Medicare and ACOs Models CEO Call January 12, 2012

Pioneer ACOS “ For established organizations with a track record of providing robust coordinated care, the CMS innovation center is offering a pioneer ACO program designed to encourage and support the next wave of innovation from vanguard organizations.” Don Berwick, Nov (80 applications, 32 selected)

Massachusetts Well Represented Atrius HealthCentral and Eastern Mass Beth Israel Deaconess Physician Organization Eastern Mass. Mt Auburn Indepnt. Practice Association (MACIPA) Eastern Mass. Partners HealthcareEastern Mass Steward Health Care System Eastern Mass

Pioneer ACOs – Design There are 5 models with varied rules for shared savings, amount of risk, and degree of capitation. The least aggressive first year financial alternative permits a “1-sided bonus-only” arrangement with no downside risk. All Pioneer ACO must assume substantial 2-sided risk (bonus/loss) in the second year In the third and subsequent years, all Pioneer ACOs will assume partial to full capitation, capitated per member per month Entities that have failed to average at least 2 percent savings in the first two years will retain their second year payment arrangements but CMS may terminate their contracts after the third year

Pioneer ACOs & Choice A beneficiary aligned to an ACO maintains complete freedom to visit any healthcare provider accepting Medicare, just as all Medicare beneficiaries participating in original, fee-for-service Medicare do. These beneficiaries do not need a referral to see a specialist outside the ACO. Unlike a managed care arrangement, like an HMO or a Medicare Advantage plan, a beneficiary aligned to an ACO is free to see any healthcare provider accepting Medicare at any time. In addition, beneficiaries maintain all the benefits to which they are entitled in original, fee-for- service Medicare.

Pioneer ACOs vs Shared Savings Model Pioneer ACO has stronger financial incentives – e.g., a higher level of shared savings and risk Pioneer ACOs move faster towards the meaningful use of electronic health records (EHRs) by the majority of the ACO’s primary care providers Pioneer ACOs need to enter similar contracts with other payers (such as commercial insurers, employer health plans and Medicaid) - 50% of revenues by year 2 ACOs need to prospectively identify – but not enroll - patients (Unclear how much concurrent data they will have access to) Target: 15,000 benes Health Affairs, Dec 2011

Pioneer ACOs vs Shared Savings Model In Year 1, CMS will pay for ACOs that report on all 33 measures. Year 2, CMS will pay for performance in 25 of the measurement categories and reporting in 8 measurement areas. In Year 3, CMS will pay for performance in 32 measurement categories while only requiring ACOs to report on CAPHS Health Status/Functional Status.

Extensive Quality Measures ACOs must report and achieve performance improvement on 33 quality distinct quality measures in four different domains: Patient/Caregiver Experience; Care Coordination and Patient Safety; Preventative Health; and At Risk Populations. (see link below) Many are patient satisfaction survey reported (shared decision making, access to specialty care); others more clinical (admissions for COPD, heart failure, med rec after hospital discharge and falls risk screening). _QualityMeasurementPayPerformanceFactSheet.pdf