May 15, 2013

1. Comparison of HEDIS® Results: MassHealth PCCP and Managed Care Plans Medicaid Advisory Committee Presentation Jeremy D. Palmer, FSA, MAAA Sheamus K. Parkes, FSA, MAAA Milliman, Inc. May 15, 2013 Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

2. Introductions Jeremy D. Palmer, FSA, MAAA • Jeremy’s primary area of expertise is Medicaid managed care. He consults to states and health plans in more than 15 states, including BMCHP in Massachusetts. Sheamus K. Parkes, FSA, MAAA • Shea’s primary area of expertise is applied statistics and predictive modeling. He provides modeling assistance to clients ranging from Medicare ACOs to Pharmaceutical Manufacturers. Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

3. Project Questions • Using the MassHealth Managed Care HEDIS reports, answer the following questions: • What conclusions can be drawn between the compliance rates among the MCO’s compared to the PCCP on all measures? • What conclusions can be drawn between the compliance rates among the MCO’s compared to the PCCP specifically for behavioral health measures? • Are the available data and sampled HEDIS measures in the MassHealth reports sufficient to make broad statements about the relative effectiveness of the MCOs compared to PCCP? Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

4. Project Answers • The composite MCO has outperformed the National Medicaid 75th and 90th Percentile Benchmark on 36% and 12% more measures than PCCP respectively when considering all HEDIS® measures from 2010 and 2011 on a credibility adjusted basis. The results are consistent when focusing on Physical Health (PH) measures. • When focusing on Behavioral Health (BH) measures, the composite MCO has outperformed both the National Medicaid 75th and 90th Percentile Benchmark on 21% more measures than PCCP on a credibility adjusted basis. • In a direct comparison of the composite MCO and PCCP, the composite MCO has been 3.6% more successful on the average HEDIS® measure from 2008 to 2012. Further, the composite MCO has an 89% probability of outperforming PCCP if a different sample of HEDIS® measures were surveyed; suggesting that a broad statement about relative HEDIS® compliance rates can be appropriately concluded. Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

5. Primary Results - % of Measures Outperforming the Benchmark (Straight Comparison) Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

6. Primary Results - % of Measures Outperforming the Benchmark (Credibility Adjusted) • Credibility adjustment results similar to straight comparison of actual reported values – actual reported values not materially skewed by small sample sizes. Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

7. Primary Results – Direct Comparison • Physical health measures show strong evidence • MCOs very likely to have outperformed PCCP • Behavioral health measures less conclusive, however: • BH results are still useful • MCOs more likely than not to have outperformed PCCP Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

8. LIMITATIONS This report was prepared by Milliman exclusively for the use or benefit of MAHP for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third party recipient of this report who desires professional guidance should not rely upon Milliman's report, but should engage qualified professionals for advice appropriate to its own specific needs. We performed a limited review of the data used directly in our analysis for reasonableness and consistency and have not found material defects in the data. If there are material defects in the data, it is possible that they would be uncovered by a detailed, systematic review and comparison of the data to search for data values that are questionable or for relationships that are materially inconsistent. Such a review was beyond the scope of our assignment. Differences between our projections and actual amounts depend on the extent to which future experience conforms to the assumptions made for this analysis. It is certain that actual experience will not conform exactly to the assumptions used in this analysis. Actual amounts will differ from projected amounts to the extent that actual experience deviates from expected experience. QUALIFICATIONS This document was created by Jeremy D. Palmer, FSA and Sheamus K. Parkes. Mr. Palmer is a Principal and Consulting Actuary in the Indianapolis office of Milliman and a Fellow of the Society of Actuaries and Member of the American Academy of Actuaries. Mr. Parkes is an Actuary in the Indianapolis office of Milliman and a Fellow of the Society of Actuaries and Member of the American Academy of Actuaries. Both Jeremy and Shea meet the qualification standards for performing the analyses contained in this document. Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

9. Appendix - Methodology and Assumptions • Optimization and Calculation • Solved via Laplace Approximation • Robust “Sandwich” Covariance Estimation • Inferences • Least Squares Means of Health Plan fixed effects • MCOs composited using current enrollment (BH Specific if appropriate) • Best Least Unbiased Prediction of (Health Plan):(HEDIS Measure) Compliance rates • Used for credible estimates of having beaten the national benchmarks • Above describes only a reference model • Many other scenarios were ran to understand model uncertainty and support different inferences • Generalized Linear Mixed Model Framework • Response • Was each individual compliant? (Bernoulli w/ Logistic Link) • Appropriate sampling weights for chart reviews • Fixed Effects • Health Plan (Skill) • HEDIS Measure (Difficulty) by Year • Random Effects (Practically random, not theoretically random) • HEDIS Measure by Health Plan • HEDIS Measure by Year and Health Plan • Simple Covariance Structures • No member identifier available • Too few health plans available Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.

10. Appendix - Case-Mix Adjustment Discussion • HEDIS was developed by NCQA and is most widely used standardized performance measures for quality of care. • HEDIS measures are not designed for case-mix adjustment. • Lack of case-mix adjustment may impact results – however: • Each specific HEDIS measure applies to a subset of the population – a form of implicit case-mix adjustment. • Removed of MassHealth Essential from PCCP population. • From the HEDIS Reports: • This report was designed to be used by MassHealth program managers and by managed care organization (MCO) managers to assess plan performance in the context of other MassHealth managed care plans and national benchmarks... Anyone reviewing this presentation should consult the information and assumptions contained in the full report supporting this executive summary in order to appropriately interpret the results provided.