From Uncertainty on the Law to Uncertainty on if it will Work
This presentation is the property of its rightful owner.
Sponsored Links
1 / 51

From Uncertainty on the Law to Uncertainty on if it will Work HFMA – Gerry Haggerty Annual Leadership Institute May 15, 2013 PowerPoint PPT Presentation


  • 98 Views
  • Uploaded on
  • Presentation posted in: General

From Uncertainty on the Law to Uncertainty on if it will Work HFMA – Gerry Haggerty Annual Leadership Institute May 15, 2013. Seth Edwards Manager, Federal Affairs. Premier is the largest healthcare alliance in the U.S.

Download Presentation

From Uncertainty on the Law to Uncertainty on if it will Work HFMA – Gerry Haggerty Annual Leadership Institute May 15, 2013

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

From Uncertainty on the Law to Uncertainty on if it will WorkHFMA – Gerry Haggerty Annual Leadership InstituteMay 15, 2013

Seth Edwards

Manager, Federal Affairs


Premier is the largest healthcare alliance in the u s

Premier is the largest healthcare alliance in the U.S.

  • Uniting more than 2,800 hospitals – 40% of all U.S. hospitals – and nearly 93,000 alternate sites of care

  • $40+ Billion in group purchasing volume, $5 Billion in savings in 2012

  • Database representing 1 in every 4 discharges

  • 2.5 Million clinical real-time transactions each day

  • Named six times as Ethisphere most ethical company

  • MalcomBaldrige Quality Award Winner

Our Mission: to improve the health of communities


Realities shaping our future

Realities shaping our future

Policy and politics of healthcare

Payment and delivery system reform

Movement toward market-based reforms


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

Policy and politics of healthcare


Our fiscal health is top national priority

Our fiscal health is top national priority

Federal debt held by the public, 1940 to 2020

  • 7.9% unemployment; 88,000 new jobs in March

  • 1.4% GDP growth in 2013

  • Federal spending 23% of GDP; Tax revenues @17% of GDP

  • 2001 Debt = 33% of GDP; 2013 debt = 77% of GDP


The competing visions and realities

The competing visions and realities

Backdrop: balance of power and fiscal realities that are largely unchanged

Democrats hold Senate

55 Democrats (+2)/45 Republicans

Republicans hold House

201 Democrats (+8)/234 Republicans

Obama

  • Legacy = healthcare reform

  • Legislative goals: fiscal fights; gun control; immigration reform; climate

  • “We don’t have a spending problem, we have a healthcare problem.”

  • MOis wait for deadline and negotiate minimal package of changes

Boehner and Republican House

  • Limit size and scope of government

  • Create and leverage triggering deadlinesfor deficit and debt reduction

  • Desire for grand bargain and tax reform, but…

Major action at state level

  • Medicaid expansion

  • Payment reforms

  • Exchanges

  • Cost containment

Crushing national debt

Medicare & Medicaid entitlement reform front & central in budget debate


2013 budget deadlines and pivotal events

2013 budget deadlines and pivotal events

Doc fix (1/1/13)

New fiscal year (10/1)

Debt celling (5/19)

Government funding expires (3/28)

Sequestration (3/1)

Legislative

State Medicaid expansion decisions

Jan

Feb

March

April

May

June

July

Aug

Sep

Oct

Nov

Dec

Multi-state health plan, exchange, essential health benefit regulations

Regulatory

Hospital payment update: 3.2% at risk; documentation & coding (10/1)


Outlook

Outlook

  • Budget fights mean potential payment cuts

    • Healthcare even bigger part of budget with ACA: +$120B/year

  • Administration: ACA implementation - ASAP

    • Focus: expanding coverage; making Medicare and Medicaid efficient

    • Details will matter and design will evolve

  • ACA litigation but little impact (contraception, Federal exchange subsidies, origination clause)

  • Insurance expansion uneven: insured increase Δ from 34MM to 27MM

  • Divided government = nothing significant changes

    • Likely to stay divided for 4 years

  • State experimentation: 30 Republican Governors/Federal tensions

    • Medicaid reform in non-expanding states

    • Delivery system reforms

  • Most likely Federal action is on SGR (Medicare MD pay) reform

    • CBO score reduced from $275B to $138B

    • Vehicle for broader delivery system reforms?


