7/31/2014. Medicare Advantage: Time to Re-examine Your Engagement Strategy. Avalere Health. Eric Hammelman, CFA. Overview



Similar documents
Star Quality Ratings: Legal, Operational and Strategic Questions for MA Organizations and Part D Plan Sponsors

Quality Ratings of Medicare Advantage Plans, 2011

HEDIS, STAR Performance Metrics. Sheila Linehan, RN,MPH, CPHQ Director of QM, Horizon BCBSNJ July 16, 2014

Health Care Reform Update January 2012 MG LILLY USA, LLC. ALL RIGHTS RESERVED

Fact Sheet Star Ratings

Fact Sheet Star Ratings

An Update on Medicare Parts C & D Performance Measures

The Star Treatment: Estimating the Impact of Star Ratings on Medicare. Advantage Enrollments. Appendices

Trends in Part C & D Star Rating Measure Cut Points

Revolution or Evolution: What s Happening Next for MedAdv and Prescription Drug Plans

STAR CROSSED: WHY DOCS TRUMP HEALTH PLANS IN CMS STAR SCORES

Medicare Advantage Stars: Are the Grades Fair?

Shoot For The Stars. Medicare Advantage Plans. Quality Scores Drive Participation 1

Medicare Advantage: The Basics

Medicare Part C & D Star Ratings: Update for August 5, 2015 Part C & D User Group Call

After years of intense discussion and little action, outcome-based healthcare has arrived with a boom.

The Centers for Medicare & Medicaid Services (CMS) strives to make information available to all. Nevertheless, portions of our files including

MEDICARE ADVANTAGE ENROLLMENT AND QUALITY: IMPACT ON PAYMENT REFORM

Medicare Advantage 2014 Spotlight: Plan Availability And Premiums

Medicare Advantage - Stride Quality Program NH Medical Director Meeting March 2015

STAR RATINGS FOR MEDICARE ADVANTAGE PLANS

PBM s: Helping to Improve MA-PD Star Scores. James Brehany PharmD, PA-C, JD Associate Vice President, Pharmacy Services PerformRx

Geneva Association 10th Health and Aging Conference Insuring the Health of an Aging Population

2015 Annual Election Period (AEP) Results. Gorman Health Group Sales Marketing and Strategy Division

Medicare 2015 Part C & D Star Rating Technical Notes DRAFT

Medicare Advantage vs. ACOs vs. Original Medicare: A Comparison. A Presentation to the 2014 CAPG Colloquium on Physician Groups in Medicare Advantage

Medicare Advantage Funding Cuts and the Impact on Beneficiary Value

CMS Five-Star Quality Rating System

MA plans available to almost all Medicare beneficiaries

Strategies for Success in the CMS Medicare Advantage Star Quality Ratings

Key Points about Star Ratings from the CMS 2015 Draft Call Letter

Medicare Advantage Update

Medicare Advantage special needs plans

Panorama Rooms Thursday 5 March, :00. Mr David Abernethy. Health Policy & Government Relations Consultant, Washington, DC

FACT SHEET Medicare Advantage (Part C): An Overview (C-001) p. 1 of 5

HDE FREE WEBINAR SERIES: BIDDING, RISK ADJUSTMENT, AND STARS. May 3, 2012

Introducing OneExchange.

Medicare 2014 Part C & D Star Rating Technical Notes

Key Points about Star Ratings from the CMS 2016 Final Call Letter

Medicare Star Ratings

Medicare- Medicaid Enrollee State Profile

Medicare 2016 Part C & D Star Rating Technical Notes. First Plan Preview DRAFT

Medicare Savings and Reductions in Rehospitalizations Associated with Home Health Use

Your 2016 Kaiser Permanente Guide to Medicare

Medicare 2016 Part C & D Star Rating Technical Notes

Affordable Care Act at 3: Strengthening Medicare

8/14/2012 California Dual Demonstration DRAFT Quality Metrics

CMS Star Ratings Program

Medicare- Medicaid Enrollee State Profile

Welcome! Medicare Advantage. Elderplan Advantage Institutional Special Needs Plan

