Emerging Healthcare Delivery System Paradigm: Opportunities and Risks for providers

1. Emerging Healthcare Delivery System Paradigm: Opportunities and Risks for providers Prepared for the AIDS Foundation of Chicago

2. Overview of Presentation… • The Patient Protection and Affordable Care Act (PPACA) allows for the development of innovative approaches to achieving the health care triple aim: Improved quality, lower costs and improved patient experience. This session will focus on the rise of Accountable Care Organizations (ACO) and how those models seek to achieve triple aim. Additionally, participants will learn how the State of Illinois is utilizing these kinds on innovations to redesign its struggling Medicaid delivery system, particularly in light of the PPACA Medicaid eligibility expansion in Cook County (1115 Waiver) and statewide beginning in 2014. Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

3. Topics Covered… • The New Alphabet Soup: • Medical/Health Home/PCMH • ACO • CCE • MCCN • MMAI • Illinois Medicaid Redesigned • ACOs and the New Chronic Disease Care Model • Opportunities and Risks for Providers Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

4. What’s a… • Medical Home/PCMH • The Patient Centered Medical Home is a model for care, provided by physician led practices, that seeks to strengthen the physician –patient relationship by replacing episodic care based on illness and individual’s complaints with coordinated care for all life stages, acute, chronic, preventative, and end of life and a long term therapeutic relationship. The physician led care team is responsible for coordinating all of the individuals health care needs, and arranges for appropriate care with other qualified physicians and support services. • CMS SMDL# 10-024 Health Home for Enrollees with Chronic conditions, 11/16/10 Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

5. Rendering of Agency for Healthcare Research and Quality (AHRQ) PCMH model Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

6. What’s a…Continued • Accountable Care Organization • A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality of care patients get. The organization's payment is tied to achieving health care quality goals and outcomes that result in cost savings. • Healthcare.gov • In concept, an ACO is a shared savings arrangement under which a set of health care providers—principally physicians and hospitals—assume some financial risk for the cost and quality of care delivered to a defined population of patients. If, collectively, an ACO's participating providers are able to improve quality, enhance patients' care experience, and limit per capita costs, they are rewarded with a share of the savings. • E. Kroch, R. W. Champion, S. D. DeVore, M. R. Kugel, D. A. Lloyd, and L. Rothney-Kozlak, Measuring Progress Toward Accountable Care, The Commonwealth Fund, December 2012. Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

7. What’s a…Continued • Care Coordination Entity • A CCE is a collaboration of providers and community agencies, governed by a lead entity, which receives a care coordination payment with a portion of the payment at risk for meeting quality outcome targets, in order to provide care coordination services for its Enrollees. • State of Illinois Solicitation for Care Coordination Entities For Children with Complex Medical Needs Innovations Project – 2013-24-010 • Managed Care Community Network • A MCCN is an entity, other than a Health Maintenance Organization, that is owned, operated, or governed by providers of health care services within Illinois and that provides or arranges primary, secondary and tertiary managed health care services under contract with the Department [Illinois Department of Healthcare and Family Services] exclusively to persons participating in programs administered by the Department. • Public Aid Code 305 ILCS 5/5-11 Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

8. What’s a….Continued • Medicaid Medicare Alignment Initiative • The Illinois Medicare-Medicaid Alignment Initiative will integrate Medicare and Medicaid benefits and services to create a unified delivery system that is easier for beneficiaries to navigate. In addition, integrated financing streams will help to improve care delivery and coordination by eliminating conflicting incentives between Medicare and Medicaid that encourage cost shifting, reduce beneficiary access to high-quality care and community-based services, and result in a lack of care management for chronic conditions. • Illinois Medicare-Medicaid Alignment Initiative, draft proposal, IDHFS, 2012. Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

9. Illinois Medicaid Redesign: Old Medicaid vs. New Medicaid Major Characteristics of the “Old” Medicaid: • Fragmented healthcare delivery system • Services lack continuity of care for clients, with few linkages among providers or care transitions provided • Most expensive SPD clients with complex health/behavioral health needs have to navigate healthcare system alone • Medicaid is fee-for-service: pays for quantity, not quality of care or efficiency; does not reward collaboration; does not provide incentives for serving SPD clients in least restrictive environment • Payment methodologies for hospitals, nursing homes and provider system in general are outdated -- don’t reflect today’s goals for quality of care and health outcomes Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

10. Old Medicaid…continued Outdated long-term care system: • Illinois historically has invested in institutional care; now need to build up home and community infrastructure • Federal consent decrees and downsizing of state facilities will require service delivery redesign for most complex and expensive SPD clients Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

