Preliminary working draft; subject to change 0 The shift to paying for results is just one part of a broader program to improve the way that care is delivered in Arkansas Episode-based care delivery How care is delivered Medical homes + Health homes Objectives ▪ Improve the health of the population ▪ Enhance the patient experience of care ▪ Enable and encourage patients to take a more active and informed role in their own care ▪ Reward providers for high quality, efficient care ▪ Reduce or control the cost of care Four aspects of broader program ▪ Results-based payment and reporting ▪ Health care workforce development ▪ Health information technology (HIT) adoption ▪ Expanded access for health care services For patients For providers

Preliminary working draft; subject to change 1 Episode-based care delivery The Arkansas approach is designed to reward coordinated, team-based care across the whole person and for specific conditions or procedures Our overall approach ▪ Providers proactively work as a team to manage a patient’s overall health The goal ▪ Patient journey: all healthcare and support services needed by a patient over time ▪ Patient journey: all services related to a specific condition, procedure, or disability How it works ▪ Typically one provider is designated as ‘quarterback’ for all patient needs for a period of time ▪ Quarterback: the provider in best position to influence prevention and management of chronic disease ▪ Quarterback: ‘Principal Accountable Provider’ in best position to influence cost and quality of services for the episode How we are implementing it… Medical homes and Health homes Incentive ▪ Providers are rewarded for providing high-quality care at an appropriate cost ▪ Outcome measured includes overall health of the provider’s patient population (across all conditions and episodes) ▪ Outcome measured is average cost and quality of care for all patients that experience a given ‘episode’ (e.g., a surgery)

Preliminary working draft; subject to change 2 Two types of episode-based care delivery Guidelines-based episodes ▪ Clinical guidelines are clear and predict the level of need ▪ Diagnosis is concrete and reliable ▪ Trajectory of the episode is consistent across clients ▪ Condition is of a meaningful size ▪ Diagnosis is “separable” from (not consistently associated with) other conditions Assessment-based episodes ▪ A reliable assessment that accurately predicts need exists ▪ Trajectory should be consistent with assessment results for a defined period of time ▪ The assessment covers a majority of the client’s needs in that area ▪ Acute medical episodes, e.g., URI, pregnancy ▪ Some behavioral health conditions, e.g., ADHD ▪ Support services driven by level of functional need, e.g., developmental disabilities, LTSS Criteria Examples Likely model for most CFCO services

Preliminary working draft; subject to change 3 PRELIMINARY Process flow for needs-based episode Universal assessment determines episode amount Performance transparency helps clients select provider Integrated person-centered care plan written Services beginProvider submits encounter data and receives payment Provider receives periodic report to track amount $30k Actual $20k$10kBudget $18k Recipient: John Smith Last year budget: $25k A B C 2011 episode score Provider score card Saline county Provider Provider 1 Provider 2 Provider health home score A A B