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1 This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA). Information contained in this presentation is.

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Presentation on theme: "1 This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA). Information contained in this presentation is."— Presentation transcript:

1 1 This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA). Information contained in this presentation is subject to change as regulations are issued and interpretation evolves. This presentation should not be considered to be legal guidance regarding ACA or its potential impact.

2 Health Care Landscape Kelly McGivern Sr. Director, Government Affairs December 14, 2012 This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA). Information contained in this presentation is subject to change as regulations are issued and interpretation evolves. This presentation should not be considered to be legal guidance regarding ACA or its potential impact.

3 3  Benefit coverage changes −Preventive Care at 100% in network –Dependents < age 26 –No pre-ex < age 19 –Prohibits rescissions except fraud –No lifetime limits/ annual limits on essential benefits –Patient protections –Grievance and appeals updates  Temporary high-risk pool  Uniform MLR definition (NAIC)  HHS Web Portal Source: Patient Protection and Affordable Care Act  Increased penalties on individual mandate  Increased insurer taxes  States must allow groups with <100 employees into exchanges (2016)  “Cadillac tax” (2018)  Patient Centered Outcomes Research fee  MLR reporting goes “live”  Administrative Simplification begins to phase in  Uniform summary of coverage  Guaranteed issue  Individual coverage mandate  Individual subsidy  State individual and small group exchanges operational  Rating rule changes  Insurer taxes  Employer “Pay or Play” Mandate  Essential health benefits  Medicaid expansion  90-Day maximum waiting period  Auto-Enrollment  Annual reporting of employee coverage  Definition of full-time employees  Wellness incentives  Medical device fee  Exchange coverage notice  FSA Cap  Tax deduction for Medicare Part D subsidy eliminated Healthcare Reform Timeline  Minimum MLR requirements  Medicare Advantage plans begin to have payments frozen  Medicare Advantage cost sharing limits effective  Pharmaceutical fee  Rate review implementation

4 4 Prominent ACA Provisions in 2014 Key ACA provisions effective in 2014 Individual Mandate Taxes and Fees Prohibits health plans from denying coverage or rating applicants based on their health status Levels the playing field between health plans and mitigates the impact of Guaranteed Issue and pricing uncertainty in the short term Institutes penalties for failing to purchase health insurance Lowers the cost of coverage for the low and middle income populations in the Individual market Levies against health insurers and other groups to fund subsidies and risk management mechanisms Institutes penalties for employers who fail to offer affordable comprehensive coverage Creates government regulated Individual and Small Group health insurance marketplaces Key ACA provisions, which will become effective in 2014, will have a significant impact on the health insurance marketplace. Risk Management Mechanisms Employer Mandate Guaranteed Issue (GI) and Rating Changes Tax Credits and Subsidies Insurance Exchanges

5 5 States have a considerable amount of flexibility in deciding how to structure their Public Individual and Small Group Exchanges. Key 2014 Provision: Insurance Exchanges Exchange Eligibility:  Full-time employees of small businesses from 1 to 100 employees  State option to limit to businesses of 50 or less until 2017  States will decide on the degree of choice offered to employees through the small business Exchange and how employers can provide contributions toward employee coverage  Beginning in 2017, states will have the option to open the Exchanges to large employers Individual Exchange Private Exchange Exchange Eligibility:  US citizen or legal alien  Not incarcerated  Resident of the state in which Exchange is based Access to Premium Tax Credits and Cost Sharing Subsidies:  Between 133% and 400% FPL  Not offered affordable coverage through an employer Description:  May allow health plans to target employers that are potentially interested in defined contribution for their employees  Potentially more health plan flexibility as plans may not need to meet QHP (Qualified Health Plan) standards  Regulatory issues to be considered include state insurance law, rating, anti-selection, risk management, and antitrust requirements Access to Premium Tax Credits and Cost Sharing Subsidies:  No access to tax credits and subsidies Small Business Health Options Program (SHOP Exchange)

6 6 Exchange Implementation Timeline Summer  States notify HHS of intent to operate Exchange Q1 – Determine Exchange technology solutions Q2 – Finalize Exchange go-to-market strategy – Begin technology build Q4 – Networks configured – Products developed and filed Health Plan Implementation Milestones Health plans currently await additional Exchange guidance from Health and Human Services and States. Degree of Clarity on Exchange Regulations from HHS and States Low Higher …2017 Award Funding and Publish Legislation Exchange Coverage Effective Build Exchange Certify Exchange IVL/SG Exchange Effective LG Exchange Effective

