Healthier Washington Transforming Health Care in Washington State - Delivery System Reform Incentive Payment (DSRIP) Program "Funds Flow 103" ...
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1 Healthier Washington Transforming Health Care in Washington State Delivery System Reform Incentive Payment (DSRIP) Program “Funds Flow 103” Technical Assistance Resource August 2017
2
Presentation Goals
This presentation provides updates on DSRIP Funds Flow, including:
Clarifications from Previous TA Sessions
Project Incentives:
Measurement and Payment Timing
P4R & P4P Achievement Value Calculation
DSRIP Funds Allocation Considerations
Note: The Funds Flow TA series disseminates DSRIP funds flow details as they are available.
Material in this presentation supersedes material from earlier Funds Flow decks, where relevant.
Clarifications from Previous TA
4
Review Updated Project Plan Supplemental
Data Workbook
Based on discussion on the July 31 Development Council call, the Healthier Washington team
reviewed the data workbook and made the following changes:
• Changed “Reinvestment Funds” to “VBP Incentive Funds” for clarity
• Dropped the “Estimated Project Funds” row under the “VBP Incentive Funds,” as ACHs
will not likely have that information at the time of Project Plan submission
The updated Supplemental Workbook was distributed by Healthier Washington on Thursday,
August 3, 2017.5
DSRIP Program Structure: Transformation
Incentives
Total Initiative 1 DSRIP Transformation Incentives ($1.12 billion*)
State Administration Funding
($52M)
VBP Incentives Design Funds (Y1 Only) Project Incentives
($169M Max) ($54M Max) ($847M Max)
Un‐earned Project
Incentive funding
Integration Incentives available as DSRIP
($75M Max) High Performance
Reinvestment Pool (Partnering Providers) Incentives
($113M Max** + Un‐earned Funds)
* NOTE: Any statewide DSRIP
funding cuts would be applied to
Project Incentive P4P payments,
Challenge Pool (MCOs) proportionally across recipients.
($56M Max**)
Subject to Change
** Max only applicable if no regions secure Integration Incentives for integrated managed care; otherwise VBP Incentives remaining
after Integration Incentives will be distributed 1/3 to the Challenge Pool (for MCOs) and 2/3 to Reinvestment Pool (for “Participating
Providers”); Source: 1115 Waiver Special Terms and Conditions; DSRIP Funding and Mechanics Protocol; Discussion with HCA6
Statewide Accountability Approach
• A set percentage of authorized DSRIP funds is at risk for statewide performance on select measures, starting
in Year 3:
DY 3 DY 4 DY 5
Share of Note: 100% of Y4 & 5 funds at risk based on
5% 10% 20%
DSRIP at Risk achievement of Integrated Managed Care by Jan 2020
• The Funding & Mechanics Protocol indicates that statewide accountability performance will be measured
using an adjusted Quality Improvement Score (QIS) methodology, similar to the approach planned for DSRIP
High Performance Incentives
• Total DSRIP funding available to be earned for the year may be reduced based on the statewide
accountability QIS performance
• Given that statewide performance is in large part based on ACH Project outcome performance, and given that
the measurement, reporting and review timing are aligned, any statewide DSRIP reductions will be applied to
the portion of DSRIP funds associated with Project Incentive P4P
Statewide Accountability Metrics
• VBP Target Achievement
• Performance on Statewide Accountability Quality Metrics:
• Mental Health Treatment Penetration • Antidepressant Medication Management
• Substance Use Disorder Treatment Penetration • Medication Management for People with Asthma (5 – 64
• Psychiatric Hospital Readmission Rate Years)
• Outpatient Emergency Department Visits per 1000 • Controlling High Blood Pressure
Member Months • Comprehensive Diabetes Care ‐ Blood Pressure Control
• Plan All‐Cause Readmission Rate (30 days) • Comprehensive Diabetes Care: Hemoglobin A1c (HbA1c)
• Well‐Child Visits in the 3rd, 4th, 5th, and 6th Years of Life Poor Control7
Integration Incentives Eligibility
Integration Incentives eligibility requires that regions meet both Phase 1 LOI and
Phase 2 implementation deadlines.
