The Role of MCOs in DSRIP Implementation – Six States Meet to Discuss

In March, the Milbank Memorial Fund brought together officials from six states to talk about the role of managed care organizations (MCOs) in state Delivery System Reform Incentive Payment (DSRIP) projects.

DSRIP, a Medicaid delivery system reform initiative, is a component of Section 1115 Medicaid demonstration waiver programs, providing states with funds that can be used to support hospitals, other providers, and communities in changing how they provide care to Medicaid beneficiaries. DSRIP initiatives are tied to defined performance metrics, such as meeting core milestones for provider capacity building and population health or clinical improvements.

The meeting came about at the suggestion of the Association for Community Affiliated Plans (ACAP), an association representing ACAP Medicaid managed care plans. Leaders of state Medicaid agencies agreed that it was useful to meet, and the Fund facilitated agenda development and the meeting itself.

Several states are using DSRIP funding mechanisms to reform their delivery systems (CA, TX, NY, KS, MA, NJ and now, NH) and others have applied for waivers to implement DSRIP initiatives ( WA and VA ). DSRIP projects are funded largely through hospitals or other provider groups, and MCOs will be critical to plans for sustaining the payment and delivery system reforms throughout the projects.

“Approved DSRIP waivers have evolved considerably and are now focused on reforms in the delivery systems used by MCOs and the improving health of the populations they cover,” says Jane Beyer, Program Officer at the Fund.

Although the topic is quite technical, the participants appreciated the chance to speak across states and across roles (public and private sector) in a collegial setting. They identified shared interests, such as the role of DSRIP funding in moving delivery system transformation, transitioning to value-based payment methods, the impact of that transition on managed care rate setting, and sustaining reform after DSRIP funding ends. The Fund will prepare a joint letter to the Center for Medicaid and CHIP Services on the proceedings, and will follow up with states in several months to assess the effect of the meeting.

“The meeting provided a valuable opportunity for states and managed care organizations to come together in a safe, neutral space where they could identify shared opportunities and challenges, brainstorm solutions, and learn from one other’s experiences,” says Christopher Koller, president of the Fund.