1. Medicare Advantage/Special Needs Plans: Considerations for a Provider-Led Frontier August 2018

2. Agenda What is Medicare Advantage and Special Needs Plans?
Current environment: Trends & Policy
When Providers take the Lead?

3. What is medicare Advantage and a Special needs plan?

4. Types of Coverage Medicare Original Fee-For-Service (FFS)
Medicare Advantage
Traditional Medicare Advantage
MA only
MA PD (includes Part D)
Special Needs Plans
Institu-tional
(ISNP)
Dual Eligible
(DSNP)
Chronic Condition
(CSNP)
Original Fee-For-Service (FFS)
Medicare Supple-mental Insurance
Prescription Drug Plan (PDP)
Medicare Advantage: sometimes called "Part C" or "MA Plans," are offered by private health plans approved by and contracted with CMS. These private plans accept financial risk and administer the Medicare program benefits plus some optional supplemental benefits.
Enrollees receive Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage plan and not traditional Medicare Fee For Service.
Most Medicare Advantage plans also include Medicare Part D Rx drug coverage (MA-PD plans)
“Special Needs Plans” are a type of Medicare Advantage plan that target enrollment of certain individuals: individuals requiring nursing home level of care for 90 days or more, individuals eligible for both Medicare and Medicaid, and individuals with specified chronic conditions.
Special Needs Plans:
Institutional Special Needs Plan – individual must reside in LTC facility for at least 90 days or meet nursing facility level of care and reside in the community/Assisted Living
Chronic Condition Special Needs Plan – targets specific chronic conditions, individual must have diagnosis of specific condition to qualify
Dual Eligible Special Needs Plan – individual must have both Medicare and Medicaid coverage. Most commonly used in conjunction with State roll out of Medicaid Managed Long Term Services and Supports (MLTSS)
Traditional Medicare (Fee For Service) Parts A and B; Deductibles; Coinsurance
Can be partnered with a Medicare Supplemental and/or Prescription Drug Plan
Medicare Supplemental Benefits/Plans: Sometimes called Med Supp or Medigap plans, these plans supplement or wrap around traditional Medicare FFS coverage for non-Medicare covered services (deductible, co-insurance, added benefits under purchased plan). Medicare (CMS) pays first and supplemental provider coordinates benefits w/ Medicare
Beginning in 2020 two types of Medigap/Med Supp plans are no longer to be sold (no new enrollment). Plan C and Plan F which represented 53% of the enrollment in Medigap polices in 2010.
These plans covered Part B deductibles (in 2018, $183/year)
Plan G covers same things as F with the exception of the Part B deductible.
Prescription Drug Plan (PDP): A managed care plan for the prescription drug or Medicare Part D benefit

5. Medicare Advantage: Overview
Medicare Advantage (MA) is an alternative to original Medicare fee-for-service (FFS) offered by private health plan companies (like an HMO or PPO) approved by Medicare and governed by a contract
Sometimes called Part C or MA Plans
Cover Medicare Part A (hospital insurance) and Part B (medical insurance) services except for hospice care. Most plans also include prescription drug coverage (Part D)
Some MA plans offer additional supplemental benefits such as: care coordination, eyeglasses, dental, and wellness services
Private insurers are responsible for deciding rules, restrictions, and costs of their MA plans; they are prohibited from charging more for some services, including SNF 5

6. Types of MA Plans Preferred Provider Organization (PPO)
Health Maintenance Organization (HMO)
Private Fee-for-Service (PFFS)
Special Needs Plans (SNP)
HMO Point of Service
Medical Savings Account (MSA)
Programs of All-inclusive Care for the Elderly (PACE)
1876 Cost Plans

7. Special Needs Plans (SNPs)
641 SNP plans nationally
DSNPs = 412
ISNPs = 97
CSNPs = 132
A type of MA plan that provides focused and specialized health care for specific groups of people, like:
Dual eligibles SNP for those eligible for both Medicare and Medicaid
Institutional SNP for those requiring 90 days + of nursing home care
Chronic Care SNP for one of 15 chronic medical conditions (e.g., ESRD).