• Phase 1: Regions with all counties submitting a binding letter of intent (LOI) to
1 integrate physical and behavioral health managed care submitted to the state
Medicaid director by September 15, 2017
• Eligible to receive 40% of total Integration Incentives available to the region
upon receipt of LOIs
2 • Phase 2: Regions that received Phase 1 funds and which implement integrated
managed care by January 1, 2019
• Eligible to receive remaining 60% of total Integration Incentives available to the
region
Note: Regions that have already passed Phase 1 or 2 milestones are eligible for enhanced DY1 Project 2A valuations, as reflected
in the Project Plan scoring methodology, a separate process from the Integration Incentives.Project Incentives: Measurement & Payment Timing
9
P4R and P4P Payment Approach
• P4P / P4R annual split applied to each Project
Project Payment Accountability by Year
• P4R: Because P4R is based on the ACH’s semi‐
100% annual reports, P4R‐based payments may be
90% earned twice a year, with P4R amount in a given
25%
year evenly split across each 6‐month reporting
80%
50%
period
70%
• P4P: Because P4P is based on annual HCA data
75%
60% compilation, P4P‐based payments may only be
50% 100%
Pay for earned 1x per year and will be paid once the
Performance data are calculated
40% (P4P)
75%
30%
50% Pay for
Example: ACH eligible to earn $8 million total in Y4 Project
20% Reporting
(P4R) Incentives, of which $2 million is accountable to Project X
10% 25% performance
0% • 50% ($1m) tied to P4R and 50% ($1m) tied to P4P
DY2 DY3 DY4 DY5 • $500k may be earned for the project based on P4R‐
based AVs at mid‐year and another $500k at year‐end
• $1m may be earned based on P4P‐based AVs, with
payment timing based on measurement / data timing10
Measurement and Payment Timing
DY 1 DY 2 DY 3 DY 4 DY 5 Post Demo. Y1 PD Y2
2017 2018 2019 2020 2021 2022 2023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
ACH Semi‐Annual
Reports
DY3 P4P DY4 P4P DY5 P4P P4P measurement conducted during relevant
Baseline Baseline Baseline demonstration year to allow time for Project
implementation to take effect.
DY3 P4P DY4 P4P DY5 P4P
Meas. Year Meas. Year Meas. Year Annual P4R potential funds
evenly split across 2
reporting & payment cycles
Project Incentive
Payments to FE Y1 Y2 Y2 Y3 Y3 Y4 Y4 Y5 Y5
Y1 funds paid in 1
installment, adjusted based
Each P4P payment includes: Y3 Y4 Y5
on Project Plan score
• P4P performance‐adjusted ACH payments
• Adjustments based on statewide
accountability
• DSRIP High Performance Incentive earnings P4R P4P
As of August 201711
P4R Measurement and Payment Timing
DY 2 DY 3
2018 2019
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4
P4R Reporting Period P4R Reporting Period
ACH Semi‐Annual Report: ACH Semi‐Annual Report:
Due July 31 Due January 31
IA IA
Scoring Scoring
Review: HCA has up to 30 days to review and
request additional information if needed Review
Clarification: ACH has 15 days to respond to Clarification
request and HCA has additional 15 days to review
Adjusted Payment to FE: Within Adjusted Payment to FE
30 days of report approval
As of August 201712
P4P Measurement and Payment Timing
DY 3 DY 4 DY 5
2019 2020 2021
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4
Up to 2 months for processing / verification
6 mo. Data Lag
P4P Measurement Year 3
1 month to: (1) run QIS
on statewide measures;
P4P measurement conducted during relevant (2) draft CMS report
demonstration year to allow time for Project Y3 P4P Results Known
implementation to take effect.