7 7 Exchange Implementation Timeline January  HHS decides on Fallback Exchanges Fall  Exchanges finalize available options  Initial enrollment Q1 – Rates filed for 2014 Q2 – Submit applications to States for qualified health plans Q3 – Ready to quote / enroll Q4 – Ready to service Health Plan Implementation Milestones Health plans currently await additional Exchange guidance from Health and Human Services and States. Degree of Clarity on Exchange Regulations from HHS and States Low Higher …2017 Award Funding and Publish Legislation Exchange Coverage Effective Build Exchange Certify Exchange IVL/SG Exchange Effective LG Exchange Effective

8 8 Exchange Implementation Timeline January  Exchange coverage becomes effective Q1 – Fully operational on the Exchange Health Plan Implementation Milestone Health plans currently await additional Exchange guidance from Health and Human Services and States. Degree of Clarity on Exchange Regulations from HHS and States Low Higher …2017 Award Funding and Publish Legislation Exchange Coverage Effective Build Exchange Certify Exchange IVL/SG Exchange Effective LG Exchange Effective

9 9 Exchange Implementation Timeline January  States may permit large employers in Exchange Health plans currently await additional Exchange guidance from Health and Human Services and States. Degree of Clarity on Exchange Regulations from HHS and States Low Higher …2017 Award Funding and Publish Legislation Exchange Coverage Effective Build Exchange Certify Exchange IVL/SG Exchange Effective LG Exchange Effective

10 10 Value-Based Contracting Michelle Mathieu Daniels Vice President Network Management December 14, 2012

11 11 Aetna Works with Providers to Create Incremental Value ACO’s Narrow Networks Provider Alignment Quality & Cost Transparency Managing Medical Costs Population-Based ManagementAccountable Care OrganizationsNarrow NetworksMedical HomesBundled PaymentsPay for Performance Transparency Tools IOEs/IOQs/Steerage Utilization Management Site of ServiceDiscounts/Unit Cost Value

12 12 What is Value? “Value” is the patient health outcome achieved per healthcare dollar spent. Our strategy is to provide improved value through population health management, which is built on the foundation of the Triple Aim: 1) Improve patient experience/engagement; 2) Improve population health; 3) Reduce aggregate cost of care. Definition of “value” from: Porter ME. What is value in health care? N Engl J Med 2010; 363: ( /NEJMp ). “Triple Aim” from: “Triple Aim Initiative.” IHI.

13 13 Charting the Payment Reform Path Full Capitation Partial Capitation Shared Savings Bundled Payments Pay-for- Performance Traditional Fee-for- Service Episodic Cost Accountability Total Cost Accountability Continuum of Payment Models Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives Substantial Minimal Savings Potential

14 14 Medicare Collaboration Our objective is to align resources and incentives to improve outcomes National and local focus

15 15 The Building Blocks of Collaboration Collaborative Care Management Nurse Case Manager in the Participating Provider’s Group Practice Care Managers work in collaboration with physicians to Develop care plans Monitor ongoing symptoms Coach patients to manage their conditions Continuity of care Performance Based Compensation Provide enhanced payment opportunities for achieving defined performance measured focus on quality, recognition and management of chronic conditions and reductions in avoidable hospital admissions and readmissions

16 16 The Building Blocks of Collaboration Medicare Data Analysis Sharing actionable information to improve recognition of chronic conditions for risk scores and achievement of quality measures Collaboration Results Overall Aetna MA inpatient utilization results are 31% - 34% better than FFS Medicare

17 17 Aligning Incentives:  Per member per month coordination-of-care fee to support practice infrastructure  Members are “attributed to the practice using standard attribution logic  Gain sharing model so practices can benefit from incremental efficiency and clinical improvements Sample Clinical Measures: Diabetic: A lipid management: LDL-C control <100 Diabetes: medical attention for nephropathy Diabetic: hemoglobin A1c management Sample Efficiency Measures: 30-day readmissions rate Bed days per thousand (excluding trauma/maternity) Inpatient cost savings PMPM ER visits per thousand Aetna supports the development of Patient Centered Medical Homes through pilots in eight states --- the early returns are promising Aetna supports the development of Patient Centered Medical Homes through pilots in eight states --- the early returns are promising Features: Three levels of PCMH certification from the National Committee on Quality Assurance Emphasis: Coordinated team-based primary care focused on the needs of members, populations Standards: Access, continuity, self-care, population mgt, treatment goals, performance improvement Creating Alignment with Patient- Centered Medical Homes

18 18 Aetna’s PCMH Models Multi-Payor Collaboratives, CMS, and Comprehensive Primary Care Initiative (CPCI) Direct Contractual Relationship Region specific contracting pipeline Care Coordination Fee and Shared Savings Efficiency and Clinical Performance Monitoring PCMH Recognition Model Market based program Care Coordination Fee Efficiency and Clinical Performance Monitoring

