Affordable Care Act: Overview of Impacts on Medicaid Marni Bussell SIM Project Director, DHS Lindsay Buechel Communications Manager, IME

Introduction The Patient Protection and Affordable Care Act (ACA), also known as “Health Care Reform”, was signed into law on March 23, o The law is complex and requires a significant amount of time and effort to plan and implement during the last 2 and coming year(s). There continues to be strong public policy debate on the law o Supreme Court Decision o Strong efforts to repeal or change the law in Congress. 2

Affordable Care Act (ACA) Key provisions take effect January 1, 2014 o Creation of Health Benefits Exchange/Health Insurance Marketplace  Exchange is a “marketplace” to allow consumers to compare plan benefits and price, provide consumer assistance, facilitate plan enrollment.  Mandate for individuals to have insurance coverage; penalties for large employers who don’t offer insurance o Option for Medicaid expansion to 133% of the Federal Poverty Level (FPL) % FPL:  Household of 1: $15,282  Household of 4: $31,322 Other provisions with various implementation dates o Mandatory Iowa Medicaid Enterprise (IME) operational changes to ensure ACA compliance o Optional opportunities to improve or re-balance health care programs 3

State Innovation Model Grant 4

The problem Chronic disease drives costs 5

Top 5% High Cost/High Risk Members* Accounted for: 90% of hospital readmissions within 30 days 75% of total inpatient cost Have an average of 4.2 conditions, 5 physicians, and 5.6 prescribers 50% of prescription drug cost 42% of the members in the top 5% in 2010, were also in the top 5% in 2009 *Excludes Long Term Care, IowaCare, Dual Eligibles, and maternity 6

Why change? Health care delivery system is fragmented Reimbursement methods reward volume not value Cost of health care is unaffordable and unsustainable for citizens and taxpayers We need to increase quality/outcomes & lower cost 7

What is Medicaid’s role in Delivery Reform? Medicaid relies on the same health care system as all others to deliver care to our covered members Medicaid uses very similar payment and contracting methods Whatever is driving the rest of the health care system is also driving Medicaid Medicaid is a significant payor - 2 nd largest payor, covers 23% of Iowans 8

9 Iowa Health and Wellness Plan Background Begins January 1, 2014 Iowans age Income up to and including 133% of the Federal Poverty Level (FPL) New, comprehensive program will replace the IowaCare program, ending December 31, 2013 The Iowa Health and Wellness Plan was enacted to provide comprehensive health coverage for low-income adults

10 Iowa Health and Wellness Plan The Iowa Health and Wellness Plan must receive approval from the federal government DHS is working to obtain approval Some program details may still change as we work with federal officials

11 One Plan, Two Options Iowa Wellness Plan For adults age Income up to and including 100% of the Federal Poverty Level Marketplace Choice Plan For adults age Income 101% to no more than 133% of the Federal Poverty Level

12 Iowa Wellness Plan: 0-100% FPL Family of one $11,490 Family of two $15,510 Individuals up to 100% FPL

Patient Manager (PM) Benefits PaymentPerformance Fee for Service or Encounter Based Fee Claim submission Administrative Fee $4.00Per Member-Per Month Wellness Exam Incentive $10.00Per Member Annually if Threshold Achieved Up to $4.00 Wellness Plan Medical Home Value Index Score (VIS) Bonus Per Member Quarterly if Quality Target Achieved

14 Iowa Wellness Plan: 0-100% FPL Program innovations include: Ensure coordination of care for members through ‘medical homes’ Ensure health care providers are accountable for achieving high quality and cost effective care that is focused on the patient Program innovations will continue to be developed through a statewide planning process related to the State Innovation Model* grant *Go to for more informationhttp://

ACO Option Medicaid may contract with Accountable Care Organizations ACO can earn the wellness exam and medical home bonus for attributed population By Year 3: the Wellness ACO option will likely be replaced with the SIM initiative to develop a state-wide, full Medicaid ACO program.

State Innovation Model (SIM) Grants available to Governors from the Centers for Medicare and Medicaid Innovation 2 tracks: Design (Iowa) or testing Provides funding for developing State Health Care Innovation Plan Iowa’s Plan will be complete by January Will apply for Testing funds 2013 Design: State Health Care Innovation Plan 2014 Testing: Application for funds / authority to test 2016? Implementation 16

State Health Care Innovation Plan “Vision” Vision: Transform Iowa’s health care economy so that it is affordable and accessible for families, employers, and the state, and achieves higher quality and better outcomes for patients. Patient-focused Accountability Aligned Quality Strategies Economically Sustainable Workforce 17

