Illinois HFS set to open public comment on extension of Medicaid behavioral health transformation waiver


Boram Kim


On Friday, the Illinois Department of Healthcare and Family Services (HFS) announced May 19th as the first of its three public hearing dates to solicit input on a draft proposal to extend the 1115 Medicaid waiver for behavioral health transformation, also known as the Better Care Illinois Behavioral Health Initiative (BCI). 


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HFS is seeking a five-year extension of BCI, which sunsets at the end of June, to build and expand the current program service capacity of 3,000 members per year to serve potentially the entire state Medicaid population across a broad range of health-related social services needs, such as food, employment assistance, housing, and medical respite services. 

The extension proposal contains new programs focused on health equity including grants for safety net hospitals, training for community health workers, and culturally and linguistically responsive care management.

The proposal targets Illinoisians who are pregnant, homeless/housing-insecure, justice-involved, unemployed, food-insecure, and those in need of violence and crisis intervention. 

HFS is seeking an annual spending authority of 3% of the state’s total Medicaid expenditures—an additional $900 million annual spending authority for the new initiative. Estimated expenditures for the proposed services over the five-year period total $7.9 billion. 

The proposed initiative includes Healthcare Transformation Collaboratives, which aim to reorient the healthcare delivery system in Illinois around people and communities to be more equitable and close gaps in healthcare access, quality, and outcomes. 

HFS will conduct three public hearings—in Chicago, Springfield, and one held virtually— aimed at garnering support for the proposal. 

In an interview with State of Reform, Kelly Cunningham, Medicaid administrator at HFS, said public buy-in and support were important to gaining federal approval for the proposed demonstrations to serve the most vulnerable in Illinois. 

“[The] 1115 waiver is actually a demonstration waiver [where] you propose a hypothesis, a little bit of a scientific experiment in terms of how the outcomes you want to see impact your population,” Cunningham said. “In getting a waiver like this approved, the federal government wants to know that the community—the people that will benefit from the services—stands behind it.”

Cunningham said CMS approval is the first hurdle to overcome, after which HFS will enter a negotiation period of the terms and conditions and operational protocols that speak to implementation. The hearings will set the stage for when that implementation phase occurs. 

BCI is a set of 10 pilot program initiatives approved by CMS in 2018 to integrate physical and behavioral health services to better serve Medicaid beneficiaries with substance use disorders (SUD) and severe mental health challenges through value-based contracting and care coordination. 

The initiatives include a pilot on SUD case management that diverts people from the criminal justice system into treatment. 

Operational delays and issues related to the COVID-19 pandemic, such as staffing shortages and the closure of services, led to HFS only being able to implement four of the 10 original SUD-related pilots, as well as lower-than-expected engagement. Despite these challenges, HFS said preliminary data from the interim evaluation indicate that 39% of the performance metrics have met initial expectations with marked progress shown over the last two years. 

Two of the six suspended programs—assistance for community integration and employment—are included in the extension, while the remaining four—which concern home, respite, and crisis care—will transition to the State Plan Authority as part of the Pathways to Success Program.

Cunningham spoke to the lessons learned from the past five years that helped inform the proposed waiver framework.

“I think one of the most important lessons we learned was that we needed to change our approach with respect to working with providers that don’t traditionally provide Medicaid services—groups like community-based organizations,” Cunningham said. “They may have a special expertise in housing support or employment support or violence prevention.

But those aren’t traditional Medicaid services, so we are really trying to be as flexible and creative as possible to educate about what it means to be a Medicaid provider, provide technical assistance, and support them in ways that make the Medicaid environment more friendly. Because we know it can be daunting—trying to enroll as a new provider [and] determine how to bill and how to work with a managed care plan.”

After the public comment period ends, HFS says it will finalize and submit its application to CMS before the current waiver sunset date, targeting June 26th.