11. The New Medicaid Continued… • Major Characteristics of the New Medicaid • State Law requires 50% of beneficiaries be enrolled in some form of Care Coordination by 2015. • Payment for services will based on meeting defined quality measures rather than Fee for Service. • Beneficiaries will be aggressively enrolled into risked based, care coordination programs. They include: Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

12. The New Medicaid Continued…. • Integrated Care Program: Although ICP had been conceptualized prior to January 2011, the program was part of the overall policy discussions which led to Medicaid reform. • Medicaid Innovations: Care Coordination Entities (CCE) and Managed Care Community Networks (MCCN). Provider driven project to develop alternative models of care for seniors and adults with disabilities. IDHFS received 75 proposals letters of intent; far fewer actual applications. • Six projects selected; 5 CCEs and 1 MCCN: CCEs include: Be Well Partners in Health, Healthcare Consortium of Illinois, Macon County Care Coordination, Precedence Care Coordination and Together4Health; MCCN: Community Care Alliance of Illinois Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

13. The New Medicaid continued… • Medicare-Medicaid Alignment Initiative (MMAI)-Care Coordination demonstration for dual eligibles within a managed care/capitation model. Likely to enroll an estimated 137,000-170,000 AABD (now referred to as Seniors and Persons with Disabilities or SPD) in Greater Chicago and Central Illinois regions. Demo regions: • Region 1: Cook, Lake, Kane, DuPage, Will, Kankakee • Region 2: Knox, Peoria, Tazewell, McLean, Logan , DeWitt, Sangamon, Macon, Christian, Piatt, Champaign, Vermilion • Cook County 1115 Medicaid Waiver: Cover ACA Medicaid expansion population in Cook county, i.e. uninsured, childless adults who utilize services from the county health system. Approximately 150,000 clients. • RFP for Children with Complex Medical needs is on the street. 2nd round of CCE/MCCN applications in Spring 2013 Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

14. Why all the focus on SPDs? Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

15. ACOs and the New Chronic Disease Care Model Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

16. ACO Foundation: Governance, HIT, Payers Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

17. Significant ACO Activity • Medicare: Pioneer Model ACO, Advanced Payment model ACO, and Shared Saving Model • Over 150 Medicare ACOs established since enactment of ACA • Medicaid ACO: New Jersey, Oregon, Illinois, (Medicaid Innovations see slide 12), Highlight: Community Care North Carolina • Commercial ACO: Many examples, Highlight: Norton Healthcare, Louisville Kentucky Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

18. ACO Models: Community Care of North Carolina (CCNC) • Established in 1988, CCNC is a statewide effort at establishing a PCMH for every NC Medicaid beneficiary. • CCNC serve as the umbrella, 501 c 3 organization • Under the CCNC umbrella are 14 local, not for profit Community Networks • Community Networks resemble ACO structure but are reimbursed differently Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

19. CCNC Model: Major Components Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

20. CCNC Provides NC with: • Statewide medical home and care management system in place to address quality, utilization and cost • 100 percent of all Medicaid savings remain in state • A private sector Medicaid management solution that improves access and quality of care • Medicaid savings that are achieved in partnership with – rather than in opposition to – doctors, hospitals and other providers. Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

21. Key Tenets of CCNC Public-private partnership “Managed not regulated” CCNC is a clinical partnership, not just a financing mechanism Community-based, physician-led medical homes Cut costs primarily by greater quality, efficiency Providers who are expected to improve care must have ownership of the improvement process

22. CCNC: “How it works” Primary care medical home available to 1.1 million individuals in all 100 counties. Provides 4,500 local primary care physicians with resources to better manage Medicaid population Links local community providers (health systems, hospitals, health departments and other community providers) to primary care physicians Every network provides local care managers (600), pharmacists (26), psychiatrists (14) and medical directors (20) to improve local health care delivery

23. CCNC: “How it works” • The state identifies priorities and provides financial support through an enhanced PMPM payment to community networks • Networks pilot potential solutions and monitor implementation (physician led) • Networks voluntarily share best practice solutions and best practices are spread to other networks • The state provides the networks access to data • Cost savings/ effectiveness are evaluated by the state and third-party consultants

25. Quality comes first, savings ensue Higher is better! *Includes the benchmark for HEDIS Year 2010. As of HEDIS Year 2011, HEDIS is no longer reporting a benchmark for BP < 130/80.

