Innovations in Medicaid: Driving System Transformation

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Published: January 4, 2023

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One of the key strengths of the Medicaid program is its built-in capacity for variation and innovation. Within broad parameters, each state agency can make different decisions about how to implement state plan requirements, take up state options, or utilize various waiver authorities to construct their program. If states want to move beyond those parameters, they can seek federal approval through section 1115 demonstration waivers after consultation with their stakeholders. Negotiations between the federal and state governments concerning such waivers, even when pursuing shared goals, are complex and time-consuming, involving tests of budget neutrality and establishment of terms and conditions including evaluations. Nonetheless, more than 45 states now operate such waivers enabling states to test and adopt new ideas to improve coverage, access, quality, and outcomes.[1]

Our nation’s healthcare system is facing a moment of crisis, challenge, and change. We are challenged by unmet needs, uneven distribution of resources, and misaligned incentives made obvious and made worse by the COVID-19 pandemic. The good news is that, within the Medicaid program, there is a track record and structural opportunity opening for leadership and transformation to answer this call. We see urgency and renewed commitment on both sides of the political aisles, among Medicaid leaders at all levels of government, and throughout the healthcare system to meet the moment.

Further, because of its reach and critical role in serving low-income children and adults, persons with disabilities, the aging, and those struggling with substance use disorder and mental health challenges, the Medicaid program must help drive recovery, improvements, and transformation of the healthcare system in a way that promotes healthcare access for all populations and serves the most vulnerable in our society.

Recently, Arizona, Arkansas, Massachusetts, and Oregon have sought and received federal approval for new efforts to improve healthcare quality and address social drivers of health. The Centers for Medicare and Medicaid Services (CMS) accommodated these important requests with new flexibilities in calculating budget neutrality, a decision we endorse fully. It is also notable that these approvals embrace a willingness to reassess established processes and controls when they may not be adequate to facilitate the demonstration of new policy approaches that could have significantly positive system-wide impact.

We are hopeful that CMS will go further and consider alternative methodologies to demonstrating value for a broad range of transformative projects. Many important investments made by the Medicaid program might increase costs in the short term but will return savings or produce efficiencies over a longer period or to different parts of our health system; they may also substantially improve the quality of life for beneficiaries and enhance the well-being of families and communities. Long-term effects, effects beyond the health system, and effects beyond Medicaid are more difficult to measure and attribute; but if our goal is an integrated health system that works for all populations, across payers, and upstream for prevention and early intervention, these effects are critical to make more visible. In this way, some of the most important impacts of our interventions may not be visible or recognized, at least not for some time and not without well designed longitudinal health services research. The best methodologies for controlling costs and capturing value will recognize those realities.

We also recognize that a balance is necessary to ensure thoughtful introduction of new ideas into a system fatigued with change; of controls over costs in a system that is already expensive; and of prioritization of initiatives and tasks for already stressed and overloaded government policy-making and health system delivery workforces. We need to ensure that we are reducing time spent on routine and nonessential tasks lengthening demonstration periods, increasing automation and leverage through technology, reducing choke points, and widening the circle of participants in and contributors to experimentation and learning.

This moment is made for Medicaid, and Sellers Dorsey has been hard at work to help Medicaid agencies take clear-eyed aim at the change we need and chart a new course with providers, plans, and technology and service partners to deliver the results we seek. We are especially focused on making sure the nation’s safety-net system can emerge from this moment better equipped with resources, stabilized, and transformed to serve their communities at a high level of performance. Sellers Dorsey will be highlighting this subject with more posts on this topic in the coming year.

[1] Kaiser Family Foundation (KFF). “Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State.” November 2, 2022. https://www.kff.org/medicaid/issue-brief/medicaid-waiver-tracker-approved-and-pending-section-1115-waivers-by-state/

Contact our Experts

Gabe Roberts

Gabe joined TennCare in 2013 as General Counsel before being named Deputy Director and COO. He was then appointed as TennCare Director and CEO by Governor Bill Lee. During his tenure as Director, Gabe championed innovative policies for members with intellectual and developmental disabilities, designed a modified block grant funding model proposal as an amendment to Tennessee’s 1115 waiver, and drove the further adoption of TennCare’s value-based purchasing model focusing on retrospective episodes of care, comprehensive primary care, and intensive behavioral health care coordination services. Gabe was also responsible for developing and operating a $12+ billion annual budget and leading over 1,200 employees. While directing TennCare, he was elected by his peers to serve on the Board of Directors for the National Association of Medicaid Directors and was named a Fellow with the Medicaid Leadership Institute. Under his leadership, TennCare was recognized with multiple national awards that highlighted TennCare’s nation-leading, value-based payment and delivery system transformation efforts. Gabe is a graduate of Vanderbilt University Law School, where he was a member of the Vanderbilt Law Review. He received undergraduate degrees in Accounting and Economics from the University of Mississippi, where he was inducted into the University’s Hall of Fame.

Current Responsibility

With a wealth of knowledge in Medicaid, payment delivery systems, and health care policy, Gabe supports the firm by providing high-level strategic guidance to team members and clients on Medicaid financing initiatives.

Education

- - - - Vanderbilt University Law School, JD
        
        University of Mississippi School of Law, JD Candidate
        
        University of Mississippi, BBA, Economics and Accounting

Penny Thompson

Penny Thompson is a nationally recognized expert on the Medicaid and Children’s Health Insurance Programs (CHIP), particularly concerning federal regulatory policy; oversight and financing; compliance and integrity; and technology solutions. Penny has held numerous positions leading national action on the Medicaid program. She was previously appointed as Chair and Commissioner for the Medicaid and CHIP Payment and Access Commission (MACPAC) and served two stints as Deputy Director of the Center for Medicaid and CHIP Services within the Centers for Medicare & Medicaid Services (CMS). Earlier in her career, she was the Director of Program Integrity for CMS. In addition to her public service, Penny has held senior management positions at major U.S. technology and consulting firms and has served on a several corporate Boards.

Current Responsibility

Penny Thompson was appointed to the Sellers Dorsey Board of Directors in July 2020. In that capacity, Ms. Thompson provides strategic advice and direction on all aspects of the Firm’s governance and performance. She contributes insight and perspective on service and product line development; partnering approaches and strategies; and market and regulatory challenges, opportunities and risks. Ms. Thompson also co-chairs the Compliance Subcommittee on behalf of the Board.