93.363: Flexible Alternatives for State Transformation Model

93.363

Inactive

Centers for Medicare and Medicaid Services (CMS) [HHS]

Aug. 23, 2018

July 9, 2017

The Flexible Alternatives for State Transformation (FAST) Model will provide states with an opportunity to develop and implement payment reforms that are driven by state needs and enable local innovation to improve healthcare value and the health of populations. Through FAST, the Innovation Center will empower states to create transformative multi-payer models in which participating payers are aligned in how they incentivize healthcare value, quality, and outcomes.Together in partnership, states and CMS will support providers in their ongoing transformation to a value-based payment system. Awardee states will have the flexibility to determine, based on state and community needs, the specific parameters of the proposed model, including the incentive structure and population and/or geographic region included in the model. FAST provides states with the flexibility to pursue comprehensive and sustainable payment reform through one of two tracks that best meets their needs: A. Transformation Track Support states to launch a new multi-payer model with Medicare, Medicaid, and commercial payer participation. These models will meet the criteria outlined in the Innovation Center's 2017 Guidance for Medicare Participation in a state-based multi-payer model, as well as criteria to become an Advanced Alternative Payment Model . States may request that CMS waive certain Medicare rules (e.g., the state sets ACO benchmarks for Medicare, the state has authority to set global budgets for hospitals) using 1115A Waiver Authority as part of the model. Full implementation of models proposed under the Transformation Track would occur after the initial 2-year SLIM award, contingent upon successful negotiation of a signed agreement between CMS and the state, and OMB approval. Receipt of a FAST award in no way guarantees approval of the proposed state-designed multi-payer model. B. Alignment Track A: Support states that are interested in either modifying existing Medicaid and/or commercial payment and delivery innovations to qualify as Other Payer Advanced APMs ; or increasing Medicare provider participation in existing Advanced APMs, particularly to build on local innovations at the practice level, and to increase small and rural and specialty provider opportunities to participate in Advanced APMs. Implementation of the proposed state-designed multi-payer model would occur after the initial 2-year FAST award, and may require CMS approval (e.g., for a Medicaid State Plan Amendment or waiver). Alignment Track states may not propose an 1115A Medicare Waiver as part of the application to the Alignment Track A. C. Alignment Track B: Support states to expand existing, or launch new, commercial and/or Medicaid alternative payment models, with an ultimate goal of building state and provider capacity to eventually participate in Advanced APMs. Implementation of the proposed state-designed model would occur after the initial 2-year FAST award, and may require CMS approval (e.g., for a Medicaid State Plan Amendment or waiver). Alignment Track B states may not propose an 1115A Medicare Waiver as part of the application to the Alignment Track B.

B - Cooperative Agreements

State Governor’s Offices, United States Territories Governors’ Offices (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the Virgin islands), and the Mayor’s Office of the District of Columbia are eligible to apply, with the exception of states that have a current SIM award, current multi-payer agreement in place with CMS, and/or states that have a current Delivery System Reform Incentive Payment (DSRIP) waiver in place. Only one application from a Governor per state will be permitted. A state cannot receive multiple awards. A state may propose that an outside organization focused on quality and state delivery system transformation, such as a non-profit affiliated with the state’s Department of Health/Medicaid single state agency or a public-private partnership supported by the Governor’s Office, receive and administer funds through a SLIM award. Under such an approach, the Governor’s Office must provide a justification for the request and an attestation that the state will actively participate in all activities described in its proposal.

The Centers for Medicare & Medicaid Services (CMS) has worked to promote efficiency and quality of health care, particularly under value-based payment models in the Medicare program. CMS has invested in a number of initiatives to achieve these goals, including the Medicare Shared Savings Program, Comprehensive Primary Care (CPC) Initiative, Comprehensive Primary Care Plus (CPC+), Next Generation ACO Model, and Bundled Payments for Care Improvement (BPCI) Initiative. These efforts were bolstered by the 2015 Medicare Access and CHIP Reauthorization Act (MACRA). MACRA directed the Secretary to create the QPP, which creates new provider incentives to promote adoption of Advanced Alternative Payment Models (APMs), not just in Medicare but also among Medicaid and private payers as well. CMS has also recognized the importance of state flexibility, because states can accelerate healthcare transformation. The Innovation Center has invested in partnerships with states under several models, including the State Innovation Model (SIM). The SIM initiative tests the ability of state governments to use their policy and regulatory levers to accelerate health care transformation that results in better care, smarter spending, and healthier people.. This Funding Announcement for the Flexibility and Accountability in State Transformation Model FAST builds upon important lessons from the SIM Initiative, but is substantively different, providing direct federal investment in states to support innovative payment reforms that are driven by state needs, but is structured to give states more accountability to achieve milestones than has been present in SIM. States will be held accountable in two ways. First, grant funds will be released incrementally, contingent upon the state's progress in achieving annual and quarterly milestones that demonstrate tangible progress in building the infrastructure and capacity needed to implement its proposed state-designed model at the conclusion of the FAST award period. Second, progression to Year 2 will be contingent upon a fundamental demonstration of the state’s commitment to the model beyond the FAST award period (e.g., evidence of future budget allocations to support the model, proposed legislation to ensure the state has necessary authorities to execute the model, submission of Medicaid SPA, etc.). We believe such investments will empower our state partners to design new approaches and to execute these strategies well, and will eventually lead to long term, sustainable improvements in quality and reductions in cost trends.