EXECUTIVE INSIGHTS. Quality in the Healthcare Marketplace: Becoming a Rising Star. Outlining the 5-Star Quality Ratings Program

WINNING ON STARS IT STARTS AND ENDS WITH PROVIDERS

2015 Medicare Advantage rates: Perspectives for payors

Medicare Advantage special needs plans

GAO MEDICARE ADVANTAGE. Relationship between Benefit Package Designs and Plans Average Beneficiary Health Status. Report to Congressional Requesters

Medicare Advantage 2015 Spotlight: Enrollment Market Update

ACO s as Private Label Insurance Products

Available to Those who ARE Medicare Eligible

Preliminary Health Insurance Landscape Analysis

Report on comparing quality among Medicare Advantage plans and between Medicare Advantage and fee-for-service Medicare

STARs Tutorial Medicare Advantage Plan Star Ratings and Bonus Payments in 2012 A Tutorial for Utilizing SETMA s Deployment of the STARS MA Program

Medicare Explained (For the rest of us!) A plain English version

Medicare Advantage Part C Revenue: Challenges Ahead

Medicare: Humana s Strategic Actuarial Positioning John M. Bertko, F.S.A., M.A.A.A.

Finding 1: Prescription Drugs Cost Less under Health Care Reform

INSIGHT on the Issues

MEDICARE ADVANTAGE HEALTH PLAN OPTIONS

Medicare Health & Drug Plan Quality and Performance Ratings 2013 Part C & Part D Technical Notes. First Plan Preview DRAFT

Assessing the 2015 MA Star ratings

HCCs and Star-Ratings: An IPA s Successful Approach to Revenue Integrity. Nancy Hirschl, CCS Victoria McKemy, MHA James Taylor, MD, CPC

Medicare Premium Support: Lessons from Medicare Plans and Plan Competition Marsha Gold, ScD, Senior Fellow

Medicare Economics. Part A (Hospital Insurance) Funding

National Association of State United for Aging and Disabilities September 17, 2014

Testimony of Thomas R. McCarthy on Behalf of Aetna Inc.

Medicare Advantage 101. Michael Taylor, PhD Medicare Advantage Branch Manager Centers for Medicare & Medicaid Services Atlanta Regional Office

Health Pricing Boot Camp August 10-11, 2009 Session 1b: Medicare Coverage for the Aged and Disabled

Medicare Advantage Program. Michael Taylor, PhD Medicare Advantage Manager

The Medicare Advantage program: Status report

Medicare (History and Financing)

The Patient Protection and Affordable Care Act. Implementation Timeline

Plan Payment Reductions, MLR, and Compliance, Oh My! The Medicare Advantage Update for Plans and Providers

Medi-Growth Medicaid, Medicare Poised to Expand

The term bid can be confusing because no competitive bidding takes place. If CMS accepts plan bids, it signs contracts with the MAOs.

Medicare. Orientation Guide

Medicare Advantage 2013 Spotlight:

Medicare Advantage Star Ratings: Detaching Pay from Performance Douglas Holtz- Eakin, Robert A. Book, & Michael Ramlet May 2012

Strengthening Community Health Centers. Provides funds to build new and expand existing community health centers. Effective Fiscal Year 2011.

NOTE TO: Medicare Advantage Organizations, Prescription Drug Plan Sponsors, and Other Interested Parties

Medicare Advantage 2014 Spotlight: Enrollment Market Update

Coventry Health Care of Florida, Inc. Coventry Health Plan of Florida, Inc. Summit Health Plan of Florida

3/11/15. Can search by: Location City Zip code or Nursing home name

The Star Rating System and Medicare Advantage Plans

How do Medicare Advantage Plans work?

