An Examination Of Medicaid Delivery System Reform Incentive Payment Initiatives Under Way In Six States

Medicaid waivers for Delivery System Reform Incentive Payment (DSRIP) seek to hold hospitals and other providers accountable for measureable improvements in health care delivery. We explore the policy context giving rise to these waivers in six states, with particular attention to the interplay among the financial needs of hospitals; the rise of managed care; and federal interest in replacing an “unconditional” Medicaid funding stream, the upper payment limit, with one rooted in pay-for-performance. Key characteristics of these main DSRIP waivers are compared with a particular focus on the establishment of project menus, performance metrics, and pay-for-performance processes. Concluding sections discuss the potential and limits of the waivers as vehicles for health care reform. The long-term durability and impact of DSRIP remains unclear. But federal and state officials have made considerable headway in planning and otherwise laying the groundwork for it.