ILRU WebCast September 10, 2003 Chris Duff, AXIS CEO Ron Franke, AXIS Member

1. The AXIS Experiment: Can People with Disabilities be Better Served in Managed Care or Fee-For-Service ILRU WebCast September 10, 2003 Chris Duff, AXIS CEO Ron Franke, AXIS Member John Tschida, AXIS Board Member

2. About AXIS Healthcare A joint venture ofCourage Center and Sister Kenny Institute, OurVision AXIS envisions a time when all people, regardless of ability, will have the health care services and supports needed for lives they find meaningful and productive. OurStrategy To work in partnership with persons with physical disabilities, as well as their key providers and payors, to address their needs by coordinating a high-quality, cost effective network of specialized services, spanning the continuum of care and support.

3. What’s wrong with the FFS Model • Islands of care… resulting in one-dimensional services • Created and managed to serve the masses… resulting in limited service delivery flexibility and systems to control utilization • Care is diagnosis or treatment based… resulting in avoidable acute episodes and/or progression of chronic conditions • Decisions and responsibility lie with the purchasers or providers… resulting in disempowerment of the individual needing services • Costs are escalating significantly faster then medical inflation • The more one needs health care… the more one hates the health care system

4. The Current Health Care Delivery System The Current Healthcare System… Medical Specialists Home Care / PCA Primary Care ? Mental Health Consumer&Support Persons Hospitals Residential Services DME / Supplies Rehabilitation …there must be a better way

5. Challenges of Creating New Models • Engaging and incenting all stakeholders – consumers, providers, payors and purchasers • Creating adequate rate setting and risk adjustment methodologies • Establishing consumer confidence in the model • Transitioning the locus of health information from the provider to the consumer… thereby preparing the consumer to assume greater responsibility and control

6. Developing the AXIS Model • Created new care models • Participated in pilot project • Engaged consumers Purchasers/Payors Providers • Identified Needs • Pilot Project • Outreach • Consumer Workgroup • Built Capitation Model • Obtained Waivers • Built Network • Contracted Disability Care System Consumers

7. MnDHO Eligibility • Persons Served • Medicaid and Medicare recipients, aged 18 – 64 • Voluntary enrollment, projected to grow to 200-400 • Individuals with primary diagnosis of a physical disability, who would benefit from the health coordination model • Geographic Scope • Twin Cities Metropolitan Area • Covered Services • Includes all Medicare and Medicaid services, including Home & Community-based Services • Capitation: • Medicare AAPCC, with PACE Adjuster for persons at risk of institutionalization • Medicaid rates ranging from $400 to $19,000, based on acuity • Planning to transition to C-DPS for acute care component of Medicaid capitation

8. Project Partners • State Medicaid Office • Manages MnDHO Waivers • Contracts with Health Plans for Managed Care Projects • Medicaid and Medicare + Choice Plan • 90,000+ members • Sole MnDHO Plan • Contracts with disability CMO, providers --- • Provider-sponsored CMO • Created to demonstrate new model of Managed Care • Primary link to disability community • Experiences with H&CB services and key providers

9. AXIS’ Role • Enrollment • Outreach to prospective members • Pre-assessment enrollment visit to explain program • Member Services • First point of contact for members • Communications and arrangements with providers • Provider Relations • Identification and engagement of needed providers • Referral management • Fee negotiation for services outside fee schedule • Utilization Management • Ensure timely, coordinated services covering full continuum of care • Urgent assessment and intervention by RN 24/7 • Authorization authority covering all services

10. AXIS’ Role Health Coordination • Partner with member and PCP to ensure effective and coordinated care • Coordinate entire spectrum of health care from acute care to mental health and community-based services • 24/7 availability for emergent concerns • Refer for appropriate services and care from experienced providers • Utilize prevention and risk management strategies • Involve consumers to facilitate self-responsibility for health status • Coordinate related services; including vocational, educational, housing, social services, recreational

11. Development of the Provider Network • Objective of the Network: • To have a comprehensive network of committed providers experienced in serving persons with physical disabilities, spanning the continuum from acute and primary care, home and community-based care and mental health services • Identification Process: • Interviews with staff from rehabilitation organization • Identification of referral preferences of primary care physicians • Consumer experiences and preferences obtained through focus groups, individual interviews and Consumer Workgroup • Tracking provider utilization by participants in the pilot health coordination projects • Review of existing county-based waiver provider contracts • Providers who have expressed interest in the AXIS model, and have come forward with creative service delivery ideas

