Arkansas Payment Improvement Initiative (APII) William Golden MD MACP

1. Arkansas Payment Improvement Initiative (APII) • William Golden MD MACP • Medical Director, Arkansas Medicaid • UAMS Professor of Medicine and Public Health • William.Golden@arkansas.gov • 0

3. Our vision to improve care for Arkansas is a comprehensive, patient-centered delivery system… • Focus today • Objectives • Improve the health of the population • Enhance the patient experience of care • Enable patients to take an active role in their care • Encourage patient engagement/accountability • For patients • Reward providers for high quality, efficient care • Reduce or control the cost of care • For providers • How care is delivered • Population-based care • Medical homes • Health homes • Episode-based care • Acute, procedures or defined conditions • Four aspects of broader program • Results-based payment and reporting • Health care workforce development • Health information technology (HIT) adoption • Expanded access for health care services

4. 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

5. Payers recognize the value of working together to improve our system, with close involvement from other stakeholders… • Coordinated multi-payer leadership… • Creates consistent incentives and standardized reporting rules and tools • Enables change in practice patterns as program applies to many patients • Generates enough scale to justify investments in new infrastructure and operational models • Helps motivate patients to play a larger role in their health and health care • 1 Center for Medicare and Medicaid Services

6. STRATEGY The populations that we serve require care falling into three domains • Patient populationswithin scope (examples) • Care/payment models • Prevention,screening,chronic care • Healthy, at-risk • Chronic, e.g., • CHF • COPD • Diabetes • Population-based: medical homes responsible for care coordination, rewarded for quality, utilization, and savings against total cost of care • Acute medical, e.g., • AMI • CHF • Pneumonia • Acute procedural, e.g., • CABG • Hip replacement • Episode-based: retrospective risk sharing with one or more providers, rewarded for quality and savings relative to benchmark cost per episode • Acute andpost-acutecare • Supportivecare • Developmental disabilities • Long-term care • Severe and persistent mental illness • Combination of population- and episode-based models:health homes responsible for care coordination; episode-based payment for supportive care services

7. How episodes work for patients and providers (1/2) • Patients and providers deliver care as today (performance period) • 1 • 2 • 3 • Patients seek care and select providers as they do today • Providers submit claims as they do today • Payers reimburse for all services as they do today

8. How episodes work for patients and providers (2/2) • Payers calculate average cost per episode for each PAP1 • Compare average costs topredetermined ‘’commendable’ and ‘acceptable’ levels2 • Based on results, providers will: • Share savings: if average costs below commendable levels and quality targets are met • Paypart of excesscost: if average costs are above acceptable level • See no change in pay: if average costs are between commendable and acceptable levels • 6 • 4 • 5 • Calculate incentive payments based • on outcomes • after close of • 12 month performance • period • Review claims from the performance period to identify a ‘Principal Accountable Provider’ (PAP) for each episode • 1 Outliers removed and adjusted for risk and hospital per diems • 2 Appropriate cost and quality metrics based on latest and best clinical evidence, nationally recognized clinical guidelines and local considerations

9. Shared savings • No change PAPs that meet quality standards and have average costs below the commendable threshold will share in savings up to a limit • Pay portion of excess costs • - • Shared costs • High • No change in payment to providers • Acceptable • Receive additional payment as share as savings • + • Commendable • Gain sharing limit • Low • Individual providers, in order from highest to lowest average cost

10. Ensuring high quality care for every Arkansan is at the heart of this initiative, and is a requirement to receive performance incentives • Two types of quality metrics for providers • Description • 1 • Quality metric(s) “to pass” are linked to payment • Core measures indicating basic standard of care was met • Quality requirements set for these metrics, a provider must meet required level to be eligible for incentive payments • In select instances, quality metrics must be entered in portal (heart failure, ADHD) • 2 • Quality metric(s) “to track” are not linked to payment • Key to understand overall quality of care and quality improvement opportunities • Shared with providers but not linked to payment

11. EPISODE-BASED COMPONENT • Hip/knee replacements • Perinatal (non NICU) • Ambulatory URI • Acute/post-acute CHF • ADHD • Developmental disabilities Potential principal accountable providers across episodes • WORKING DRAFT • Principal accountable provider(s) • Orthopedic surgeon • Hospital • Primary physician (e.g., OB/GYN, family practice physician) • (Hospital?) • Approaches under consideration for instances where multiple providers involved, e.g., • Prenatal care and delivery carried out by different providers • Patient sees multiple providers for URI • Provider for the in-person URI consultation(s) • Hospital • (Outpatient provider will be incented by medical home model to prevent readmissions) • Could be the PCP, mental health professional, and/or the RSPMI provider organization, depending on the pathway of care • Primary DD provider • 1 Multiple approaches under consideration for instances when prenatal care and delivery carried out by different providers

