Payment Improvement Initiative Webinar

1. Payment Improvement Initiative Webinar Patient-centered medical home March 11,2013

2. Objectives • Welcome, overview of initiative timeline and SIM update – Dr. Joe Thompson • Introduction to patient centered medical homes (PCMH) • Q&A

3. Overview of initiative aspirations • 2013 • 2014 • 2015 • Q2 • Q3 • Q4 • Q1 • Q2 • Q3 • Q4 • Q1 • Launch 75 – 100 episodes through mid 2016 • RetrospectiveEpisodes (e.g. URI,Perinatal, ADHD) • Enroll most Arkansas practices starting in mid 2014 • Patient CenteredMedical Homes • Behavioral Health and DD Health Homes starting in 2014 • Health Homes (BehavioralHealth and DevelopmentalDisability) • ProspectiveEpisodes (Long TermServices and Support,Developmental Disability) • Reach all Adults in this population by end of 2014; Children to follow in 6-12 months

4. Arkansas is one of six states CMS awarded model-testing grant • SIM Awardees to implement healthcare innovation plans • The CMS State Innovation Models (SIM) Initiative is providing funding to the State of Arkansas • $42 million to implement and test the initiatives over the next 42 months • Funding covers episode-based care delivery, patient-centered medical homes, and health homes • The State sees this grant as an indication of CMS’ engagement with the initiative and belief that it could be a model more broadly applied in the country

5. Objectives • Welcome, overview of initiative timeline and SIMupdate • Introduction to patient centered medical homes (PCMH) • Payment Initiative context and role for PCMH – Dr. Andy Alison • Overview of PCMH approach • Path forward • Q&A

6. There are major health care challenges in Arkansas • Health status in Arkansas is poor, with the state ranked at or near the bottom of all states on national health indicators, such as heart disease and diabetes. • The health care system is hard to navigate, and it does not encourage doctors and other providers to work as a team when caring for patients. • Health care spending is growing unsustainably: • Insurance premiums doubled for Arkansas employers and families in past 10 years (adding to uninsured population) • Budget shortfalls projected for Medicaid.

7. Transition to system that financially rewards value and patient outcomes and encourages coordinated care Medicaid and private insurers believe paying for patient results, rather than just individual patient services, is the best option to control costs and improve quality •  • Reduce payment levels for all providers regardlessof their quality of care or efficiency in managing costs • Pass growing costs on to consumers through higher premiums, deductibles and co-pays (private payers), or higher taxes (Medicaid) • Intensify payer intervention in clinical decisions to manage use of expensive services (e.g. through prior authorizations) based on prescriptive clinical guidelines • Eliminate coverage of expensive services, or eligibility

8. Patient-centered medical homes are a core component of this shift to paying for results and part of a broader statewide effort • Improving the health of the population • Enhancing the patient experience of care • Reducing or control the cost of care • Enable and reward providers for • How care is delivered • Medical homes + Health homes • Episode-based care delivery • Five aspects of broader program • Results-based payment and reporting • Health care workforce development • Health information technology adoption • Consumer engagement and personal responsibility • Expanded coverage for health care services

9. Principles of patient-centered medical home design for Arkansas Patient-centered Focus on improving quality, patient experience and cost efficiency Balanced Empowering Provide autonomy as well as guidance Provide support to enable clinical leadership Practical Minimize requirements and administrative burden

10. What is PCMH? • Journey to PCMH • Aspirations • Providers are responsible for managing health across their patient panel • Coordinated and integrated care across multidisciplinary provider teams • Focus on prevention and management of chronic disease • Expanded access • Referrals to high-value providers (e.g., specialists) • Improved wellness and preventative care • Use of evidence-informed care A team-based care delivery model led by a primary care provider that comprehensively manages a patient’s health needs

11. Why primary care and PCMH? • Most medical costs occur outside of the office of a primary care physician (PCP) , but PCPs can guide many decisions that impact those broader costs, improving cost efficiency and care quality • Ancillaries (e.g., outpatient imaging, labs) • Specialists • Patients & families • PCP • Hospitals, ERs • Community supports

12. Several developments in primary care payment aim to more appropriately compensate PCPs for playing this essential role • Medicaid rate bump – increase in primary care rates paid by Medicaid starting in April Outside of PCMH • Coverage expansion – decrease in uncompensated care with increase in coverage on exchanges • Gain-sharing – significant upside only opportunity to share in savings from effectively patient panels’ total cost of care Part of PCMH • Support payments for PCMH– per member per month (PMPM) payments to support investment in care coordination and practice transformation activities

13. Goals of episode-based and PCMH components of the Payment Initiative are aligned  Reward high-quality care and outcomes Encourage clinical effectiveness Promote early intervention and coordination to reduce complications and associated costs Encourage referral to higher-value downstream providers   

14. Objectives • Welcome, overview of initiative timeline and SIMupdate • Introduction to patient centered medical homes (PCMH) • Payment Initiative context and role for PCMH • Overview of PCMH approach – Dr. Bill Golden • Path forward • Q&A

