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Oregon 1115 Waiver Renewal

The Center for Medicare and Medicaid Services (CMS) has the authority to waive certain regulations in order to pilot demonstration projects at the state level. Oregon has had an 1115 waiver for providing Medicaid benefits through CMS since 1994 when the Oregon Health Plan was created. More recent waiver amendments have established the Children's Health Insurance Program, OHP-Plus, and in 2012, Health System Transformation efforts and Coordinated Care Organizations.

The current 1115 Waiver is effective through June 2017, however, CMS requires that applications for renewals or amendments be submitted one year prior to ensure enough time to finalize the application. The 1115 waiver allows the State to test new approaches to financing and delivering Medicaid services. The 2012-2017 waiver agreement included a commitment to reducing the OHP per capita medical expenditure trend by 2 percentage points over the final three years of the demonstration, while maintaining standards of quality and access. Current data shows a savings of $500 million to date and expected savings of $1.4 billion by the end of the current waiver.

The Waiver renewal process is in three steps outlined in this OHA document. The next steps for reform are to build on transformation and integration efforts, address social determinants of health and health equity, commit to maintaining a sustainable rate of expenditure growth, and expand the coordinated care model.

One of the methods of doing this is to evaluate an enhanced rate setting methodology that will promote CCO use of flexible services as a health expense, such as housing assistance, and other non-billable items critical for health. Rate setting has traditionally been based on claims data, which is rooted in a fee-for-service model of health care. Oregon is striving to move beyond the fee-for-service model into a system that will promote value over volume of care and evaluate outcomes through metrics. In addition to the work that the SB231 Payment Reform Collaborative will complete, there is additional research on the effect housing and supportive services has on total health care expenditures.

The Providence Center for Outcomes Research and Education (CORE) recently published a Health in Housing study in coordination with Enterprise Community Partners demonstrating the effect housing and supportive services has on utilization of health care services. The study showed 4 key results: total Medicaid expenditures declined by 12%, primary care visits went up and emergency department visits decreased, residents reported increased quality and access to care, and integrated services in housing were a key driver of health care outcomes.

Oregon can use this data in the 1115 waiver renewal process for evidence of the positive effect housing assistance and supportive services has on Medicaid costs to better allow CCOs to use flexible service funds in the global budget to assist members in need of these services and not be negatively impacted in rate setting or against the medical loss ratio.

The Oregon Medicaid Advisory Committee met April 6th to discuss the 1115 Waiver renewal. For an overview of the Oregon Medicaid Renewal process visit the OHA website.

Posted on April 6, 2016.