8. How it Works -SNP Requirements
Must comply with MA plan rules but some additional requirements apply
Eligibility is limited to targeted population for each SNP
Must include Part D prescription drug coverage
Must have an evidence-based Model of Care (MOC) aligned with the National Committee for Quality Assurance (NCQA) standards and approved by CMS

9. How it Works - SNP Requirements
Quality: same quality improvement requirements as other MA plans but tailored to the special needs of individuals served by the SNP
SNPs must conduct both a Chronic Care Improvement Program (CCIP) and a Quality Improvement Project (QIP) targeting the special needs population that it has selected to serve
4 additional quality measures:
Care management
Medication review
Functional status
Pain assessment

10. Medicare Advantage: Special Needs Plans
Institutional
Enrollees: NF resident for 90 or more days, or assisted living resident or the community dwelling AND meet nursing facility level of care
Clinical protocols are developed to reduce unplanned discharges and provide as many services as possible within the nursing facility, avoiding hospitalizations
Dual Eligible
Enrollees: eligible for both Medicare and Medicaid
Traditionally provide only Medicare benefits but coordinate with enrollee’s Medicaid benefits
Fully Integrated Dual Eligible (FIDE) SNPs provide both Medicare and Medicaid benefits
Chronic Condition
Enrollees: Must be diagnosed with the chronic condition targeted by the plan
Plan specifies a chronic condition and develops optimal benefits and clinical supports to avoid and/or manage acute episodes
Fond du Lac is the only county that is an outlier.
County information retrieved from:

11. Institutional Special Needs Plan (ISNP)
ISNP Eligibility
Institutional Equivalent SNPs
Restrict enrollment to Medicare Advantage (MA) eligible individuals who require or are anticipated to need 90 days or more of care and services provided in:
A long-term care (LTC) skilled nursing facility (SNF)
A LTC nursing facility (NF)
An intermediate care facility (ICF) for the developmentally disabled
An inpatient psychiatric facility
An assisted living facility (ALF)
ISNPs may also enroll community-dwelling individuals who require an institutional level of care, prior to having at least 90 days of such care, if:
A CMS-approved needs-assessment is conducted by an independent entity
The results indicate the individual’s condition makes it likely that either the length of stay or the need for an institutional level-of-care will be at least 90 days

12. DSNP: Dual-Eligible Beneficiaries
Population: Individuals who qualify for both Medicare and Medicaid; plans can limit enrollment to specific types of dual-eligibles
Services: Combines Medicare and Medicaid benefits
Medicare: Part A (Hospital), Part B (Doctor and some preventative), and Part D (Pharmacy)
Medicaid: provides additional medical coverage including doctor visits, nursing home care
Often includes Dental, Vision and Hearing, not included in Medicare Part A or Part B
Copays and cost sharing is either $0 or decreased and paid by Medicaid
Medicare
Medicaid Low Income Qualifying Individuals
Dual Special Needs Population (DSNP)

13. Fully-Integrated Dual Eligible SNPs (FIDE SNPs)
FIDE SNPs must:
Provide dual eligibles access to Medicare and Medicaid benefits under a single plan with an aligned care management model and specialty provider network
Have a state contract to offer a capitated benefit package that includes acute, primary care and LTSS benefits, consistent with state policy
Employ CMS and state approved policies and procedures or integrate enrollment, member materials, communications, grievance and appeals, and quality improvement

14. FIDE SNP and Rates FIDE SNPSs may be eligible for:
The PACE frailty factor payment adjustment reflects the cost of treating high concentrations of frail individuals if their risk scores indicate a “similar average level of frailty” as the PACE program

15. Chronic Condition SNP (C-SNP)
Medicare Advantage plan targeting benefits for persons with one or more of the following severe or disabling chronic conditions:
Chronic alcohol and other drug dependence
Autoimmune disorders
Cancer (excluding pre-cancer conditions)
Cardiovascular disorders
Chronic heart failure
Dementia
Diabetes mellitus
End-stage liver disease
End-Stage Renal Disease (ESRD) requiring any mode of dialysis
Severe hematologic disorders
HIV/AIDS
Chronic lung disorders
Chronic and disabling mental health conditions
Neurologic disorders
Stroke

16. How it Works – Applying to be a Plan
Annually MA and SNP plans submit a competitive bid to CMS
Applicants with a CMS approved MA-PD contract in place only need to complete the SNP portion of the MA application
MA premiums are set through the bidding process
Each county in the plan’s service area has a payment benchmark based on county-level payment rates, national growth rate in per capita Medicare spending and Hierarchical Condition Category (HCC) CC Risk Adjustment
Benchmarks set the bidding target and represent the maximum amount CMS pays. Enrollee premiums are higher when the plans bid above the target
Over/under slide – Benchmark line if over then enrollee must pay out of pocket for their additional premium. If under, then the plan is rebated a portion of the dollars to offer supplemental benefits like eyeglasses, dental, etc. Health related.
Supplemental benefits pre-2019:
Preventative & Allowance for Comprehensive Dental
Eye Exams & Allowance for Eye Wear
OTC Benefit
Fitness Benefit
24 hour Nursing Hotline

