Overview
Under Chapter 118E of the Massachusetts General Laws, the Executive Office of Health and Human Services, through the Division of Medical Assistance, administers the state’s Medicaid program, known as MassHealth. MassHealth provides access to healthcare services for approximately 1.8 million eligible low- and moderate-income children, families, seniors, and people with disabilities annually. In fiscal year 2021, MassHealth paid healthcare providers more than $18.1 billion, of which approximately 45% was funded by the Commonwealth. Medicaid expenditures represent approximately 40% of the Commonwealth’s total annual budget.
Section 1115 Demonstration Waiver
Section 1115 of the Social Security Act grants the United States Department of Health and Human Services the authority to approve demonstration projects that may help promote the objectives of the Medicaid program. Demonstration projects allow the Centers for Medicare & Medicaid Services to examine the potential effects of program changes, such as new payment processes, coverage types, or service delivery methods. These projects give MassHealth the flexibility to improve its services.
Delivery System Reform Incentive Payment Program
In 2016, Massachusetts began efforts to restructure its Medicaid program. MassHealth established a new five-year Section 1115 demonstration waiver with the federal government, effective July 1, 2017 through June 30, 2022, that authorizes it to allow integrated care to be provided by accountable care organizations (ACOs), community partners, and community service agencies, which are all health service organizations that provide specialized care to MassHealth members. This waiver came with a one-time federal investment of $1.8 billion for the Delivery System Reform Incentive Payment (DSRIP) Program. The DSRIP Program’s goal is to restructure the way MassHealth delivers healthcare to its members by funding ACOs, community partners, and community service agencies to better coordinate care and to ensure the accountability of providers for the cost and quality of the care they provide.
ACOs
ACOs are networks of physicians, hospitals, and other community-based healthcare providers that are responsible for coordinating all of a member’s medical care, behavioral health services, and long-term services and supports. There are currently 17 approved ACOs in Massachusetts that partnered with MassHealth on March 1, 2018 to provide healthcare to approximately 850,000 of its members. Approximately $1 billion of the total $1.8 billion of DSRIP Program funding will be paid to ACOs by the end of the Section 1115 demonstration waiver period, in June 2022.
Budget Approval Process
Since the inception of the DSRIP Program on July 1, 2017, MassHealth has contracted with Public Consulting Group as the DSRIP Program’s independent assessor. The independent assessor is responsible for reviewing DSRIP Program budget proposals submitted by ACOs, community partners, and community service agencies.
To receive DSRIP Program funding, ACOs submit their budget proposals to MassHealth within 30 calendar days after MassHealth prompts them to do so. After receiving the proposals, MassHealth and the independent assessor separately review them. MassHealth and/or the independent assessor may request additional information or clarification regarding an ACO’s budget proposal.
When the independent assessor completes its review, it notifies MassHealth of its recommendation to approve, deny, or propose revisions to a budget proposal. If the proposed revisions are made, the independent assessor reviews the revised budget proposal before making its final recommendation to MassHealth. If the final recommendation is to deny the proposal, MassHealth can override the recommendation and approve the proposal. In this situation, MassHealth publishes its rationale for the override in a quarterly report it is required to submit to the Centers for Medicare & Medicaid Services.
Each ACO’s budget proposal must receive final approval from MassHealth to receive DSRIP Program funding. However, if an ACO does not have all the data it needs to calculate and submit its budget proposal before August of the preceding calendar year, MassHealth can approve a preliminary funding amount. According to MassHealth’s Massachusetts Delivery System Reform Incentive Payment (DSRIP) Protocol (Attachment M), MassHealth can provide an ACO with its first quarterly payment with only this preliminary approval. After MassHealth grants final approval, MassHealth may make quarterly payments to the ACO for the rest of the calendar year.
| Date published: | June 29, 2022 |
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