Waiver Renewal

Medicaid 1115 Transformation Waiver

For more information, read about the Texas Healthcare Transformation and Quality Improvement Program on the federal Medicaid website.

On Jan. 15, 2021, HHSC received Federal approval for the Texas Healthcare Transformation and Quality Improvement 1115 Demonstration Waiver. Pursuant to CMS direction, HHCS has submitted that document for re-approval. Learn more about the July 2021 Extension Application below. 

July 2021 Extension Application Submission [Paused]

On July 14, 2021, Texas submitted to CMS its request to extend and to amend the Texas Healthcare Transformation Quality Improvement Program waiver under section 1115 of the Social Security Act. Below please find links to the submitted cover letter, Extension Appendices, and Preliminary Evaluation Findings (Supplement A-Preliminary Draft Results).

May 2021 Extension Request Full Public Notice

HHSC seeks feedback on a draft request to extend and to amend the Texas Healthcare Transformation Quality Improvement Program waiver under section 1115 of the Social Security Act. The extension request reflects the same terms and conditions agreed to and approved by the Centers for Medicare and Medicaid Services on January 15, 2021, subject to any pending waiver amendments.

The proposed 1115(a) waiver extension application, including the proposed Special Terms and Conditions, Authorities, Waiver Lists, Extension Appendices, Attachment A, Attachment U, and external evaluation is posted below. To obtain a copy of additional waiver attachments, ask questions, obtain additional information, obtain a hard copy of the waiver extension, or submit comments regarding this proposed extension application individuals may contact Basundhara Raychaudhuri by U.S. mail, telephone, fax, or email at:

U.S. Mail
Texas Health and Human Services Commission
Attention: Basundhara Raychaudhuri, Waiver Coordinator, Policy Development Support
PO Box 13247
Mail Code H-600
Austin, Texas 78711-3247

Email
TX_Medicaid_Waivers@hhsc.state.tx.us  

Telephone
512-487-3318

Fax
Attention: Basundhara Raychaudhuri, Waiver Coordinator, at 512-206-3975

Draft Application

Location and times of Public Hearings

1115 Transformation Waiver: Extension Application Public Hearing on June 2, 2021 at 10:00 am on the campus of UT Southwestern Medical Center, T. Boone Pickens Building, Auditorium, 6001 Forest Park Road, Dallas, Texas 75235. (Located between Inwood Road and Mockingbird Lane, and between Maple Avenue and Harry Hines Boulevard). This is an in-person and virtual hearing. To participate virtually, members of the public must register here.

Medical Care Advisory Committee will be held on June 10, 2021 at 9:00 am. This is a virtual-only meeting. Members of the public must register for the meeting here.

1115 Transformation Waiver: Extension Application Public Hearing on June 15, 2021 at 10:00 am at the Health and Human Services Commission, Brown-Heatly Building, Public Hearing Room, 4900 North Lamar Blvd., Austin, Texas 78751. This is an in-person and virtual hearing. A link to the webcast and virtual registration for commenters wishing to provide testimony during the hearing will be included in the agenda posted in the Texas Register and on the HHSC’s website.

Additional Opportunity for Comment:
From the date of public notice in the Texas Register until June 28, 2021, an individual may obtain a free copy of the proposed waiver extension application, ask questions, obtain additional information, or submit comments regarding this proposed extension application by contacting Basundhara RayChaudhuri by U.S. mail, telephone, fax, or email at:

U.S. Mail
Texas Health and Human Services Commission
Attention: Basundhara Raychaudhuri, Waiver Coordinator, Policy Development Support
PO Box 13247
Mail Code H-600
Austin, Texas 78711-3247

Email
TX_Medicaid_Waivers@hhsc.state.tx.us

Telephone
512-487-3318

Fax
Attention: Basundhara Raychaudhuri, Waiver Coordinator, at 512-206-3975

Program Description Goals and Objectives

Since 2011 when the waiver was initially approved, the managed care model in Texas has been expanded statewide and includes more services under capitation. Today, Texas serves over four million Texans through Medicaid and CHIP programs, and 95% are covered under the Medicaid managed care model. This request to extend preserves the innovations, collaboration, and improved value of care through a continuous extension through 2030 of our current demonstration period. 

Under terms of this demonstration, the state provides managed medical assistance through the following programs. 

  • STAR. STAR is the primary managed care program providing acute care services to low-income families, children, and pregnant women. 
  • STAR+PLUS. STAR+PLUS provides acute and long-term service and supports to older adults and adults with disabilities. 
  • STAR Kids. The STAR Kids Program provides acute and long-term service and supports to children with disabilities. 
  • Children’s Dental. The Children’s Dental program provides dental care to children under the age of 21.

The extension request is for approximately 10 years, which will allow the 1115 waiver authority to run through 2030. The requested extension will allow Texas continued flexibility to pursue the established goals of the 1115 waiver, which are to: expand risk-based managed care to new populations and services, support the development and maintenance of a coordinated care delivery system, improve outcomes while containing cost growth, and transition to quality-based payment systems across managed care and providers.