17. How it Works – Applying to be a Plan (cont.)
Supplemental Benefits:
Plans that bid below target receive a portion of the difference or a “rebate”, which they must use to provide supplemental benefits
Higher quality plans (5-star rating system) receive more of the rebate and therefore are able to provide richer supplemental benefits
Over/under slide – Benchmark line if over then enrollee must pay out of pocket for their additional premium. If under, then the plan is rebated a portion of the dollars to offer supplemental benefits like eyeglasses, dental, etc. Health related.
Supplemental benefits pre-2019:
Preventative & Allowance for Comprehensive Dental
Eye Exams & Allowance for Eye Wear
OTC Benefit
Fitness Benefit
24 hour Nursing Hotline

18. How it works – Payment
Fixed Monthly Payment Per Enrollee: CMS pays MA or SNP plan per member per month(PMPM) to cover Medicare Part A, B & D services
Risk adjusted Payment: based off Hierarchical Condition Categories (HCCs) that adjust for health expenditure risk; this is set annually
Assessment and documentation of enrollees’ needs are critical to maximize payment
Bonus payments: MA plans receive 5% bonus if their performance on 5-star quality rating system measures is 4 stars or higher
MA-PD plans rated on up to 48 unique quality and performance measures
5-star plans can market year round not just during annual enrollment
Greater flexibility how care is delivered and what can be paid for (e.g., Can waive 3-day hospital stay to receive SNF care)

19. ISNP PMPM & Medical Loss Ratio
85% must be spent on care
Payments for covered services
Capitated Per Member Per Month to SNF for preventive care, care management, etc. = new SNF revenue
15% is used on administrative costs and profit for the plan

20. Current environment: Trends & Policy

21. Growing steadily.
SNPs permanently reauthorized
Bipartisan support of MedAdv plans
Governments like the predictability of managed care

22. Cerner report: 48% of new MA plan beneficiaries are newly eligible for Medicare introducing a younger, healthier cohort

23. Medicare Advantage Penetration Across States
National Average expected to grow to 41% by 2027
Source: Congressional Budget Office, “Medicare – Congressional Budget Office’s January 2017 Baseline,” January 24, Available at:
While nationally one-third of those eligible for Medicare are enrolled in Medicare Advantage plans, that penetration and enrollment levels can vary dramatically by state and by county.
Impact on provider

24. Fully-Integrated Dual-Eligible SNPs (FIDE SNPs)
FIDE SNPs must:
Provide dual eligibles access to Medicare and Medicaid benefits under a single plan with an aligned care management model and specialty provider network
Have a state contract to offer a capitated benefit package that includes acute, primary care, and LTSS benefits, consistent with state policy
Employ CMS and state-approved policies and procedures or integrate enrollment, member materials, communications, grievance and appeals, and quality improvement

25. MA Enrollee Demographics
57% are female
53% have incomes < $30,000 (46% in FFS)
30% are from diverse populations (23% FFS)
-Hispanic/Latinos selecting at higher rate
86.8% live in Urban Area (76% in FFS)
28% of enrollees are years old
(24% in FFS)
MA enrollees have poorer reported health -61% Fair or Poor (56% FFS)
Medicare Advantage enrollees are more likely to be female, with lower incomes, are more ethnically diverse, younger but have poorer health.
Sources: AHIP Medicare Advantage Demographics Report, 2015, published June 2018

26. MA Enrollment Trends
48% of new MA plan beneficiaries are newly eligible for Medicare – younger, healthier
41% of Medicare enrollees are projected to be in MA plans by 2026
94% of MA Enrollees are satisfied with only 2% returning to Medicare FFS
Source: “The Medicare Advantage Opportunity: How payers and providers can capitalize on this growing segment,” Cerner

27. National Observations
Significant growth in managed care in both Medicare and Medicaid
Other risk-based, alternative payment models are also increasingly impacting Medicare FFS beneficiaries as the Center for Medicare and Medicaid Innovation continues to roll out these models
Federal Policymakers appear committed to:
Moving away from FFS to Value-Based Payment
Expanding MA
Increasing expectations of providers to deliver value
Evidence that gainsharing is not occurring when acute or primary care control the dollars under these models

28. 2019 Key Policy Developments
Special Needs Plans permanently reauthorized and new requirements to better integrate with LTSS and Behavioral Health
MA plans supplemental benefits expanded to allow some Home and Community Based Services
MA plans to be permitted to offer more targeted and flexible benefit offerings by health status or disease
New requirements being established to ensure integration in SNPs

29. New MA Supplemental Benefits
Beginning with CY2019 plans
CMS and Congress are changing what MA plans can offer as supplemental benefits – some HCBS
CMS reinterpreted “primarily health-related” for CY2019
Congress via the Bipartisan Budget Act takes it further for CY2020
Supplemental benefits:
Can’t be Part A or B covered services
Must be primarily health-related AND
MA plan must incur a cost for providing the benefits.

