Overview of the Medicaid 1115 Waiver Program

In December 2011, the Texas Health and Human Services Commission (HHSC) received approval for a waiver of certain federal Medicaid requirements under Section 1115 of the Social Security Act. The Texas 1115 Waiver is a five-year demonstration program.

The Texas Healthcare Transformation and Quality Improvement Program (the Transformation Waiver) allows the state of Texas to expand Medicaid managed care while preserving federal hospital funding historically received as Upper Payment Limit (UPL) payments — supplemental payments to make up the difference between what Medicaid pays for a service and what Medicare would pay for the same service. Replacing the UPL payment methodology are two funding pools — the Uncompensated Care (UC) Pool and the Delivery System Reform Incentive Payment (DSRIP) Pool.

  • Uncompensated Care Pool payments are designed to help offset the costs of uncompensated care provided by the hospital or other health care providers.

  • DSRIP Pool Payments are incentive payments to hospitals and other health care providers that developed programs or strategies to enhance access to health care, increase the quality of care, improve the cost-effectiveness of care and benefit the health of the patients and families served.

HHSC has defined the types of entities eligible to participate in the Transformation Waiver to include: hospitals, community mental health centers, local health departments, physician practice plans affiliated with an academic health science center and physician practice plans not affiliated with an academic health science center. To receive payments from the UC and/or DSRIP pools, entities must participate in a regional health care partnership. Within the partnership, participants include governmental entities providing public funds known as intergovernmental transfers (IGT), Medicaid health care providers and other stakeholders.

HHSC has defined 20 regions in Texas that define the geographic boundaries of regional health care partnerships. Region Nine consists of three counties — Dallas, Denton and Kaufman. The participants in each region are charged with developing a regional plan identifying partners, community needs, proposed projects to address the community needs and the funding distribution for each pool. Each partnership has one anchoring entity which acts as the primary point of contact for HHSC in the region and responsible to serve as an administrative extension of HHSC with respect to the regional activities. In Region Nine, Parkland Health & Hospital System has been designated as the anchoring entity.

For more information regarding the program, please follow the links below or visit the HHSC website.

Framing Elements of the Waiver

Delivery System Reform Incentive Payment (DSRIP) Program

DSRIP Funding and Mechanics Protocol (PFM)

Regional Healthcare Partnership 9 (RHP 9)



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