The extension will also create financial stability for Texas Medicaid providers during and subsequent to the ongoing public health emergency, as HHSC works to transition and continue the valuable innovations developed through Delivery System Reform Incentive Payment program. The extension years better align the DSRIP transition timeline with the overall goals to create a sustainable, integrated managed care program.

Under the extension, DSRIP will fully transition and Medicaid managed care expenditures will adjust to promote access to care and provide incentives that drive value.

The extension request notes that the DSRIP pool is eliminated and incorporates a new section incorporating planned delivery system and provider payment initiatives within Medicaid Managed Care. The programs include Comprehensive Hospital Increased Reimbursement Program, Texas Incentives for Physician and Professional Services Program, Rural Access to Primary and Preventive Services Program, and Directed Payment Program for Behavioral Health Services. The extension request includes a request to create Public Health Provider-Charity Care Program. The program is proposed to begin on October 1, 2021, as a part of DSRIP transition. The program is designed to defray costs associated with care, including behavioral health, immunizations, chronic disease prevention and other preventive services for the uninsured. The program is limited to publicly-owned and operated community mental health clinics, local behavioral health authorities, and local mental health authorities, local health departments, and public health districts.

The extension request includes a reassessment of the charity care pools. Year 3 of the PHP-CCP will be resized based upon actual charity care cost data from Year 2. The Uncompensated Charity Care pool will first be re-sized in DY11 to take effect in DY12 (FY2023). The second re-sizing will take place in DY16 to take effect in DY17 (FY2028). Re-sizing will allow for adjustments to uncompensated care pool based on actual charity care.

Texas seeks the same Special Terms and Conditions previously agreed to and approved by CMS. The January 15, 2021, approved extension included STCs related to new processes and reporting requirements for the state’s Directed Payment Programs.  Proposed DPPs for state fiscal year 2022 include CHIRP, TIPPS Program, RAPPS Program, Directed Payment Program for BHS, QIPP for Nursing Facilities, and an Ambulance Services Directed Payment Program. The January 15, 2021, approved extension also included: new authority for the state to receive federal financial participation for payments made through the Public Health Providers Charity Care Pool, and new reporting and transparency requirements for Home and Community-Based Services to further ensure beneficiary safeguards by adding Long Term Services and Supports-specific performance measures.   

The Texas directed payment programs proposed within Medicaid Managed Care include:

Comprehensive Hospital Increase Reimbursement Program

CHIRP is a proposed directed payment program that provides increased Medicaid payments to hospitals for inpatient and outpatient services provided to persons with Medicaid enrolled in STAR and STAR+PLUS programs. CHIRP is the successor to the Uniform Hospital Rate Increase Program, which is currently in its fourth year of operation.

Quality Incentive Payment Program

QIPP is a value-based directed payment program that provides incentive payments to eligible nursing facilities participating in the Medicaid STAR+PLUS program. Through QIPP, MCOs are directed to make payments to eligible nursing facilities once the facilities demonstrate meeting the required goals. QIPP is currently in its fourth year of operation.

Texas Incentives for Physicians and Professional Services

TIPPS is a proposed value-based directed payment program for certain physician groups providing health care services to persons with Medicaid enrolled in STAR, STAR+PLUS, and STAR Kids programs. TIPPS funds will be distributed to eligible physician groups based on each physician group’s achievement of performance requirements collected twice per year.

Rural Access to Primary and Preventive Services

RAPPS is a proposed directed payment program for rural health clinics that provide primary and preventive care to persons in rural areas of the state enrolled in Medicaid STAR, STAR+PLUS, and STAR Kids programs. RAPPS focuses on the management of chronic conditions. RAPPS funds will be distributed to enrolled RHCs who meet program requirements.

Directed Payment Program for Behavioral Health Services

DPP BHS is a proposed value-based payment program to incentivize Community Mental Health Centers to continue providing services that are aligned with the Certified Community Behavioral Health Clinic model of care to persons enrolled in Medicaid STAR, STAR+PLUS, and STAR Kids programs. DPP BHS funds will be distributed to enrolled CMHCs who meet program requirements.

A central feature of Texas’ November 2020 application was stability through budget certainty for our health care systems across Texas in the midst of the ongoing public health emergency.  Through a collaborative process, a waiver agreement was reached between CMS and Texas effective January 15, 2021.  CMS withdrew this agreement on April 16, 2021.  Texas seeks the same agreement along with pending waiver amendments.

Beneficiary Groups, Eligibility Requirements, and Benefits 
Eligibility groups affected by the demonstration can be found beginning in Section C. BENEFICIARIES SERVED THROUGH THE DEMONSTRATION in the STCs.

STAR+PLUS provides acute and long-term service and supports to older adults and adults with disabilities. The STAR+PLUS HCBS Program provides long-term services and supports to two groups of people, as defined below:

STAR+PLUS 217-Like HCBS Group. This group consists of persons age 21 and older, who meet the nursing facility level of care (LOC), who qualify as members of the 217-Like HCBS Group, and who need and are receiving HCBS as an alternative to nursing facility care. This includes persons who could have been eligible under 42 CFR 435.217 had the state continued its section 1915(c) HCBS waiver for persons who are elderly and/or physically disabled. This group is subject to a numeric enrollment limitation.