Medicare Advantage Payment Refresher

Medicare At A Glance. State Health Insurance Assistance Program (SHIP)

O n Oct. 12, the Centers for Medicare & Medicaid

Report to Board of Administration

Making the most of Medicare

Anatomy of an ACO. Through the Eyes of a Physician-owned IPA. Genesis Accountable Care Organization

Factors affecting variation in Medicare Advantage plan star ratings. Carlos Zarabozo September 10, 2015

Transcription:

Medicare Advantage: Time to Re-examine Your Engagement Strategy July 2014 avalerehealth.net Avalere Health Avalere Health delivers research, analysis, insight & strategy to leaders in healthcare policy and business 220+ policy and industry experts with backgrounds in government, academia and research organizations, managed care, industry and healthcare delivery, financial services and professional societies Capabilities in market strategy, policy analysis, reimbursement design, data analytics, modeling & scoring, evidence reviews, due diligence, qualitative research Research published by leading foundations and journals Eric Hammelman, CFA Vice President at Avalere Health Primary focus is using data to help shape business and policy strategies Previously with JPMorgan 2 Overview Medicare Advantage (MA) plans have historically given little strategic thought to working with skilled nursing facilities (SNF), focusing most of their efforts around limiting prices and length of stay Changes in the payment structure for MA plans due to the Affordable Care Act (ACA) has forced them to start thinking about new ways to manage the total care of their enrollees One of the primary changes for MA plans from the ACA has been a direct link between payment and quality (the Stars) This new focus by MA plans on quality provides SNFs a possible means to engage in new ways and redirect the conversation away from price and LOS The goal of this presentation is to explain how MA plans are reimbursed and demonstrate possible opportunities for SNFs to treat MA as a partner rather than an adversary 3 1

Presentation Overview Medicare Advantage Enrollment Trends How Medicare Advantage Plans Get Paid and Changes Under ACA Medicare Advantage Plans Traditional Evaluation of SNFs Star Ratings Quality Measures and a Possible Role for SNF Partnership 4 Enrollment in Medicare Advantage Continues To Grow at a Steady Pace, Even Amid Continued Financial Pressures Number of Enrollees (in Millions) 18 16 14 12 10 8 6 4 2 0 11.4 National Medicare Advantage Enrollment 2010-2014 12.2 13.3 14.6 15.9 2010 2011 2012 2013 2014 Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2010 (reflecting January 2010 enrollment), February 2011 (reflecting January 2011 enrollment), February 2012 (reflecting January 2012 enrollment), February 2013 (reflecting January 2013 enrollment), and February 2014 (reflecting January 2014 enrollment. Excludes lives in plans with fewer than 10 enrollees. Figures are rounded and may not add to totals. Data includes enrollment in employer plans and the territories. 5 Recent MA Growth in California Slightly Slower due to Higher Historic Penetration Rates Number of Enrollees (in Millions) 2.5 2.0 1.5 1.0 0.5 California Medicare Advantage Enrollment 2010-2014 1.6 1.7 1.8 1.9 2.1 0.0 2010 2011 2012 2013 2014 Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2010 (reflecting January 2010 enrollment), February 2011 (reflecting January 2011 enrollment), February 2012 (reflecting January 2012 enrollment), February 2013 (reflecting January 2013 enrollment), and February 2014 (reflecting January 2014 enrollment. Excludes lives in plans with fewer than 10 enrollees. Figures are rounded and may not add to totals. Data includes enrollment in employer plans and the territories. 6 2

In 2009, MA Enrollment Was More Common Out West 2009 MEDICARE ADVANTAGE PENETRATION % of all Medicare enrollees <10% 10-20% 20-30% 30%+ Source: Avalere Health Medicare Advantage Enrollment Model 7 Current Enrollment Patterns Show Higher 2014 MA Penetration in Rust Belt and Florida 2014 MEDICARE ADVANTAGE PENETRATION % of all Medicare enrollees <10% 10-20% 20-30% 30%+ Source: Avalere Health Medicare Advantage Enrollment Model 8 By 2019 MA Will Continue To Cover > 25% of Medicare Enrollees but Concentration Varies 2019E MEDICARE ADVANTAGE PENETRATION % of all Medicare enrollees <10% 10-20% 20-30% 30%+ Source: Avalere Health Medicare Advantage Enrollment Model 9 3