30. List of Newly Qualifying Supplemental Benefits
Adult Day Services
Assistance with activities of daily living (ADLs)/Instrumental ADLs (IADLs) provided outside the home
Education to support performance of ADLs/IADLs
Physical maintenance/rehabilitation activities
Social Services to ameliorate impact functional/psychological impact of injuries or health conditions, reduce emergency room use
Recreational and social activities or meals – as long as purpose is primarily health related and provided by licensed/qualified staff
Home-based palliative care (life expectancy > 6 months)
Keep in Mind:
New benefits are NOT for all Medicare beneficiaries
MedAdv penetration in NY = 38% (2017 and 5/2018)
NY has two of the top 5 counties in the country for MedAdv penetration: #2 = Monroe (65%); and #5 = Erie (58 now 59.7%)
This is an option , not a requirement.
Provides will need to negotiate and managed contracts with MA plans to deliver these supplemental benefits.
On April 27, CMS guidance provided the following list of services that it explicitly deemed to meet the new interpretation
List is not exhaustive

31. List of Newly Qualifying Supplemental Benefits (cont.)
In-home support services for short periods of ADL/IADL assistance needed due to medical condition or disability
Pain management (medically-approved, non-opioid)
Memory fitness benefit
Home & Bath Safety device & modifications
Transportation to help with health needs
Keep in Mind:
New benefits are NOT for all Medicare beneficiaries
MedAdv penetration in NY = 38% (2017 and 5/2018)
NY has two of the top 5 counties in the country for MedAdv penetration: #2 = Monroe (65%); and #5 = Erie (58 now 59.7%)
This is an option , not a requirement.
Provides will need to negotiate and managed contracts with MA plans to deliver these supplemental benefits.
On April 27, CMS guidance provided the following list of services that it explicitly deemed to meet the new interpretation
List is not exhaustive

32. When Providers Lead the Plan
When the provide becomes the payer…
Model: Provider transforms into payer
Contract directly with CMS to operate a Medicare Advantage Plan
Determine which products best meet needs of population (ISNP, CSNP,DSNP MAPD)
Significant investment: HMO license, provider network, MAPD, effective Model of Care, etc.
Take risk for total cost of care for patient population

33. Why now? Changing Payment Environment
Major payers are moving from FFS to paying for value – quality + lower cost
Value-based payment program 2% Medicare FFS
New SNF Prospective Payment System(PPS) – Patient Driven Payment Model
SNF Quality Reporting Program penalty = 2%
Risk-based models are being tested: Bundled Payment, Accountable Care Organizations
Rising MA penetration and Medicaid Managed Care LTSS adoption
Government and employers seeking greater predictability on costs
Providers now subject to multiple payers with multiple ways of doing things
Managed care impacts
Often smaller or single site organizations are left out of networks or have no leverage
Substitutions of care reducing demand for short stay rehab in a SNF
Shifting payment policy
Value based payment program 2% cut
New SNF PPS – Patient Driven Payment Model
SNF Quality Reporting Program penalty = 2%
Risk-based models being tested: Bundled Payment, ACOs
Changing Care Delivery Patterns
Reduced hospitalizations = fewer Skilled Nursing Facility stays
Shorter SNF Lengths of Stay
Preferred Provider Networks

34. Why now? Changing care delivery patterns
Disrupting the amount and type of care and services provided
Derive savings from Post Acute Care (PAC) delivery changes and substitutions of care
Reduced hospitalizations = fewer Skilled Nursing Facility stays
Shorter SNF Lengths of Stay
Rise of preferred provider networks, often exclude smaller/single site organizations
Patient determines payer and model, PAC/LTSS provider has little control over terms
Accountable Care Organization and Bundled Payment attribution, managed care enrollment
Pain with little or no gain: PAC and LTSS providers generating savings but not receiving a share
Managed care, Comprehensive Care for Joint Replacement (CJR) and Bundled Payment Care Improvement-Advanced (BPCI-A) bundles, and ACOs
Pain with Little or No Gain: PAC and LTSS providers generating savings but not receiving a share
Managed care, CJR and BPCI-A bundles, and ACOs
Patient determines payer and model, PAC/LTSS provider has little control over terms
ACO and Bundled Payment attribution, managed care enrollment
Administrative costs of compliance are significant
Provider has limited view into Total Cost and Outcomes of Care - data controlled by the payer

35. LeadingAge State Affiliates
Who is getting in?
Providers
LeadingAge State Affiliates
Partners
Good Samaritan as Great Plains Medicare Advantage in ND, SD, NE
Provider-Sponsored Health Plans represent roughly 19% of the MA enrollment today (Cerner population health report.