SSI-Related Eligibles. Persons age 65 and older, and adults age 21 and older, with physical disabilities that qualify as SSI eligibles and meet the nursing facility LOC as defined by the state.

Individuals can be eligible for HCBS under STAR+PLUS depending upon their medical and / or functional needs, financial eligibility designation as a member of the 217-Like STAR+PLUS HCBS Group or an SSI-related recipient, and the ability of the State to provide them with safe, appropriate, and cost-effective LTC services.

Medical and / or functional needs are assessed according to level of care (LOC) criteria published by the State in State rules. These LOC criteria will be used in assessing eligibility for STAR+PLUS HCBS benefits through the 217-Like or SSI-related eligibility pathways.

For an individual to be eligible for HCBS services, the State must have determined that the individual’s cost to provide services is equal to or less than 202 percent of the cost of the level of care in a nursing facility.

STAR is the primary managed care program providing acute care services to low-income families, children, pregnant women, adoption assistance and permanency care assistance, and former foster care children.

The STAR Kids program provides a continuum of services, including acute care, behavioral health, state plan long-term services and supports, and 1915(c) home and community based waiver services to children with disabilities. The following groups of Medicaid clients from birth through age 20 are mandatory in the STAR Kids program.

Children receiving SSI and disability-related (including SSI-related) Medicaid who do not participate in a 1915(c) waiver: these children will receive their state plan acute care services and their state plan long term services and supports (LTSS) through STAR Kids.

Children receiving HCBS services through the Medically Dependent Children Program (MDCP) 1915(c) waiver: these children and young adults will receive the full range of state plan acute care services and state plan LTSS as well as MDCP 1915(c) HCBS waiver services through STAR Kids.

Children’s primary and preventive Medicaid dent al services are delivered through a capitated statewide dental services program (the Children’s Dental Program) to most children under 21. The following Medicaid recipients are excluded from the Children’s Dental Program, and will continue to receive their Medicaid dental services outside of the Demonstration: Medicaid recipients age 21 and over; all Medicaid recipients, regardless of age, residing in Medicaid-paid facilities such as nursing homes, state supported living centers, or Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/ID); and STAR Health Program recipients.

Eligibility  
The extension does not make any changes to eligibility requirements.

Enrollment 
Extending the waiver will not have a significant impact on enrollment.

Cost Sharing 
Under the extension there will continue to be no beneficiary cost sharing.

Benefit Coverage 
The extension will not change the array of benefits provided under the current 1115 waiver authority.

Waiver Authorities
Updated authorities include the end of DSRIP in FFY 2021, COVID-19 related authorities, and the new Public Health Provider Charity Care Pool (PHP-CCP).    

Waiver Lists
The list of waivers includes ;

  1. Statewideness - Section 1902(a)(1)
    To enable the State to conduct a phased transition of Medicaid beneficiaries from fee-for-service to a managed care delivery system based on geographic service areas. To the extent necessary, to enable the State to operate the STAR+PLUS program on a less than statewide basis.
  2. Amount, Duration, and Scope of Services - Section 1902(a)(10)(B)
    To the extent necessary to enable the State to vary the amount, duration, and scope of services offered to individuals, regardless of eligibility category, by providing additional, or cost-effective alternative benefit packages to enrollees in certain managed care arrangements. To the extent necessary to enable the state to provide a greater duration of hospital services for individuals with severe and persistent mental illness.
  3. Freedom of Choice - Section 1902(a)(23)(A)
    To the extent necessary, to enable the State to restrict freedom of choice of provider through the use of mandatory enrollment in managed care plans for the receipt of covered services. No waiver of freedom of choice is authorized for family planning providers.
  4. Self-Direction of Care for HCBS Members - Section 1902(a)(32)
    To permit section 1915(c)-like Home and Community Based Services (hereinafter HCBS) members to self-direct expenditures for HCBS long-term care and supports as specified in paragraph 43(h) of the STCs.

Budget Neutrality
This request includes the rebasing previously approved in the January 15, 2021, version of the STCs.  Without waiver, expenditures will be rebased effective in FFY 2023 (Oct 2022-Sep 2023) using FFY 2022 (Oct 2021-Sep 2022) data to establish the rebased without-waiver per member per month (PMPM) costs.  To calculate the new rebased amount, without waiver PMPMs will be adjusted to account for annualized amounts of approved state-directed payments (pending state legislative approval) made in FFY 2022. Texas is requesting that in response to the public health emergency, CMS allow a one-time adjustment to budget neutrality to account for impacts of COVID-19 on enrollment and expenditures.  A subsequent rebasing exercise to without waiver PMPMs is included effective FFY 2028 using FFY 2026 expenditures. These processes will ensure that budget neutrality will continue to support funding needs and flexibility moving forward.  See Texas budget neutrality demonstration.  

