Aligning incentive payments with outcomes: lessons from a Medicaid Section 1115 waiver program

By obtaining a Medicaid waiver under Section 1115 of the Social Security Act, many states have taken advantage of an opportunity to innovate and transform their Medicaid programs. The Center for Medicare and Medicaid Innovation has granted Section 1115 waivers to several states to develop Delivery System Reform Incentive Payment (DSRIP) programs, which vary in their federal funding pools, structures, and goals, but share key characteristics, such as the withholding of payment until certain milestones and metrics are met. The DSRIP project in New York--as exemplified by Finger Lakes Performing Provider System--is being closely watched across the country as CMS and state Medicaid programs contemplate similar measures to transform Medicaid and bend its cost curve.