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

Payment and delivery system reform


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

A TRANSFORMATIVE MOMENT IN HEALTHCARE

• Fragmented care delivery

• Misaligned relationships with physicians, payers

• 30% unnecessary services

• Lack of transparency

Systemic

challenges

• Government, commercial and consumer pricing pressure

• Mix degradation

• Flat/declining utilization

• Movement to risk-based payments

• Value-based purchasing and harm penalties

• Bundled payments

Economic

and regulatory

challenges

Transformative

challenges

Imperative to manage population health, impact outcomes and provide higher quality at lower cost


Obama budget calls for deep cuts to medicare providers

Obama budget calls for deep cuts to Medicare providers

  • 4/10 - President Obama released a $3.77 trillion budget (FY) 2014 budget blueprint

  • $400 billion in cuts over 10 years to Medicare and Medicaid

    • $306.6 billion in provider cuts

    • $67.8 billion reductions due to beneficiary cost-sharing changes

  • Revisits Obama’s FY 2013 proposals

  • Overall, :

    • $1.8 trillion in new savings and tax revenue over the next ten years

    • Majority goes to replace sequester’s $1.2 trillion automatic spending cuts

    • Boasts investments that are fully paid ($2 in cuts for every $1 in new revenue)

  • $803.5 million for the operation of insurance exchanges

  • SGR repeal and replace similar to other congressional proposals

  • NIH flat funded ($31 billion)

  • FDA + $800 million

  • Delays for one year the cuts to disproportionate share hospital (DSH) payments (2015, instead of 2014)


Obama budget calls for deep cuts to medicare providers1

Obama budget calls for deep cuts to Medicare providers

Medicare

Medicaid

Beneficiaries

  • Reduce bad debt payments ($25.5 billion)

  • Reduce Graduate Medical Education payments ($11 billion)

  • Cuts to Critical Access Hospitals (CAHs) ($2.1 billion)

  • Reductions to post-acute care providers ($79 billion)

  • Post-acute care bundled payment ($8.2 billion)

  • Cut Waste, Fraud, and Abuse in Medicare ($400 million)

  • Part D drug rebates ($123 billion)

  • Additional Independent Payment Advisory Board (IPAB) cuts

  • Accelerate manufacturer drug rebates in the donut hole ($11.2 billion)

  • Changes to the in-office ancillary exception ($6.1 billion)

  • Reduce Part B drug payments ($4.5 billion)

  • Reduce clinical lab services payments ($9.7 billion)

  • Delay for one year cuts to DSH payments and rebase DSH

  • Apply Medicare competitive bid rates to Medicaid durable medical equipment (DME) ($4.5 billion)

  • Cut Waste, Fraud, and Abuse in Medicaid ($3.7 billion)

  • Increase income-related premiums ($50 billion)

  • Increase Part B deductible for new beneficiaries ($ 3.3 billion)

  • Introduce home health copayments for new beneficiaries ($730 million)

  • Introduce a surcharge for first dollar Medigap policies for new beneficiaries ($2.9 billion)


Fy 2014 proposed inpatient pps rule

FY 2014 Proposed Inpatient PPS Rule

  • Released April 26, will be published in May 10, Federal Register

  • Market basket increase of 2.5%, but 0.8% final update

  • 0.1% decrease in total payments in FY 14 compared to FY 13

  • 0.8% reduction due to documentation and coding offset

  • 0.9% reduction in DSH using uncompensated care proxy

  • 0.2% reduction for revised admission/medical review criteria

  • Raises readmissions penalty to 2% in FY 14, and adds hip/knee and COPD to program in FY 15

  • 57 total IQR measures for FY 16 payment- removes 8 measures and adds 5 claims-based outcome measures.