Annual aggregate expenditures under the 1115 extension are expected to increase consistent with historical state trends.  Standard growth trends include population (caseload) growth and cost growth due to inflationary factors from case mix changes, healthcare advancements and rate changes.  Within the budget neutrality calculations, HHSC projects, subject to and pursuant to 42 CFR § 438.6, over $7 billion will be included into the Medicaid Managed Care rates through directed payment programs in FFY 2022.  These continue funding for current DPPs, launch new DPPs, and incorporate innovations from DSRIP into Medicaid managed care.  Pending Applications include over $5 billion directed to hospital services (CHIRP); $600 million directed to physicians (TIPPS); $170 million directed to behavioral health services (BHS); $20 million directed to Rural Health Clinics (RAPPS); and $1.1 Billion directed to nursing facilities services (QIPP).  HHSC has submitted a state plan amendment to implement increased reimbursements for public ground ambulance services, which it intends to serve as a basis of a directed-payment program in managed care; in managed care, the estimated annual payments could be $150 million.  HHSC also projects a pool size up to $500 million in expenditures from the Public Health Provider Charity Care Program for FY 2022 and FY 2023.  This is included in Attachment U from the STCs approved January 15, 2021.   

Evaluation Design
Texas will develop a new evaluation design for the extension period and plans to incorporate the following updates into the design to reflect recent or future changes to the THTQIP demonstration waiver. Texas will replace the DSRIP component of the evaluation with a component on the new DPPs, including evaluation questions assessing how the DPPs support providers’ transition from DSRIP; broaden the focus of the Medicaid Managed Care (MMC) component of the evaluation to incorporate evaluation questions on overall MMC performance over time; incorporate evaluation questions on the new PHP-CCP, including questions assessing the intersection between the existing Uncompensated Charity Care (UCC) pool and PHP-CCP; and  incorporate additional evaluation questions assessing cost outcomes for the demonstration as a whole.

Hypothesis and Evaluation Parameters

The evaluation design will include at least one evaluation question and corresponding hypothesis for each demonstration component under the 10-year extension (the new DPPs, MMC, PHP-CCP and UCC, and the Overall Demonstration). Collectively, findings from the evaluation components above will inform whether Texas continued its progress towards meeting the goals of the Demonstration and help guide future program improvements.

This plan for a new evaluation design doesn’t impact the External Evaluation to be submitted to CMS by September 30, 2021.  Based on preliminary findings HHSC believes the THTQIP demonstration waiver is on track to meet its intended objectives. Specifically, early evidence suggests DSRIP has incentivized some forms of collaboration and improved health outcomes; MMC shows early signs of improved access and quality of care; more providers are participating in APMs, and; the demonstration generates overall cost savings.

November 2020 Extension Request

HHSC sought feedback on the 1115 Waiver “Fast Track” extension proposal posted below and submitted the proposal to CMS (see the CMS webpage for the Texas Healthcare Transformation and Quality Improvement Program).

The proposed waiver extension application is posted at the link provided below. To obtain a copy of the waiver attachments, ask questions, obtain additional information, obtain a hard copy of the waiver extension, or submit comments regarding this proposed extension application individuals may contact Amanda Sablan by U.S. mail Texas Health and Human Services Commission Attention: Amanda Sablan, Waiver Coordinator, Policy Development Support, PO Box 13247, Mail Code H-600, Austin, Texas 78711-3247, telephone 512-487-3446, fax Attention: Amanda Sablan, Waiver Coordinator, at 512-206-3975, or email at: TX_Medicaid_Waivers@hhsc.state.tx.us until December 27, 2020.

Public Meetings

Due to the Public Health Emergency public meetings will only occur virtually.

December 7, 2020

  • 2:00 p.m. 1115 Waiver - Public Hearing webinar
  • HHSC is conducting a public hearing to solicit feedback on the 1115 Waiver application. Members of the public throughout the State are provided this medium to have an opportunity to provide comments.
  • Agenda
    • Introductions
    • Overview of Proposed Fast Track 1115 Extension Application
    • Questions and Answers
  • Click here to register for the public hearing

December 8, 2020

The Health and Human Services Commission (HHSC) will submit a “Fast Track” extension application to the Centers for Medicare & Medicaid Services (CMS) for the Texas Healthcare Transformation Quality Improvement Program (THTQIP) waiver under section 1115 of the Social Security Act. The extension request is for 5 years, which will allow the 1115 waiver authority to run through 2027.

Program Description Goals and Objectives
The requested extension will allow Texas continued flexibility to pursue the goals of the existing 1115 waiver: expand risk-based managed care to new populations and services; support the development and maintenance of a coordinated care delivery system; improve outcomes while containing cost growth; and transition to quality-based payment systems across managed care and providers.

The extension will also create financial stability for Texas Medicaid providers, as HHSC works to transition the valuable work identified through Delivery System Reform Incentive Payment (DSRIP) innovations. The extension years better align the DSRIP transition timeline with the overall goals to create a sustainable program. There are no significant policy changes requested under this extension application.