19 19 More PCMH Proof Points StateCost ImprovementQuality Improvement Florida 40% fewer inpatient days 37% lower ER visits 18% lower total costsIncreased primary care visits by 250% Michigan 10% lower adult ER visits 17% lower ambulatory care sensitive inpatient admissions60% better access to care Minnesota 39% lower ER visits 24% lower inpatient admissions Reduced appointment wait time from 26 days to 1 day New Jersey Reduced PMPM costs by 10% 26% lower ER visits 21% lower inpatient admissions 31% increase in ability to self-manage blood sugar 24% increase in LDL screening North Carolina 52% fewer visits to specialists 70% fewer visits to ER Medicaid saved $900 million in 3 years Medicaid: 21% increase in asthma staging 112% increase in flu innoculations Ohio34% decrease in ER visits 22% decrease in patients with uncontrolled blood pressure Rhode Island17-33% lower costs among PCMH members 44% increase in quality scores for family/children’s health 35% increase for women’s care Texas 23% lower readmission rates $1.2 million in estimated cost savings Results compiled by the Patient-Centered Primary Care Collaborative at: “Benefits of Implementing the Primary Care Patient-Centered Medical Home.” PCPCC

20 20 Definition of Bundled Payments Bundled Payments can be defined as payments that reimburse providers on the basis of expected costs for clinically-defined episodes of care. They are a mid-point on the road to payment reform. Where Bundled Payments Have Succeeded Medicare Participating Heart Bypass Center Demo CMS (HCFA) spending declined by 15.5% in the first 2 years. CMS Acute Care Episode demonstration 20% reduction in supply costs at Hillcrest Savings of $4 million in device/supply costs at Baptist Health. Congressional Budget Office (CBO) Study of 34 Demonstration Programs Only 1 demonstration program saved a significant amount of money – using Bundled Payments. RAND Health study of payment reform options Bundling had the most to offer – the potential for a 5.4% reduction in prices.

21 21 Aetna and Bundled Payments With Bundled Payments, Aetna aims to support the “Triple Aim” of improved population health, improved patient experience and reduced cost of care. First Principles for Bundled Payments In designing our Bundled Payment program, Aetna principles include: In pursuing bundles, or any payment innovation, Aetna aims to improve quality of care while reducing costs. Aetna puts a premium on quality measurement in bundles and sees the opportunity to align incentives to ensure quality care as a key advantage of bundled payments. Yet, it’s also true that: When it comes to Bundled Payment contracts, one size doesn’t fit all. It is important to meet providers where they are (on risk and integration). First Procedures for Bundled Payments Knee ReplacementHip ReplacementBariatric Surgery Infertility ServicesCABG SurgeryAngioplasty

22 22 Pay-for-Performance – Payment Reform’s Underpinnings Pay-for-Performance (P4P) can mean a stand-alone program, but there are P4P components to any payment mechanism that ties payment to achievement of quality metrics, including most programs whose results are on these slides. Aetna’s Hospital and Specialty P4P programs offer hospitals and providers scorecards that assess their proficiency at improving outcomes and following evidence-based processes of care. They also reward facilities and providers that publicly report on the quality of the care they offer. Aetna’s goals for the program include: Ensure quality care for the money hospitals receive. Ensure hospitals operate efficiently. Closing the gap between low-and-high performers.

23 23 Pay-for-Performance – Payment Reform’s Underpinnings

24 24 Aetna’s Way Forward

25 25 Quality health plans & benefits Healthier living Financial well-being Intelligent solutions Margaret Anson, SVP Strategy and Operations Accountable Care Solutions December 14, 2012 Accountable Care

26 26 CMS Model Medicare only Defined network Shared savings Quality measures and reporting Aetna Perspective All patient model – Medicare, Medicaid, Commercial All payor model – not limited to Aetna members Committed to quality and total cost management Symmetrical risk sharing Aetna’s Accountable Care Solutions offering is a sustainable long-term model for change We see Accountable Care as a Broad, Transformational Commercial Model

27 27 Accountable Care Benefits All Stakeholders Lower cost, higher quality, enhanced member experience Aetna and Health System Partner Members Quality-based, coordinated care Lower out-of-pocket costs Enhanced member experience Tools to support a healthy lifestyle Employers Cost savings Sustainable solution Improved quality Enhanced wellness and care management Improved employee productivity Care Providers Consultants/Brokers Innovative client cost savings solution Increased growth through opportunity to differentiate Quality indicator reports Infrastructure to manage populations and risk Payment aligned with quality and outcomes Improved compensation

28 28 ACOs allow providers to counter significant profitability reductions via a sustainable business model This Is How It Works Performance Gap (e.g., Rate Pressure, Competitive Market Forces) Current Performance Future Performance Without Defensible Strategy Invest in New ACO Capability Operating Cost Improvement Shared Savings Steerage (Commercial, Medicare, Medicaid) Clinical Integration Clinical Efficiency and Enhanced Care Management/HIT Growth