California Penetration Rates Vary Across the State 2014 MEDICARE ADVANTAGE PENETRATION IN CALIFORNIA % of all Medicare enrollees <10% 10-20% 20-30% 30%+ Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2014 (reflecting January 2014 enrollment). 10 MA is Popular Across All Ages 16.0 2012 NATIONAL MEDICARE ENROLLMENT BY AGE 14.0 Millions 12.0 10.0 8.0 6.0 4.0 2.0 24% 76% 32% 68% 33% 67% 32% 68% 30% 26% 70% 74% 0.0 <65 65-69 70-74 75-79 80-84 85+ FFS MA It s not just the Boomers Source: Avalere Health analysis of CY2012 Medicare 100% Denominator File 11 Dual-Eligible Special Needs Plans (SNPs) Continue To Grow Number of Enrollees (in thousands) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 National SNP Enrollment by SNP Type 2011-2014 Chronic or Disabling Condition Dual-Eligible Institutional 80.5 1,050.8 47.0 1,157.8 48.7 1,340.4 49.1 1,534.2 162.2 192.8 256.1 283.2 2011 2012 2013 2014 N = 1.29 million N = 1.40 million N = 1.65 million N = 1.87 million Source: SNP Comprehensive Report released by the Centers for Medicare & Medicaid Services in February for each plan year from 2011 to 2014. 12 4

California SNP Market Also Dominated by Dual-Eligible Plans Number of Enrollees (in thousands) 300 200 100 0 California SNP Enrollment by SNP Type 2011-2014 Chronic or Disabling Condition Dual-Eligible Institutional 46.9 10.6 146.5 158.9 189.5 219.4 16.9 18.5 24.6 38.6 2011 2012 2013 2014 8.6 6.4 N = 210 thousand N = 188 thousand N = 223 thousand N = 264 thousand Source: SNP Comprehensive Report released by the Centers for Medicare & Medicaid Services in February for each plan year from 2011 to 2014. 13 UnitedHealth, Humana, Kaiser, and Aetna Provide MA Benefits to Over 50 Percent of All MA Enrollees PARENT ORGANIZATIONS BY PERCENT OF NATIONAL MEDICARE ADVANTAGE ENROLLMENT 2013 2014 Other, 35% UnitedHealth, 21% Other, 33% UnitedHealth, 21% Humana, 17% Humana, 18% WellCare, 2% Kaiser, BCBS of MI, 2% 8% Coventry, 2% Highmark, 2% Aetna, 4% CIGNA, 3% WellPoint, 4% Health Net, 2% WellCare, 2% Highmark, 2% BCBS of MI, 2% CIGNA, 3% WellPoint, 4% Aetna, 7% Kaiser, 8% N = 14.6 million N = 15.9 million Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2013 (reflecting January 2013 enrollment) and February 2014 (reflecting January 2014). Figures are rounded and may not add to totals. Data includes enrollment in employer plans and the territories. 14 Most Top MA-PD Sponsors Strengthened Market Positions in 2014 ENROLLMENT OF TOP 10 MA-PD PLAN* PARENT ORGANIZATIONS 2013-2014 2014 2013 2.1 3.0 UnitedHealth 2.9 2.4 Humana 2.0 1.2 Kaiser 1.1 0.7 Aetna 0.3 0.7 WellPoint 0.6 0.4 CIGNA 0.4 0.3 WellCare 0.2 0.3 Highmark 0.3 0.2 Health Net 0.2 0.2 InnovaCare 0.2 0 1 2 3 4 Number of Enrollees (in Millions) 38.4% of MA-PD plan lives 29.1% of MA-PD plan lives Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2013 (reflecting enrollment accepted as of January 2013) and in February 2014 (reflecting enrollment accepted as of January 2014). *Includes Special Needs Plans (SNPs); excludes Medicare Advantage plans that do not offer drug coverage. Data includes enrollment in employer plans and the territories. Figures are rounded and may not reflect exact totals. 15 5

