HEALTHCARE REFORM CARE DELIVERY AND REIMBURSEMENT MODELS. April 10, 2014

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1 HEALTHCARE REFORM CARE DELIVERY AND REIMBURSEMENT MODELS April 10,

2 MARKETPLACE UPDATE 2

3 MARKETPLACE - ESSENTIAL HEALTH BENEFITS 3

4 MARKETPLACE - METAL LEVELS 4

5 WHAT IS THE HEALTH INSURANCE MARKETPLACE (CONTINUED)? Effective January 1, 2014, State and Federal Marketplaces were established. 18 States Declared State-based 7 Federal-State partnership 26 State Default to the Federal Goal: Provide health benefit options to the uninsured; Increase consumer choice; Provide Benefit Standardization Premiums will be community-rated and risk-adjusted on only 4 factors (single/family, geography, age, tobacco use) Individual subsidies will be offered 5

6 MARKETPLACE STATS (ILLINOIS) Enrollment Stats by Age: 75% Ages 35 to 64 25%: Ages 18 to 34 77% qualify for Federal Subsidy 138% to 400% of Poverty Level Health Plan Selection: Platinum & Gold 22% Silver 54% Bronze: 24% Tax Penalty: $95 or 1% of Income Source: 6

7 ILLINOIS MEDICAID REFORM 7

8 ILLINOIS MEDICAID GENERAL FACTS Current Medicaid Enrollment: 2.7 Million Current Medicaid Deficit: $2.7 Billion State law requires 50% of Illinois Medicaid recipients move to Managed Care by 2015 Modified eligibility requirement to 138% of Federal Poverty Level Estimated Increase in Medicaid population by 2015: 500,000 Source: https://www2.illinois.gov/hfs/agency/documents/medicaid101.pdf 8

9 WHAT IS THE FEDERAL POVERTY LEVEL? Source: 9

10 SENIORS & ADULTS WITH DISABILITIES INNOVATIONS ENROLLMENT & COST 10

11 IL MEDICAID CARE COORDINATION PROGRAMS Integrated Care Program Effective October 1, 2012 Applies to older adults, and adults w/ disabilities Eligible for Medicaid, but not eligible for Medicare. 108,000 eligible members in Chicago region Medicare-Medicaid Alignment Initiative (MMAI) Effective March 1, 2014 Applies to Seniors & Persons with Disabilities eligible for Medicare and Medicaid 118,000 eligible members in Chicago region Children, Families and NEWLY ELIGBLE Adults Effective July 1, 2014 Eligibility: Below 138% of the National Poverty Level (NPL) 11

12 REIMBURSEMENT REFORM 12

13 CONTINUUM OF PAYMENT MODELS 13

14 REIMBURSEMENT MODELS Fee-For Service Episodic Reactionary Medicine Lacks Care Coordination, Case Management Reimbursement Method: Per Service Focus: Quantity of Care Increased Utilization: Length of Stay Admissions Clinic Visits Specialty services 14

15 REIMBURSEMENT MODELS 3 Pay For Performance (P4P) Value-Based Purchasing Rewards providers Performance Measures based on Quality and Efficiency Disincentives, eliminating payments for negative outcomes Never Events Readmissions Modest improvements in outcomes Little cost savings due to added administrative requirements Validity of quality measurements 15

16 REIMBURSEMENT MODELS 2 Capitation Preventative Proactive Medicine Population Based Medicine Evidence Based Medicine Focus: Quality of Care Requires Care Coordination: Community Outreach Case Management Utilization Management Care Setting: Community based (Schools, Churches, Work, Home (Telemedicine) Reimbursement Methodology: Per Member Per Month 16

17 CARE MODEL GOALS 17

18 REFORM BASED CARE MODELS GOAL Maximized health outcomes Avoid unnecessary duplication of services & prevent error Delivering high-quality care Spending health care dollars more wisely Providers share in the Savings Accountable Care Organizations (ACO) Groups of doctors, hospitals, and other health care providers Care Coordination Reimbursement :Fixed Per Member Per Month (PMPM) Patient Centered Medical Homes (PCMH) Team based health care delivery (Primary Care, Specialists, Hospital, Ancillary) Care Coordination Emphasis on Primary Care Population Based Health Care Reimbursement :Fixed Per Member Per Month (PMPM) 18

19 REFORM BASED CARE MODELS - ILLINOIS Coordinated Care Entities (CCE) Collaboration of providers and community agencies Governed by a lead entity Provide Care Coordination Managed Care Coordinated Entities (MCCN) Owned, operated, or governed by providers Provides or arranges primary, secondary and tertiary services Provide Care Coordination Accountable Care Entities (ACE) Formed to coordinate network of Medicaid services Large enough to handle 40,000 members in Cook County Provides PCP, Specialty, Hospital and Mental Health services Provide Care Coordination, Utilization Management, Case Management 19

20 REFORM BASED CARE MODELS 2 Health Maintenance Organizations (HMO) Members must select a Primary Care Physician (PCP) PCP acts as Gatekeeper PCP collaborates with specialists to provide medical services - referrals Requires Care Coordination, utilization management, case management Per Member Per Month (PMPM) Capitation 20

21 EXAMPLE OF AN ACCOUNTABLE CARE ORGANIZATION 21

22 MODEL OF AN ACCOUNTABLE CARE ENTITY 22

23 HEALTHCARE FINANCE

24 Income Statement Full Risk Model *PMPM Values are arbitrary and meant for illustration purposes only

25 SUMMARY 25

26 WHAT DOES THE FUTURE HOLD Newly Insured - Marketplace and Medicaid Reform Population / Evidence Based Medicine Investment in Organizational Infrastructure Increased Care Coordination Tighter Control on Utilization Management Payer: Narrower Provider Networks Provider: Market Consolidation 26

27 INFORMATION SOURCES Get Covered Illinois Federal website Illinois Department of Healthcare and Family Services ation.html U.S. Department of Health and Human Services Blue Cross Blue Shield of Illinois. 27

28 QUESTIONS? 28

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