AHCCCS Contractor Update Meeting: CYE 16 Value-Based Purchasing Policy – Sneak Peak March 18, 2015 Shelli Silver

Rebranding Payment Reform, Payment Modernization, Gain Sharing, Shared Savings… Now: Value-Based Purchasing (VBP) Aligning incentives Promoting quality Improving member outcomes Improving provider performance Slowing/lowering costs Reaching across Arizona to provide comprehensive quality health care for those in need

CYE 16 VBP Policy – Acute Care At least 20% of total medical spend must be subject to a contract utilizing a VBP strategy Strategies include: Primary Care Incentives Performance-based Contracts Bundled/Episode Payments Shared Savings Reaching across Arizona to provide comprehensive quality health care for those in need

CYE 16 VBP Policy – Acute Care cont. Shared Risk Capitation + Performance-based Contracts At least 25% of the 20% requirement shall be with Primary Care Providers MCOs will account for “limited” cost of care or “total” cost of care for each contract provider can only impact direct and limited costs attributed to members, or the total cost of care attributed to members Reaching across Arizona to provide comprehensive quality health care for those in need

CYE 16 VBP Policy – Acute Care cont. The same dollars can not be counted under multiple contracts One contract can not be counted under multiple strategies Contracts must be executed by February 1, 2016 AHCCCS is developing a structured system for non-encountered VBP payments Reaching across Arizona to provide comprehensive quality health care for those in need

CYE 16 VBP Policy – Acute Care cont. 1% of capitation will continue to be assessed via a reconciliation Same quality measures will apply MCOs are not limited to the quality measures in Policy as part of VBP strategies Intent for VBP contracting for future years’ 35% in 2017 50% in 2018 Reaching across Arizona to provide comprehensive quality health care for those in need

CYE 16 VBP Policy Timeline Acute Care draft Policy to be released on or around April 1, 2015 Comment period with deadline to be provided All other AHCCCS lines of business to follow with draft policies in April/May 2015 Reaching across Arizona to provide comprehensive quality health care for those in need