New York State & CMS Finalize $8B Medicaid Waiver

Last week, New York Governor Andrew Cuomo announced that a final agreement was reached between the state and the Centers for Medicare and Medicaid Services (CMS). This groundbreaking 1115 Medicaid waiver amendment will reinvest $8 billion of the $17.1 billion in federal savings generated by the State’s Medicaid reform efforts. The waiver will transform the state's health care system, bend the Medicaid cost curve and ensure access to quality care for Medicaid members. Governor Cuomo is deeply committed to reinvesting Medicaid into supportive housing, recognizing that stable, supportive housing improves the health of vulnerable people and saves government money.

The $8 billion will be reinvested in 3 ways:

  1. $500 Million for an Interim Access Assurance Fund (IAAF);
  2. $6.42 Billion for the Delivery System Reform Incentive Payments (DSRIP) program; and
  3. $1.08 Billion for other Medicaid Redesign purposes


Most of the reinvestment programs will be implemented through the DSRIP plan to promote community-wide collaborations to implement innovated projects focused on delivery system reforms through planning grants, provider incentive payments, administrative costs and DSRIP-related workforce programs. The main goal of the DSRIP is to reduce avoidable hospital use by 25% over the next 5 years. The DSRIP plan establishes 25 different projects for which eligible safety net providers (major public general hospitals, FQHCs, nursing homes) can apply to implement over five years. Approved providers will receive incentive payments based on their performance and outcome milestones.

Supportive housing advocates have been following the waiver request closely as it originally included the creation of a Medicaid Supportive Housing Expansion Program that dedicated $150 million annually ($750 million over 5 years) to expand access to supportive housing. This program would have reinvested Medicaid savings into rental assistance and capital components of supportive housing. Unfortunately, the state had to remove this provision because CMS would not approve the way the state proposed using federal reinvested savings for capital expenses and rental subsidies. Despite CMS’s decision, the State of New York is still very committed to supportive housing as an integral health intervention for achieving the Medicaid Redesign’s goals.

  • NY is still investing their ‘state-only’ Medicaid savings dollars into supportive housing.  New York’s  recently approved budget included $222 million over a two year period to fund their Supportive Housing Initiative ($91 million for SFY 2014-15; $127 million for SFY 2015-16) to provide rental subsidies, service funding and capital dollars to create supportive housing for high-cost Medicaid members.

Included in one of the DSRIP projects is an initiative that directs hospitals to partner with housing providers to develop transitional housing for high risk patients who are unable to safely transition from a hospital when the acute medical needs are fully met. This transitional housing would provide short term care management to allow transition to a longer term care management and would allow additional time to support rehabilitation, stabilization, and patient confidence in self-management.

We expect that housing will remain an essential part of the state’s Medicaid reform efforts as DSRIP applicants are strongly encouraged to engage community providers from multiple disciplines to transform the health care delivery system. In fact, applications from single providers are ineligible. This collaborative of engaged community stakeholders will be referred to as “Performing Provider Systems” (PPS) and supportive housing provides should be included in these broad collaborations in submitting DSRIP project proposals based on a thorough assessment of  community health needs. In addition, the state’s Medicaid Health Home initiative continues to operate and the state has invested resources to improve health and housing integration within these networks.  New York has allocated $260 million of state Medicaid savings into the Supportive Housing Development Fund over two fiscal years.

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