12. Quality measures “to pass” • Quality measures “to track” PREVIEW: Wave 2a quality metrics (1/2) • Cecal intubation rate reported by provider on an aggregated quarterly basis – must meet minimum threshold of 75%.1 • In at least 80% of valid episodes, the withdrawal time must be greater than 6 minutes. 1 • Perforation rate • Post polypectomy/biopsy bleed rate • Colonoscopy • Percent of episode with administration of intra-operative steroids – must meet minimum threshold of 85% 1 • Post-operative primary bleed rate (i.e., post-procedure admissions or unplanned return to OR due to bleeding within 24 hours of surgery) • Post-operative secondary bleed rate • Rate of antibiotic prescription post-surgery • Tonsillectomy • Cholecystectomy • Percent of episodes with CT scan prior to cholecystectomy – must be below threshold of 44% • Rate of major complications that occur in episode, either during procedure or in post-procedure window: common bile duct injury, abdominal blood vessel injure, bowel injury • Number of laparoscopic cholecystectomies converted to open surgeries • Number of cholecystectomies initiated via open surgery • 1 Quality metric determined based on data entered into portal

13. Wave 2B medical episodes overview • Brief description • Unique feature(s) PCI • Triggered by an angioplasty or stent, procedural episode goes from initial diagnostic angiogram through 30 days post procedure • Metric tracking the appropriateness of each PCI • Variable pre-procedure window • Triggered by a CABG procedure, this procedural episode tracks costs from the date of procedure through 30 days after • Aligned with Society of Thoracic Surgery (STS) quality metric database CABG • Triggered by ER/ Inpatient stay for COPD, tracks length of stay and care delivered for 30 days following discharge • Aligns with CHF episode • Builds foundation/ template for similar medical episodes COPD exacerbations Asthma exacerbations • Triggered by ER/ Inpatient stay for asthma, tracks length of stay and care delivered for 30 days following discharge • Large population covered, primarily focused on young • Has process in place to confirm potential false positive triggers • SOURCE: Arkansas Department of Human Services (DHS), Division of Medical Services, Medicaid claims CY2011 (includes pharmacy)

17. e Draft thresholds for General URIs • Provider average costs for General URI episodes • Adjusted average episode cost per principal accountable provider1 • Average cost / episodeDollars ($) • Antibiotics prescription rateabove episode average2 • Antibiotics prescription ratebelow episode average2 • Year 1 acceptable • 67 • Year 1 commendable • 46 • Gain sharing limit • 15 • Principal Accountable Providers • 1 Each vertical bar represents the average cost and prescription rate for a group of 10 providers, sorted from highest to lowest average cost • 2 Episode average antibiotic rate = 41.9% • SOURCE: Arkansas Medicaid claims paid, SFY10

18. Provider Portal

21. POPULATION-BASED COMPONENT Population-based models provide the “umbrella” for ensuring that the full range of needs are met for a population • Elements of preliminary design • Attribution of members to accountable primary care provider, to avoid restrictions on member access • Care coordination for high-risk patients with one or more chronic conditions • Rewards for costs and quality of care for direct, indirect decisions (e.g., referrals) • Medical homesfor most populations • Each payor independently defines incentives, to include a combination of: • Care coordination fees • Shared savings against total cost of care targets • For smaller providers, bonus payments based on quality and utilization • Similar approach as above; however, • Responsibility for health promotion and care coordination vested with providers of supportive care, recognizing their greater influence in daily routines • Health homes for those receiving supportive care

22. Clinical leadership Physician “champions” role model change Practice leaders (clinical and office) support and enable improvement • Arkansas PCMH strategy 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

23. 2/3 Providers can then receive support to invest in improvements, as well as incentives to improve quality and cost of care 2 3 • Practice support • Shared savings • Invest in primary care to improve quality and cost of care for all beneficiaries through: • Care coordination • Practice transformation • Reward high quality care and cost efficiency by: • Focusing on improving quality of care • Incentivizing practices to effectively manage growth in costs DHS/DMS will also provide performance reports and patient panel information to enable improvement • 22