36. Considerations: Risks and Investments
You need to become a health insurer
Upfront investment ~ $2M + reserves
Obtaining enrollees
About 500 to breakeven; to generate revenue
Timing in MN – 2019 transition from MA cost plans to MA risk plans
Building a provider network
The competition - other plans and systems - and impacts on other business revenue
The capital call
Choosing the right partner(s)
Insurer – need a license, reserves, understand who you can market to and how, need to understand insurance laws and regulations, need to put together and submit a bid every year to be a Medicare Advantage plan, need to balance costs and services provided

37. Barriers to entry and success
Culture Change: New business model, requires new way of thinking
Your staff
Other provider partners: hospitals, physicians, etc.
The people you serve
Funds to start up and support a plan
Future funds when medical expenses exceed projections
Must have a care model and longitudinal care management

38. Benefits to Provider-Owned MA plan
Prospective vs. Retrospective payment: you get the money/budget to care for people upfront and then must manage; don’t have to wait for CMS to calculate whether you are over/under a target.
You get to choose your partners – provider network
Your good deeds are rewarded: work to improve quality, reduce length of stay and readmissions is financially rewarded
Knowledge of resident enrollees’ needs and trusted relationship
Full view of utilization patterns and costs via claims data
Preemption: once enrolled in a SNP, the individual is no longer eligible to be attributed to a Medicare ACOs, bundled payment, or similar CMS value-based payment demo or pilot, etc.
Additional flexibilities: choose your benefit design, 3-day hospital stay waivers to allow to treat in place

39. Managed Care Models Owner/Operator/ Limited Subcontract
Owner/Partnership: Provider +Subcontractor(s)
Owner/Partnership: Multiple Providers Form Plan
Non-Owner/Subcontractor
Owner/Operator/Limited Subcontract: RiverSpring Health (Hebrew Home)
Owner/Partnership: Presbyterian Homes of MN/AllyAlign or Medica, SIMPRA Advantage (AL)/AllyAlign
Owner/Partnership: Provider Partners Health Plan (Rick Grindrod)
Nonowner/subcontractor: OptumHealth

40. Provider-Led (Owner/Operator)
Owner/ Partnership
Non-owner/ Subcontractor
Ownership
Provider
Provider(s); Provider + Subcontractor
Health Plan
Subcontracts
Limited
Significant – network, enrollment
HMO License & Medicare Advantage contract
Plan Owner
Administrative functions
Provider pays; subcontract functions
Owner bears cost and admin functions
Medical Loss Ratio Risk
Provider - full
Capitalization & Reserves
Plan Administrator/ Owner

41. Brown Univ. Study: MA vs. FFS on Hips
Evaluated outcomes for MA and FFS beneficiaries with hip procedures between 1/1/2011 – 12/31/2015
Findings:
SNF Length of Stay (LOS) was 5.1 days shorter under MA
MA beneficiaries had an avg. 463 fewer therapy minutes
Considerations
Minor difference in the readmission rate
Did not look at impact on average cost per beneficiary
Did not track home health utilization when SNF LOS was shorter
MA plans had a care manager assigned to the beneficiary and who was actively engaged in the discharge planning process
FFS beneficiaries had a greater rate of cognitive impairments
Results not generalizable
Source: pmed &type=printable : PLOS Medicine, June 26, 2018

42. PPHP Experience
PPHP ISNP - SNF patients’ actual medical costs drop to approximately 73% of the premium
Medicare in the LTC patient has been totally unmanaged until now
SNFs are in great position to reduce hospital costs –the main driver of the cost of patient care

43. AllyAlign Reported Outcomes
40% - 80% enrollment penetration
Majority of Model of Care plan submissions received 100% score from NCQA
Results:
Members receive average of 2.8 NP visits per month
Hospitalizations decrease in year 1 of new plans by 30%
Preliminary star ratings show 4 and 5 star rating across 44 of 46 eligible metrics

44. AllyAlign Results
2016
2017