Expanded Coverage through the Affordable Care Act: What it Means to You and Your Business

1. Expanded Coverage through the Affordable Care Act: What it Means to You and Your Business Integra Users Seminar January 23, 2014 Leigh Davitian, JD Brad Kile, PhD

2. Disclosures Brad Kile is an independent consultant and has no financial interest or relationships to disclose. Leigh Davitian is an independent consultant and has no financial interest or relationships to disclose.

3. Learning Objectives • List the main implications of the Affordable Care Act (ACA) on health professionals and the patient they serve. • Compare current reimbursement models with new financial incentives for providers under the ACA. • Assess new opportunities presented by the ACA for pharmacists to diversify and expand the services provided to beneficiaries • Explain how the new Health Insurance Exchanges (HIE) impact the demand for medications. • Identify how the Centers for Medicare and Medicaid Services considers the differences between Drug Regimen Review (DRR), Medication Therapy Management (MTM), and Comprehensive Medication Review (CMR) for individuals residing in long-term care settings • Identify the impact on demand for health care services as a result of Medicaid expansion and the availability of coverage through health insurance exchanges.

4. Presentation Outline • Affordable Care Act Implementation • What is Happening Now and Big Picture • Timelineand Benchmarks • New Payment Models • ACA Provisions • Payment for Medications and Medication Reviews • Expanded Coverage Under the ACA • Health Insurance Exchanges • Medicaid Expansion • Key Policies • 2014 Federal Agenda • Q & A

5. Affordable Care Act Implementation

6. What is Happening Now Major work must be done to handle monumental shift in coverage and eligibility Coverage • Health Insurance Exchanges • Target is 30 million currently lacking coverage Eligibility • Medicaid extends to 133% federal poverty level • Target is 17 million currently not eligible

7. ACA IMPLEMENTATION 2010-13 2014 2015-2020 Regulate Coverage Restructure Industry Expansion Care Delivery - Insurance - Individual - Quality Reform Mandate ties to Payment

8. Big Picture on ACA • Expanded coverage through Health Insurance Exchanges and Medicaid Expansion • Impact on Employers • Impact on Individuals • Impact on Health Providers • Program Integrity • Adapting to Change • Payment Models • Linking Care Across Settings • Tying Payment to Quality

9. Enforcement Efforts under ACA

10. Compliance Programs • For over 14 years, the Office of Inspector General (OIG) has been encouraging Medicare and Medicaid providers to “adopt voluntary”compliance programs  • Affordable Care Act (ACA), compliance programs are no longer voluntary for Medicare and Medicaid providers • Specifically, Section 6401 of ACA requires healthcare providers to establish compliance and ethics programs that contain certain “core elements” as a condition of their participation in the federal healthcare programs •  To date, HHS has not defined the “core elements” but should not deter providers from implementing a workable, organic compliance program • For now – show a good faith effort

11. Mandated Compliance Program ALL Medicare providers MUST have comprehensive compliance program in place by March 23, 2013… 10 months ago!

12. Vague Elements Identified • Develop and distribution of written policies, procedures and standards of conduct • Designate a chief compliance officer in charge of operating the program • Implement regular education and training program for all “germane” employees • Develop an internal audit system to identify problem areas • Develop a system to report deficiencies and problem areas • Develop a process where employees can come forward without fear of retaliation • Develop a means to quickly remedy problems in a systematic, transparent way

13. Some Core Elements Develop Written Policies • Looks like a code of ethics or standards of conduct • Similar to a “mantra” that all good business’ should put into place • Best practices for one’s own company • Hiring good, quality employees remains important • Criminal background checks especially with those in middle/higher management

14. Compliance Officer Select An Appropriate Compliance Officer • The designation of a chief compliance officer and other appropriate bodies should a be full-time, longer term employee(s) that understand the business OR has served in this capacity in other businesses/organizations • Many companies use their HR or office manager as designated officer • Caveat: Be sure officer has a keen understanding for all aspects of the business • Choose wisely!!!

15. Compliance Officers Duties • Compliance Officer SHOULD be very familiar with: • All pertinent CMS regulations governing Medicare providers conditions of participation and regulations on a state and federal level • Coordination of Benefits • Primary insurances role • Secondary insurances role • Private payors • False Claims Act • Anti-kickback regulations • HIPAA regulations • ACA provisions!!