Year 3 State QIS
Report to CMS
CMS 90‐day Review
Y3 P4P Total
IA: (1) Scores P4P Achievement Values; Funds Known
(2) calculates ACH QIS for High
Performance funds
Y3 ACH P4P AV Results Known
Up to 4 mo. to: (1) adjust total Project Incentives based on statewide performance; (2) apply AVs to
adjust ACH funds; (3) identify total unearned funds; (4) apply ACH QIS to identify ACH‐level DSRIP High Y3
Performance Incentives; and (5) align payment timing with 2nd DY4 P4R payment
As of August 2017Project Incentives: P4R and P4P Achievement Values
14
P4R DSRIP Project Incentives Process
PROVIDERS
Implement demonstration Projects and related VBP and workforce initiatives with ACH
Collaboratively Receive incentive
design funds
demonstration
Projects and
submit Project Provide direction on Receive funds
Plan Prepare and submit
ACH
Project Incentive for
semi‐annual reports
distribution to administrative
on Project progress
Financial Executor expenses
FINANCIAL
EXECUTOR
Distributes funds to
recipients as and
when instructed by
ACHs
Independent Releases
Assessor achievement‐
HCA
Approves
provides ACH adjusted funds
Project Plan
Achievement to Financial
Value score Executor15
P4R Achievement Value Calculation
• ACHs provide a semi‐annual report every 6 months reporting “Report against QIP measures” is worth
on P4R metrics one AV in aggregate
• P4R metrics include progress milestones and P4R “project Milestone AVs will be applied based on
metrics” in Toolkit the quarter indicated in the Project
Plan. This determines the timing of the
AV for that milestone, but does not
• Each P4R metric is assigned an AV of either 1.0 or 0.0, with shift funding timing, which is fixed and
an AV of 1.0 provided based on: based on annual funds available for
the Project as a whole
• Providing evidence of completion of Project
milestones by the quarter indicated in the ACH’s If needed, an ACH may request to shift
Project Plan a milestone from the time reflected in
their Project Plan, as long as the new
• Reporting on the P4R project metrics for the year timing is still before the quarter
required in the Toolkit
in each semi‐annual period16
Example: P4R Achievement Value Calculation
Example: $500k tied to P4R for Project X each 6 months in Year 4
First 6 months Second 6 months
Milestones Project Metrics Milestones Project Metrics
# Metrics 1 (due Q2) 3 3 (each due Q4) 3
2 complete;
P4R Status Incomplete Reported Reported
1 incomplete
AV 0.0 (1) 1.0 (3) 1.0 (2); 0.0 (1) 1.0 (3)
Total AV 3.0 5.0
Percent AV 3.0 / 4.0 = 75% 5.0 / 6.0 = 83.3%
Earned
$500k * 75% = $375k $500k * 83.3% = $416.5k
P4R Funds
$208.5k cumulative unearned P4R in DY4
Unearned
DY4 DSRIP High Performance Incentives17
P4P DSRIP Project Incentives Process
PROVIDERS
Implement demonstration Projects and related VBP and workforce initiatives with ACH
Collaboratively Receive incentive
design funds
demonstration
Projects and
submit Project Provide direction on Receive funds
Plan
ACH
Project Incentive for
distribution to administrative
Financial Executor expenses
FINANCIAL
EXECUTOR
Distributes funds to
recipients as and
when instructed by
ACHs
Independent Releases
Compiles
Assessor achievement‐
HCA
Approves outcome
provides ACH adjusted funds
Project Plan measure
Achievement to Financial
data
Value score Executor18
P4P Achievement Value Calculation
There are two types of P4P metrics in the Project Toolkit: Gap‐to‐Goal and Improvement‐Over‐Self. For
each metric, an ACH‐specific P4P Improvement Target will be identified annually.
P4P Components
Anticipated Timing
Gap‐to‐Goal Measures Improvement‐Over‐Self Measures
For ACH Reference: Historical ACH Performance* Early September 2017*
Absolute Benchmark Selection n/a Early September 2017
Determination of % Gap Closure by Metric n/a Early September 2017
n/a Determination of % Improvement Over Self by Metric Mid‐September 2017
For ACH Reference: 2016 Benchmark Value n/a Early September 2017
2017 Benchmark Value n/a October 2017
Final Measure Specifications December 2017
Measurement Manual: Draft for Public Comment January 2018
Final Measurement Manual March 2018
P4P Year 3 Baseline Year (2017) Measurement October 2018
ACH‐Specific DY3 P4P Improvement Target October 2018
Components in italics do not directly determine the ACH‐Specific P4P Improvement Target
*Depending on the metric, will include separate rates for up to 3 years of data (2014‐2016). Refresh of metrics already provided to
include Calendar Year 2016 (where possible). Remaining metrics not yet provided to date (primarily related to oral health, maternal/child
and reproductive health projects) will be delivered December 2017.
As of August 201719
P4P Achievement Value Calculation
• Once a year, HCA will compile P4P metric performance, which the IA will use to calculate
P4P Achievement Values (AVs)
• Each metric is then assigned an AV based on ACH performance against their ACH‐Specific
Improvement Target
% of Improvement < 25%
100% 75 – 99% 50 – 75% 25 – 50%
Target Attained Threshold
AV 1.0 0.75 0.5 0.25 0
• AVs for each Project are summed to determine the P4P Total Achievement Value (TAV) for
the year for the Project
• TAV is then divided by the # of metrics (total possible Project AVs), to calculate the
Project’s Percentage Achievement Value (PAV) for the year
• The PAV is multiplied by the potential P4P value for the project for the year to determine
the P4P portion of the year‐end performance‐adjusted payment20
Example: P4P Achievement Value Calculation
Example: $1 million tied to P4P for Project X in DY 4; Project X has 10 P4P outcome metrics in DY4
100% of Improvement Target attained on 2 metrics 1.0 AV (2)
Between 75 and 99% of Improvement Target attained on 6 metrics 0.75 AV (6)
AVs Earned
Between 50 and 75% of Improvement Target attained on 1 metric 0.5 AV (1)
Below 25% of Improvement Target attained on 1 metric 0.0 AV (1)
Total AV 7.0
Percent AV 7.0 / 10.0 = 70%
Earned P4P
$1m * 75% = $750k
Funds
Unearned
$250k DY4 DSRIP High Performance Incentives
FundsQ&A
22
Upcoming Funds Flow TA Topics
Additional Funds Flow TA Sessions Will Cover:
• VBP Incentives Methodology
• DSRIP High Performance Incentives:
• Additional details on QIS methodology
• Final list of High Performance metricsDSRIP Fund Allocation Considerations
24
DSRIP Funds Flow Allocation
Each ACH will need to develop a regionally‐tailored allocation approach to distribute
DSRIP funds earned by the region.
