1. P4P: Developments and Acceptance In Medicaid and Medicare Disease Mgmt. Gus Geraci, MD Senior Product Manager for Provider Facing Programs McKesson Health Solutions

2. May 8, 2007Disease Management Colloquium2 Agenda Science and Design of P4P Success and Failures Progress to Date Questions

3. May 8, 2007Disease Management Colloquium3 Agenda Science and Design of P4P Success and Failures Progress to Date Questions

4. May 8, 2007Disease Management Colloquium4 Science of P4P Defects Exist in Current Payment Systems  Incentive for Volume  Quality May Suffer Do $$$ Work to Change Behavior? Mixed Literature and Emotion

5. May 8, 2007Disease Management Colloquium5 Science of P4P (2) Evidence is Accruing that Programs Do Work Many Naysayers Every Program is Different How To Avoid “Gaming”

6. May 8, 2007Disease Management Colloquium6 P4P and Disease Management In Medicaid/Medicare Challenges: FFS Environment  No Direct Contractual Relationship With Providers DM Programs Perceived As Interfering Misperception of Funding Source for DM Programs  Not From MY Pocket “Too much paper” Concerns About Potential Liability

7. May 8, 2007Disease Management Colloquium7 P4P in Disease Management We Have Hard Evidence that P4P Achieves Better Results Within a DM program by:  Engaging Providers  Providing an Incentive for Specific Evidence Based Activities  Thereby Improving Clinical and Financial Results

8. May 8, 2007Disease Management Colloquium8 McKesson’s P4P Approach Incorporate P4P Market Feedback into Design Tie P4P Payments to Key DM Program Success Factors  Influenced By Providers Involve National/State Professional Organizations in Design Publicize P4P Program Well

9. May 8, 2007Disease Management Colloquium9 Helps ensure quality of care  Yes: based on nationally accepted guidelines Foster the patient-provider relationship  Yes: provider is key in recruitment and goal-setting Offers voluntary participation  Yes: no penalty or reduction in fees for non-participation Uses accurate data and fair reporting  Yes: payments based on information received directly from providers, patients or claims Provides fair and equitable incentives  Yes: providers are paid a fair amount as compensation for the work done Design Follows AMA P4P Guidelines

10. May 8, 2007Disease Management Colloquium10 Market Feedback Program Design Data Validity Model Complexity Long Lag times between physician behavior, data collection and reporting, and bonus payments Confusing to physicians Difficult to administer Low pt volume per physician Not statistically significant Case mix issues P4P Design Flaws Payments designed like FFS system Start with simple participation metrics Use widely accepted claims-based metrics (HEDIS-like) Frequent payments: First payment within 6 months after program launch; quarterly payments thereafter

11. May 8, 2007Disease Management Colloquium11 Agenda Science and Design of P4P Success and Failures Progress to Date Questions

12. May 8, 2007Disease Management Colloquium12 MS MHS Program Experience – Stormy! MS MHS Program launched August 22, 2005 Hurricane Katrina struck MS Gulf Coast August 29 th  Practitioners focused on meeting refugee needs  P4P introductory mailing delayed

13. May 8, 2007Disease Management Colloquium13 Medicare Health Support (MS) Development of an individualized, goal oriented care management plan in consultation with each targeted pt, to include:  Point of contact responsible for communications  Self-care education and education for primary caregivers and family members  Education for physicians and other providers as well as collaboration to enhance communication of relevant information CMS-Mandated Services

14. May 8, 2007Disease Management Colloquium14 MS Design Similar to PA Enroll Information Exchange  Clinical and Administrative Evidence Based Clinical Metrics

15. May 8, 2007Disease Management Colloquium15 How the P4P Program Works Time Physician responsibilities:

16. May 8, 2007Disease Management Colloquium16 Mississippi - Terminated Results Not Tracking With Design

17. May 8, 2007Disease Management Colloquium17 PA Medicaid P4P Program PA Practitioners More Familiar With P4P Programs (Commercial and Medicaid MCO) FFS Managed Care Program – EPCCM Program Continues to Grow in Enrollment “I actually got a check…”

18. May 8, 2007Disease Management Colloquium18 Survey of Participating Providers 56% Agree/Strongly Agree P4P is Useful to Practice 42% Unsure 2% Strongly Disagree 60% Agree Strongly Agree Helps Improve Quality 38% Unsure 2% Strongly Disagree

19. May 8, 2007Disease Management Colloquium19 Clinical Results P4P participation is shown to increase the average monthly rate of occurrence for a blood test for cholesterol within the diabetes population P4P participation is shown to increase the average monthly rate of occurrence for a prescription for controller medication within the asthma population P4P participation is shown to increase the average monthly rate of occurrence for a prescription for cholesterol lowering medication within the CAD population P4P participation is shown to increase the average monthly rate of occurrence for a prescription for beta-blocker within the heart failure population

20. May 8, 2007Disease Management Colloquium20 Financial Results P4P Participation Resulted in Greater Savings in Inpatient Costs Than Non-P4P

21. May 8, 2007Disease Management Colloquium21 Agenda Science and Design of P4P Success and Failures Progress to Date Questions

22. May 8, 2007Disease Management Colloquium22 Progress to Date We’ve Learned a LOT Getting Out of Medicare in MS Continuing Strong in PA Designing Next Two Years for PA  Non-Disease Management P4P − Quality Incentives Aligned with State Initiatives

23. May 8, 2007Disease Management Colloquium23 Redesigning the Program Realigning the Program Reinforcing Success of P4P in Medical Home Model for Primary Care Success Exists in Specialty and Primary Care P4P Requests for P4P in New And Current Programs

24. May 8, 2007Disease Management Colloquium24 Stay Tuned for Next Year! More Detailed Analysis More Non-DM Data P4P Works  Clinical  Financial  Greatest Barriers Are: − Supporting Program − Distrust

25. May 8, 2007Disease Management Colloquium25 Agenda Science and Design of P4P Success and Failures Progress to Date Questions

26. May 8, 2007Disease Management Colloquium26 Questions? Gus.Geraci@McKesson.com