1. “Reaching across Arizona to provide comprehensive quality health care for those in need” Primary Care Provider Medicare Rate Parity Shelli Silver Assistant Director February 20, 2013 Our first care is your health care Arizona Health Care Cost Containment System

2. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 2  On November 6, 2012, less than 2 months prior to the January 1, 2013 effective date of the regulations, CMS published final rules to implement Section 1202 of the ACA  CMS is allowing States until March 31, 2013 to submit their methodologies to CMS for approval retroactive to January 1, 2013 For enhanced FMAP funding For methodology to pay MCOs State Plan Amendment (SPA)  CMS will engage in “expedited” approval not to exceed 90 days! Federal Requirements

3. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 3  Contract amendments will be necessary for pass-through payment requirements (and cap rate adjustments if necessary)  CMS will not approve an amendment without an approved SPA – thus earliest effective date we expect is July 1, 2013, but could be later  Enhanced payments will be required, retroactive to January 1, 2013 dates of service, for qualified providers and qualifying services Federal Requirements, cont.

4. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 4  AHCCCS’ web-based provider attestation form was posted February 18, 2013  Physicians filing the required attestation on or before April 30, 2013 (note change in date from earlier communication) will be paid enhanced fees retroactively to January 1, 2013 dates of service; attestations filed on or after May 1, 2013 will be paid enhanced fees on a go-forward basis from the time the attestation is received  CMS requires AHCCCS to audit physicians submitting attestations  AHCCCS and MCOs must recoup all enhanced payments from physicians who attest that they meet the requirements but are found to not meet those requirements in the audit Provider Attestation

5. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 5  On January 8, 2013, CMS released a Technical Guidance and Rate Setting Practices document containing 3 models that “would generally be considered reasonable and acceptable to CMS”  The document further notes that “states may use an approved model that is reasonable and thoroughly documented”  AHCCCS will likely propose to CMS a variation of their Risk Model 3 – Non-risk Reconciled Payments for Enhanced Rates AHCCCS would prospectively pay cap rates without enhanced payments At some interval, MCOs would summarize actual claims data to calculate the total payments that providers were paid to meet the parity requirement AHCCCS would review these reports and, if found reasonable, would pay the MCO the calculated additional payment amounts AHCCCS Payments to MCOs

6. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 6 MCOs would be required to include recoupments in their reporting and refund additional payments to AHCCCS MCOs would be required to include all reprocessed claims in their reporting and refund additional payments to AHCCCS for any reduced claim payments  AHCCCS will continue to develop this methodology, and all related requirements, and will provide MCOs with more guidance when available  MCO feedback is welcome  This anticipated proposal is subject to CMS approval and is subject to change in part or in its entirety AHCCCS Payments to MCOs, cont.

7. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 7  AHCCCS surveyed MCOs on December 18, 2012, to learn which of two payment options MCOs would prefer to implement: 1) Enhanced rates paid through the claims processing system on a claim-by- claim basis 2) Enhanced rates paid through supplemental payments on a periodic basis  Opinions were evenly split  Major concern over option 1 for AHCCCS is inflated data that cannot be used for future rate-setting/trending  Major concern over option 2 for MCOs is that supplemental payments would live outside core claims processing system, making reprocessing of claims difficult MCO Payments to Providers

8. “Reaching across Arizona to provide comprehensive quality health care for those in need” Our first care is your health care Arizona Health Care Cost Containment System 8  Due to implementation sometime after July 2013, and recoupment of enhanced payments upon audit identification of providers failing to meet attestation standards, claims reprocessing will be rampant  Consequently AHCCCS will require MCOs to process enhanced payments using option 1 - through the claims processing system on a claim-by-claim basis  AHCCCS has developed an encounter reporting requirement to allow the actuaries to identify payments without enhanced fees: MCOs will use CN1 Code 09 (other) on all impacted encounters MCOs will report the rate, prior to PCP rate parity, in the HP Allowed Amount field MCOs will report the enhanced payment in the HP Paid field MCO Payments to Providers, cont.

9. “Reaching across Arizona to provide comprehensive quality health care for those in need” Questions? Our first care is your health care Arizona Health Care Cost Containment System 9