The Centers for Medicare and Medicaid Services (CMS) approved the "Texas Healthcare Transformation and Quality Improvement" demonstration proposal on December 12. CMS approved Medicaid waivers under section 1115 of the Social Security Act for the period December 12, 2011 through September 30, 2016. Prior section 1915(b) and 1915(c) waivers have been consolidated under the global section 1115 budget neutrality limit. This approval helps the Texas Health and Human Services Commission (HHSC) to expand its managed care program for many low-income families and children (State of Texas Access Reform, or "STAR") as well as a managed care program offering additional long term care services and supports, with a consumer-directed option, for the aged, disabled, and the chronically ill (STAR+PLUS). HHSC will be authorized to expand STAR statewide and to expand STAR+PLUS in all non-rural counties as early as March 2012, subject to readiness assessments. HHSC may use savings achieved through managed care expansion and other savings (including reductions in existing supplemental payments) to finance a re-engineered uncompensated care pool and a new delivery system reform incentive payment pool. The first of these pools may be used for qualifying hospitals as well as for physician practice groups and other providers (including governmental providers of emergency medical services) serving the currently uninsured. The second pool may be used to finance high-priority infrastructure development, such as expanding primary care and behavioral health care capacity; program innovation and redesign, such as launching "medical homes" to improve coordination of care for individuals with complex medical conditions; quality improvements, including hospital-specific quality of care initiatives; and population-focused improvements, such as preventive care initiatives for high-risk populations. Texas plans to work with public and private hospitals to create Regional Healthcare Partnerships (RHPs) linked with local government entities and the public hospitals to identify patient care access, quality, and performance improvement metrics relevant to local conditions and to create incentives for health systems transformation so that communities will be ready for Medicaid and private insurance expansion under the Affordable Care Act (ACA) in 2014. The percentage of funding for the uncompensated care pool will decrease over time as the ACA increases coverage and the percentage of funding dedicated to delivery system reform will grow.