DEPARTMENT OF HEALTH AND SOCIAL SERVICES

Division of Medicaid and Medical Assistance

PROPOSED

PUBLIC NOTICE

Global Budget

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and under the authority of 31 Del. C. §512, Delaware Health and Social Services ("Department") / Division of Medicaid and Medical Assistance (DHSS/DMMA) is proposing to amend Title XIX Medicaid State Plan regarding Global Budget, specifically, to amend the Whole Child Health Global Budget model for fee-for-services program populations.

Any person who wishes to make written suggestions, compilations of data, testimony, briefs, or other written materials concerning the proposed new regulations must submit same to, Planning and Policy Unit, Division of Medicaid and Medical Assistance, 1901 North DuPont Highway, P.O. Box 906, New Castle, Delaware 19720-0906, by email to DHSS_DMMA_Publiccomment@Delaware.gov, or by fax to 302-255-4413 by 4:30 p.m. on July 1, 2025. Please identify in the subject line: Global Budget

The action concerning the determination of whether to adopt the proposed regulation will be based upon the results of Department and Division staff analysis and the consideration of the comments and written materials filed by other interested persons.

SUMMARY OF PROPOSAL

The purpose of this notice is to advise the public that Delaware Health and Social Services (DHSS)/Division of Medicaid and Medical Assistance (DMMA) is proposing to amend Title XIX Medicaid State Plan regarding Global Budget.

Statutory Authority

Background

On January 2, 2025, the Secretary of DHSS executed a Memorandum of Understanding (MOU) with Nemours Children's Health (Nemours) to implement the Whole Child Health Global Budget model (Model). The Model is a financing arrangement between DHSS and Nemours designed to promote whole child health while simultaneously mitigating growth in costs and optimizing financial stability for both DHSS/DMMA and Nemours.

States are required to document the policies and methods used in setting payment rates for Medicaid services in their Medicaid State Plans (42 CFR 447.201).

Summary of Proposal

Purpose

The purpose of this proposed regulation is to amend the Whole Child Health Global Budget model for fee-for-services program populations.

Summary of Proposed Changes

Effective April 1, 2025, the DHSS/DMMA proposes to amend Title XIX Medicaid State Plan to clarify global budget.

Public Notice

In accordance with the federal public notice requirements established in Section 1902(a)(13)(A) of the Social Security Act and 42 CFR 440.386 and the state public notice requirements of Title 29, Chapter 101 of the Delaware Code, DHSS/DMMA gives public notice and provides an open comment period for 30 days to allow all stakeholders an opportunity to provide input on the proposed regulation. Comments must be received by 4:30 p.m. on July 1, 2025.

Centers for Medicare and Medicaid Services Review and Approval

The provisions of this state plan amendment (SPA) are subject to approval by the Centers for Medicare and Medicaid Services (CMS). The draft SPA page(s) may undergo further revisions before and after submittal to CMS based upon public comment and/or CMS feedback. The final version may be subject to significant change.

Provider Manuals and Communications Update

Also, there may be additional provider manuals that may require updates as a result of these changes. The applicable Delaware Medical Assistance Program (DMAP) Provider Policy Specific Manuals and/or Delaware Medical Assistance Portal will be updated. Manual updates, revised pages or additions to the provider manual are issued, as required, for new policy, policy clarification, and/or revisions to the DMAP program. Provider billing guidelines or instructions to incorporate any new requirement may also be issued. A newsletter system is utilized to distribute new or revised manual material and provide other pertinent information regarding DMAP updates. DMAP updates are available on the Delaware Medical Assistance Portal website: https://medicaid.dhss.delaware.gov/provider

Fiscal Impact

There is no anticipated fiscal impact.

Attachment 4.19-A

Page 13

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE/TERRITORY: DELAWARE

Delaware Whole Child Health Global Budget

Effective for services incurred on April 1, 2025, through December 31, 2027, Nemours Children's Health (Nemours) is eligible for Medicaid supplemental payments based on the cost and quality of services provided by Nemours to Medicaid fee-for-service program enrollees.

The State will annually calculate a Global Revenue Budget (GRB) for Medicaid and CHIP services provided by Nemours Children's Health in calendar years (CYs) 2025, 2026, and 2027. For each year, the GRB will be calculated based on historical Medicaid and CHIP expenditures with the following adjustments:

1. Trend: Based on shared efforts through model design reviews of pertinent data, a trend of 5% per annum will be used for establishing the GRB for the first Performance Year, CY 2025. This figure is the presumptive trend assumption for Performance Years two and three (CYs 2026 and 2027), unless the State determines the need for adjustment based on data and experience.

2. Demographics: Adjust for changes in Delaware Medicaid including managed care utilization and CHIP enrollment. The State will further determine the appropriate adjustment to be made to the GRB based on actual and projected enrollment changes starting Performance Year two.

3. Exclusions: Identify select Exclusions to be paid outside of the Global Revenue Budget (GRB). The State will consider the following factors in determining excluded services starting Performance Year two:

3.1.1 Certain Physician-Administered Drugs.

3.1.2 New Technology.

3.1.3 Outliers exclusion will not apply during 2025, 2026 or 2027.

4. Utilization Adjustments: The GRB will be adjusted for changes to Major Planned Services and Market shift, starting Performance Year two. Any adjustments will be made using claims and encounter data, and will consider:

4.1.1 Market Shift. Adjust for shifts in market share of Model services to Medicaid beneficiaries

between Nemours and other providers.

4.1.2 Major Planned Service Changes. Adjust for material service additions, service expansions,

or service reductions, or other potential situations using the approach contained in methodology

specifications.

5. Policy Adjustments: Adjustments to account for policy changes that impact Medicaid or CHIP covered benefits, reimbursement, or enrollment, including potential fee schedule rate changes or changes in supplemental payments.

6. Other Potential Budget Adjustments: Potential adjustments to account for exogenous factors unrelated to the Model, such as changes in health insurance coverages; rapid adoption of a new technology; investments in care redesign at an accelerated pace; changes in law or regulations; localized health, environmental, or economic shocks; natural disasters; acts of war; localized civil disorder; rapid acceleration in inflation; and delays in party provision of data or performing of other deliverables that affect Model implementation.

Attachment 4.19-A

Page 13 cont.

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

STATE/TERRITORY: DELAWARE

After each calendar year, Delaware Medicaid and CHIP program payments to Nemours will be reconciled to the GRB. If actual Medicaid and CHIP program payments are at least 0.5% less than the GRB, Nemours will be eligible to receive 100% of the savings, subject to performance on Quality Measures, not exceeding $5 million for Performance Year 2025, $15 million in 2026, and $18 million in 2027.

Contingent on Nemours meeting or exceeding Quality Measure Performance Targets, Title XIX Medicaid State Plan fee-for-service supplemental payments will be equal to the Title XIX Medicaid State Plan fee-for-service portion of the GRB (i.e., the portion of the GRB attributable to projected Title XIX Medicaid State Plan fee-for-service program enrollees) multiplied by the total earned savings.