Delivery-system reform, coverage, addiction treatment, and contested eligibility conditions have all run through 1115 waivers. This lesson surveys the range.
Because Section 1115 is so broad, states have used it to test a remarkable range of ideas. Four categories cover most of the activity, and together they show both the promise and the political volatility of the tool.
Delivery-system reform (DSRIP)
The most ambitious value-based use was the Delivery System Reform Incentive Payment (DSRIP) program. States including New York, Texas, and California ran multibillion-dollar 1115 demonstrations that paid provider systems for hitting reform milestones, standing up care coordination, integrating behavioral health, reducing avoidable admissions, rather than for volume. DSRIP was value-based purchasing at the scale of an entire state’s safety net. Results were mixed, and most DSRIP programs have since wound down, but they seeded delivery-reform capacity that outlasted them.
Coverage and benefits
States have used 1115s to test coverage designs: alternative expansion models, continuous-eligibility policies to blunt the churn from the foundations module, and benefit changes. The expenditure authority is what makes this possible, since it funds populations and services the standard state plan would not.
Addiction and behavioral health
A large wave of 1115s addressed substance use disorder and serious mental illness, letting states pay for residential treatment that Medicaid’s institutional-payment exclusion would otherwise block. This has been one of the more durable and bipartisan uses of the authority.
Contested eligibility conditions
1115s have also been used to attach conditions to coverage, most prominently work or community-engagement requirements. These have been repeatedly litigated and have moved on and off the table with changes in administration.
Worth remembering: the same authority that funds delivery reform and addiction treatment also carries the program’s sharpest political fights. An 1115 waiver reflects the priorities of whoever approves it, which is why the demonstration landscape looks different every few years.
Key takeaways
- 1115s have tested delivery-system reform (DSRIP), coverage and benefit designs, addiction and mental-health treatment, and contested eligibility conditions.
- DSRIP tied large federal pools to reform milestones rather than volume; most have wound down.
- Because each demonstration reflects federal priorities, the 1115 landscape shifts with each administration.
Sources
Check your understanding
DSRIP programs, funded through 1115 waivers, paid providers for what?
Delivery System Reform Incentive Payment programs tied large pools of federal money to reform milestones rather than volume. Most have since wound down.