  • New measures for FY 16 VBP and new domains in FY 17

  • Creates HAC Reduction Program with two Domain measurement that overlaps in its entirety with existing HAC program and VBP

  • Comments due June 25, 2013


Hospital readmissions reduction program hrrp

Hospital Readmissions Reduction Program (HRRP)

  • Hospital-specific payment adjustment factor were applied to inpatient claims beginning Oct 1, 2012.

  • CMS proposes to use refined 30-day AMI, HF and PN measures based on 3 years of data (July 1, 2009 - June 30, 2012) for FY 2014 payment

  • Proposes to expand applicable conditions to include COPD and Hip/Knee for FY 2015

  • Applies to wage-adjusted base operating DRG payment amount (includes new tech add-on payment only, no adjustments for DSH, IME, outlier, or low volume)

  • For SCHs the adjustment will only apply to the national portion of the rates, not the additional payment due to the hospital-specific rates

1%

2%

3%

3%

3%


Hrrp 30 day readmissions measure refinement

HRRP: 30-day Readmissions Measure Refinement

  • Proposed to exclude readmissions classified as “planned” that may have occurred within 30 days of discharge

  • Planned readmissions include admissions for:

    • Types of care always considered planned – obstetrical delivery, transplant surgery, maintenance chemotherapy, and rehabilitation

    • A nonacute readmission for a scheduled procedure

  • Admissions for acute illness or for complications of care are never considered planned

  • Subsequent unplanned readmissions after a planned readmission that fall within 30-days of the original index admission will also be excluded

  • Applied to readmissions measures for FY 2014 and proposed for FY 2015 (with some revisions)

  • Maryland has received exemption from the FY 2014 VBP program


Ipps medicare dsh proposed uncompensated care dsh payment

IPPS: Medicare DSH- Proposed Uncompensated Care DSH Payment

Total DSH Payments in FY 2014 Absent ACA Provision

“Empirically Justified

DSH Payments”

25%

Distributed in exactly the same way as current policy

Distributed based on three factors:

Factor 1: Total DSH payment pool in FY 2014

Factor 2: Change in the percentage of uninsured

Factor 3:Proportion of total uncompensated care each Medicare DSH hospital provides

75%

“Uncompensated Care DSH Payments”


Ipps medicare dsh uncompensated care payment eligibility

IPPS: Medicare DSH – Uncompensated Care Payment Eligibility

  • Only affects operating DSH, not capital DSH

  • Only IPPS hospitals receiving a DSH payment adjustment can receive an “uncompensated care payment”

  • Hospitals in Puerto Rico and those participating in the Bundled Payments for Care Improvement Initiative are included

  • Maryland hospitals and hospitals participating in the Rural Community Hospital Program are excluded

  • Sole Community Hospital’s (SCHs) paid under their hospital-specific rates will be excluded, and uncompensated care payments will not be factored in determining if the federal or hospital-specific rate is higher for each claim.


Ipps medicare dsh factor 1 total dsh payments

IPPS: Medicare DSH – Factor 1 – Total DSH Payments

  • Uses most recently available projections of total Medicare DSH for the subsequent federal fiscal year as calculated by the Office of the Actuary

  • Projections are based on

    • Medicare cost reports for Medicare DSH payment

    • IPPS Impact file for Medicare DSH patient percentages and Medicare DSH payment adjustment percentages

    • Inflation updates and estimates of changes in utilization and case mix

  • CMS proposes to use the March 2013 estimate for proposed rule ($12.338 billion), July 2013 estimate for the final rule


Ipps medicare dsh factor 2 change in the uninsured percent

IPPS: Medicare DSH - Factor 2 – Change in the Uninsured Percent

  • CMS must determine how much the 75 percent pool will be reduced as a result of the decline in the uninsured population (proposed 75 percent pool is $9.2535 billion)

