1 Commonwealth Health Insurance Connector Authority Commonwealth Care CY07 Contract Extension Board of Directors Meeting June 5, 2007

Commonwealth Care CY07 Contract Extension The financial terms of the current Commonwealth Care MMCO Contract expire 12/31/2007 – Originally planned to finalize a 2008 (1/1/2008 – 12/31/2008) rate agreement with each of the MMCOs by September 1, 2007 Staff has decided to pursue a 6-month contract extension due to the following: – lack of available cost and utilization data (claims-based data) – continued stabilization of a start up program yet to hit steady state – alignment of Commonwealth Care contract year with State Fiscal Year (and budget cycle)

Key Financial Terms of MMCO Contract Extension Minimal increase to current capitation rates to reflect Medicaid Hospital and Physician unit price changes per Chapter 58 Maintain an aggregate stop loss program –5% risk band corridor Retain existing specific stop loss program –Premium amount at 1.25% of capitation payment –Threshold level at $75,000 (may be adjusted based on analysis from actuaries) Allow for direct marketing to enrollees to increase self-selection and decrease need for auto assignment –Pilot program for PTIIA in Fall 2007 –May expand to full population if successful Allow enrollees a 1x MMCO change – Due to restrictions of lock-in policy, allow for a change to be effective for the extension period – Another choice period in Spring of 2008 for SFY 2009

Timeline for Contract Extension Discussion with MMCOs Late May, 2007 –Began preliminary discussions with each MMCO regarding an extension Week of June th –Finalize discussions and develop amendment Week of June 25 th –Execute amendment to existing contracts Month of December 2007 –Implement changes for 1/1/2008 effective date

Timeline for Discussion of Program Changes As a result of a contract extension, the discussion and analysis of certain Commonwealth Care program changes is as follows: –November, 2007 Begin discussions with Connector Authority BOD and each MMCO regarding CommCare Plan Design and Contract terms, including; Copays Benefits Capitation Rates Aggregate and Individual Stop Loss Programs Auto assignment methodology –January 1 – February 29, 2008 Negotiate Contracts –March 2008 Execute Contracts Submit to CMS for Approval –April, 2008 Hold Open Enrollment – July 1, 2008 Effective date of new SFY 2009 contract (7/1/2008 – 6/30/2009)