Medicaid Delivery System Reform Incentive Payments: Where Do We Stand?

Gusmano M, Thompson F
Publication Year: 2018
Population Focus: Medicaid beneficiaries
Type of Literature: Grey


Insights Results

Overview of article/program

  • This blog explores the answer to 3 questions: 1) What types of organizational networks currently operate under DSRIP rubric; 2) What have these initiatives accomplished; and 3) What developments and challenges await DSRIP over the next few years
  • Medicaid enrollees have 2 defining characteristics that contribute to their health problems, ultimately driving of program costs: 1) They are disproportionately disadvantaged in terms of social determinants of health (e.g., transportation, housing, diet); and 2) They more readily suffer from mental health and substance use disorders


    • Among the current cohort of DSRIP initiatives, 3 (Arizona, New Hampshire, Rhode Island) give priority to enhanced services for those with mental health and substance use disorders. Arizona’s DSRIP directs lump sum payments to Medicaid managed care organizations, which then offer financial incentives to physical and behavioral health providers to integrate their services, including for enrollees transitioning from criminal justice facilities. New Hampshire’s DSRIP establishes regional Integrated Delivery Networks that target individuals at risk for, or already diagnosed, with mental health and substance use disorders. These networks must include behavioral health specialists and community-based organizations. The Rhode Island DSRIP seeks to galvanize the development of two types of Medicaid Accountable Care Organizations (ACOs)—comprehensive and specialized—both of which seek to enhance care coordination for those with behavioral health problems
    • Massachusetts and Washington have a focus on behavioral health with 30% of DSRIP funds going towards Medicaid ACOs and managed care organizations to bolster services for enrollees with complex behavioral health conditions in Massachusetts. In Washington, they list the integration of physical and behavioral health purchasing as 1 or 5 objectives
    • Many states like California, New York and Washington, have pledged to meet specific managed care targets for alternative payment models of face penalties
    • More recent DSRIP programs differ from earlier ones in 4 key ways: 1) They are becoming more delinked from supplemental funding; 2) They are less hospital-oriented and more focused on broader provider partnerships (e.g., recruiting primary care providers, behavioral health specialists, nursing facilities and home- and community-based service providers to collaborative networks); 3) They place a greater emphasis on behavioral health; and 4) They seek to spread value-based purchasing to a larger portion of Medicaid services
    • Little evidence exists that DSRIP waivers have significantly improved quality and health outcomes or reduced spending on healthcare services

    Key takeaways/implications

    • Overall, DSRIP waivers have helped to encourage an infrastructure of value-based payment for Medicaid
    • At least 2 factors complicate the assessment of DSRIP’s impact: 1) It’s difficult to isolate program effects from other factors; and 2) The service integration that DSRIP programs seek involve overcoming silos that have separated hospital and community-based health and social services for decades. There are also many difficulties with reporting requirements
    • A comparative analysis of not just outputs and outcomes, but also implementation dynamics could be very valuable research moving forward. Research may also want to focus on the impact of reporting requirements on value-based payment systems