This presentation outlines key considerations in the following areas:
• Allocation design
• Implementation factors
• Funds stewardship and transparency25
DSRIP Allocation: Example Approaches
DSRIP funds earned can be allocated
across layers of regional initiatives:
ACHs may choose to design DSRIP
allocation to align incentives with and
ACH Administrative Expenses among Partnering Providers and/or to
fund health system transformation
Example Approaches:
Distribution to Partnering Providers
and Organizations • Participation Incentives
• Planning Support Incentives
• Project Implementation Payments
Payments to Support Regional or
Cross‐Regional Investments • Revenue Loss‐Based Incentives
• Performance‐Adjusted Payments26
DSRIP Allocation: Timing Considerations
DSRIP allocation approaches are not mutually exclusive and may change over time.
Example Allocation Approaches Year 1 Year 2 Year 3 Year 4 Year 5
Participation
Planning
Project Impl.
Revenue Loss
Performance
Modifiers: Funds distribution could also be modified based on scale or organization type across allocation
approaches based on factors like Medicaid patient volume, number of EDs, number of physicians, type of
organization (ie, NGO, local government, small provider, BH provider, hospital, etc.)
Example: A participating hospital in a NY State DSRIP PPS had a successful program to divert ED
patients to lower acuity settings. Initially, the PPS provided DSRIP funds for the hospital to
formalize their program and train other hospitals in the program. In early years, the other
hospitals were provided DSRIP funds to staff the new program. In later years payments the PPS
plans to adjust these payments based on performance metrics associated with ED diversion27
Incentivizing Participation and/or Planning
DSRIP funds can encourage early buy‐in and prompt constructive engagement that can
enable regions to implement projects and achieve later performance targets
Participation Incentives Planning Incentives
Example: All organizations signing an LOI to Example: ACH partners receive flat (or size‐
act as a Participating Provider / Organization modified) amount of DSRIP funds for hitting a
receive a flat (or size‐modified) amount of Y1 threshold level of effort (i.e., x # of meetings)
DSRIP funds contributing to ACH‐led Project Plan (Y1)
and/or Implementation Plan (Y2) drafting
Considerations:
• Encourages early participation and buy‐in Considerations:
• Can create momentum toward project • Quantitative participation thresholds may
implementation not take into account subjective
• Provides incentives for actions that alone differences in value of planning support
are insufficient to shift the delivery across organizations
system toward value28
Project Implementation Payments
A primary goal of DSRIP funds is to provide ACHs and their partners with short‐term funding
to supplement existing resources for implementing health system transformation initiatives.
Example: 2 years’ salary for a health system‐based care coordinator to call patients and schedule H1C
testing and follow up to support Project 3D, or up‐front costs of integrating a care coordination data and
analytics system with a provider’s existing EHR platform to support Project 2B
Considerations:
• Provides catalytic investments to enable a transition to successful value‐based contracts
• Supports alignment with ACH‐developed Implementation Plans / Project Plans
• Project activity or investment‐based funds can provide a stepping‐stone to outcome‐based funds,
providing a smoother transition from DSRIP‐based supports29
Performance‐Based Allocation
ACHs may wish to tie DSRIP allocation to partners’ project performance or contribution to
hitting DSRIP accountability P4P metrics over time.