California Market Dominated by Kaiser and UnitedHealth PARENT ORGANIZATIONS BY PERCENT OF MEDICARE ADVANTAGE ENROLLMENT IN CALIFORNIA 2014 WellCare 3% California Physicians' Service 4% Other 12% WellPoint 5% SCAN Health Plan 7% Kaiser Foundation Health Plan 45% Health Net 7% UnitedHealth Group 17% N = 2.1 million Source: Avalere Health analysis using enrollment data released by the Centers for Medicare & Medicaid Services in February 2014 (reflecting January 2014). Figures are rounded and may not add to totals. Data includes enrollment in employer plans. 16 Presentation Overview Medicare Advantage Enrollment Trends How Medicare Advantage Plans Get Paid and Changes Under ACA Medicare Advantage Plans Traditional Evaluation of SNFs Star Ratings Quality Measures and a Possible Role for SNF Partnership 17 MA Plan Payments Are Determined by Comparing Plan Bids to County-Level Benchmarks MA payment structure encourages plans to bid below the benchmark Prior to 2011, plans bidding below the benchmark received 75% of the difference between their bid and the benchmark as a rebate to offer additional benefits; CMS kept 25% of the difference as savings Plans bidding above the benchmark must charge a premium for Parts A and B services equal to the difference between their bid and the benchmark Benchmark = $1,000 Beneficiary premium for Part A/B services= $100 CMS savings = $25 Rebate amount = $75 = Plan bid = Rebate to plan = Beneficiary premium Plan Bids above Benchmark Plan bid = $1,100 Plan payment from CMS = $1,000 Plan Bids below Benchmark Plan bid = $900 Plan payment from CMS = $975 Note: Numbers are for illustration purposes only. 18 6

Plans Have Flexibility in Assigning Rebate Dollars DISTRIBUTION OF REBATE DOLLARS BY TYPE OF BENEFIT, ALL MA PLANS, 2010 (PRIOR TO ACA) Reduced Part D Premium, 10% Reduced Part B Premium, 2% Enhanced Part D Benefit, 13% Reduced Cost Sharing, 54% Added Benefits, 21% Source: Medicare Payment Advisory Commission. Report to the Congress: Medicare Payment Policy. March 1, 2010. Available at: http://medpac.gov/documents/mar10_entirereport.pdf. 19 Health Reform Modified MA Payment by Revising Benchmarks Revised Benchmarks Divides counties into quartiles based on local fee-for-service (FFS) spending Sets county-level benchmarks equal to local FFS costs, multiplied by a specific percentage: Quartile 1: 95% Quartile 2: 100% Quartile 3: 107.5% Quartile 4: 115% Implementation Standard phase-in schedule is as follows: 2011: benchmarks equal 2010 amounts 2012: benchmarks equal 50/50 blend of old and new amounts 2013+: benchmarks equal new amount Allows for four or six year phase-in schedule in counties with large changes in benchmarks $30-$49 change: four years >$50 change: six years Source: Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Act of 2010. 20 California MA Benchmarks Ratio of MA Benchmark to FFS Costs 95% 100% 107% 115% Source: Avalere Health analysis of CY 2015 Medicare Advantage Ratebook 21 7

and by Linking Payment to Quality 1 Beginning in 2012, plans with ratings of 4 stars or higher may receive bonuses 2012: Bonus equals 1.5% of local FFS costs 2013: Bonus equals 3% of local FFS costs 2014: Bonus equals 5% of local FFS costs 2 Some counties eligible for double quality bonuses Urban floor county; Local FFS costs below national average; AND MA penetration greater than 25% (as of December 2009) 3 Also links rebates to plan quality ratings 4.5+ stars: 70% of difference between bid and benchmark 3.5-4.4 stars: 65% of difference between bid and benchmark <3.5 stars: 50% of difference between bid and benchmark Source: Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Act of 2010. 22 Star Ratings Have Significant Implications for MA Payments Assuming three plans in the same county with different star ratings submit bids that are all $900 PMPM, each plan would receive different payments: Plan Bid Rebate Amount 4.5-star plan benchmark = $1,050 Plan payment from CMS = $1,005 3.5-star plan benchmark = $1,035 Plan payment from CMS = $987.75 2.5-star plan benchmark = $1,000 Plan payment from CMS = $950 $105 rebate $87.75 rebate $50 rebate 4.5-star Plan 3.5-star Plan 2.5-star Plan Plan bid = $900 Plan bid = $900 Plan bid = $900 Plan rebate % = 70% Plan rebate % = 65% Plan rebate % = 50% CMS = Centers for Medicare & Medicaid Services MA = Medicare Advantage PMPM = Per Member Per Month QBP = Quality bonus payment Note: Numbers are for illustration purposes only. Values correspond to the policy in year 2014. 23 ACA Provisions Seek To Align MA Plan Payments with Medicare Fee-for-Service (FFS) Spending 125% MA PLAN PAYMENTS AS A PERCENT OF FFS COSTS, 2011 vs 2014 110% 109% 106% 105% 114% 110% 110% 106% 114% 113% 111% 112% 109% 107% 100% 75% 50% All plans HMO Local PPO Regional PPO PFFS Special Needs Employer Group Plans Plans 2011 2014 TYPE OF MA PLAN Source: Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy, Chapter 12: The Medicare Advantage Program: Status Report, March 2011. Available at: http://www.medpac.gov/chapters/mar11_ch12.pdf. Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy, Chapter 12: The Medicare Advantage Program: Status Report, March 2014. Available at: http://www.medpac.gov/chapters/mar14_ch13.pdf ACA = Affordable Care Act MA = Medicare Advantage. 24 8

