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Illinois 1115 Waiver Revisions

Health & Medicine Policy Research Group (HMPRG)
July 23, 2014
The Path to Transformation: Illinois’ 1115 Waiver Proposal has undergone a series of revisions since its inception in the fall of 2013. The final submitted document, dated June 4th 2014, contains a number of changes since the February draft was published and made open for public comment. While an additional draft was released on March 25th, no significant revisions were made between the March  and June 4th documents.  Throughout this process, Health & Medicine staff has been monitoring revisions, and we’re pleased to share this memo which describes the changes from the initial draft proposal to the final submitted version.

As the submitted proposal serves as an outline of the broad goals of the waiver, the continuing stakeholder engagement process this summer will synthesize input on more specific implementation issues to prepare the state should the waiver be approved.  The Governor’s Office of Health Innovation and Transformation (GOHIT), with  support from Health & Medicine, is coordinating this stakeholder engagement through five workgroups. The five workgroups cover Services and Supports, Integrated Delivery System Reform, Data and Technology, Workforce, and Public Health Integration. In addition to the support we are providing to GOHIT, Health & Medicine is also a participant in each of the workgroups. Information on those workgroups is available here. Additional details and other changes are to be expected as well, given the continuous feedback from CMS following their review of the proposal.

Below are sections of the waiver that were revised in between drafts that we expect to resurface during the workgroup and implementation process and are worthy of special attention. You may also click here to view our chart detailing all revisions between the February and final drafts.

Cost Sharing
Although the original January draft of the waiver application stated that Illinois was not requesting cost sharing, the February draft contained a significant amount of content discussing plans to maximize cost sharing with reference to requirements embedded in the SMART Act. The cost sharing in the February draft was proposed pending an update to the Medicaid Management Information Systems (MMIS). While federal law requires cost sharing to not exceed 5% of the family’s income, this version proposed waiving the requirement to track each family’s incurred cost sharing and also the requirement to notify beneficiaries when they meet this cost sharing limit. Those tracking requirements, the February draft explains, are beyond the existing capacity of the State’s MMIS.  

In the final version, however, all heading sections under “Cost Sharing” (Aggregate Limits, Native Americans, and Non-Emergency Services Furnished in an Emergency Department) have been taken out, and replaced with a statement that no changes to cost sharing are being proposed. However, in response to public comments, the document later notes an overall “misunderstanding of the intent of this waiver,” and details how the State plans to “follow up with stakeholders and may modify this request pending those discussions.” At a May 9, 2014 Illinois Medicaid Advisory Committee meeting, HFS explained that the request to waive some cost sharing rules was in response to a change on the federal level that applied the same tracking requirements to nominal co-payments as it had to higher ones. These discussions warrant additional attention as any similar alterations to cost sharing will prove to be an exacting task  due to the high volume of public comments.

Specialized Mental Health Rehabilitation Facilities (SMHRFs)  
Responsive to stakeholder feedback on the February draft, the final version seeks to claim CNOM dollars for SMHRF services, not waive the IMD exclusion.  The request for federal match on SMHRF services was removed from the enumerated list of services in the “Expenditure Authority Waiver Requests” section and added to the section on the designated state health programs (DSHP) in the final version.
University of Illinois Hospital and Health Sciences System
This section was reorganized with a new section discussing goals for Delivery System Incentive Payments that are currently reflected in the distinct work groups. It does not reflect all of the current projects under consideration so these revised topics and more will be open for discussion with stakeholders and with CMS.  

Children with Medical Complexity
Responsive to previous stakeholder comments, Pathway 1 has been revised to address the new development of integrated systems for this specific population. The State proposes to implement such a program without amendment to the waiver, potentially building on the nascent Coordinated Care Entities for Children with Medical Complexity currently starting up in Illinois. The waiver language suggests that Illinois and CMS would jointly develop and approve quality metrics and shared savings/risk methodologies that are consistent with CMS' guidance. This is in response to existing CCE’s requesting recognition of a pending bill in Congress, HR 4930, that would create federal standards for pediatric health care networks. If the waiver is approved, the State is agreeing to review such a program.

Costs Not Otherwise Matchable (CNOMs)
Many significant changes occurred regarding the Costs Not Otherwise Matchable (CNOMs) amount totals. Although smaller than in the original draft, the final five-year variance between the ‘without waiver’ and ‘with waiver’ budget calculations allows for some financial cushion in meeting budget neutrality.  

Part of the increase in CNOM is from new programs to be funded by the waiver.  Appendix C identifies new funding to the DHS DD Grant in UIC Family Care ($1,789,900), DASA Addiction Treatment ($6,299,060), and the Illinois State Board of Education Birth-To-Three Initiative ($42,000,000). Public comments on earlier drafts of the waiver had noted the need for more investment in DD services, substance use disorder treatment, and maternal/child health programs.

Public Notice of Waiver Application
Additional responses to the public comments were made, noting general support for the waiver. Concern regarding the restoration of adult dental care under the waiver was raised, but those services have since been restored through SB 741.

A detailed summary of the January 2014 public comments was organized by Health & Medicine with responses made by the State. This document can be viewed here.