Accountable Care and Value Based Payments 101: Government Programs Update

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1 1 Accountable Care and Value Based Payments 101: Government Programs Update June 24 th, 2014 Dave Neiman, FSA, MAAA Senior Consulting Actuary (720)

2 2 Caveats Opinions expressed are those of the speaker and do not represent those of the Society of Actuaries, nor of the American Academy of Actuaries, nor of the Actuarial Standards Board, nor of Wakely Consulting Group

3 3 Momentum Creates Legislation Center for Medicare and Medicaid Innovation Preliminary MSSP/Pioneer ACO Results Bundled Payments for Care Iniative Medicaid State Initiatives Patient Centered Medical Home Models Provider Based ACO Models Bundled Payments Initiatives Medicare Advantage & Managed Medicaid Plans Key Actuarial Considerations Appendices References

4 Center for Medicare and Medicaid Innovation 1 Accountable Care Medicare Shared Savings Program Pioneer ACO Model Advance Payment ACO Model PGP Transition Demonstration Comprehensive ESRD Care Initiative Bundled Payments for Care Improvement Model 1: Retrospective Acute Care Model 2: Retrospective Acute Care Episode & Post Acute Model 3: Retrospective Post Acute Care Model 4: Prospective Acute Care Medicare Medicaid Enrollees Financial Alignment Initiative Reduce Avoidable Hospitalizations of Nursing Facility Residents Health Care Innovation Awards State Innovation Models Initiative 4

5 Center for Medicare and Medicaid Innovation 1 Primary Care Transformation Comprehensive Primary Care Initiative Multi-Payer Advanced Primary Care Practice Demonstration Federally Qualified Health Center Advanced Primary Care Practice Demo Independence at Home Demonstration Graduate Nurse Education Demonstration Capacity to Speed Innovation Partnership for Patients Community-Based Care Transitions Million Hearts Innovation Advisors Program Imaging Demonstration Initiatives Focused on the Medicaid Population Medicaid Emergency Psychiatric Demonstration Medicaid Incentives for Prevention of Chronic Diseases Strong Start Initiative 5

6 The Landscape: Medicare Shared Savings Program and Pioneer ACOs by Location 6

7 7 Interim 2012 Results are In! Medicare Shared Savings Program / Pioneer ACOs 2012 Financial Results* MSSP ACOs 2 Pioneer ACOs 3 Spending Lower Than Target 54 ACOs 8 ACOs Spending Not Significantly Different 23 ACOs 60 ACOs Spending Higher than Target 1 ACO Total 114 ACOs 32 ACOs Estimated Savings $128 million $148 million Shared Savings Trigger 29 ACOs Quality Standards 109 Satisfactory 32 ACOs *Overall 5 year savings of $108 million for PGP demonstration with 7 of 10 physician group practices earning shared savings

8 8 The Landscape: Bundled Payments for Care Improvement by Location

9 9 Additional Details Bundled Payments for Care Improvement 5,6 Episode Services included in the bundle Model 1 Model 2 Model 3 Model 4 All acute patients, all DRGs All Part A services paid as part of the MS- DRG payment Selected DRGs, hospital plus post-acute period All non-hospice Part A and B services during the initial inpatient stay, post-acute period and readmissions Selected DRGs, post-acute period only All non-hospice Part A and B services during the post-acute period and readmissions Selected DRGs, hospital plus readmissions All non-hospice Part A and B services (including the hospital and physician) during initial inpatient stay and readmissions Payment Retrospective Retrospective Retrospective Prospective Participants

10 10 Medicaid State Level Activity Many States are pursuing payment reform options Examples included on the next two slides (many more exist) Some State options can be generalized into: PCMH Centric Model Provider Based ACO Model Bundled Payments Details included in Appendix

11 11 Medicaid State Level Activity Minnesota 7 Health Care Home 8 ACO 7,9 Oregon Medicaid Coordinated Care Organizations 7,10 Vermont ACOs 11 BluePrint for Health 12 Arkansas Payment Improvement Initiative 7,13 Episode-Based Payments Patient Centered Medical Homes & Health Homes Tennessee: Episode-Based Payments 14

12 12 Medicaid State Level Activity Colorado Accountable Care Collaborative PCMHs: Regional Care Collaborative Organizations 15 Payment Reform Pilot 16 Pennsylvania 7 Pay for Performance Efficiency Adjustment North Carolina PCMHs: Community Care of North Carolina 17 Three-Pronged Proposed Reform Legislation 18 Massachusetts Mandatory Enrollment in APMs 20 New Jersey ACOs 21

13 13 Medicaid PCMH Models Regional Accountability for Health Outcomes Colorado Accountable Care Collaborative Regional Care Collaborative Organizations (RCCO) Primary Care Medical Providers Statewide Data and Analytics Contractor Community Care of North Carolina Regional Community Care Networks Primary Care Physicians Oregon Coordinated Care Organizations Other Medical Home Models Vermont BluePrint for Health Minnesota Health Care Homes Arkansas PCMH and Health Homes

14 14 Colorado Accountable Care Collaborative Program Components Regional Care Collaborative Organizations (RCCO) Achieve Financial and Health Outcomes / Accountability & Reporting Network Development / Provider Support Medical Management and Care Coordination Primary Care Medical Providers (PCMP) Coordinated Medical Home Member/family centered, Whole person orientated Statewide Data and Analytics Contractor (SDAC) RCCO & PCMP Payments FFS Reimbursement for Medical Services PMPM Payment to RCCOs and PCMPs for Medical Home/Care Coordination Incentive Payments Full Risk Global Payment Pilot