Activity Performance ACH Metric Performance
Example: Primary care physicians can support Example: Applying ACH‐level performance on P4P
ED diversion through extending hours or by metrics as a modifier for payments to provider types
providing services not otherwise covered; an that could reasonably impact the metric outcomes
ACH could provide a flat (or size‐modified) (See subsequent slide)
amount of funding to PCPs providing evidence
of extended hours or of services provided Considerations:
• Aligns incentives between ACHs and partners
Considerations: • Measuring individual partners’ performance on
• Rewards activities that may otherwise be ACH‐level P4P metrics is likely not an effective
un‐funded through DSRIP or other sources strategy, given scale issues and level of effort
of support required
• Tying payments to milestones at recipient • ACHs may want to instead consider applying
level can support project implementation intermediate process measure and/or proxies for
and ACH‐level P4R / P4P achievement outcome performance (ie, potential metric impact)30
Example: Performance‐Based Allocation
Some NY PPSs developed a multi‐layer methodology for allocating DSRIP funds that aligns
incentives with PPS‐level P4P metrics. This approach may apply well to ACH partners.
An ACH pursuing Project 2D (Diversion) decides to allocate $400,000 to partners in Year 4 to reward partners for
helping the ACH region achieve full credit on the P4P Outpatient ED utilization metric
Provider Class Impact on Metric: The ACH could group partners into classes and apply a subjective
1 ranking from 1 to 3 based on potential impact on the ED utilization metric
Partners Meeting Threshold Participation in Relevant Initiatives: The ACH could identify which
2 specific partners met a minimum participation threshold, which could also be defined by type (ie,
extending hours, implementing initiatives, lending care coordination or outreach support)
Distribution Across Classes: The ACH could develop an algorithm to distribute the total funds
3 associated with the P4P metric amongst classes, as illustrated below
Distribution Within a Class: Funds allocated to a class of partners could be distributed amongst
4 qualifying partners based on a size or level of effort modifier
PCPs Hospitals CBOs BH Provider Other
Metric Impact Rank 3 2 2 1 1
# of Participants 15 3 5 3 1
Distribution Weight 45 6 10 3 1
Share by Class 69% 9% 15% 5% 2%
Amount by Class $276k $36k $60k $20k $8k31
Revenue Loss‐Based Payments
DSRIP funds may also provide transitional support for organizations facing declining revenue
due to health system transformation, to support transition to a more sustainable model.
• Example:
• A hospital in a region pursuing the Diversion and Chronic Disease projects partners
with the ACH, PCPs and CBOs to reduce preventable admissions for diabetes
complications. By DSRIP Y4, the successful program has contributed to declining
utilization and revenue loss for the hospital, and to strong ACH P4P performance
• In the long‐term, the hospital plans to enter into VBP contracts that would provide
predictable revenue regardless of utilization levels and restructure to repurpose fixed
assets and reduce variable costs in the affected departments
• Using DSRIP funds, the ACH can provide temporary funding to support hospital
operations during the transition period
• Considerations:
• Approach could reduce barriers in the transition to value‐based care and VBP contracting
• ACHs may want to require evidence of revenue loss
• ACHs may want to avoid conflicting incentives of a volume‐based distribution approaches32
Funds Stewardship and Transparency
Phase II certification requires that ACHs convene open and transparent public governing body meetings
on discussions and decisions pertaining to the demonstration, including DSRIP.
Allocation methodologies should be defensible as appropriate and fair
Ensure the rationale for the DSRIP distribution methodology can be clearly communicated
Secure buy in from a range of organization types, potentially by using multiple allocation
methodologies throughout the demonstration
Engage stakeholders and encourage participation in relevant governing body meetings, including by
conducting outreach through existing community forums or stakeholder organizations as well as one‐
on‐one outreach where relevant
Identify spokespeople who can communicate back to large organizations or provider types with
tailored messages about DSRIP allocation
Anticipate preparing regular communication with partners and stakeholders about the status of
DSRIP Projects and funds allocation33
Implementation Considerations
In developing and implementing their DSRIP allocation approach, ACHs will have to balance multiple
demands and relationships.
Include a wide range of organizations in allocation considerations. DSRIP recipients can include a full
range of organization types supporting health system transformation, including CBOs
Align allocation approaches with Project Plan goals and accountability. DSRIP can create shared
incentives across stakeholders in the region to align and coordinate transformation efforts
Set expectations early. Communicate to partners that funding distribution is likely to be iterative over
the course of the demonstration and that DSRIP funds are time‐limited
Identify complementary funding sources. Not all investments required to transform the delivery
system will be funded by DSRIP and those that are funded may not be funded up‐front. Consider
identifying types of alternative funding sources, such as other grants or VBP contracts, where relevant
Keep in mind that later year funds are based on outcomes from early year investments. Saving
DSRIP funds for later year distribution carries risks of not meeting P4P metrics in later years
Allocation methodology rewarding volume may produce mixed messages. While modifiers based on
visit volume may be relevant in early years, shifting toward participation and performance in DSRIP
allocation can align well with an overall transition from volume to valueQ&A
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