29 29 DescriptionModel Build Population Specific Models Private Label Health Plan Clinical Integration Support All Payers Clinical Integration Support All Payers  Medicare: Pioneer, Medicare Shared Savings Program, Medicare Advantage  Medicaid  System Employees  Commercial Fully Insured  Large, self funded customers  Federal Employees  Medicare: Pioneer, Medicare Shared Savings Program, Medicare Advantage  Medicaid  System Employees  Commercial Fully Insured  Large, self funded customers  Federal Employees  Governance  Network Development  Business, Payment and Clinical Model Development  Workflow Redesign, Clinical, IT, Care Management Infrastructure Development  Change management  Role and Responsibility Definition  Governance  Network Development  Business, Payment and Clinical Model Development  Workflow Redesign, Clinical, IT, Care Management Infrastructure Development  Change management  Role and Responsibility Definition  Use of Aetna insurance license and expertise (e.g., actuarial) to enable private label or co-branded health plan offering and manage risk  Leverage Aetna scale/operations – claims processing, customer service, call center, & care management (e.g., staff, programs, technology)  Use of Aetna insurance license and expertise (e.g., actuarial) to enable private label or co-branded health plan offering and manage risk  Leverage Aetna scale/operations – claims processing, customer service, call center, & care management (e.g., staff, programs, technology) Three models of collaboration

30 30 License Claims Member Services Sales and Marketing Actuarial / Underwriting Implementation Services Health Plan Services License Claims Member Services Sales and Marketing Actuarial / Underwriting Implementation Services Health Plan Services Care Management Embedded CM Telephonic CM DM, UM, CM Wellness Senior Programs Implementation Services Care Management Telephonic / Embedded UM, DM, CM, BH, MM Training, Staff & Programs Wellness and Lifestyle Clinical / IT Platform Implementation Services HIT/HIE HIE CDS PHR / Pt Portal Analytics Implementation Services CT Suite HIT/HIE HIE CDS PHR / Patient Portal Analytics Implementation Services Care Team Suite HIE CDS Analytics & Reporting Implementation Services Provider Branded Health Plan Provider Branded Health Plan Payment Reform Payment & Incentive Models Consulting Strategy Development and Change Management Infrastructure Out Patient FacilitiesPharmacy Home Health Physicians HospitalsStaff Out Patient FacilitiesPharmacy Home Health Physicians HospitalsStaff Business Models A la Carte and Turn-Key Solutions Any Payer, Any Insurance Segment

31 31 We are better prepared this time around 31  Care coordination through HIT  Aligned incentives between payers and providers  Cost savings and sustainable solutions  Cost-shifting to members moderates utilization  Insufficient data to change consumer behavior and coordinate care  FFS reimbursement encourages volume over value  Broad networks with out-of-network benefits increase cost  Disjointed care delivery  FFS reimbursement encourages volume over value  UM functions as barrier to care  Insufficient data to support care coordination  Limited payer/provider collaboration ACOs are not HMOs by another name HMO Gatekeeper Model Advent of the PPO Consumer Directed Health Plans TODAY 1980s 2000s 2012 THEN …… NOW Policy and cost pressures are forcing change; Technology is available to enable transparency and collaboration with providers through aligned incentives Limited transparency and access to information; Absence of public policy to drive systematic change

32 32 Hospital Employee Benefit Plan Administration Powered by Creation of meaningful Payment and incentives for triple aim improvement on a defined population(s) Clinically Integrated Delivery Model that has the ability to drive improved performance Business model that Rewards both partners Dedicated service model Custom network administration Clinical coordination with on site programs Reporting/Data analytics Decision support tools Clinical Data Integration Secure Data Exchange Leading consumer mobile app Symptom-to-Provider pathway Navigation, access, appointments, registration Provider interface Cloud-based applications Rapid / viral distribution Population-based clinical intelligence, decision support and alerts Care Management, communication and workflow technology Diverse Suite of Unique Tools and Services

33 33 Our Strategies Deliver Benefits to all Stakeholders ConsumersProvidersEmployers Improved access, quality, affordability, and convenience Flexible and customizable Payment aligned with quality and outcomes Infrastructure to manage populations and risk More affordable benefits Increased and improved engagement Workforce productivity and human capital

34 34 What is Your ACO Readiness?  Do you have a population based care management program?  How strong is your commitment to the triple aim of better care, better health, reduced costs?  Have you embraced the PCMH philosophy?  Can you embrace payer discipline?  Are you ready to share risk with payers or the government?  Do you have an organizational commitment to transformation?  How are you perceived by your community (do employers see you as a partner in helping manage their benefit costs)?  Does your existing “owned” or “clinically integrated” provider network provide adequate geographic coverage for your targeted population or do you need more partners?  Does your technology plan support population health management?

35 35 Questions?

36 36 Thank you


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