16. Some Core Elements Training • Regularly review and update training programs for ALL employees who“touch” Medicare billing, coding, claims, etc • Test employees’ understanding of training topics • Maintain documentation to show which employees received training • Make sure the Board of Directors receive training • Starts at the top! • Attend conferences and webinars, subscribe to publications and OIG’s email list • Monitor OIG’s website and other government resources

17. Some Core Elements Lines of Communication • Have open lines of communication between you and employees • Maintain an anonymous “ reporting method” to report issues • Retaliation is a serious for not-reporting • Enforce a non-retaliation policy for employees who report potential problems • Use surveys or other tools to get feedback on training and on the compliance program • Use newsletters or internal websites to maintain visibility with employees

18. Some Core Elements Internal Auditing • Create an audit plan and re-evaluate it regularly • Identify your organization’s risk areas • Perform proactive reviews in regards to coding, billing, contracting, business associates • Identify REAL value added services that promote quality of care to customers and their end users • Create corrective action plans to fix the problem

19. Contracting Trends • How long has your contract been in place? • When did you last review your contracts? • When did you last amend your contract? • Do you even know where your contracts are stored? • Are they standard template contracts? • Are they different and customized for each customer? • Did legal counsel write the contracts? • Did legal counsel at least review the contracts?

20. Contract Due Diligence:Know the Other Party • Do thorough due diligence • Have you done business with them before? • Strengths • Weaknesses • Suspicions activities • Identify any Medicare exclusions • Have they been in business under another name before? • Understand your customers current financial position • Understand your customers residents/beneficiaries current clinical needs

21. Contract Due DiligenceClearly Define Services • Set clear expectations for both sides • Detailed provisions • Short is NOT sweet • Be thorough with your language • Entire agreement in single document • No side emails or discussions • No “hand-shakes” • No napkin provisions • Perform services only in agreement • Side services can cause conflicts and misunderstandings • Could lead to heighten suspicion • Don’t start services until the agreement is fully executed • Amendments need to be IN WRITING

22. In a Nutshell … A compliance program must be “effective in detecting and preventing criminal, civil, and administrative violations” and “in promoting quality of care” within your business and as it pertains to Medicare, Medicaid and other government payor programs …

23. Audits and Investigations: How do you Respond?

24. Audits Fact Pattern: You are a health care provider and on a random Monday a man enters your place of business and introduces himself. He hands your receptionist an “official” piece of paper and insists it be delivered to the person in charge. Appears to be legal documents. What should the receptionist do?

25. Who Entered your POB? • Who is it? • Important to identify what organization person is representing • Should show identification • Private Organizations under Contract with CMS • Program Safeguard Contractors • Recovery Audit Contractors • Zone Program Integrity Contractors • Medicare Carriers • Federal Law Enforcement: • HHS-OIG • FBI • DOD • IRS • FDA

26. What Type of Document? What type of documentis being served/delivered? • HHS-OIG Subpoena • Search Warrant • Request for general documentation • Request for employee files • Request for billing or coding information • Request for patient information

27. Protocol in Place • Do all employees know how to respond to such an occurrence? • Does your employer have a protocol in place? • Covered in the companies compliance program • Written policy distributed to all employees • Phone tree • Owner/Chief Executive Officer • Office Manager • Compliance Officer • General Counsel • Do you have rights NOT to respond?

28. In a Nutshell:Protocol in Place • Point of contact person • Employee in authority • Knows your business operations • Want to limit amount of persons interacting with law enforcement or agency • Want to show “deference” to the process but privileges are in place to protect employees • Sixth Amendment – Right to Counsel • Government has a right to talk to your employees • NEVER tell employees to NOT talk or interact • Want to put policies in place to control the situation

29. Can One be Proactive in this “Complicated”Environment?

30. Provider Status: Reality or Fiction

31. Question: • Why are Pharmacists NOT Bona Fide Health care providers?

32. Why Pharmacist Profession DID NOT want to be Bona Fide Providers • Lack of confidence to consultant “patients” • Exposure to malpractice • Liability for improper information shared with “patient” • Malpractice insurance costs • Lack of time to consultant “patients” • Lack of ability to dispense volume of inventory if time is needed to consult • Profession attached to product NOT professional services • Lack of ability to meet financial demands

33. That was then; This is NOW • Role of pharmacists has changed over years • Academically • Clinically • Medication management • Patient consultations • Mandated in select health care settings • OBRA ’87 • Diabetes Education • Immunization providers • Medication Therapy Management under Part D • So – why do we still not have provider status?

