Delivery System Reform and Incentive Payment (DSRIP) programs are part of Section 1115 Medicaid waiver safety-net care programs. The program, which operates as a pay-for-performance model, uses a rewards-based payment structure to fund projects focused on meeting the “Triple Aim.”
Although, each state’s DSRIP program takes different forms, there is a general structure to the program. The state allocates DSRIP funding to participating providers, either safety-net hospitals or provider organizations, using a pre-determined formula that is unique to the state. Then the participating providers choose projects to implement from a menu that is predetermined by the state and the Centers for Medicare and Medicaid Services (CMS). Participating providers receive payments from the state for meeting milestones, such as implementing the project, reporting on the project, and meeting metrics related to quality of care.
The first DSRIP program was launched in California in 2010. In addition to California, five other states that have implemented DSRIP programs over the past five years, including: Kansas, Massachusetts, New Jersey, New York, and New Jersey. The scope of these projects vary widely both in terms of funding, the number of participating provider organizations, and the projects that are implemented.
Key Features of States With DSRIP Programs
Number of Providers
Number of Projects Implemented
|California||$6.67 billion||2010-2015, 2015-2020||17 Hospital Systems||186|
|Kansas||$60 million||2012-2017||2 Hospitals||4|
|Massachusetts||$1.3 billion||2011-2014, 2014-2019||7 Hospitals||49|
|New Jersey||$538 million||2012-2017||49 Hospitals||75|
|New York||$12.8 billion||2014-2019||25 Provider Partnerships||259|
|Texas||$11.42 billion||2011-2016||20 Provider Partnerships||1,239|
Among the six states with DSRIP programs, two earmark money for behavioral health initiatives (New York and Texas) and three allow provider organizations to implement behavioral health-related projects (California, Massachusetts, and New Jersey). Behavioral health initiatives funded under DSRIP include: health homes for individuals with SMI, integration of primary and behavioral health care, telemental health, and crisis stabilization services.
The results of these programs is still uncertain. Only two states, Massachusetts and California, have completed a full DSRIP cycle (the same length of time as the state’s Medicaid Section 1115 waivers) and these states have only released interim evaluation reports. California has reported that hospital systems have met 99% of their metrics, and Massachusetts hospitals have reported that they met 95% of their metrics. Other states have reported on the incentive payments earned by provider organizations, but not the number of metrics that have been met.
There is some controversy associated with DSRIP. The program was born from a need to preserve supplemental payments to safety-net hospitals due to the implementation of managed care. States have been upfront that these losses have driven them to find alternative payment mechanisms – including DSRIP (see State Experiences Designing and Implementing Medicaid Delivery System Reform Incentive Payment (DSRIP) Pools). And like uncompensated care pools, CMS has warned that DSRIP cannot exist indefinitely (see Tennessee, Kansas Also Get Warning: Expand Medicaid or Risk Hospital Funds). Evidence of the end of DSRIP in its current form is apparent in the agreement to California’s Bridge to Reform waiver. CMS decided that California will be able to continue the program for an additional five years with a focus on value-based purchasing, but the program will not be renewed again (see CMS Agreement In Principle To California Bridge To Reform Waiver).
The bigger implication of the DSRIP initiative, no matter the structure, is the overall move to link performance to payment. The DSRIP programs are unlikely to completely go away in the next five years – states are still trying to negotiate programs with CMS and states are requesting program renewals. What I do expect is smaller programs with stricter standards and measures. Essentially, these initial pay-for-value models will likely be replaced by initiatives that are more transparent and have more risk assumption by provider organizations.
To learn about each state’s DSRIP program in-depth, be sure to check out: What Is DSRIP & What Organizations Receive DSRIP Funding For Behavioral Health Projects? An OPEN MINDS Market Intelligence Report. The report includes a list of the provider organizations that are receiving DSRIP funding in each of the six states, the behavioral health projects that are being implemented, and an overview of the DSRIP system. The report answers a number of questions including:
- What is DSRIP?
- What states have a DSRIP program?
- How is DSRIP funded?
- What types of providers can participate in DSRIP?
- What types of projects are implemented under DSRIP?
- What states have behavioral health DSRIP projects?
- What are the results of state DSRIP programs?
- What is the future of DSRIP?
The report is free to all OPEN MINDS Circle premium members, and can be purchased in the OPEN MINDS e-Store for $495.