Since 2011 when the waiver was initially approved, the managed care model in Texas has been expanded statewide and includes more services under capitation. Today, Texas serves over four million Texans through Medicaid and CHIP programs, and 95% are covered under the Medicaid managed care model. This request to extend preserves the innovations, collaboration, and improved value of care through a continuous five-year extension of our current demonstration period.

Under terms of this demonstration, the state provides managed medical assistance through the following programs.

  1. STAR. STAR is the primary managed care program providing acute care services to low-income families, children, and pregnant women.
  2. STAR+PLUS. STAR+PLUS provides acute and long-term service and supports to older adults and adults with disabilities.
  3. STAR Kids. The STAR Kids Program provides acute and long-term service and supports to children with disabilities.
    1. i. Delivery of Medically Dependent Children Program (MDCP) Services. The State will deliver services authorized under the MDCP section 1915(c) waiver through the STAR Kids managed care model for those individuals not in state conservatorship. Those children in state conservatorship who are eligible for the MDCP section 1915(c) waiver will receive those services through the STAR Health managed care program under the 1915(a) authority, rather than under the 1115 authority, and through contract with the STAR Health managed care organization.

Beneficiary Groups and Eligibility Requirements
Eligibility groups affected by the demonstration can be found beginning in section C table 2 State Plan Populations Affected by the Demonstration in the STCs. The extension does not make any changes to eligibility requirements.

Enrollment
Extending the waiver will not have a significant impact on enrollment.

Cost Sharing
Under the extension there will continue to be no beneficiary cost sharing.

Benefits
The extension will not change the array of benefits provided under the current 1115 waiver authority.

Waiver Authorities
Statewideness - Section 1902(a)(1)
To enable the State to conduct a phased transition of Medicaid beneficiaries from fee-for-service to a managed care delivery system based on geographic service areas. To the extent necessary, to enable the State to operate the STAR+PLUS program on a less than statewide basis.

Amount, Duration, and Scope of Services - Section 1902(a)(10)(B)
To the extent necessary to enable the State to vary the amount, duration, and scope of services offered to individuals, regardless of eligibility category, by providing additional, or cost-effective alternative benefit packages to enrollees in certain managed care arrangements. To the extent necessary to enable the state to provide a greater duration of hospital services for individuals with severe and persistent mental illness.

Freedom of Choice - Section 1902(a)(23)(A)
To the extent necessary, to enable the State to restrict freedom of choice of provider through the use of mandatory enrollment in managed care plans for the receipt of covered services. No waiver of freedom of choice is authorized for family planning providers.

Self-Direction of Care for HCBS Members - Section 1902(a)(32)
To permit section 1915(c)-like Home and Community Based Services (hereinafter HCBS) members to self-direct expenditures for HCBS long-term care and supports as specified in paragraph 43(h) of the STCs.

Expenditure Authorities

Expenditures for the STAR+PLUS 217-Like HCBS Group

Expenditures for the provision of state plan benefits and HCBS like services to individuals age 65 and older, or age 21 and older with disabilities, not eligible for these benefits under the state plan, who would otherwise be Medicaid-eligible under section 1902(a)(10)(A)(ii)(VI) of the Act and 42 CFR § 435.217 in conjunction with section 1902(a)(10)(A)(ii)(V) of the Act, if the services they receive under STAR+PLUS were provided under a HCBS waiver granted to the State under section 1915(c) of the Act. This expenditure authority is subject to an enrollment cap. All Medicaid laws, regulations and policies apply to this expenditure authority except as expressly waived or listed as not applicable.

Expenditures Related to Managed Care Organization (MCO) Enrollment and Disenrollment

Expenditures made under contracts that do not meet the requirements in section 1903(m) of the Act specified below. Texas managed care plans will be required to meet all requirements of section 1903(m) of the Act except the following:

Section 1903(m)(2)(H) of the Act, Federal regulations at 42 CFR 438.1, to the extent that the rules in section 1932(a)(4) are inconsistent with the enrollment and disenrollment rules contained in STC 23(c) of the Demonstration’s Special Terms and Conditions (STCs), which permit the State to authorize automatic re-enrollment in the same managed care organization (MCO) if the beneficiary loses eligibility for less than six (6) months.

Expenditures for Inpatient Hospital Services and Prescription Drugs for STAR, STAR Kids, and STAR+PLUS Enrollees that Exceed State Plan Limits

Expenditures for all enrollees for inpatient hospital services that would not otherwise be covered under the State plan (as outlined in the STCs), and expenditures for prescription drugs for adults ages 21 and older enrolled in STAR or STAR+PLUS.

HCBS for SSI-Related State Plan Eligibles

Expenditures for the provision of HCBS waiver-like services as specified in Table 5 and Attachment C of the STCs that are not described in section 1905(a) of the Act, and not otherwise available under the approved State plan, but that could be provided under the authority of section 1915(c) waivers, that are furnished to STAR+PLUS enrollees who are ages 65 and older and ages 21 and older with disabilities, qualifying income and resources, and a nursing facility institutional level of care. All Medicaid laws, regulations and policies apply to the Demonstration Expenditure authority except as expressly waived or listed as not applicable.

