Arkansas Health Care Payment Improvement Initiative (AHCPII) National Association of State Human Services Finance Officers July 30, 2014

We face major health care challenges in Arkansas Navigation challenges in the health care system Hard for patients to navigate Does not reward providers who work as a team to coordinate care for patients Fragmented provider system Many independent providers >60% physicians in practices of 5 or fewer Mix of rural and urban populations About 40% of Arkansans in rural areas Health care system not integrated Low rankings on national health indicators Ranked at or near the bottom of all states on national health indicators, such as heart disease and diabetes We face major health care challenges in Arkansas

DCO-AAA123-20110905- The episode-based model is designed to reward coordinated, team-based, high quality care for specific conditions or procedures The goal Coordinated, team-based care for all services related to a specific condition, procedure, or disability (e.g., pregnancy episode includes all care prenatal through delivery) Accountability A provider ‘quarterback’, or Principal Accountable Provider (PAP) is designated as accountable for all pre-specified services across the episode (PAP is provider in best position to influence quality and cost of care) Incentives High-quality, cost-efficient care is rewarded beyond current reimbursement, based on the PAP’s average cost and total quality of care Provider Stories: Coordination: Perinatal Hospital Stays Pathology - Placentas Drug Screens – Identified case of full drug workup on all patients

All but URI, ADHD, and ODD are multi-payer

Episodes Progress to Date Completed first performance period reconciliations for URI, ADHD, Perinatal, CHF, and TJR in April 2014 Significant enhancements in provider, portal, episode, documentation and technical refinements to existing algorithms Discussions underway to apply lessons learned to refine existing episodes and develop base definitions for future waves Providers Produced over 15,600 Principle Accountable Provider (PAP) reports for nearly 2,000 distinct providers representing approximately 227 million claims Changing specialist and facility referral patterns Impact Increased screening for diabetes, HIV, Hepatitis B and other conditions in pregnant women A 29% drop in ADHD episode costs for Oct. 2012 – Dec. 2012 Improved coding and oversight of stimulant medication to ensure prescriptions match diagnoses Stabilized costs for CHF and TJR A 19% decrease in unnecessary antibiotic prescriptions for URI for Oct. 2012 – Sept. 2013 An 18% reduction in multiple courses of antibiotics prescribed for sinusitis and other URIs In addition to total cost of care, here are a few key shared savings terms that are important to understand. New Portal Functionality: (e.g., random sampling for quality metrics, confirmation view and print capability for provider entries)

While only 3-5% of health care dollars are spent on primary care services, a PCMH PCP influences nearly all of health care expenditure

Patient Centered Medical Homes will support patients to connect with the full constellation of providers who form their health services team… What is PCMH? Key Attributes 24/7 access for all individuals Evidence-informed care Providers with responsibility for a practice’s entire population Coordinated and integrated care across multidisciplinary provider teams Focus on prevention and management of chronic disease Referrals to high-value providers (e.g., specialists) Improved wellness and preventative care A team based care delivery model led by a primary care provider that holistically manages a patient’s health needs Incentives Monthly fees to support care coordination efforts and ramp-up of PCMH model Shared savings model that rewards providers for controlling costs while maintaining or improving quality

PCMH Progress to Date PCMH Exceeded 2014 enrollment target of 40% of eligible beneficiaries 79% of eligible beneficiaries (289K) enrolled through second enrollment period1 20% of PCMHs opted to pool for shared savings, and pooling will be expanded next year 62 PCMHs (93 individual sites) are enrolled with practice transformation vendor Practice transformation vendor is helping providers meet activity requirements Program has been adjusted and improved based on provider feedback regarding reports, the portal, and model design Providers Metric performance demonstrates opportunity for growth among PCMHs Quality targets are within reach for most PCMHs Additional metrics, care category cost information and peer comparison, and shared savings reports have all been added since first reports Impact Expanding functionality of portal enables providers to: Review PCMH statistics and compare to peers Select high priority beneficiaries and exclusions Document practice support activity approach Record care plan status for high priority beneficiaries 1 Includes enrollment in PCMH and CPCi programs

Lessons Learned Design and development Ensure multi-payer consistency for design to maximize clarity and impact for providers Standardize design elements as much as possible to streamline development Create thorough documentation of requirements and design approach (including for reports and provider portal inputs) Implemen-tation Don’t expect perfection in the first version. Plan for maintenance and revision of the models. Follow up on missed quality metrics (to ensure failure isn’t due to lack of data) Provider engagement Maintain early and frequent/ ongoing engagement with the provider community (e.g., local clinical input for design, outreach prior to implementation, monthly touch points with AHA and AMS) Providers respond to gain/risk sharing – in some ways positively (e.g., clearly adjusting behavior), and in some way to benefit from the system (e.g., adjusting coding behaviors)

For more information regarding AHCPII . . . DCO-AAA123-20110905- For more information regarding AHCPII . . . Online More information on the Payment Improvement Initiative can be found at www.paymentinitiative.org –Further detail on the initiative, PAPs, and portal –Printable flyers for bulletin boards, staff offices, etc. –Specific details on all episodes and PCMH –Contact information for each payer’s support staff –All previous workgroup materials – Link to new AHCPII video Medicaid: 1-866-322-4696 (in-state) or 1-501-301-8311 (local and out-of state) or ARKPII@hp.com Blue Cross Blue Shield: Providers 1-800-827- 4814, direct to EBI 1-888-800-3283, APIICustomerSupport@arkbluecross.com QualChoice: 1-501-228-7111, providerrelations@qualchoice.com Phone/email Dawn (Zekis) Stehle Director of Health Care Innovation/Interim Medicaid Director Dawn.Zekis@dhs.arkansas.gov 1-501-683-0173 Today’s Presentation