  • Required to use Congressional Budget Office (CBO) estimates in FY 2014 – FY 2017

  • Required to use CBO estimate from March 20, 2010, which is 18%, as the baseline number of uninsured in 2013

  • Uses CBO estimate from Feb. 5, 2013, which is 16%, as the most recent estimate of the number of uninsured in 2014

  • Change in uninsured is 88.9%, but available portion is 88.8%

    • 1-[(0.16-0.18)/0.18]= 88.9%

    • 88.9% - 0.1 percentage point= 88.8% (required reduction for FY 2014)

  • Results in a pool of $8.217 billion (reduction of about $1 billion in Medicare DSH payments in FY 2014)


Ipps medicare dsh factor 3 proportion of uncompensated care

IPPS: Medicare DSH – Factor 3 – Proportion of Uncompensated Care

  • Uses proxy to calculate uncompensated care proportion

    Hospital's Medicare SSI Days + Medicaid Days

    Total DSH Hospitals’ Medicare SSI Days + Medicaid Days

  • Date sources:

    • 2010/2011 cost report data for the Medicaid days

    • FY 2011 SSI ratios for the Medicare-SSI day

    • Includes Medicare MA patient days in the Medicare fraction

  • CMS considered using charity care, bad debt and other data from the hospital cost report worksheet S-10 to measure uncompensated care

    • Not proposing for FY 2014 use due to inconsistencies among hospitals and relative lack of experience reporting the information

    • May propose using worksheet S-10 data in the future


Ipps medicare dsh uncompensated care payment operations

IPPS: Medicare DSH - Uncompensated Care Payment Operations

  • Payments for uncompensated care will be made on a periodic basis, NOT on a per discharge basis

    • Uncompensated care payments will be determined in final rule each year and will not be updated with newer data or settled on cost report

    • “Empirically justified” DSH will still be paid on a per discharge basis

    • Final determination for only eligibility will be at cost report settlement

    • “Empirically justified DSH payments” (25% portion) and uncompensated care payments may then be recouped if not eligible

    • Uncompensated care payments will begin with Federal FY not hospital FY, but will be reported in hospital FY

  • Estimate of Uncompensated Care DSH Payment

    • Multiply Factor 3 by total estimated pool amount to calculate estimated uncompensated care DSH payment amount for your hospital. Appears on IPPS Impact file and supplemental table

    • Link to Medicare DSH Supplemental Data File [ZIP, 339KB]


Payment and delivery reform is happening

Payment and delivery reform is happening

Value-based purchasing:

HACs, quality, efficiency, cuts

Bundled payment

Global payment

HAC & readmissions penalties

Shared savings

FEE-FOR-SERVICE MOVING to integrated care, new payment models & risk

  • Population Management

  • Population analytics

  • Care management

  • Financial modeling and management

  • Legal

  • Physician integration

  • High Value Episodes

  • DRG and episode targeting

  • Care models and gainsharing

  • Data analytics

  • Cost management

  • High Performing Hospitals

  • Most efficient supply chain

  • Best outcomes in quality, safety

  • Waste elimination

  • Satisfied patients


Is the cost curve already being bent

Is the cost curve already being bent?

Source: Cutler, David, and Shani, Nikhil. “If Slow Rate of Health Care Spending Growth Persists, Projections May Be Off By $770 Billion.” Health Affairs, 32, no. 5 (2013): 841 – 850.


Value based purchasing across silos

Value based purchasing across silos

Track 1

Post-Acute Care Episode Bundling

Track 2

Acute and Post-Acute Care Episode Bundling

Acute Care Bundling

Medical Home


Ipps inpatient value based purchasing vbp

IPPS: Inpatient Value-Based Purchasing (VBP)

  • A percent of inpatient base operating payments are at risk based on quality and efficiency metric performance

  • A budget neural policy, where hospitals must fail to meet targets for bonuses to be generated for others

  • Rewards for achievement or improvement

  • Quality measures from Hospital Compare measure set

    • 20 measures (12 process/8 HCAHPS dimensions) in FY 2013,

    • Adds 3 outcome measures (3 mortality) in FY 2014, and

    • Adds 2 outcome measures and 1 efficiency measure in FY 2015.

