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Section 1115 Demonstration HIE Policy

Section 1115 Demonstrations

In addition to making use of state plan authority, integration of HIE and HIT into state Medicaid programs can also be accomplished under demonstration authority at section 1115 of the Social Security Act (1115 demonstrations). 

CMS has provided technical assistance to states regarding how to promote the use of HIT and HIE in section 1115 demonstrations in conjunction with the state’s overarching goals for the demonstration programs. For example, collaboration with states recently resulted in special terms and conditions (STCs) for a state demonstration that hold a state and its managed care entities accountable for HIT adoption.  CMCS and the state developed HIT adoption benchmarks as a part of a larger health reform effort in the state.  

Achieving the budget neutrality requirements of 1115 demonstrations assures that the demonstration programs do not cost more than the state’s activities would have cost without the demonstration. Improved coordination of care through the exchange of health data is a key component that the programs can leverage and promote commercial health plans efforts to improve quality of care and health outcomes and lower the growth in costs of health care. 

Given the unique situation of each state and each section 1115 demonstration, it is difficult for CMS to provide specific STCs for use as a template. However, the following high-level STCs can serve as a starting point for states:

  1. The state shall have plans for certified HIT adoption for their providers.
  2. The state shall track the adoption of electronic health records and HIE utilization.
  3. The state shall participate in all efforts to ensure all regions of the state have coverage by certified HIT.
  4. For states engaged in major delivery system and payment reforms, the state shall ensure that the innovation strategy and the HIT/HIE strategies are integrated and supportive of a unified vision.