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Attaining Coverage Through a Section 1115 Demonstration Waiver
A state seeking to maintain flexibility in offering the National Diabetes Prevention Program (National DPP) lifestyle change program may want to consider whether the program would align with an 1115 demonstration waiver.
These waivers provide states with additional flexibility to design, demonstrate, and evaluate new approaches to delivering Medicaid such as:
- Expanding eligibility to individuals who are not otherwise Medicaid or CHIP (Children’s Health Insurance Program) eligible;
- Providing services not typically covered by Medicaid;
- Using innovative service delivery systems that improve care, increase efficiency, and reduce costs.
About 1115 Demonstration Waivers
Section 1115 of the Social Security Act gives the Secretary of Health and Human Services the authority to approve experimental, pilot, or demonstration projects that promote the objectives of the Medicaid program. There are general criteria the Centers for Medicare and Medicaid Services (CMS) uses to determine whether Medicaid/CHIP program objectives will be met under the demonstration.
These criteria include whether the demonstration will:
- Increase and strengthen overall coverage of low-income individuals in the state;
- Increase access to, stabilize, and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state;
- Improve health outcomes for Medicaid and other low-income populations in the state; and
- Increase the efficiency and quality of care for Medicaid and other low-income populations through initiatives to transform service delivery networks.
For more information about 1115 waivers, see “1115 Waiver Considerations” section below or About Section 1115 Demonstrations.
Note: It may be necessary for a state to seek a preventive services State Plan Amendment (SPA) in addition to the 1115 waiver when covering the National DPP lifestyle change program. Generally, CMS prefers to approve changes that can be authorized under a SPA through that mechanism.
System Reform 1115 Waivers
The Vermont “Global Commitment to Health” Medicaid 1115 waiver uses a multi-disciplinary approach to promote basic principles of public health, public-private partnerships, and program flexibility. The waiver allows the state to invest in broader population health initiatives that benefit both Medicaid and non-Medicaid beneficiaries. These investments can be made if the state provides essential Medicaid benefits and keeps overall Medicaid expenditures below a pre-determined, baseline spending cap.
The state uses the investment funds to deliver the self-management programs under the State of Vermont’s Blueprint for Health (Blueprint) initiative. This initiative provides grant funding to local communities to design and implement strategies for improving health and wellbeing. Through the Blueprint, the state is delivering six chronic disease prevention and self-management programs or “workshops,” including the National DPP lifestyle change program. Other programs include the Stanford Self-Management Programs (Chronic Disease, Pain, and Diabetes), tobacco cessation programs, and the Wellness Recovery Action Plan (WRAP).
The state delivers and pays for the National DPP lifestyle change program using Blueprint grant dollars, which come from 1115 waiver savings (measured from a pre-determined baseline).
Funding and support for the program comes in two forms:
- Infrastructure funding. Payments are provided through health service area* grants. These grants include at least $45,000 per year for self-management programs. The payments support program implementation costs and lifestyle coach stipends and are used to implement all state-sponsored chronic disease prevention and self-management programs. Each health service area is required to offer at least three continuous National DPP lifestyle change programs per year.
*Blueprint health service areas are state-defined geographical boundaries that dictate the coverage areas of Blueprint Community Health Teams. These teams are responsible for helping to determine and meet the needs of the local population).
- Technical assistance capacity payments. These payments are made to an administrative organization that works in partnership with the Blueprint and Department of Health to provide program technical assistance on a statewide basis, including: (1) leadership, lifestyle coach, and curriculum training for the National DPP lifestyle change program; (2) quality improvement activities; (3) marketing, recruitment, and retention support; and (4) data aggregation, tracking, and submission. Technical assistance was managed by the YMCA of Greater Burlington through the first three quarters of 2017. The University of Vermont Medical Center took over program technical assistance beginning October 1, 2017 (Blueprint for Health In 2017 Annual Report).
The State of Vermont (managed through the Blueprint for Health, Department of Vermont Health Access) serves as the CDC-recognized organization, meaning it collects, aggregates, and submits data to the CDC from each of the National DPP lifestyle change programs operated by the 14 health service areas. The state is in the process of receiving full CDC-recognition.
Due to the unique funding mechanism and structure outlined in the 1115 waiver, the National DPP lifestyle change program is available and free to any person in Vermont who wants to participate.
Other benefits to this approach include:
- The health service area grant recipients have relationships with their local providers that allows them to support providers in utilizing electronic health records to develop patient panels from which to recruit eligible program members.
- As a state-based organization, the Blueprint can ask its community partners (e.g., Area Agencies on Aging, libraries, medical providers, etc.) to help recruit people to the program.
- The Blueprint works with employers across the state, including the Vermont state employee plan, to promote participation. For example, the Blueprint worked with an employer to provide employees with release time to participate in the National DPP lifestyle change program.
Delivery System Reform Incentive Payment (DSRIP) 1115 Waivers
The National DPP lifestyle change program is included in the New York and Texas DSRIP 1115 demonstration waivers. The goal of DSRIP 1115 waivers is to reform a Medicaid program’s delivery and payment system to better focus on improving population health, care quality, patient experience, and reducing costs.
In DSRIP 1115 waivers, participating providers or payers develop project plans with specific goals for delivery and payment system improvement. The project plans outline plans for program implementation and delivery and are approved by the state and CMS.
It is important to note that programs and system reforms included in these project plans are not reimbursed through federal Medicaid matching funds. Instead, participating providers and payers receive financial support for program implementation and delivery from a pool of state and federal dollars established by CMS. Receipt of dollars is dependent on meeting pre-determined measures and milestones.