  • Inpatient Quality Reporting measures are “on deck” for VBP.

  • AdvisorLiveon April 18, 2012 www.premierinc.com/advisorlive

  • 1% 1.25% 1.5% 1.75% 2%


Ipps movement toward outcomes and efficiency

IPPS: Movement toward outcomes and efficiency

Hospitals’ VBP payment will increasingly be based on their performance on outcomes/efficiency

FY 2013

FY 2014

Active Performance Period

FY 2015

Clinical process Patient experience Outcomes Efficiency


Growing number of public and private acos

Growing Number of Public and Private ACOs

  • Estimated 400+ public and private ACO’s in 43 states

  • Medicare specific ACOs:

    • First ACOs (10 organizations) part of the PGP demonstration project beginning in 2006

    • 32 CMMI “Pioneer” participants, program began 1/1/2012

    • Medicare Shared Savings Program

      • 4/01/2012: 27 ACOs selected to participate

      • 7/01/2012: 89 ACOs selected to participate

      • 1/1/2013: 106 ACOs selected to participate

= Insurer

= Hospital System

= IPA

= Community Based Organization

Source: Leavitt Partners Center for Accountable Care Intelligence, January 2013


States medicaid acos

States: Medicaid ACOs

  • Additional states passed legislation to encourage ACO creation:

  • Connecticut

  • Iowa

  • Maryland

  • Massachusetts

  • Montana

  • New Hampshire


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

50 markets

300+ hospitals

12,000+ MDs

23 markets

100+ hospitals

5,000+ MDs

100% success rate in helping 20 members apply for MSSP and Pioneer


Enabling members population health success

Enabling members Population Health success

Connecting People:

National ACO Collaboratives

Connecting Data:

Population Health Analytics

Connecting Knowledge: Operational Deployment

MO

ACO Implementation &

Readiness

80+ members collaborating

on best practices

120+ market assessments

Population Health

data management

Analytics supporting clinical integration and risk-based relationships

Resources to build capabilities

Cohorts, best practices portal, guidebooks, tools, vendor contracts


Collaborative members participating in mssp pioneer

Collaborative Members Participating in MSSP/Pioneer

  • AtlantiCare

  • Aurora Health

  • Banner Health**

  • Baystate

  • Billings Clinic

  • Bon Secours-Greenville, S.C.

  • Bon Secours-Richmond, VA

  • Fairview Health System**

  • Geisinger

  • Hackensack University Medical Center

  • Heartland Health

  • Methodist Health System

  • Mountain States Health Alliance

  • Southcoast

  • Summa Health System

  • University Hospitals

  • WellStar

    ** Pioneer members

WA

ME

MT

ND

MN

VT

OR

NH

WI

MA

ID

SD

NY

MI

WY

RI

IA

CT

PA

NE

NV

NJ

IL

OH

IN

DE

UT

DC

CO

WV

MD

VA

MO

CA

KS

MO

KY

NC

NM

TN

AZ

OK

AR

SC

31

MS

AL

GA

TX

LA

FL

= PGP Transition Demo

= ACO Pioneer

= MSSP (April 01 start date)

= MSSP (July 01 start date)

*MSSP January 2013 announced


Time until joining or creating aco c suite only

TIME UNTIL JOINING OR CREATING ACO (C-SUITE ONLY)

