1. AHCCCS Contractor Update Meeting Rate-Related Updates Shelli Silver November 19, 2014

2. FQHC Implementation Delayed until we are ready – no sooner than 3/1/15 – hopefully no later than 3/1/15 Various issues to clarify/complete including: o FQHC request for 1 - 3 “visit” codes o Comments on services that are “incident to” PPS-payable visit o Billing manual, testing and MCO contracts Cap rates to be adjusted at implementation 2 Reaching across Arizona to provide comprehensive quality health care for those in need

3. CMS Process for Cap Rate Review CMS has released new requirements for capitation rate development for managed care programs o Enhancing rate oversight o Providing clearer expectations to states  Released a 2015 Managed Care Rate Setting Consultation Guide for use when setting rates for rating periods starting in calendar year 2015 with any managed care program subject to actuarial soundness requirements in 42 CFR §438.6 3 Reaching across Arizona to provide comprehensive quality health care for those in need

4. CMS Process for Cap Rate Review, cont. Also new - CMS Office of the Actuary (OACT) will review all cap rates along with the current review performed by the Region o Effective 1/1/15 and after CMS amending 1115 Waiver to require that AHCCCS submit cap rates/contracts/ amendments at least 45 days prior to effective dates from the current 30 days 4 Reaching across Arizona to provide comprehensive quality health care for those in need

5. Health Insurer Fee CMS has approved a methodology for amending cap rates for the health insurer fee (HIF) and related income taxes Two step process o Step 1 – AHCCCS will amend rates for the HIF + premium tax around December annually o Step 2 – AHCCCS will amend rates to add federal and state income taxes, if appropriate, in the spring of the following year 5 Reaching across Arizona to provide comprehensive quality health care for those in need

6. Health Insurer Fee, cont. 2014 HIF on 2013 revenue: o For year 1, AHCCCS avoiding CYE 14 rates due to withhold complications (Acute), thus amending September 2013 rates primarily 2015 HIF on 2014 revenue, and annually: o AHCCCS intends to amend cap rates for month of October 2014, and annually thereafter  Member months should be stable thus permitting most accurate payment adjustment 6 Reaching across Arizona to provide comprehensive quality health care for those in need

7. AFIS Replacement Accounting system for State of Arizona being replaced effective July 2015 Implications for Contractors: o Daily capitation can really be paid daily!  Can Contractors accept this change?  One net payment inclusive of all payments (cap/RI), credits (sanctions, recoupments), etc. 7 Reaching across Arizona to provide comprehensive quality health care for those in need

8. AFIS Replacement, cont.  AHCCCS ISD must be able to produce a daily 820  820 will not be released at same time as funds  820 won’t show all detail of co-mingled funds  AHCCCS staff to research ability to produce and distribute an electronic report with payment detail o Conversion is slated for first week of July 2015  Small risk that July capitation could be impacted but payment date due to holiday and implementation date could coincide  State team understands significance of timely payments and AHCCCS is one of top priorities 8 Reaching across Arizona to provide comprehensive quality health care for those in need

9. Thank You. 9 Reaching across Arizona to provide comprehensive quality health care for those in need