CMS Demonstration Expanded Quality Bonus Payments to 3- Star Plans and Accelerates Payment to 4- and 5-Star Plans ACA Quality Payments Under the ACA, only plans with 4-5 stars would receive an increase in their benchmarks o 2012: Bonus equals 1.5% of local FFS costs o 2013: Bonus equals 3% of local FFS costs o 2014+: Bonus equals 5% of local FFS costs Quality payments are only applied to new portion of the benchmarks, which are being phased in CMS Demonstration Under the demonstration, CMS will accelerate QBPs to 4- and 5- star plans and extend QBPs to plans with 3 stars o CMS will apply bonus to entire benchmark, rather than only the new portion o Benchmarks plus bonuses will not be capped at prior law benchmark levels Demonstration to run from 2012-2014 Sources: Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Act of 2010 and in the April 15, 2011 CMS Final Rule Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programsfor Contract Year 2012 and Other Changes; Final Rule CMS Fact Sheet 2013 Part C and D Plan Ratings, Table 1. Available at: http://cms.gov/medicare/prescription-drug- Coverage/PrescriptionDrugCovGenIn/PerformanceData.html 25 At the End of the Demonstration in 2015, 3- and 3.5- Star Plans Face a Significant Payment Cliff PERCENT QUALITY BONUS PAYMENTS BY STAR RATING, 2012-2015 Quality Bonus Payment % 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2012 2013 2014 2015 3-Star Plan 3.5-Star Plan 4-Star Plan 5-Star Plan Nationally 48% of MA enrollment is in plans that will experience a cliff in QBPs in 2015 In California, it s only 15% of enrollment Source: CMS. Fact Sheet 2014 Star Ratings. October 24, 2013. Available at: http://cms.gov/medicare/prescription-drug- Coverage/PrescriptionDrugCovGenIn/Downloads/2014-C-and-D-Star-Ratings.zip. 26 Average Rating Across Contracts of Most Top MA-PD Plan Sponsors Fall Shy of 4 Stars NATIONAL ENROLLMENT-WEIGHTED AVERAGE STAR RATING* BY PLAN SPONSOR, 2014 Aetna Inc. Blue Cross Blue Shield of Michigan CIGNA Health Net, Inc. Highmark Humana Inc. 4.04 4.09 3.77 3.89 3.68 3.98 Kaiser Foundation Health Plan, Inc. 4.99 UnitedHealth Group, Inc. 3.46 WellCare Health Plans, Inc. WellPoint, Inc. 3.07 3.26 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 OVERALL STAR RATINGS *2014 overall star ratings are enrollment-weighted using October 2013 enrollment data (CMS. Medicare Advantage Contract and Enrollment Data. October 17, 2013. Available at: http://cms.gov/research-statistics-data-and-systems/statistics-trends-and- Reports/MCRAdvPartDEnrolData/Downloads/2013/Oct/Monthly-Report-By-Contract-2013-10.zip). Does not include contracts that were too new to be measured or did not have enough data to calculate a rating. Source: Avalere Health analysis of CMS 2014 Part C Medicare Plan Ratings Data. October 21, 2013. Available at: http://cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovgenin/downloads/2014-c-and-d-star-ratings.zip. 27 9