15. Clinical leadership Physician “champions” role model change Practice leaders (clinical and office) support and enable improvement Arkansas PCMHstrategy centers on three core elements: • Incentives • Gain-sharing • Payments tied to meeting quality metrics • No downside risk Support for providers • Monthly payments to support care coordination and practice transformation • Pre-qualified vendors that providers can contract with for • Care coordination support • Practice transformation support • Performance reports and information

16. INCENTIVES PCMH model has two ways for PCPs to receive upside only gain-sharing 1 • Receive gain-sharing based on your own performance improvement For both options: • Quality metrics must be met for gain-sharing • Costs to calculate gain-sharing are risk-adjusted and exclude high-cost outliers • Your year 1 performance • Your year 2 performance • or… 2 • Receive gain-sharing based on being a high performer in the state • State-wide performance • Your performance Similar to episodes approach, but no down-side risk in PCMH

17. INCENTIVES PMCH model provides options to pool patients across practices to enable gain-sharing • To safeguard provider performance measurement from random variation, need to measure costs across a group of at least 5000 • Pooling enables smaller practices to reach this panel size and participate in gain-sharing • Costs are calculated and gain-sharing allocated based on all patients in a pool • PCPs can choose from 3 pooling options • Considerations 1 Everyone starts in a “default pool” • Simplest option to sign up and start participating in PCMH, especially for smaller practices Opt out of default if practice or health system has more than 5000 patients for a payer on its own Opt out of default to form a voluntary pool by virtually affiliating with a few other practices • Smaller groups may provide • Greater opportunity for impact • Scale for practice transformation • Support network 2 3

18. SUPPORT FOR PCMH ACTIVITIES Practices will have the option to contract with pre-qualified vendors to support for care coordination and practice transformation activities • Support to ensure that all patients – especially high-risk patients – receive holistic, wrap-around, coordinated care across providers and settings • Care coordination • (on-going activities) • State has released two requests for qualifications (RFQs) for vendors to support your practices • Support to train practices on approaches, tools, and infrastructure needed to achieve a population health approach and improve performance • Practice transformation (up-front activities) • Use of pre-qualified vendors is optional • Vendor model developed based on provider input that: • An easy process to identify vendors is important • Support is needed • Providers need flexibility to tailor support to their own practices

19. SUPPORT FOR PCMH ACTIVITIES Practices will receive monthly payments to support these activities • Care coordination and general practice investment • Practice transformation • Payment amount • Average of $4 per member per month (PMPM) • Actual amount paid to be adjusted based on risk and complexity of patient panel • $1 per member per month (PMPM) • Flat amount per patient – not risk adjusted A PCP with 2000 attributed patients could receive up to $120,000 a year in support • Purpose and uses • Fund on-going care coordination activities • Fund PCP and staff time invested in new care model • PCPs choose how to use funds (e.g., pre-qualified vendor, other external support, internal practice investment) • Fund costs to transition practice model to PCMH • PCPs only receive $1 PMPM payment if they contract with a pre-qualified vendor

20. Success for PCMH requires physician leaders CLINICAL LEADERSHIP Clinical leadership is essential to success • Feedback from providers • Critical for physicians to set the vision for how their practices will change • PCMH is a team effort – PCPs, clinical staff, office staff must all be engaged • In their practices to change mindsets, role model change and empower office leaders • In their communities to be proponents and early adopters of the model • Provider input & guidance through the PCMH Provider Advisory Group has been a critical part of PCMH development to date

21. Objectives • Welcome, overview of initiative timeline and SIMupdate • Introduction to patient centered medical homes (PCMH) • Payment Initiative context and role for PCMH • Overview of PCMH approach • Path forward – Sheena Olsen • Q&A

22. Anticipated PCMH rollout ILLUSTRATIVE • Potential PCMH coverage over next several years • Wave 3 • Wave 2 • All Arkansas practices • Wave 1 • Early adopters (up to 30%) • CPCI (69 practices) Start of wave • October 2012 • Mid 2013 • Wave 2a - pediatrics • Wave 2b –adults • Mid 2014

23. How we hope to continue this engagement • AAP, AAFP, AHA, AMS • Updates and engagement in design process • Collaborate to engage membership as PCMH model is implemented • Medical societies • Clinical leaders • Regular meetings with provider advisory group to input on design • Planning sub-groups of pediatricians / family practitioners to input on specific clinical elements (e.g. ,quality metrics) • Today’s intro webinar • Regional town halls and Little Rock forum to raise broader awareness starting in late April in advance of initial (pediatric) enrollment period • Email, social media, other media updates • Broader public awareness

24. Objectives • Welcome, overview of initiative timeline and SIMupdate • Introduction to patient centered medical homes (PCMH) • Q&A

25. Questions

26. For more information talk with provider support representatives… Online • More information on the Payment Improvement Initiative can be found atwww.paymentinitiative.org • Further detailed information • Printable flyers for bulletin boards, staff offices, etc. • Specific details on PCMH • Contact information for each payer’s support staff • All previous workgroup materials Phone/ email • Medicaid: 1-866-322-4696 (in-state) or 1-501-301-8311 (local and out-of state) orARKPII@hp.com • Blue Cross Blue Shield: Providers 1-800-827- 4814, direct to EBI 1-888-800-3283, APIICustomerSupport@arkbluecross.com • QualChoice: 1-501-228-7111, providerrelations@qualchoice.com