Jeffrey L. Simmons, M.D. Medical Director for Behavioral Health

1. The Alternative Quality Contract (AQC) Model: A Progress Report Jeffrey L. Simmons, M.D. Medical Director for Behavioral Health Blue Cross Blue Shield of Massachusetts April 3, 2014

2. The Alternative Quality Contract (AQC): Key Components • Global Budget • Covers all medical services • Health status adjusted • Based on historical claims • Shared risk • Declining trend • Quality Incentives • Ambulatory and hospital • Significant earning potential • Nationally accepted measures • Long-Term Contract • 5-year agreement • Sustained partnership • Supports ongoing investment

3. Linking Quality and Efficiency As quality improves, provider share of surplus increases or share of deficit decreases

4. Nationally Accepted and Validated Measure Set for Performance Incentives

5. Incentive Risk • BCBSMA employs several strategies to insulate providers from insurance risk in the AQC: • Health status adjustment • Use of network-wide trend as benchmark for budget-setting • Prescription drug benefit adjustment • Reinsurance requirements/ contract terms • Caps on provider liability for budget deficits • Upside risk-only in payment for quality performance • Incentive Risk • Variation in costs and outcomes due to factors within providers’ control—care processes, unnecessary utilization, etc. • Examples: HbA1c control among diabetics, ED use for ambulatory-care sensitive visits

6. AQC Groups (Current as of March, 2014)

7. AQC Participation (Current as of March 2014) Most PCPs and specialists are in AQC Contracts today Most of our HMO Blue members are patients of AQC groups* * In-State HMO members of an AQC PCP, membership may fluctuate

8. AQC Improving Adult and Pediatric Care Quality and Outcomes:Improvement of the 2009 Cohort of AQC Groups from 2007-2012 Adult Chronic Care Pediatric Care Adult Health Outcomes 100 Optimal Care 50 = These graphs show that the AQC has accelerated progress toward optimal care since it began in 2009. The first two scores are based on the delivery of evidence-based care to adults with chronic illness and to children, including appropriate tests, services, and preventive care. The third score reflects the extent to which providers helped adults with serious chronic illness achieve optimal clinical outcomes. Linking provider payment to outcome measures has been one of the AQC’s pioneering achievements.

9. What impact has the AQC had on BH care? • Primary impact so far has been on awareness and staffing • Perception of BH as a key component requiring active management • Increasing interest in Collaborative Care Model • Emerging measures – 11/17 AQCs chose a serial PHQ-9 Patient Reported Outcomes Measure • Addition of behavioral health clinicians to staffing patterns • Partnerships with organized behavioral health clinical groups • Academic review of the use of mental health and substance abuse services has just begun in partnership with the Harvard and Johns Hopkins Schools of Public Health • Impact on mental health and substance abuse quality gates (HEDIS Antidepressant Measure and Total Readmissions) • Impact on inpatient and outpatient service utilization • Impact on provision of medical services to those with BH needs

10. AQC Impact on Medical Care for BehavioralHealth Members Preliminary analysis shows that AQC-based care results in comparable improvement in key medical measures for behavioral health members.

11. What do AQC Providers want from BH Providers? • High impact interventions for those most in need • Full integrated continuum of care • Inpatient admission and ER avoidance where appropriate • Urgent access to adult and child psychiatric consultation • Appropriate and timely services in the PCP’s or pediatrician’s office • Collaborative Care – a new professional model • Appropriate use of video technology • Effective communications to and from BH providers • Shared EMR or standardized info/data exchange • Reliable and valid measurement of outcomes • Standardized measure sets • PROMS • Partnership on cost and quality • Innovative payment arrangements

12. How will behavioral health practices be organized to meet these needs and what form will reimbursement take? • Payment • Fee-for-service • Quality incentives (process measures and outcomes) • Case rates • Episode rates • Full risk-sharing • Structures • Salaried Staff • Multidisciplinary Groups • Bricks and Mortar • Virtual • CMHCs • Small Groups • Solo Practice