California MA Plans Already Demonstrating High Quality CALIFORNIA ENROLLMENT-WEIGHTED AVERAGE STAR RATING* BY PLAN SPONSOR, 2014 WellCare Health Plans 3.00 California Physicians' Service 4.00 WellPoint 3.77 SCAN Health Plan 4.42 Health Net 3.97 UnitedHealth Group 3.98 Kaiser Foundation Health Plan 4.99 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 OVERALL STAR RATINGS *2015 overall star ratings are enrollment-weighted using February 2014 enrollment data (CMS. Medicare Advantage Contract and Enrollment Data. Available at: http://cms.gov/research-statistics-data-and-systems/statistics-trends-and- Reports/MCRAdvPartDEnrolData/Downloads/2013/Oct/Monthly-Report-By-Contract-2013-10.zip). Does not include contracts that were too new to be measured or did not have enough data to calculate a rating. Source: Avalere Health analysis of CMS 2015 Medicare Plan Ratings Data. October 21, 2013. Available at: http://cms.gov/medicare/prescription-drug-coverage/prescriptiondrugcovgenin/downloads/2014-c-and-d-star-ratings.zip. 28 Presentation Overview Medicare Advantage Enrollment Trends How Medicare Advantage Plans Get Paid and Changes Under ACA Medicare Advantage Plans Traditional Evaluation of SNFs Star Ratings Quality Measures and a Possible Role for SNF Partnership 29 Recent Trends in MA Post-Acute Strategies Initiatives To Improve SNF Networks Understanding SNF clinical offerings Improving clinical relationships between primary care physician groups and their preferred SNFs Managing SNF costs Substitution of Lower Cost Settings Exploring clinical relationships with HHAs Actively discharging to HHAs Discharging to SNFs as alternative to IRF, LTACH Criteria for Network Selection Strong performance and outcomes data Receive patients from particular hospitals Clinical affiliations with the primary care physician group in network Unique capabilities (e.g., dementia care) 30 10

Plans Are Looking for High Performing SNFs Most frequent evaluation metrics used to assess SNFs for inclusion in network Length of Stay Hospital Admission Rates Hospital Readmission Rates Patient Satisfaction Average Daily Census Nursing Home Compare Quality Measures Occupancy Rate Source: Avalere Health survey of Medicare Managed Care Organizations, Spring 2014. 31 Medicare Advantage Networks Getting Narrower Medicare requires all MA plans to have networks for enrollees that meet certain standards o The standards relate to the minimum number of providers in a given county as well as the maximum travel time for 75% of enrollees UnitedHealth dropped 10-15% of its network providers in 2014 1 o Early indications for CY 2015 suggest other plans are following United s lead o Avalere analysis shows United lost about 7-10% of its enrollment due to the network changes Most of the lives United lost appear to have shifted to other MA plans Unclear if these lost lives were more or less profitable to the plan Medicare Advantage Network Requirements Primary Care Medicare Acute Inpatient Skilled Nursing Home Health Physicians County Enrollees in County Beds Miles Facilities Miles Agencies Miles Number Miles Los Angeles 1,281,771 1,070 10 1 10 1 n/a 147 5 San Diego 437,581 588 30 1 30 1 n/a 81 10 Placer 67,476 91 30 1 30 1 n/a 13 10 Yolo 25,550 35 30 1 30 1 n/a 5 10 San Benito 6,985 9 60 1 60 1 n/a 2 10 1 UnitedHealth Culls Doctors From Medicare Advantage Plans Wall Street Journal, November 16, 2013. Source: CY 2015 Medicare Advantage Health Services Delivery Reference File 32 SNF Benefit Structure for California MA Plans Percent of Enrollment in MA Plans 3-Day Stay for SNF Care Copay on 1 st Day of SNF Care 3-day $40-200 prior per day hospital 6% stay is required 0.5% $25 per day 27% No prior hospital stay is required 99.5% $0 per day 67% Source: 2014 Medicare Advantage Plan Options Database Weighted by July 2014 Enrollment 33 11

