicaid members, while allowing states to innovate and pilot new ways to deliver care and facilitate provider collaboration — leading to significant system change. DSRIP in New York was inspired by previous federal-state partnerships on delivery system reform in other states including Oregon, California, Texas, and New Jersey.

New York State’s Current DSRIP Program:

New York based its first DSRIP request on the demonstrated success of the state’s Medicaid program in bending the cost curve after the state generated $17 billion in federal savings and improved quality outcomes through Medicaid Redesign Team (MRT) initiatives dating back to 2011. CMS approved the initial DSRIP request in April 2014 and committed $8 billion of federal investment to DSRIP and DSRIP-related programs through March 2020 — which brings us to today.

New York’s current DSRIP program, now in its final year, focuses on transforming the state’s health care delivery system and rewarding value over volume by reducing avoidable hospital use across the state, creating integrated delivery systems, and supporting the move toward value-based payment arrangements. 25 Performing Provider Systems (PPS) — collaboratives of providers and community-based organizations assigned to specific regions in the state — are currently implementing population health, clinical improvement, and system transformation projects at a local level. The PPS earn performance payments once they achieve and report specific milestones and metrics. The program included a planning year (Year 0), five years of DSRIP program implementation, and is slated to conclude in March 2020. Over the course of its implementation, New York worked with other states interested in implementing and expanding delivery reform system efforts, and Washington, Massachusetts, and North Carolina, New Hampshire and Rhode Island have since received federal approval to implement similar programs.

Since 2014, other statewide initiatives to improve care and outcomes for the state’s most vulnerable populations have been launched in parallel to DSRIP and the extension request incorporates those areas which have drawn national and international attention.

DSRIP 2.0 — Building on Success

The state’s request for an extension, as detailed in the amendment request, is focused on sustaining and expanding the successful work of providers across New York in achieving statewide goals and community-level improvement, and the promise of significant continued transformation through delivery system reform in the coming years. As a direct result of DSRIP implementation, there are some PPS and communities across the state that have seen local efforts generate significantly higher returns.

Extending the state’s DSRIP program will provide additional time and funding to successful collaborations and initiatives that are meaningfully transforming how Medicaid members are supported by the state’s health care delivery system. The extension also allows the state’s commitment to the transition to value-based payment to continue.

What is the state asking for?

· New York is asking for an additional $8 billion investment over four years: April 2020-March 2024:

o DSRIP Performance — $5 billion — continued investment in current DSRIP priority areas as well as new focus points including: reducing maternal mortality, children’s population health, and long-term care reform,

o Workforce Development — $1 billion — investment in workforce development initiatives, especially non-clinical community-based workers, as the delivery system continues to evolve,

o Social Determinants of Health — $1.5 billion –investment to create Social Determinant of Health Networks to deliver SDoH interventions linked to value-based payment arrangements to address the SDoH faced by Medicaid members such as housing instability and food insecurity,

o Interim Access Assurance Fund — $500 million — investment to support financially distressed hospitals that serve the state’s most vulnerable populations and communities and accelerate the transformation toward acute and ambulatory health care in those areas.

· The agreement would include a one-year continuation of DSRIP under the state’s existing section 1115 waiver, and a conceptual agreement for the final three years, to ultimately be incorporated in a future 1115 extension. (The current overall 1115 waiver expires in March 2021, so this will allow the agreement to carry over into the future waiver — this approach is consistent with the first DSRIP approval.)

· VDEs — second-generation “value-driving entities” will consist of PPS or a subset of PPS, provider, CBO and MCO teams specifically approved by the state to implement high-priority DSRIP promising practices. VDEs may modify existing PPS structures or instead propose new teams and structures. Qualified Entities (QEs), regional networks storing electronic health information data, would also be integrated into the collaborative partnerships. VDEs will still be assigned specific regions but will have the flexibility to modify the existing PPS structure to accommodate the partnership changes. All VDEs will be required to bring in managed care organizations (MCOs) into the management and operational structure to replicate, scale, and make ready for VBP contracting the promising practices. Ideally, VDEs will include CBOs in governance.

· VDEs will be tasked with driving DSRIP promising practices and additional focus areas to the ultimate goal of full support by VBP contracts by 2023.

· VDEs will be selected based on a history of performance improvement, the strength of provider/MCO/CBO partnerships, an inclusive governance structure, and the potential to sustain DSRIP promising practices under VBP arrangements by year 3 of the extended demonstration.

How is the program evolving? What’s different?

The DSRIP extension request updates the existing DSRIP program by incorporating a number of proposed updates:

· Engagement of MCOs in VDEs to further support VBP efforts,

· Significant investment in SDoH through DSRIP, building on the state’s focus on SDoH in VBP — this would likely be the largest single investment in SDoH in United States history!

· Deliberate focus on DSRIP success stories and replication of those efforts,

· Alignment with federal initiatives on policy and payment,

· Clear expectations related to engagement of CBOs, specifically in VBE governance,

· Specific focus on the engagement of QEs/RHIOs with VBEs,

· Recognition of populations/challenges not previously well-served by DSRIP: reducing maternal mortality, children’s population health, long-term care reform,

· Commitment to evolve measure specifications to align with CMS sets, focus on poor performance, and ensure feasibility for measuring both provider performance and VBP measurement.

Interested in talking more about how New York’s DSRIP experience can inform delivery system reform efforts across the country and world, the importance of addressing the social determinants of health, or the nuts and bolts of an 1115 waiver? Some helpful resources are linked below, and I love to connect with others who are new to these areas, long-time experts or somewhere in between. Find me at @kalinscot or send an email to kalin@helgersonsolutions.com, and let’s catch up!

DSRIP Promising Practices: Strategies for Meaningful Change for New York Medicaid (United Hospital Fund)

An Overview of Delivery System Reform Incentive Payment Waivers (Kaiser Family Foundation)

Addressing SDoH via Medicaid Managed Care Contracts and Section 1115 Demonstrations (Center for Health Care Strategies)