State of Vermont Demonstration to Integrate Care for Dual Eligible Individuals Financing Model Workgroup Meeting #3: August 26, 2011

2 Agenda Review of Meeting #2 Minutes Review of Meeting #2 Minutes Overview of Existing Vermont ‘Non- Traditional’ Financing Mechanisms for Community Services Overview of Existing Vermont ‘Non- Traditional’ Financing Mechanisms for Community Services Discussion: Pros and Cons of Alternative Payment Approaches Discussion: Pros and Cons of Alternative Payment Approaches Financing Model Workgroup Meeting #3 (August 26, 2011)

Overview of “Non-Traditional” Financing Mechanisms for Community Services Community Rehabilitation & Treatment case rates Developmental Disability Services: Individualized Budgets Home Health Agencies: Medicare Prospective Payments Hospice: Medicare or Medicaid daily rate(s) PACE: Medicaid & Medicare capitated monthly payments Choices for Care: ‘Flexible Choices’ for home and community based services 3Financing Model Workgroup Meeting #3 (August 26, 2011)

Questions for Each “Non-Traditional” Financing Mechanism Purpose or goals Short description of mechanics, including payment principles Benefits to consumer, incentives/disincentives Benefits to provider, incentives/disincentives What works well or should not be changed What does not work well or could be improved Outcome, performance, or quality measures 4Financing Model Workgroup Meeting #3 (August 26, 2011)

5 Preliminary Discussion: Alternative Payment Approaches Financing Model Workgroup Meeting #3 (August 26, 2011) ObjectiveFee-for-ServiceCase RateCapitation/ Bundled Ensure Access/Provider Sustainability Payments based on volumePredictable funding levels Need to monitor service adequacy Promotes person-centered service development at the community level Promote Quality CareVolume/Capacity Based, but dependant on reimbursement amounts Monitor care delivery Outcomes-based incentives Supports person-centered care plan development Monitor outcomes Promote FlexibilityDefined list of covered services Additional flexibility within provider’s range of services Maximizes flexibility Promote Integrated and Coordinated Care Case management servicesWithin provider’s range of services Coordinated service planning and budgeting Manage Program CostsRelatively predictable; managed by State Greater management at provider level; Provider incentive to develop cost-effective alternatives; Opportunities for provider- specific savings/reinvestment Greater management at community level; System incentive to provide cost-effective alternatives; Opportunities for system- wide savings/reinvestment