Accountable Care Organization

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1 Accountable Care Organization April 13, 2011 The Indianapolis Association of Health Underwriters

2 Drivers of Payment Reform Increased attention to regional variation in costs and quality Payment for care does not correlate with optimal outcomes Regional differences in health care supply, delivery and practice lead to variations in spending that do not correspond to health care quality Increased efforts to align payment incentives with performance rather than volume Current FFS leads to inefficiencies in care Payment reform alternatives that reward lowest-cost/highestoutcome results are needed Accountable Care Organizations, Deloitte

3 Evolution of Reimbursement Strategies 3

4 Payment Innovation Balanced Approach Three Payment Reform Models Fee-For-Service Enhancement Procedure/Condition/ Episode-Based Payment Population- Based Payment Performance Recognition Programs (P4P) Each strategy can include additional rewards and/or penalties related to quality of care goals, efficiency of care goals, other aspects of care or care outcomes Best Reforms to Pursue May Vary Based on Market Conditions Provider organizations Other delivery system infrastructure Active payment initiatives 4

5 Accountable Care Organizations The Accountable Care Organization (ACO) model is a local health organization that is accountable for 100% of the expenditures and care of a defined population of members. The provision of value by ACOs will require their coordination of care across all continuums of care for the defined population. Defining WellPoint Principles: 5 year relationship Transitioning to a global payment over the term of the relationship Development of shared risks over the term of the relationship 5

6 ACO Criteria for Commercial PPO WellPoint will contract with provider organizations which meet the criteria to operate as an Accountable Care Organization. These criteria include the following: A minimum population eligible for membership > 15,000 members Full complement of medical services with the exception of Transplants Must have a formal legal structure to receive and distribute reimbursement for member services An adequate network of ACO professionals to provide total care to the defined population Defined relationships with hospitals and physicians Demonstrated plan for reducing the cost of medical care Deploy an IT platform supporting the capture and electronic exchange of clinical information across the Ambulatory, Inpatient and Ancillary (lab, imaging, erx, etc.) settings for the high volume ACO Professionals Electronic medical record system allowing for improved coordination of care A commitment from the senior leadership regarding the ACO initiative A willingness to enter a 5 year contractual relationship 6

7 Anthem ACO Model for 2011 All ACO partners will have the following features: Membership Defined by Attribution Provider Network Full Network with the exception of Transplants IT IT Infrastructure Data Exchanges Legal Structure to receive / distribute savings Management Structure Financial FFS & Shared Savings Care Management Fee Medical Management Possible Delegated Medical Management Defined Processes to promote quality & coordinate care 7

8 Data Exchanges for ACOs Membership Electronic Membership File Membership additions/deletions Census Hospital Census Emergency Census Claims Two years of historical Monthly claims data file Medical Management Utilization Management Case Management Disease Management Pharmacy Claims data files Analytic reports Reporting Series of analytic reports 8

9 ETG Attribution Overview ETG Product: Symmetry/Ingenix Episode Treatment Group Version Purpose: to attribute members to an Accountable Care Organization Criteria: High probability of identifying members with a pre-existing clinical relationship with providers Flexibility in filtering the percentage of members attached to a group Tax ID 9

10 ETG Attribution Overview (continued) PPO Population for Anthem Two years of PPO claims data Fully insured PPO lines of business Members with both medical and pharmacy claims Excluded members with no claims ETG Exclusions Non-episodic Treatments Ungroupable Services Episodes assigned to Hospitals 10

11 ETG Attribution Overview (continued) Episode Matching Logic Patient A Episode of Care Total Episodes Provider Tax ID Each Episode has a responsible Tax ID Calculate the total number of episodes for each patient Match the total number of episodes for each Tax ID % of patient s episodes attached to each Tax ID 11

12 Potential Payment Models Examples Year 1 Year 2 Year 3 Year 4 Year 5 Option 1 FFS with yearly Reconciliation against a medical budget FFS with yearly Reconciliation against a medical budget Global PMPM with increasing risk sharing arrangement Global PMPM with full risk sharing arrangement Global PMPM with full risk sharing arrangement Option 2 Global PMPM with partial risk sharing arrangement Global PMPM with increasing risk sharing arrangement Global PMPM with increasing risk sharing arrangement Global PMPM with full risk sharing arrangement Global PMPM with full risk sharing arrangement 12

13 Shared Savings Quality Gate Quality Gate Physician Quality Metrics Hospital Quality Metrics Can participate in upside savings Note: Points are scored based on both improvement and an attainment threshold 13

14 Quality Metrics - Physician Breast Cancer Screening Colorectal Cancer Screening Childhood Immunization Status (MMR + VZV) Chlamydia Screening in Women HbA1C Screening LDL Screening Nephropathy Monitoring Cholesterol Management LDL Screening (Pts with/ Cardiovascular Conditions) Use of Imaging Studies for Low Back Pain Appropriate Testing for Children with Pharyngitis Appropriate Treatment for Children with Upper Respiratory Infection Avoidance of Antibiotic Treatment of Adults with Acute Bronchitis Medication Monitoring (ACE/ARBs, digoxin, diuretics) 14

15 Quality Metrics - Hospital JC/CMS NHQM AMI, PN, CHF & SCIP ACC Metrics for Cardiology STS metrics for Cardiac Surgery Deep Sternal Wound Infection Prolonged Ventilation Operative Mortality for CABG Surgical Re-exploration Pre-operative Beta Blockade National Healthcare Surveillance Network Central line associated bloodstream infections Ventilator associated pneumonia Catheter associated urinary tract infections Patient Satisfaction - CAHPS 15

16 Draft Efficiency Score Card Categories Metrics Points Emergency Department Prescription Medications Aggregated total - avoidable visits per 1000 Rx pmpy or Rx/ Generic Prescribing rate 25 Spine MRIs per 1000 Imaging Inpatient Spine CTs per Abdominal CTs per 1000 Admits per 1000 Days per HEDIS - all cause readmission rate 16

17 Current State Initiatives for Jan 2011 implementation California Monarch Healthcare HealthCare Partners Sharp (Sharp Community & Sharp Rees-Stealy) New Hampshire Dartmouth Hitchcock Pending Projects for later in 2011 Expansion to other Anthem states Medicare Advantage Medicaid ASO groups 17

18 ACO Process for New Markets Implementation Team Leverage SME s Time table: 4 months Established multi-functional workgroups IM/IT Actuary/Heathcare Analytics Medical Management Contracting/Network Communications Product Maintenance Team Local PE&C team PRG team IM 18

19 ACO Implementation Discussion Items Membership Lines of Business Member Attribution for PPO members Narrow focus (chronic disease) vs population focus Leakage Medical Management Opportunities Delegated Medical Management Understanding where medical costs can be better managed Site of Service Pharmacy ED Readmissions 19

20 ACO Implementation Discussion Items Operation Issues Communications Member Notification Employer Notification Broker Notification Electronic eligibility Additions/Deletions to membership Reporting and Data Exchange Payment Methodologies Performance Metrics Quality Metrics Efficiency Metrics 20

21 2012 Draft ACO Products California ACO Core Only ACO Providers can be accessed Regional Offering where ACO presence is strong Self Refer Option within ACO network Most Aggressively Priced Option ACO Flex 3 Tier PPO offering Tier 1 ACO Providers Tier 2 PPO Providers Tier 3 Non Contracting Out of Network Providers Flexibility to move between Tiers when accessing care An alternate option to traditional PPO offerings, with the goal to manage cost more effectively 21

22 Questions 22

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