What’s Next – Strategic Response for Providers, States, and Advocates
As CMS narrows the scope of Section 1115 demonstration authority, a new Medicaid reality is taking shape—one where innovation must be more targeted, better documented, and directly aligned with core Medicaid objectives.
For states, providers, and cross-sector partners who have spent the last decade building transformative, person-centered care models, this moment demands both adaptation and advocacy. While the federal government may no longer support some forms of creative financing, the need for whole-person care, health equity, and sustainable long-term support systems has not diminished.
This final post in the series outlines a practical, strategic path forward for stakeholders committed to advancing Medicaid transformation in a changing policy landscape.
1. Reframe Innovation Within Medicaid’s Core Mission
The new guidance doesn’t eliminate innovation—it refocuses it. Future 1115 waivers must directly support Medicaid-eligible individuals with interventions tied to:
Coverage expansion
Access to care
Improved health outcomes
Cost-effectiveness within Medicaid
Strategic Tip: Reframe existing or proposed programs in language that ties directly to clinical outcomes, utilization reduction, and access metrics.
For example, instead of “housing support,” frame as “housing transition services that reduce hospital readmissions for high-risk Medicaid beneficiaries.”
2. Use Data to Demonstrate Value
CMS is signaling a higher bar for waiver approval. States and providers must be ready to quantify the impact of non-traditional services—especially those tied to social determinants of health.
What to Document:
Reduced ER visits or inpatient stays
Improvements in medication adherence or care plan follow-through
Increased stability for high-utilizing or complex-needs enrollees
Avoided costs and improved quality-of-life outcomes
Strategic Tip: Lean on evaluation partners or internal data teams to produce simple, compelling outcome dashboards. Share these with CMS, state partners, and advocacy groups to make the case for continued flexibility.
3. Explore Alternative Financing Models
With DSHP and DSIP funding mechanisms no longer available, stakeholders will need to braid or blend funding to sustain wraparound supports.
Options to Explore:
Local government funds (e.g., county behavioral health)
Philanthropic and foundation support
Health-related social needs (HRSN) services through Medicaid managed care organizations (MCOs)
American Rescue Plan Act (ARPA) funds or behavioral health block grants
Value-based payment models that allow reinvestment of shared savings
Strategic Tip: Map out the landscape of available funding sources in your state and region. Look for opportunities to coordinate across Medicaid, housing, employment, and public health systems.
4. Strengthen Collaboration with Medicaid Managed Care Plans
Many of the services at risk—such as care coordination, tenancy support, or food interventions—can be implemented through value-added services or in-lieu-of services within MCO contracts.
Key Actions:
Position CBOs and providers as partners to MCOs, offering scalable solutions that meet Medicaid member needs.
Encourage MCOs to include enhanced services in rate development processes and quality incentive structures.
Strategic Tip: Build internal fluency around Medicaid managed care rules and contracting options. Demonstrate how your service fills a gap in MCO performance or quality outcomes.
5. Center Equity and Lived Experience in Policy Advocacy
CMS’s move toward program integrity doesn’t negate the moral imperative of Medicaid: to serve those who face the greatest barriers to health and independence. Now is the time to elevate the voices of Medicaid enrollees and caregivers to shape the future of innovation.
Tactics:
Document and share stories of how specific waiver services have supported stability, recovery, and independence.
Join or form cross-sector coalitions that represent both provider and consumer interests.
Participate in public comment periods and federal listening sessions on waiver design and Medicaid policy.
Strategic Tip: Use a dual narrative—quantitative data backed by qualitative stories—to make the case for preserving and expanding successful models.
Final Thoughts: Strategy, Not Surrender
The end of DSHPs and DSIPs is a loss for states and communities that had built flexible, coordinated systems of care. But it is also an opportunity. With clearer guardrails, there is room to create 1115 waivers that are strategic, compliant, and deeply impactful—especially when designed in collaboration with those closest to the care experience.
By staying focused on Medicaid’s core values—dignity, equity, and access—we can ensure the next generation of waivers continues to advance care for those who need it most.
Series Recap:
Redrawing the Lines: The Future of Medicaid Innovation Under 1115 Waiver Reform
State Spotlights – How 1115 Waivers Are Powering Transformation
From DSHP to DSIP – The Collapse of Creative Financing in Medicaid
What’s Next – Strategic Response for Providers, States, and Advocates