24. Activities tracked for practice support payments provide a framework for transformation • Completion of activity and timing of reporting Evolve your proce-sses Month 12 Continue to innovate Commit to PCMH Month 0-3 Start your journey Month 6 Month 16-18 Activity Month 24 • 1 • Identify office lead(s) for both care coordination and practice transformation1 • 2 • Assess operations of practice and opportunities to improve (internal to PCMH) • 3 • Develop strategy to implement care coordination and practice transformation improvements • 4 • Identify top 10% of high-priority patients (including BH clients)2 • 5 • Identify and address medical neighborhood barriers to coordinated care (including BH professionals and facilities) • 6 • Provide 24/7 access to care • 7 • Document approach to expanding access to same-day appointments • 8 • Complete a short survey related to patients’ ability to receive timely care, appointments, and information from specialists (including BH specialists) • 9 • Document approach to contacting patients who have not received preventive care • 10 • Document investment in healthcare technology or tools that support practice transformation • 11 • Join SHARE to get inpatient discharge information from hospitals • 12 • Incorporate e-prescribing into practice workflows3 • 13 • Integrate EHR into practice workflows • 1 - At enrollment; 2 - Three months after the start of each performance period; 3 - At 18 months

25. Metrics tracked for practice support payments guide practices through improvements and measure performance • PRELIMINARY • Target • 36 months • and beyond • 24 months • Metric • 12 months • Percentage of high-priority patients that have a care plan in medical record (incorporating information from specialists, including behavioral health) • 70% • 90% • Increasing • Metrics to be evaluated as a portfolio • Practices will need to meet targets for the majority of metrics tracked for practice support • Percentage of high priority patients that have been seen by PCP at least twice in the past 12 months • 67% • 75% • Increasing • Percentage of patients who had an acute inpatient hospital stay who were seen by physician within 10 days of discharge • 33% • Increasing • Increasing • Percentage of emergency visits that are non-emergent (NYU algorithm) • <50% • Decreasing • Decreasing

26. Shared savings will reward eligible entities for performance on quality and cost of care 3 • Providers receive greater of two shared savings methods if they have met performance on quality • Practices must meet performance benchmarks on quality • Incentive payments are based on the greater of two payment calculation methods • Model is upside-only, providers do not risk-share • < A • Provide efficient care • Practice costs in performance period • State-wide cost thresholds • OR • < B • Manage growth of costs • Practice-specific benchmark cost • Practice costs in performance period What shared savings could mean for your practice • Attributed beneficiaries: 6,000 Risk-adjusted per beneficiary benchmark cost: $2,000 • Practice risk score: 1.0 2014 medium cost threshold: $2,032 • Per beneficiary payment • Annual incentive payment • Risk-adjusted cost of care • $1,900 • $ 66 • $ 396,000 • $1,800 • $ 116 • $ 696,000

27. Quality metrics tracked for shared savings incentive payments promote provision of appropriate care PRELIMINARY • Metric • Target (%) • Percentage of pediatric patients who receive age-appropriate wellness visits • 0-12 months • 3, 4, 5, 6, years • 12-20 years • 67 • 67 • 40 • Additional context • Assess quality metrics annually • Each metric is evaluated only if n is greater than or equal to 25 • To be eligible for shared savings, shared savings entities must meet greater than or equal to 2/3 of quality metric targets • Quality metrics are likely to evolve over time • Percentage of diabetes patients who receive annual HbA1C testing • 75 • Percentage of patients prescribed appropriate asthma medications • 70 • Percentage of CHF patients on beta blockers • 40 • Percentage of women > 50 years who have had breast cancer screening in past 24 months • 50 • Percentage of patients on thyroid drugs with a TSH test in past 18 months • 80 • Percentage of patients prescribed ADHD medications by PCP who receive appropriate follow-up care • 25

28. More information on the Payment Improvement Initiative can be found atwww.paymentinitiative.org • Further detail on the initiative, PAP and portal • Printable flyers for bulletin boards, staff offices, etc. • Specific details on all episodes • Contact information for each payer’s support staff • All previous workgroup materials

31. Draft ADHD thresholds • ADHD provider cost distribution • Average episode cost per provider1 • Average cost / episodeDollars ($) • RSPMI • Physician or psychologist • Level II acceptable • $7,112 • Level II commendable • $5,403 • Level II gain sharing limit; Level I acceptable • $2,223 • Level I commendable • $1,547 • Level I gain sharing limit • $700 • Principal Accountable Providers • 1 Each vertical bar represents the average cost and prescription rate for a group of 3 providers, sorted from highest to lowest average cost • SOURCE: Episodes ending in SFY10, data includes Arkansas Medicaid claims paid SFY09 - SFY10