Source: Premier healthcare alliance spring 2013 member survey


Early r esults show opportunities for savings

Early results show opportunities for savings

$500 savings per patient/year

19% lower patient costs

Lowered health plan costs by $10m to $15m

12.3% reduction in net health care costs

$1.59m savings on cardiac and ortho. services

4.48% reduction in employee BMI


Assessments drive insight

Assessments drive insight

Implementation Collaborative overall assessment*

Readiness Collaborative

overall assessment**

Blue = High

Green = Average

Red = Low

*Data from 24 markets

**Data from 51 assessments


Collaborative lessons learned 8 critical success factors for population health

Collaborative lessons learned8critical success factors for population health

  • Robust primary care network

  • Patient-centered medical home

  • Physician-led/professionally managed

  • Clinically integrated network

  • Care management programs

  • Population health analytics

  • Aligned payorarrangements

  • Acute episode focus

    “Accountable Care Strategies: Lessons from the Premier Health Care Alliance’s Accountable Crare Collaborative”, The Commonwealth Fund; Amanda J. Forster, Blair G. Childs, Joseph F. Damore, Susan D. DeVore, Eugene A. Kroch, and Danielle A. Lloyd (Premier Research Institute); August 2012

    “Measuring Progress Toward Accountable Care”, The Commonwealth Fund; Eugene Kroch, R. Wesley Champion, Susan D. DeVore, Marla R. Kugel, Danielle A. Lloyd, and Lynne Rothney-Kozlak (Premier Research Institute); December 2012

Commercial Bundled PaymentContracting Guidebook

February 2013

Version 1.0


Number of executed agreements by payor category

Number of executed agreements, by payor category


1 682 000 covered lives by model as of 12 31 12

1,682,000 Covered lives, by model (as of 12-31-12)


Top 5 and bottom 5 lessons from comparisons

Top 5 and Bottom 5 – Lessons from Comparisons

38


Major commercial health plan trends

Major Commercial Health plan trends

  • Rapid movement toward consumer driven health plans and new payment arrangements

  • Components of new payment models

    • Transformational funding

    • Care management

    • Shared Savings

  • Early Adopters include the following:

    • Regional Blue Cross plans (MN, MA, IL, HA, etc.)

    • Commercial Health Plans (Aetna, Cigna, Humana, etc.)

  • Partnering with MSSP ACOs

    • Universal American (31 MSSPs)

    • Walgreen’s (3)

  • Building delivery systems

    • Cigna- Primary Care Network (PCMH)-Phoenix

    • United HeatlhCare-Monarch physicians group (2300 physicians)

    • Aetna purchases Active Health

    • Da Vita acquires Healthcare Partners

  • Growth in Provider Sponsored Health Plans

  • State Insurance Exchange strategies

  • Medicaid managed care/ACOs


New payor arrangements

New payor arrangements

  • Commercial arrangements with Blues plans

    • Minnesota Blue Cross and major delivery systems (35% of hospitals)

    • Horizon Blue Cross with AtlantiCare

    • BCBS Michigan with Marquette General Hospital

    • HMSA with Hawaii Pacific Health

    • Blue Cross of Massachusetts-AQC program

    • Blue Shield of California/CHW/Hill Medical Group (CalPers)

    • CareFirst BCBS in Maryland building largest PCMH

    • BCBS Illinois-Advocate ACO arrangement

    • Texas BCBS and Texas Health Resources form ACO arrangement

  • Other commercial arrangements

    • Cigna continues to expand its Collaborative Accountable Care to 52 programs in 22 states covering nearly 510,000 lives

    • Texas Health Resources partners with Aetna to form an ACO

    • Memorial Hermann (Houston’s largest health care provider) partners with Aetna to form ACO

    • Aurora Health Care and Banner Health both form ACOs with Aetna


Premier s bundled payment services the largest collaborative in the us focused on bundled payment

Premier’s Bundled Payment ServicesThe largest collaborative in the US focused on bundled payment

Collaborative Members

Members in Model 2 Application

WA

ME

MT

ND

MN

VT

OR

NH

WI

ID

MA

SD

MI

NY

WY

RI

CT

IA

PA

NE

NV

NJ

OH

IN

DE

UT

IL

MD

WV

VA

KS

CO

DC

CA

KY

MO

NC

AZ

OK

TN

AR

NM

SC

MS

AL

GA

LA

TX

FL

CMS ACE Demo States

2009/2010 – 3 years

As of 8/08/2012


Cms initial undertaking more to come

CMS initial undertaking…more to come

  • We are focused on Model 2 of first wave

Future Models

4 Models Now

4 Models to Come

  • Section 3023 of ACA by 2013?