Expenditures Related to the Uncompensated Care Pool

Subject to an overall cap on the Uncompensated Care (UC) Pool, the following expenditure authorities are granted for the period of the Demonstration:

Through September 30, 2019, expenditures for care and services that meet the definition of “medical assistance” contained in section 1905(a) of the Act that are incurred by hospitals and other providers for uncompensated costs of medical services provided to Medicaid eligible or uninsured individuals, and to the extent that those costs exceed the amounts paid to the hospitals pursuant to section 1923 of the Act. Effective October 1, 2019, expenditures for care and services that meet the definition of “medical assistance” contained in section 1905(a) of the Act that are incurred by hospitals and other providers for uncompensated costs of medical services provided to uninsured individuals as charity care, and to the extent that those costs exceed the amounts paid to the hospitals pursuant to section 1923 of the Act.

Expenditures Related to the Delivery System Reform Incentive Payment (DSRIP) Program

The following expenditure authorities are granted for the 7th and 8th years of the Demonstration (FFY 2018 and FFY 2019):

Expenditures for incentive payments from DSRIP pool funds for the Delivery System Reform Incentive Payment (DSRIP) Program.

Subject to CMS’ timely receipt and approval of all deliverables specified in STC 37 (Transition Plan for DSRIP Pool) relating to the creation and implementation of the sustainability plan and associated milestones for DSRIP transition, the following expenditure authorities are granted for the 9th and 10th years of the Demonstration (FFY 2020 and FFY 2021):

Expenditures for incentive payments from DSRIP pool funds for the Delivery System Reform Incentive Payment Program.

Expenditures Related to COVID-19 Response

Additional inpatient hospital care during COVID-19 Public Health Emergency.

The following are temporary expenditure authorities that will expire 60 days after the conclusion of the Secretary’s Public Health Emergency, and are effective March 1, 2020:

Expenditure authority for inpatient hospital stays related to COVID-19 (i.e. a stay for which the COVID-19 diagnosis is listed anywhere on the claim but is not necessarily the primary diagnosis, excluding presumptive positive cases), in order to extend the 30-day spell of illness limitation in STAR+PLUS for an additional 30 days, allowing an individual to stay up to 60 days in a hospital.

Expenditure authority for inpatient hospital stays related to COVID-19 to extend the 30-day spell of illness limitation described in the state plan for an additional 30 days to allow a Medicaid beneficiary to stay up to 60 days in a hospital.

Expenditure authority to allow Medicaid beneficiaries to exceed the $200,000 inpatient hospital benefit limitation for COVID-19 related stays.

Budget Neutrality
This extension request continues current budget neutrality policies through the end of the extended demonstration period. No deviations from current financial performance are expected as no methodology changes have been requested.

Evaluation Design
The current evaluation design includes 5 evaluation questions and 13 hypotheses. The THTQIP demonstration waiver extension does not alter the overall goals and objectives of the evaluation; therefore, HHSC is not proposing modifications to the approved evaluation questions. HHSC is also not proposing changes to hypotheses, data sources, statistical methods, and/or outcome measures for the evaluation of the UC Pool or components related to the overall impact of the THTQIP demonstration. HHSC is proposing changes to the DSRIP and Medicaid Managed Care (MMC) expansion components. DSRIP funds are scheduled to phase out during the final year of the current THTQIP demonstration on October 1, 2021. HHSC may continue to examine DSRIP using a revised hypothesis and measure set focused on the DSRIP transition process occurring under the THTQIP extension.

Hypotheses under the MMC component of the THTQIP extension evaluation will remain the same, but HHSC will update the study populations associated with each hypothesis to focus on recent or forthcoming changes in services or benefits provided to populations served under the THTQIP. HHSC will review and modify current MMC measures to examine access to care, care coordination, quality, outcomes, and satisfaction, as applicable to the new populations and/or benefits. HHSC will submit a revision to the CMS-approved evaluation design incorporating these edits following approval of the THTQIP extension.

Public Health Emergency

Responding to the public health emergency has put pressure on the state’s health care system. Therefore, this application also requests that the Secretary exercise his authority under 42 CFR § 431.416(g) to waive certain notice procedures in order to expedite a decision. Approval of this “Fast Track” extension will sustain the achievements of the demonstration and support the needs of beneficiaries and Texans.

Health Information Technology (Health IT) Strategic Plan

CMS approved HHSC’s Health Information Technology Strategic Plan on May 11, 2020.The Health IT Strategic Plan is a requirement of Texas 1115 Healthcare Transformation and Quality Improvement Program Waiver, Special Terms and Conditions #39. The plan includes milestones related to Health IT adoption and health information exchange (HIE), which will benefit stakeholders involved in and served by the 1115 waiver. Read more information about the waiver.

