HPS Advance Payment ACO Presentation

Walsingham Academy • Williamsburg, VA • Randolph Macon College • Ashland, VA • Bachelor of Arts • Duke University, MHA • Durham, NC • Master of Health Administration • 25+ Years Experience • Hospital Executive • Health System Physician Organization Executive • Practice Administrator • IPA Executive Director • Consultant/Business Advisor • Professional Memberships • Medical Group Management Association • Virginia Medical Group Management Association • Richmond Academy of Medicine R. Chris Darling, MHA Copyright 2013 - All Rights Reserved

Overview / Vision • Over the next 15 minutes we will discuss: • What is a Medicare Accountable Care Organization (ACO), • How the Medicare Shared Savings Program (MSSP) shares money with ACO’s that reduce Medicare costs, • What is the Medicare ACO Advanced Payment Program (APP), • What physicians have to do to use an Advance Payment ACO to take a leadership role in the clinical and practice transformation movements without having to make a capital investment, and • What physicians have to do to create an ACO opportunity that has the potential to generate a large amount of profit over three years without absorbing any financial risk. Copyright 2013 - All Rights Reserved

Accountable Care Organizations • In 2006 the term Accountable Care Organization or ACO was coined by Elliott Fisher, Director of the Center for Health Policy Research at Dartmouth Medical School. • On March 31, 2011 the Department of Health and Human Services (DHHS) proposed the initial set of guidelines for establishment of Medicare ACO’s under the Medicare Shared Savings Program (Section 3022 of the Affordable Care Act). • On December 2, 2011 CMS’s Center for Medicare and Medicaid Innovation (CMI), announced an initiative to distribute $170m to approved independent medical practice ACO’s. Copyright 2013 - All Rights Reserved

Advance Payment Program • Designed “to test whether pre-paying a portion of future shared saving could increase participation in the Medicare Shared Savings Program.” • Created in response to complaints that only large practices and hospital affiliated groups had the financial wherewithal and infrastructure to pursue MSSP benefits. • CMS commitment $170 million • First round April 2012 • Second round July 2012 • Third round January 2013 • 35 Advanced Payment ACO’s have been approved • Anticipated next round January 2014 • Three year contract term Copyright 2013 - All Rights Reserved

Advance Payment ProgramThree types of payments • Fixed and variable • An upfront, fixed payment of $250,000. • An upfront, variable payment of $36 per beneficiary. • A monthly payment for 18 months of $8 for each of the ACO’s approved Medicare beneficiaries. Note: Medicare continues to pay providers under the Medicare fee schedule. Copyright 2013 - All Rights Reserved

The “No Risk” Advance Payment Model • CMS makes the advance payments the ACO. • The goal is for the ACO to repay the advance payments out of Medicare Shared Savings payments to the ACO during the term of the three year contract. • If the ACO does not generate enough Medicare Shared Savings to repay the advance payments, CMS will not attempt to recoup advance payments. • In other words, this program works like a loan forgiveness program. Copyright 2013 - All Rights Reserved

IMPORTANT CMS will pursue full recoupment of advance payments from any ACO that does not compete the full, initial agreement period or from any ACO that expends funds inconsistent with the approved spend plan. Copyright 2013 - All Rights Reserved

Key Criterion 1. ACO must have at least 5,000 “pure” Medicare beneficiaries. • Cannot include beneficiaries enrolled in Medicare Advantage programs. 2. ACO must have less than $50m in annual total revenues. Copyright 2013 - All Rights Reserved

Application Key Components • Beneficiaries are determined using an algorithm that matches providers’ claims activity and their patients for the past three years. • Based on the algorithm, the ACO Cost Target is also determined. • Applications must identify strategy and tactics regarding how to report on 33 quality measures. Copyright 2013 - All Rights Reserved

33 Quality Measures • Patient/caregiver experience • Care coordination/patient safety • Preventive health • At-risk population management: • Diabetes • Hypertension • Ischemic Vascular Disease • Heart Failure • Coronary Artery Disease _____________________________________________________________________________ • Collection Methodology • 7 are collected via patient survey, • 3 are calculated via claims, • 1 is calculated from the Medicare and Medicaid Electronic Health Records (EHR) Incentive Program data, and • 22 are collected via the ACO Group Practice Reporting Option (GPRO) Web interface. Copyright 2013 - All Rights Reserved

Selection Process • ACO’s that meet the initial eligibility requirements will be evaluated based on the quality of their application’s “spend plan”, which outlines how the ACO intends to use advance payments. Copyright 2013 - All Rights Reserved

A QUICK REVIEW • The Advance Payment ACO model has been created by CMS with the goals of transforming care and saving costs. • Participants in the Advance Payment ACO continue to be paid by Medicare. • Providers in the Advance Payment ACO model must work as a team to achieve program goals. • The program lasts three years and requires reporting and data management capabilities. • Can be implemented for eligible providers with little or no financial risk. Copyright 2013 - All Rights Reserved

The HPS AdvancedPayment ACO Solution • HPS has identified a strategic business partner that has successfully helped practices apply for and manage CMS Advanced Payment Accountable Care Organizations. • This partner has a proven process to assess ACO readiness, facilitate the ACO application process and upon approval work with the ACO to optimize program participation and financial return. • Using the HPS ACO implementation model, no upfront capital investment is required to implement the ACO. Copyright 2013 - All Rights Reserved

The Healthcare Practice Solutions Advance Payment ACOProposal • It is proposed that at no risk to your practice, you agree to work with HPS to determine whether or not your practice is eligible and ready to participate in an Advance Payment ACO. • If your practice is eligible for an Advance Payment ACO and there is continued interest, your practice and HPS will agree to work together on an exclusive basis to successfully apply for and benefit from a CMS/MSSP/Advance Payment Accountable Care Organization. Copyright 2013 - All Rights Reserved

Guaranteed services to increase practice value • Proven strategic partners R. Chris Darling, MHA, Business Advisor tel: 804.402.3833 www.HPSlink.com contactus@HPSlink.com Copyright 2013 - All Rights Reserved

HPS Advance Payment ACO Presentation