34. Lack of Status Runs Deep • Understanding the evolved role of pharmacists • Legislators • Regulators • Payors • Industry participants • Not merely an intermediary between vendor and consumer • Pennsylvania Supreme Court Case

35. Lack of Status Runs Deep • Medicare trust fund being threatened by insolvency • “Ever-shrinking” pie • Allowing for compensation in a “costernot a saver” • Political battle: New spending versus cuts • Ancillary health care groups threatened by inclusion • PHARMACY MUST BECOME and STAY UNITED • Remain vigilant, tenacious and persevere

36. Expanded Coverage Under the ACA

37. Health Insurance Exchanges Health Insurance Exchanges (Marketplaces) • Virtual insurance marketplaces for individuals and employers to shop for coverage • Distributors of health care, not deliverers • Commercial insurers will manage care within federal/state requirements • Facilitate support/subsidies for individuals based on need

38. Health Insurance Exchanges • What has to be covered? • Actuarial equivalent calculated for each state • Essential Health Benefits • Prescription drugs • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental and behavioral health • Rehab and Lab services • Preventive / wellness care • Pediatric care

39. Health Insurance Exchanges • HIE plan options tiered as “precious metals” • Actuarial Value • 90%+ Platinum • 80%+ Gold • 70%+ Silver • 60%+ Bronze

40. HIE – Facilitating Subsidies • Support provided via HIEs, consumer assistance “Navigators” • Help determine eligibility for financial assistance • HEIs required to tell consumers if they are eligible for coverage through state Medicaid or CHIP programs • Help for those with incomes between 100% - 400% of FPL • Reduced cost sharing < 250%; lower deductibles and copays • Premium tax credits – refundable and advanceable at time of purchase through HIE

41. Insurance Reform • Incentives for Insurers • Increased demand • Diversity of insurance pools • Financial incentives for covering those with pre-existing conditions • Tighter Regulation of Insurers • Premiums can vary only based on: age, tobacco use, family size, and geography • Medical Loss Ratio – must spend at least 80% of premiums on direct care

42. Health Insurance Exchanges Health Insurance Exchanges • Virtual insurance marketplaces for individuals and employers to shop for coverage • Distributors of health care, not deliverers • Commercial insurers will manage care within federal/state requirements • Facilitate support/subsidies for individuals based on need

43. Impact on Businesses Penalties for Not Providing Affordable Coverage • Small businesses <50 employees NOT required to offer coverage • Businesses >50 employees will pay a penalty • $2,000 per employee (excluding the first 30 employees) if they do not offer coverage for employees who average 30 or more hours per week • No penalty for part-time employees

44. Health Insurance Exchanges Impact on providers • Payment • Care delivery • Competition • Consolidation of contracts

45. Medicaid in transition • 60 million Americans covered by Medicaid (1 in 5) • ACA expands eligibility in 2014; will lead to approximately 16 million more individuals in Medicaid • All states operate some Medicaid Managed Care (MMC), except Alaska, New Hampshire and Wyoming • 65% covered by MMC, but payments account for only 20% of Medicaid spend – due to exclusion of high-cost populations

46. Medicaid in transition • States moving aggressively to place high-cost population into MMC: disabled, elderly, nursing home residents, dual eligible, mental heath • Motivation of States • Improve care delivery and payment systems • Focus on high-cost/high needs • Budget pressures • Medicaid expansion under ACA • Federal funding incentives: • “Person-centered systems of care” • Medicaid “health homes” • Demos on integration for dual eligibles

47. Medicaid Expansion • Targets those individuals at or below 133% of federal poverty level • Federal government will pay 100% of the cost for expansion for 2014, 2015, 2016 • Federal share tiers down to 90% for 2020 • State participation varies • Help for those “left behind’ in states that do not expand eligibility

48. New Payment Models

49. New Reimbursement MODELS • Accountable Care Organizations • Bundled Payment • Hospital Readmissions • Value Based Purchasing

50. Revisiting the Key Concepts • Typing Payment to Quality • Linking Care Across Settings • Beyond ACOs, these concepts are central to: • Part B Reform (replacing the SGR) • Bundled Payments • Value-based Purchasing