DSRIP DY7-10 Protocols

DY9-10 COVID-19 Protocol Changes

Significant changes in care delivery due to COVID-19 may prevent Delivery System Reform Incentive Payment (DSRIP) program providers from achieving Category B goals for Medicaid and Low-Income or Uninsured (MLIU) Patient Population by Provider (PPP), improving Category C measures (pay-for-performance measures) of health care quality, and earning related incentive payments. CMS provided guidance to all DSRIP states regarding measurement flexibilities for Calendar Year (CY) 2020 due to COVID-19’s impact on providers’ ability to achieve goals.

DY7-10 Measure Bundle Protocol (MBP)

The initial draft Demonstration Year (DY) 7-10 MBP, an accompanying Excel file of Related Strategies, the summary of stakeholder feedback on the initial draft DY7-10 MBP, and the revised DY7-10 MBP incorporating changes from stakeholder feedback is posted below. Also included below is the final, approved DY7-10 MBP and a final version of the Related Strategies Excel file. Unless specifically indicated in the DY7-10 MBP as only a DY7-8 or DY9-10 requirement, all requirements apply to DY7-10.

DY9-10 Program Funding and Mechanics Protocol (PFM)

The initial draft DY9-10 PFM along with a file showing a summary of proposed changes to the DY9-10 PFM is posted below. Also included below are the proposed changes to the DY9-10 PFM webinar along with the accompanying frequently asked questions documents, the summary of stakeholder feedback on the first draft DY9-10 PFM, and the revised DY9-10 PFM with changes made based on stakeholder feedback. The final, approved DY9-10 PFM and an accompanying file showing final provider DY9-10 valuations and Minimum Point Thresholds (MPTs) is also included below. Note that unless indicated specifically as a requirement only for DY7-8, all previous DY7-8 requirements also apply to DY9-10.

DSRIP DY7-8 Protocols Approved

On Jan. 19, 2018, CMS approved the DSRIP Protocols - the Program Funding and Mechanics Protocol and the Measure Bundle Protocol. These protocols cover the requirements for participation in DSRIP for Demonstration Years 7-8, Oct. 1, 2017 through Sept. 30, 2019. HHSC will work with stakeholders to develop requirements for DY9-10.

The approved protocols are below. Also posted is a summary of DY7-8 requirements.

Draft DY7-8 Measure Bundle Protocol and Value Based Purchasing Roadmap

HHSC has updated the draft DY7-8 Measure Bundle Protocol and submitted it to CMS for review and approval. The draft DY7-8 Measure Bundle Protocol contains proposed Category A Core Activities; the Category B system definition; Category C Measure Bundles for Hospitals and Physician Practices, Measures for Community Mental Health Centers, and Measures for Local Health Departments; and the Category D Statewide Reporting Measure Bundle for all provider types.

Draft DY7-8 Program Funding and Mechanics Protocol and Planning

HHSC has updated the draft DSRIP PFM that describes proposed requirements for DSRIP participation in DY 7-8. A summary of requirements in the revised draft and a summary of stakeholder feedback on the first draft of the DY7-8 PFM have also been posted. This draft PFM was submitted to CMS for approval. HHSC is still in negotiations with CMS on the request for an additional 21 months (Jan. 1, 2018 through Sept. 30, 2019). This draft is contingent on CMS negotiations and approval of the PFM and on any applicable actions by the Texas Legislature.

DY7-11 Waiver Renewal Request and Approval

1115 Waiver Renewal Approval

On Dec. 21, 2017, the Centers for Medicare and Medicaid Services approved a five-year renewal of the Texas 1115 Transformation Waiver from October 2017 to September 2022, Demonstration Years 7-11. The renewal continues Medicaid managed care statewide along with the Uncompensated Care pool and the Delivery System Reform Incentive Payment program pool.

The DSRIP funding pool has been extended four years, through Sept. 30, 2021. Pool sizes are $3.1 billion in DY7-8, $2.91 billion in DY9, $2.49 billion in DY10, and $0 in DY11.

1115 Waiver Negotiation Update

HHSC is now requesting an additional 21 months of level funding for the UC and DSRIP pools, and a continuation of the managed care provisions of the 1115 Waiver, through Sept. 30, 2019.

We believe this extension is necessary to allow the new administration and the 115th Congress to make changes to the nation's health care system, and the Medicaid program specifically, during 2017. The 21 additional months also allows for the 86th Legislature to respond to any federal changes and sufficient time for Texas to develop a new 1115 Waiver proposal. This extension would provide financial and operational certainty for Texas providers to continue serving Medicaid and low-income uninsured populations that benefit from the waiver while the Trump administration determines its policies regarding Section 1115 Demonstration Waivers.

The Texas 1115 Medicaid Transformation Waiver is a five year waiver expiring on Sept. 30, 2016. Pursuant to the waiver's terms and conditions, Texas submitted a waiver extension request to the Centers for Medicaid and Medicare Services on Sept. 30, 2015.

Letter to CMS on Waiver Extension

On Oct. 6, 2016, HHSC sent the letter below to CMS in advance of negotiations on the 1115 Waiver extension. The waiver extension application submitted in Sept. 2015 was attached to the letter.