  • Medicaid bundling demos?

  • Private Sector Initiatives


Commercial bundles

Commercial bundles

  • Commercial insurers are experimenting with Bundled Payments

  • Payors can benefit from a discounted fee arrangement and the chance to partner with a provider willing to work to improve care delivery to the payor’s beneficiaries

  • Commercial bundled payment agreements have the potential to increase volume


Congressional sgr proposals

Congressional SGR proposals

Step 1: SGR repeal & period of stable payments

Provider opt-out of UIP for alternative payment model adoption

Step 2: Portion of payments based on quality of care

OR

Update Incentive Program (UIP)


From uncertainty on the law to uncertainty on if it will work hfma gerry haggerty annual leadership institute may 15 2013

Movement toward market-based reforms


Movement toward market based reforms

Movement toward market-based reforms

Facts about Insurance Exchanges (marketplaces)

  • Governmental or not-for-profit entities

  • Qualified Health Plans (QHPs) compete on the Exchange

  • QHPs offer the state’s definition of “essential health benefits” (EHB)

  • Open to individuals and small employers

  • QHPs offer EHBs at designated “metal levels” of cost sharing defined by actuarial value (AV):

    • bronze (60% AV)

    • silver (70% AV)

    • gold (80% AV)

    • platinum (90% AV)

      AV = percentage of the total allowed cost of benefits paid by the plan, versus by the consumer through cost sharing


Exchange implications

Exchange Implications

26M will join exchanges

Employers with unskilled labor may “dump” to exchanges

  • Many individuals will purchase “Bronze” plan

  • Influence consumer behavior

  • Impact on potential for bad debt

  • New competitive environment and marketing by insurers

  • Drive narrow networks

  • Greater pricing pressure

Greater consumer demand for price & quality information

Expandable to new populations (Medicare/Medicaid)

Large employers moving toward reference pricing?


Marketplace timeline

Marketplace timeline

Policy

Operations & IT

Issuers &

States

Consumer assistance

Train staff to assist patients in selecting & enrolling in plan

Ensure compliance & contract with QHPs

Hospital

steps

30

Talk to state officials to see if your hospital can serve as a Navigator


Insurance exchanges how will they be structured

Insurance exchanges – how will they be structured?

State-based, 17+DC

Washington

Vermont

Minnesota

Partnership, 6

North Dakota

Montana

New York

Federally Facilitated, 27

Wisconsin

Michigan

Oregon

Maine

South Dakota

Idaho

Pennsylvania

Wyoming

Delaware

Iowa

Ohio

New Hampshire

Nebraska

Maryland

Massachusetts

Illinois

Nevada

Rhode Island

Connecticut

Utah

New Jersey

Colorado

Kentucky

Kansas

North Carolina

Missouri

Tennessee

California

West

Virginia

Indiana

Virginia

South Carolina

Oklahoma

Arkansas

New Mexico

Arizona

Mississippi

Georgia

Alabama

Texas

Louisiana

Florida

Alaska

Hawaii

As of 3/4/13


What does this mean

What does this mean?

  • Payment levels constrained

  • Don’t be distracted by the political fights, but engage

  • Traditional Medicare & Medicaid leveraged to drive change

  • Coverage expansion (revenue relief) uneven

  • Value-based payment reforms, population health and market transformation is happening -- this time!

  • Greater insurer competition and consumer demands

  • Providers are well positioned in this environment, but

  • Provider-led transformation will require policy change, de-regulation, scale and smart decisions


Questions

Questions?

Seth Edwards

Manager, Federal Affairs

[email protected]

202.879.8006


  • Login