As such, the caution with using a DSRIP 1115 waiver approach is that the demonstration is time-limited and, in the past, CMS has expressed disinclination to renew these types of programs without some additional guarantee of sustainability. To continue covering the services provided by National DPP lifestyle change programs once the DSRIP 1115 demonstration has ended, a state would need to seek a SPA to draw down federal Medicaid matching funds or participating providers and payers would need to find alternative financing for the program.
State Examples: Incorporating the National DPP Lifestyle Change Program in DSRIP 1115 Waivers
In New York, DSRIP participating providers must include at least five but no more than 11 projects chosen from the three different domains, as required by the state Medicaid agency. The National DPP lifestyle change program was an optional project for providers to pursue under Domain 3 (clinical improvement projects). Language from the toolkit is as follows:
Project Title: Implementation of evidence-based strategies in the community to address chronic disease—primary and secondary prevention projects. (adult only)
Objective: These projects are focused on improving patient self-efficacy and confidence in self-management and engagement of the at-risk population in primary and secondary disease prevention strategies.
Rationale and Relationship to Other Projects: While Project 3.c.i is focused on practice improvement focused on diabetes care, this project focuses on developing community resources that will work collaboratively with community practitioners to assist patients with primary and secondary preventive strategies to reduce their risk factors for diabetes and ameliorate the long-term consequences of diabetes and other co-occurring chronic diseases.
Core Components: Performing provider systems undertaking this project will need to complete the following key components:
- Providers will implement CDC-recognized National Diabetes Prevention Programs (National DPP) and/or create linkages with community program delivery sites to refer patients to CDC-recognized programs in the community such as the National DPP, Chronic Disease Self-Management Program (CDSMP), and Diabetes Self-Management Education and Support (DSMES).
- Providers will identify patients at high risk for onset of diabetes or with pre-diabetes and refer them to institutional or community National DPP delivery sites.
- Providers will collaborate with these sites to monitor progress and make ongoing recommendations.
- Focus will be on lifestyle modification including diet, tobacco use, and exercise and medication compliance and will provide recommendations consistent with community resources.
- A quality committee will be established including providers and National DPP staff to monitor the outcomes of the project and implement improvements when indicated.
- Coordination with the Medicaid Managed Care organizations serving the affected population as well as Health Homes for eligible/involved patients.
For more information, see New York’s DSRIP Project Toolkit.
In Texas, regional provider groups have more flexibility in proposing projects rather than selecting from a predetermined menu. One of the projects proposed in Region 6, the Community Diabetes Project, focused on implementing the National DPP lifestyle change program by establishing an agreement between the City of San Antonio Metropolitan Health District and the national YMCA Diabetes Prevention Program to offer the program to the San Antonio community.
The region sought over three million dollars over a five-year period to implement this program. In addition to those on Medicaid, the program is provided to uninsured and underinsured individuals.
12-Month Continuous Eligibility 1115 Waivers
One challenge to covering the National DPP lifestyle change program in Medicaid is the high rate of churn among Medicaid beneficiaries, particularly those closest to the eligibility income limit. Churn is defined as the repeated movement of families and individuals on and off benefit coverage over time as their income falls below and increases above the eligibility income limit.
Medicaid churn rates vary substantially by state and are dependent on the qualifying level of income for Medicaid eligibility. Some states report churn rates as low as 2%, while other research has found rates to be as high as 40%.
Given the National DPP lifestyle change program is a year-long program, it may be difficult to manage the participating populations if there is a high rate of churn even if strong recruitment and retention processes are implemented.
To mitigate this issue, one option states may want to consider is seeking an 1115 waiver that would allow for 12-month continuous eligibility for its adult Medicaid population. While the Affordable Care Act (ACA) restricts states from requiring Medicaid beneficiaries to renew coverage more than once every 12 months, beneficiaries are still required to report changes in income that may cause them to lose coverage. States with approved 12-month continuous eligibility waivers are able to provide a full year of coverage regardless of changes in income or household size.
As of January 2016, Kaiser Commission on Medicaid and the Uninsured report shows New York and Montana provide 12-month continuous eligibility to parents and other adults under Section 1115 waiver authority.
1115 Waiver Considerations
Demonstrations must also be “budget neutral,” meaning that over the course of the demonstration, federal Medicaid expenditures will not be more than what federal spending would have been without the waiver.
In calculating the cost savings from implementing the National DPP lifestyle change program, states will need to estimate how many Medicaid enrollees have prediabetes as well as the type 2 diabetes-related costs that could be averted by implementing the National DPP lifestyle change program (see Economic Impact section for more information on estimating the cost-effectiveness or cost-savings of the program as well as the Identification section for more information on identifying Medicaid enrollees eligible for the program).
These estimates are then included in the budget neutrality calculations to show the difference between expenditures “with waiver” v. “without waiver.” Budget neutrality must be achieved within a five-year period if pursuing an 1115 waiver.
An additional consideration exists for those states that have implemented, or plan to implement waivers to reform the broader Medicaid delivery system and promote population health. The National DPP lifestyle change program would align well with an overarching strategy for reform and enhanced prevention efforts.
In this case the National DPP lifestyle change program can be accommodated into the budget neutrality calculations for the full waiver, meaning that savings generated from a different program could be used to offset any costs incurred by the National DPP lifestyle change program within the first five years of the demonstration.
Budget neutrality calculations are very specific to the state, the waiver application, and the number of Medicaid reforms being sought. Most state actuaries have experience developing budget neutrality calculations and CMS is available to provide technical assistance to individual states to identify elements needed to demonstrate budget neutrality.
Generally, section 1115 demonstrations are approved for an initial five-year period and can be extended for an additional three or five years. States commonly request and receive additional three- or five-year extension approvals.
Content Updated: December 4, 2019