On Aug. 19, 2016, HHSC sent a letter to CMS to facilitate discussions on the longer term extension of the Medicaid 1115 Demonstration Waiver. The letter specifies that HHSC is on track to submit the required independent report analyzing the Uncompensated Care pool and Delivery System Reform Incentive Payment program on Aug. 31, 2016. The letter also states that HHSC seeks a clear understanding of CMS' vision for DSRIP integration into Medicaid managed care and HHSC's vision for the longer term extension. The HHSC proposal that is in development includes both a glide path for the integration of DSRIP into managed care for Medicaid beneficiaries and the continued support of locally directed interventions for the continued transformation of the health care system for all Texans. The letter is linked below.

Uncompensated Care Evaluation and Report

The Standard Terms and Conditions for the 15-month waiver extension require Texas to submit a report conducted by an independent evaluator of the state's Uncompensated Care program that studied the impact of the UC pool on overall UC in the state, Medicaid provider rates, Medicaid beneficiary access to services, and a number of other areas. The report was submitted to CMS on Aug. 31, 2016, and is linked to below.

DSRIP DY6 Extension and Protocols

15-Month 1115 Waiver Extension

HHSC and the Centers for Medicare and Medicaid Services have agreed to a 15-month extension of the Texas 1115 Waiver. The agreement will take the program through December 2017 and will maintain its current funding. HHSC and CMS will continue negotiating a longer term extension. Please see below for the extension approval letter from CMS and the Standard Terms and Conditions for the extension.

HHSC has submitted a request to the Centers for Medicare and Medicaid Services for an initial 15-month extension of the 1115 Medicaid Demonstration Waiver, as specified in the letter below. The purpose of this initial extension is to allow time for state and federal governments to work through a longer term agreement, which is most important for Medicaid beneficiaries in Texas.

RHP Planning Protocol for Demonstration Year 6A

HHSC has submitted to CMS an addendum to Attachment I of the RHP Planning Protocol for Demonstration Year 6A. Changes to the RHP Planning Protocol for DY6A are consistent with the approved DY6 Program Funding and Mechanics Protocol.

DY6 Program Funding and Mechanics Protocol

On June 23, 2016, CMS approved the DY6 Program Funding and Mechanics Protocol (PFM), which is Attachment J in the waiver's Special Terms and Conditions. The PFM includes the requirements for participation in DSRIP during DY6. The approval letter from CMS and the approved PFM are linked to below.

Stakeholder Feedback

Feedback on the 1115 Transformation Waiver Extension request received from stakeholders at public meetings held in 2015 and in previous surveys can be found in the 1115 Waiver Extension Request Stakeholder Feedback spreadsheet below. This document describes DSRIP proposals in the extension request, where they can be found in the current waiver, if applicable, proposed effective dates for each proposal, and a summary of stakeholder comments received on each proposal.

Initial Waiver Extension Application (2015)

Extension Application Submission

Texas has submitted the 1115 Transformation Waiver Extension Application to CMS. Below please find links to the submitted cover letter, application and interim evaluation report.

 

1115 Waiver Extension Application Draft

The document posted below is the 1115 Waiver Extension Application Draft, attachments and Public Notice. HHSC will be taking comments on this draft during July at the statewide public meetings listed below.

To obtain copies of the renewal application, submit comments or receive other information about the renewal, interested parties may also contact Mike Erwin by mail at Texas Health and Human Services Commission, PO Box 13247, Mail Code H-600, Austin, Texas 78711-3247, phone 512-424-6549, fax 512-730-7472, or by email at TX_Medicaid_Waivers@hhsc.state.tx.us.

Statewide Engagement on the 1115 Waiver Extension Application

Summary of Comments from Public Meetings

The document below contains summaries of comments received during the statewide public meetings, including the webinar, that were held on the 1115 Waiver Extension Application. The summary was prepared for HHSC's review to assist with finalizing the waiver extension request. Please note that the meetings are listed in the document alphabetically by city, rather than by date.

Discussion of Key DSRIP Issues

At the Executive Waiver Committee held on May 14, 2015, HHSC outlined several proposed components on how to continue and strengthen the DSRIP program in the waiver renewal period. Please see the document "Waiver Renewal - Discussion of Key DSRIP Issues" posted below.

The shaded portions of the document reflect the level of detail HHSC plans to include in the draft renewal request that will be posted in July for submission to CMS in September 2015. Many of the other programmatic details discussed in this document will be worked out through amendments to the program protocols, which HHSC will work to submit to CMS in late 2015 - early 2016. HHSC will work with stakeholders in the coming months both on the renewal request and the protocol changes.

Transition Plan for Funding Pools

Per the Texas waiver terms, HHSC must submit a transition plan to CMS by March 31, 2015 based on the experience with the DSRIP pools, actual uncompensated care trends in the state, and investment in value based purchasing or other reform options. HHSC formally submitted the Transition Plan below to CMS on March 24, 2015.