Under the authority of Section 1115 demonstrations, some states have implemented Delivery System Reform Incentive Payment (DSRIP) programs to improve care, improve health, and lower costs by incentivizing and supporting care delivery redesign that transitions away from episodic treatment toward prevention and management of health and wellness for low-income populations. DSRIP programs restructure Medicaid funding into a pay-for-performance arrangement in which providers earn incentive payments outside of capitation rates for meeting certain metrics or milestones based on state-specific needs and goals, which are used to measure success. Newer DSRIPs are also increasingly leveraged to promote alternative payment methodologies in managed care in the hope that, by demonstrating savings, managed care organizations will sustain DSRIP achievements after the conclusion of the programs. DSRIP financing, including the state match, varies by state, but all states must meet the budget neutrality requirements of §1115 demonstrations and some states have been able to do so by repurposing funds and using banked managed care savings.
Currently there are 13 states with approved DSRIP programs: Alabama, Arizona, California, Kansas, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Texas, and Washington. While the structure and scale of DSRIP programs vary widely across states, most programs have a common denominator in their goal to improve population health. The following are the different approaches states use to leverage DSRIP to address population health:
1. Population health projects and metrics: Many DSRIP programs reward providers with incentive payments for achieving process and outcome metrics related to population health. For instance, participating providers in New York must implement at least one population-wide project that aligns with the state’s Prevention Agenda, which includes promoting mental health and reducing premature births, as well as prevention of substance abuse, chronic diseases, and sexually-transmitted diseases. In California’s program, 16 entities are undertaking the Million Hearts Initiative project that aims to prevent heart attack and stroke, 15 entities are addressing cancer screening and follow-up, and nine entities selected an obesity prevention and healthier foods initiative. Similarly, providers in Alabama’s nascent program can focus on implementing projects that improve prevention and management of chronic disease and/or improve birth outcomes.
2. Flexible services funding: In Massachusetts, emerging Accountable Care Organizations (ACOs) will be able to use DSRIP funds to address health-related social needs, such as services for individuals transitioning from an institution to the community, services to maintain a safe and healthy living environment, and support for individuals who have experienced violence.
3. Engaging Community-Based Organizations: Washington’s DSRIP requires the decision-making body of each regional Accountable Community of Health (ACH) to include voting partners from community-based organizations that provide social and support services reflective of the social determinants of health for the populations in the region. In Massachusetts, certified community-based organizations called Community Partners (CPs) may use DSRIP funding for health promotion and navigation to, and engagement with, community resources and social services providers.
By allowing states to improve care delivery and address social determinants of health, DSRIP provides states with an opportunity to improve population health in traditional and non-traditional ways while still maintaining budget neutrality. While DSRIP programs are time limited in nature, the move toward reducing more costly care required to treat preventable health conditions by addressing social determinants of health and improving population health has the potential for lasting impacts on the health care landscape beyond DSRIP.
Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.
 For state-specific information on different states’ DSRIP programs, please visit the DSRIP tab of NASHP’s State and Delivery System Payment Reform Map. For more in-depth cross-state analysis of DSRIP programs, please refer to NASHP’s 2015 DSRIP Report.