Presentation Overview Medicare Advantage Enrollment Trends How Medicare Advantage Plans Get Paid and Changes Under ACA Medicare Advantage Plans Traditional Evaluation of SNFs Star Ratings Quality Measures and a Possible Role for SNF Partnership 34 CMS Combines Part C and Part D Measure Star Ratings for Overall Star Rating for MA Prescription Drug (MA-PD) Plans 36 Part C Measures Step 1 Step 2 15 Part D Measures Weighted Average of Individual Part C and D Measures + Integration Factor* = Overall Star Rating *Factor applied by CMS to reward consistent performance across domains. Source: CMS. Medicare 2014 Part C & D Star Rating Technical Notes. October 21, 2013. Available at: http://cms.gov/medicare/prescription- Drug-Coverage/PrescriptionDrugCovGenIn/Downloads/2014-C-and-D-Star-Ratings.zip. 35 CMS Places Greater Importance on Outcomes Measures Compared to Process Measures in Calculating Overall Scores Process Measures Measure-level star rating multiplied by weight of 1.0 Patient Experience and Access Measures Measure-level star rating multiplied by weight of 1.5 Intermediate Outcome and Outcome Measures Measure-level star rating multiplied by weight of 3.0 Source: CMS. Medicare 2014 Part C & D Star Rating Technical Notes. October 21, 2013. Available at: http://cms.gov/medicare/prescription- Drug-Coverage/PrescriptionDrugCovGenIn/Downloads/2014-C-and-D-Star-Ratings.zip. 36 12

CMS Measures MA Plans in Five Domains Focused on Plan Quality of Care and Service Domain Category Staying Healthy: Screening, Tests, Vaccines Managing Chronic (Long Term) Conditions Member Experience with Health Plan Member Complaints, Problems Getting Services, and Improvement in the Health Plan's Performance Health Plan Customer Service Examples of Performance Measures Screening for breast cancer, colorectal cancer, cholesterol, and glaucoma Annual flu vaccine Checking to see if members are at a healthy weight Yearly review of all medications and supplements being taken* Controlling blood pressure Readmissions to a hospital within 30 days of being discharged Ease of getting needed care and seeing specialists Getting appointments and care quickly Overall rating of healthcare quality Complaints about the health plan Beneficiary access and performance problems Members choosing to leave the plan Plan making timely decisions about appeals Reviewing appeals decisions *Special needs plans only. Source: CMS. Medicare 2014 Part C & D Star Rating Technical Notes. October 21, 2013. Available at: http://cms.gov/medicare/prescription- Drug-Coverage/PrescriptionDrugCovGenIn/Downloads/2014-C-and-D-Star-Ratings.zip. 37 SNFs Can Help Certain Managing Chronic Conditions Measures Measures included in Managing Chronic Conditions domain o Care for Older Adults Medication Review (SNP only) o Care for Older Adults Functional Status Assessment (SNP only) o Care for Older Adults Pain Screening (SNP only) o Osteoporosis Management in Women who had a Fracture o Diabetes Care Eye Exam o Diabetes Care Kidney Disease Monitoring o Diabetes Care Blood Sugar Controlled *** o Diabetes Care Cholesterol Controlled *** o Controlling Blood Pressure (SNF patients excluded) o Rheumatoid Arthritis Management o Improving Bladder Control o Reducing the Risk of Falling o Plan All-Cause Readmissions *** *** These measures have a weight of 3x the other measures due to classification as an outcomes measures 38 How To Engage Identify specific measures at each plan that could be addressed by a program run by your SNF o Pay attention to measures where the plan scored a 2 (critical) or 3 (at-risk), as these are measures that the plan will want to improve as well For each plan, take the following steps o Step 1: Identify the number of stays in the last 12-18 months that were paid by the specific sponsor o Step 2: Determine if patients would have met the criteria for any of the critical or at-risk measures o Step 3: Develop programs and protocols that would ensure patients would qualify for positive quality score o Step 4: Contact the plan and demonstrate how your programs and protocols will help their quality score 39 13