Overview of OHIC’s Care Transformation & Payment Reform Initiatives KATHLEEN C. HITTNER, MD. HEALTH INSURANCE COMMISSIONER NOVEMBER 12 TH, 2015

Agenda  Policy Objectives of the Affordability Standards  Strategy 1: Care Transformation  Strategy 2: Payment Reform  Questions

Policy Objectives The key objective of OHIC’s Affordability Standards is to make health insurance coverage more affordable for Rhode Islanders by driving increased efficiency and quality in medical care delivery. Two mutually reinforcing strategies to achieve this objective are to transform the way care is delivered and reform how care is reimbursed.  

Care Transformation Initiatives to foster a delivery system capable of managing population health and total cost of care. Strengthen primary care. Expand PCMH to reach 80% of primary care providers by Reduce barriers to practice transformation. Build connections between primary care, specialists, hospitals and post-acute care providers. Make data and analytics accessible and actionable. Transfor ming the Delivery System

Payment Reform Initiatives to align health care payment with incentives for efficiency and quality of care. Drive health care payment to alternative payment models that evaluate provider performance on cost and quality. Convene stakeholders to plan strategies and develop recommendations around expansion of alternative payment models. Paying for Value, Not Volume

First Wave: Second Wave:  Value-based contracting with hospitals.  Increased financial support for primary care. Patient-centered medical homes. EHR incentives and CurrentCare  Price increase limitation for hospitals. Growth tied to CMS Price Index Required quality incentive program. Fee increases tied to quality.  Systemic payment reform.  Enhanced Patient- centered medical home standards.  Accountable Care Organizations.  More aggressive price increase limitation for hospitals.  Budget increase limitation for ACOs. Year by year targets for use of alternative payment models by commercial payers. Paying for Value, not Volume. Transfor ming the Delivery System Controllin g Cost Outcomes Anticipated Outcomes  Unpreceden ted focus on quality performanc e targets.  Fee increases at risk for quality performanc e.  Primary care spend increased from 5.5% to 10.6% of spend.  Significant growth in PCMH & HIT.  Greater leverage for insurers to negotiate reasonabl e rate of increase of hospital fees.  Stronger incentives for cost efficiency and quality in provider reimbursement contracts.  Less waste and duplication.  Improved ability of medical homes to manage high risk and rising risk patients.  Greater coordination of care across the system.  Hospital fee increases aligned with core inflation by Goals THE AFFORDABILITY STANDARDS  Premium increases in line with core inflation.  More innovative and efficient health care system.  Improved access to services through greater affordabilit y.  Healthier population.  Improved climate for doing business in Rhode Island.

Questions?