As the Centers for Medicare and Medicaid Services (CMS) continues to focus on alternative payment models for payment reform and the transition to value, states have responded with innovative proposals to reform the delivery and payment of Medicaid services, with increasing focus on the integration of social determinants of health (SDOH) data and systems of care. New York state specifically has historically demonstrated creative approaches to Medicaid reform with their 1115 Waiver Delivery System Reform Incentive Payment (DSRIP) program, which sunset in December 2020. While the previous 1115 Waiver in New York focused on reducing preventable hospitalizations with a tertiary nod toward improving coordination of traditional healthcare and SDOH focused services, the newly proposed 1115 waiver is intended to serve as a more dedicated statewide effort in the shift towards value-based payment with robust approaches to integrating SDOH services data and the community-based organizations (CBOs) that provide those services with traditional care delivery systems of care. The program is anticipated to start in January 2023 with community planning work kicking off this fall.
One of the main pillars of this proposed waiver will be Health Equity Regional Organizations (HEROs) which will act as regional coalitions of managed care organizations, health systems, community-based providers, long-term support and services, and regional health information organizations, among others. In contrast to the Performing Provider Systems (PPSs) under the previous 1115 initiative in New York State, HEROs will not distribute payments directly to participating providers but will receive funds in the form of planning grants focused on developing the necessary infrastructure and governance structures to ingest and share health and social data from government and proprietary sources for the purposes of regional planning. This new initiative also incorporates the development of Social Determinants of Health Networks (SDHN) which will be another type of regional entity overlapping with HEROs that will serve as a coalition of CBOs for the purposes of contracting for services to be rendered under the waiver. This post will focus on HEROs and how organizations can begin thinking about planning efforts ahead of waiver approval and we intend to cover SDHNs in detail in a future blog post.
Under the proposed 1115 waiver, there will be nine regions with one HERO per region, as defined by the Managed Care Regions used by the New York State Department of Health (NYSDOH) for Medicaid rate setting (see figure 1). Broadly, HEROs can be new or existing entities which could include local departments of health or social services, behavioral health IPAs and other structures formed by regional participants such as PPSs. During the first public comment period for the waiver concept paper, many organizations specifically requested for multiple HEROs to be allowed per-region or that one or more of the nine initially proposed regions be split. In response to this, NYSDOH stated that at least two regions, likely to include New York City, may be divided into multiple sub-regions.
While some PPSs may be well positioned to become HEROs with minor modification to meet the governance requirements, many PPSs have discontinued operations following the end of DSRIP which presents an opportunity for new collaborations to surface. Local health departments are another example of existing entities that could be well-appointed to serve as the regional HERO, being able to leverage existing infrastructure for data sharing as well as established relationships with other government entities like housing authorities – but historically these entities have been slow in New York to participate in initiatives like DSRIP and Health Homes, especially compared to States like California where Whole Person Care specifically focused on building infrastructure at this level. Given the current landscape in New York, it is likely that new organizations will by-and-large need to step up to play the HERO role in most regions.
Figure 1: New York State Department of Managed Health Care Regions