26. Commercial ACO: Norton Healthcare, Louisville Kentucky • The Engelberg Center for Health Care Reform at the Brookings Institute and The Dartmouth Institute for Health Policy and Clinical Practice launch ACO Pilot Program to help foster ACO development in private insurance market. • Brookings and Dartmouth selected five organizations: Carilion Clinic (Roanoke, VA), Healthcare Partners (Torrance, CA), Monarch Healthcare (Irvine, CA), Norton Healthcare (Louisville, KY), and Tucson Medical Center (Tucson, AZ) • Norton Characteristics: Integrated delivery system w/ 5 Hospitals, 475 physician employees, 2,000 medical staff, 1.4 million patient encounters and 430,000 unique patients Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

27. Norton Healthcare ACO Model: Partnership with Humana • ACO Specifications • Governance Structure: Internal, Executive steering CommitteeLegal Structure: 501(c)3 of Parent OrganizationParticipating Payers in Year 1: HumanaDate Initiated Discussions with Payers: July 2009Reimbursement model: Shared Savings, move toward risk bearingQuality Metrics Used in Year1: Brookings-Dartmouth Starter Set, additional claims/clinical data and clinically enhanced measuresACO Primary Care Providers: 170ACO Medical Specialists: 35ACO Surgical Specialists: 36 Electronic Health Record: Epic Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

28. Norton Continued… • ACO population: 7,000 Norton Healthcare and Humana self insured employees • Responsible for providing full spectrum of health care services • Norton will be accountable for both quality and lowered costs • Payment Model specifics: • Expenditures must be 2% lower than baseline to be eligible for Shared Savings • Shared Risk is 60/40; 60% to the employers (Humana and Norton) and 40% to the provider (Norton) • Care Coordination: Developing system strategy; Norton Hospitals use traditional Phone and Fax method of care managing patients Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

29. What are the Risks for Providers and Provider Organizations within New Models? • Financial: • Significant costs associated with new models of care • Interoperable EHR, other infrastructure costs • Development of Care Coordination/Management program • Other Costs: Time, organizational culture- change is hard • Reimbursement: New and Different • Phase out of FFS • Care Management fee ($3-5 PMPM) • Shared savings, global or bundled payment • Medicaid “shared” savings: Maybe difficult to find much savings in Illinois program Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

30. Provider Risks continued… • Will it Work: No guarantees • Data collection and use critical: not good enough to simply collect data; Data must be used to demonstrate quality and efficiency Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

31. What are the Opportunities for Providers and Provider Organizations within New Models? • New models require effective Care Coordination/management program: New biz opportunity for organizations who demonstrate effective CM model; more cost effective than recreating the wheel • Partnership/collaborations: No more going it alone…? • Small to midsized organizations or group practices must ask themselves tough questions about the future • Existing partnerships may need reexamination based on changing models of care: Data sharing, quality measures, shared reimbursement; may want more formal relationship in response to changing landscape Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

32. Opportunities continued… • New Collaborations or partnerships: • IDHFS will review and consider collaborative proposals: Must be comprehensive and include mental health • Medicare still accepting shared savings ACO proposals • Formation of new entities: • Development of new “Care Coordination/Management” organization in response to growing trend: Medicare, Medicaid, commercial • FQHC: Federally Qualified Health Center model; excellent fit for PCMH development Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

33. Questions…. Contact Information for Largent Government Solutions, LLC: Philippe Largent Principal Largent Government Solutions, LLC plargent@lgs-il.com (217) 848-1182 http://www.linkedin.com/in/philippelargent Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

34. Sources • CMS State Medicaid Director Letter # 10-024 Health Home for Enrollees with Chronic conditions, 11/16/10 • E. Kroch, R. W. Champion, S. D. DeVore, M. R. Kugel, D. A. Lloyd, and L. Rothney-Kozlak, Measuring Progress Toward Accountable Care, The Commonwealth Fund, December 2012. • State of Illinois Solicitation for Care Coordination Entities For Children with Complex Medical Needs Innovations Project – 2013-24-010 • MCCN definition: Public Aid Code 305 ILCS 5/5-11 • SPD Enrollment vs. Costs: The Future of Care Coordination for Seniors and Persons with Disabilities July 2012, Illinois Department of HealthCare and Family Services • Norton Healthcare: A Strong Payer–Provider Partnership for the Journey to Accountable Care Josette N. Gbemudu, Bridget K. Larson, Aricca D. VanCitters, Sara A. Kreindler, Eugene C. Nelson, StephenM. Shortell, and Elliott S. Fisher Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago

35. Sources • Community Care of North Carolina: Putting Health Reform Ideas into Practice in Medicaid, Kaiser Commission on Medicaid and the Uninsured, May 2009 • Web Sources: • http://pcmh.ahrq.gov/portal/server.pt/community/pcmh__home/1483 • http://innovations.cms.gov/initiatives/ACO/index.html • https://www.communitycarenc.org/ Prepared by Largent Government Solutions, LLC for the AIDS Foundation of Chicago