15 15 Medicaid Provider Based ACO Models Minnesota Integrated Health Partnerships Modeled after MSSP Beneficiaries can be attributed to an IHP and enrolled in an MCO (health plan agnostic) Total Cost of Care Shared Savings Model with Quality Measurement Proposed North Carolina ACO Legislation Establish shared savings risk model with providers Mandates number and distribution of PCPs CNCC can contract out PCPs or become an ACO no requirement for ACOs to contract with current CNCC networks. Vermont Modeled after MSSP Two Tracks Phased-In Approach

16 16 Medicaid Bundled Payment Models Arkansas and Tennessee are Adopting Similar Models Arkansas Episode-Based Model 75 to 100 episodes implemented by 2017 Start with perinatal care, attention deficit hyperactivity disorder, upper respiratory infection, hip/knee replacements and congestive heart failure Attribute Provider to Episode of Care Shared Savings Model around Average Costs Retroactive Risk-Adjusted Outliers Removed

17 Principal Accountable Provider (PAP) 17

18 Arkansas Episode Based Payment 18

19 19 Medicare Advantage & Medicaid Managed Care Plans Success starts with the Providers Lowered Revenue from CMS & States Are risk adjustment coding opportunities tapped out? Which risk adjustment model should be the focus of our initiatives? Reduced claim costs may be final lever to pull (or negative margin) Example Health Plan Strategies Care Coordination Waste Reduction Align Incentives With Rewards Strategic Alliances Shared Savings Models Partial or Full Capitation High Performance Networks

20 20 Key Actuarial Considerations 22 Defining Patient Populations Performance Measurement ACO Payment Arrangements Performance Benchmarks Risk Adjustment Reinsurance Solvency Considerations Data Availability and Management Impact of Mixed Systems of Reimbursement Challenges to Entry

21 Appendix 21

22 22 Oregon Medicaid CCO Design Community-based organizations to integrate health services Must operate within specified budget Accountable for health outcomes Early 2013 Results Decreased ED Visits by 13% relative to 2011 Decreased Hospitalization for Chronic Conditions Increased Primary Care by 18% relative to 2011 Decreased all-cause readmissions by 8% relative to 2011 Unique Characteristics Committed to limited level of growth in claim costs Flexibility with provider payment methods Replaced MCOs contracting process separate for physical and mental health services

23 23 Minnesota Medicaid ACO Design Modeled after MSSP Shared Savings Model - Bonus/Payment Based on TCOC Quality Tied to Statewide Quality Reporting and Measurement System Attribution Model Pool Identification: HCH or E&M Code (95% to 97%) Enrollment Exclusions: Duals, Partial Benefit Programs, Continuity Attribution ACO Level (Members Attributed) HCH Visits (0% to 1%) PCP E&M Visits (30% to 40%) Specialist Visits (0% to 2%) Ties Most Recent Visit (2% to 5%)

24 24 Minnesota Medicaid ACO Total Cost of Care Claim Exclusions (35% to 45%) Long-term care and waiver services excluded Majority of Dental, DME &, transportation Intensive chemical dependency & mental health Risk Adjustment Johns Hopkins ACGs Separate for MCOs and FFS Trend Include benefit changes and other policy changes Rely on trends set by State Actuaries Timing Population assigned at beginning of measurement year Targets set in beginning of measurement year

25 25 Minnesota Medicaid ACO Health Plan Agnostic State DHS Provider Group MCOs Provider (ACO) Capitation Payments to MCO FFS Payments to Provider State DHS Capitation Payments to MCO Shared Risk with Provider FFS Payments to Provider State Contract with ACO Shared Savings Dollars

26 26 North Carolina Community Care of North Carolina Public/Private Partnership PMPM payments to Regional Community Care Networks and Primary Care Physicians Estimate financial savings between $500 million to $1.5 billion between 2007 through 2009 Proposed Reform Legislation Provider based ACOs with possible pilot programs Shared Savings Model tied to Quality Outcomes Leverage PCMH that serve Medicaid beneficiaries today Strengthen contractual performance monitoring for provide services for mental health, substance abuse, and intellectual and developmental disabilities Establish a long-range planning effort for LTSS

27 27 Vermont BluePrint for Health Specialized & Targeted Services Level of Need: Acuity and Complexity Advanced Primary Care Practice Health Maintenance Prevention Access Communication Self-Management Support Guideline Based Care Coordinate Referrals Coordinate Assessments Community Health Teams Support Patients & Families Support Practices Coordinate Care Coordinate Services Referrals & Transitions Case Management Self Management Support Counseling Population Management Specialty Care Advanced Assessments Advanced Care Management Social Services Economic Services Community Programs Self Management Support Public Health Programs Panel Management

28 28 References 1 Medicare and Medicaid Payment Innovation, John D. Shatto, FSA, June 10, hs16_ pdf 8 SION&RevisionSelectionMethod=LatestReleased&dDocName=dhs16_ ionmethod=latestreleased&rendition=primary&allowinterrupt=1&nosaveas=1& ddocname=dhs16_ alth%20aco%20slides%20-%20june%2012% pdf

29 29 References %2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere= &ssbinar y=true 16 %2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere= &ssbina ry=true 17 https://www.communitycarenc.org/ pdf 20 apter%20224%20implications%20for%20masshealth%20summary.pdf

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