12. What AXIS Does: A Member Perspective Previous Experience of Medicaid System • Could never get the answers I needed • Referred from one place to the next, many of which were fruitless • Competency varied greatly among providers • Help was available, but on their timeline • Things happened to me, instead of me being able to make things happen

13. What AXIS Does: A Member Perspective 55 weeks in a nursing home • Skin breakdown wasn’t identified until to became a significant problem • Homecare treatment was slow and ineffective • Progressed to surgery and nine months on bed rest • Never lost hope of returning home, but didn’t know how I could make it happen

14. What AXIS Does: A Member Perspective AXIS helped me build a plan to get home • Enrolled while in nursing home • Health Coordinator and I pulled my family and friends together to work out all the logistics • AXIS authorized all the services I needed on a daily basis • I moved home 30 days later

15. What AXIS Does: A Member Perspective What’s different with AXIS • I am no longer alone • When I have a problem or concern, I get useful help immediately • When I started to have some skin breakdown, my health coordinator was out here immediately, and a skin care nurse was in my home the next day… it was treated and resolved in a few weeks of partial bed rest

16. What AXIS Does: A Member Perspective Why AXIS works for me • I know I can always get the help I need… I no longer have to worry about living alone • My health coordinator suggests thing I wouldn’t have thought about… I get new toys to help me as my MS progresses • My quality of life is far better… and I’m a lot cheaper for the government

17. Developing the AXIS Model • Created new care models • Participated in pilot project • Engaged consumers Purchasers/Payors Providers • Identified Needs • Pilot Project • Outreach • Consumer Workgroup • Built Capitation Model • Obtained Waivers • Built Network • Contracted Disability Care System Consumers

18. Why this Model Works Payor: State Medicaid Perspective • Helps control costs for its ‘outlier’ population of individuals with disabilities • People with disabilities exempt from managed care in Minnesota • Capitation provides incentive to manage health and dollars • Sensitive risk adjustment system better matches cost and care • State transfers risk to other entities • AXIS and Ucare have negotiated risk corridor for profit/loss • Stop-loss protection guards against high cost cases • No opt-out conditions for high-cost diagnoses • Pharmacy carve-out is only exception • The potential for expansion • Boutique size allows for successful midstream corrections • Can learnings transfer to other locations and populations?

19. Why this Model Works Providers: • UCare • Mission fit: an opportunity to improve care for a defined population within public health programs • Symbiotic core competencies: AXIS brings benefit that Ucare doesn’t have • The numbers work: fiscal analysis makes sense • Size matters: slow, steady implementation is manageable • Direct Care Providers • Primary clinics have steady stream of referrals • Additional team support from AXIS in negotiating barriers on behalf of consumers • AXIS serves as medical ‘home’ with a holistic view of each consumer and their care plan

20. Why this Model Works • Consumers: • Voluntary in nature • Enrollees can return to FFS without minimum ‘lock-in’ period or consequences • Quality of care drives AXIS behavior • Flexibility • Capitation allows for creativity not found in FFS health care purchasing • Consumers identify goals and priorities, the dollars flow to support them • More than just a health plan • AXIS uses better health to support quality of life, community integration • Work, home, and community engagement needs evaluated and supported by unique consumer health plans

21. Why this Model Works • Consumers: • Tangible results • Hospitalizations have been more than halved, to 100 hospitalizations/1,000 members • Hospital length of stay has been reduced by more than 60%. • 40+ people have been transitioned out of nursing homes • 90% of members report satisfaction with their health care services, as compared with 10% satisfaction prior to enrollment. • 85% of members reported receiving help managing their health care services, as compared with 5% receiving help prior to enrollment.

22. What’s next? • Policy implications: • Can AXIS model expand to other places and populations? • Current FFS expenditures and demographics indicate continued cost growth • Individuals with mental illness and developmental disabilities experience similar challenges with health care and community living • What can AXIS offer the private insurance market? • Trend of consumer-driven health care is increasing • Traditional disease management programs don’t address needs of people with disabilities • Commercial market potential • Employer-based purchasing to better manage medically complex individuals

23. New Week: Evaluation • Developa range of evaluation components to: • Ensure the delivery of health care services consistent with current best practices • Measure program for effectiveness, and reengineer the way services are provided in the future • Identify key elements that lead to desired outcomes, then standardize the elements into practice protocols • Demonstrate the benefits of the AXIS/UCare project to stakeholders • Demonstrate improved outcomes by managing care for members and setting the standard for future managed care programs