Iowa State Innovation Model Plans Improve value and align payment models Valued based payment reform Organized, coordinated delivery systems Build on developing health homes / medical homes Align payors to provide ‘critical mass’ to support needed investments in change 18 * ‘Accountable Care Organizations’ are a reimbursement method that incents accountability for outcomes and lowers costs Strategy 1: Implement a multi-payer ACO* methodology across Iowa’s primary health care payers Strategy 2: Expand on the multi-payer ACO methodology to address integration of long term care services and supports and behavioral health services Strategy 3: Population health, health promotion, member incentives

Goals of Iowa Wellness Plan Begins to implement SIM Strategy 1 and 3 in the Wellness Plan –Implements medical homes and ACOs –Health Incentives for members to engage in Healthy Behaviors Based on local access to care Focus on health and improved outcomes Emphasis on care coordination 2/13/201219

Iowa Wellness Plan Reforms Iowa will pay incentives to physicians and ACOs for achieving quality metrics consistent with Wellmark metrics No claims history so starting with incentives and will move to shared savings for ACOs Provides starting point to begin and learn, and will eventually be merged under larger Medicaid SIM designs 2/13/201220

21 Iowa Wellness Plan: 0-100% FPL Out of Pocket Costs: No copayments except for using the emergency room when it is not an emergency No monthly contributions during the first year (2014)* No contributions for those with income below 50% FPL* Costs cannot exceed 5% of income *Monthly contributions subject to CMS approval

22 Iowa Wellness Plan: 0-100% FPL Monthly contributions* waived beginning in 2015 if the member completes wellness activities First year (2014) members need to complete health risk assessment and wellness exam (annual physical) 2015 and beyond will also other wellness activities *Monthly contributions subject to CMS approval

23 Marketplace Choice Plan: % FPL Family of one $11,491- $15,282 Family of two $15,511- $20,628 Individuals 101% FPL up to 133% FPL

24 Marketplace Choice Plan: % FPL Members select a certain commercial health plan available on the Health Insurance Marketplace Medicaid pays the premiums to the commercial health plan on behalf of the member – often referred to as “premium assistance”

25 Marketplace Choice Plan: % FPL Innovation: Purchasing private coverage Allows individuals to stay enrolled in their current plan if their income changes

26 Application Process APPLICATION PROCESS DHS website Federal Health Insurance Marketplace DHS Contact Center

Stronger Primary Care (PCP/MH) Stronger Care Management (Health Home (Chronic Condition & SPMI & BIPP) Stronger Home and Community Based Services (through BIPP) Stronger Mental Health System (Through Redesign Efforts) SIM Development Phase I: H&W Population Phase II: Full Medicaid, Statewide ACO Regions Phase III: Fully Defined LTC and Behavioral health Accountability Iowa Health & Wellness Builds PCP Capacity & Entry Point for New Population Incentivizes Medical Home Concepts, Prepares for ACO models Sustainability through SIM Development, and Multiplayer Alignment Current State: Mostly FFS Unmanaged Care Silos of Care Delivery Limited Access Volume Based Purchasing Future State: Value Based Purchasing Clear Accountability Integrated Care Delivery Alignment in Measures and Analytics Data are timely and Secure 27

Stakeholder Process Workgroups met June – September, 2013 Metrics and Contracting Member Engagement Long Term Care Integration Behavioral Health Integration Two Consumer Focused Workgroups (October) Recommendations to Steering Committee, October 30, 2013 Review and seek guidance from Legislative Subcommittee in November

SIM Organizing Principles for Transformation Areas of Recommendation Across all Workgroups: Care Coordination/Community focus Communication/Technology Regulatory Financing Measures/data Transparency Provider Supports Patient Supports Access/Benefits Dedicated and consistent leadership Collaboration and open communication Clarity in accountability Transparency in Data Alignment in measure and analytics 29

IowaCare Transition

IowaCare will end on December 31, 2013 Current members will continue to have same access to services until the program ends o Continue to seek care at medical home

IowaCare Transition Current members will not be cancelled unless: o Premiums are not paid o Get other health insurance o Turn 65 o Move out of the state

IowaCare Transition DHS re-evaluated the decision that all IowaCare members will have to go through the full application process and will: o Centrally verify the income of all IowaCare members o `Administratively transfer` qualifying members into the Iowa Health and Wellness Plan

IowaCare Transition DHS must verify income in order to `administratively transfer` Members who cannot be verified or whose income exceeds the Iowa Health and Wellness Plan limits will be instructed to proceed to the full application process

IowaCare Transition The verification/transfer process will take place by the end of October Members whose verified income indicates eligibility for Iowa Health and Wellness will receive confirmation of eligibility and will proceed to enrollment for physician selection, or qualified health plan selection Members whose income cannot be verified or cannot be transferred, or have income too high for the program will receive an additional letter instructing them to proceed to HealthCare.gov

IowaCare Transition Iowa Medicaid will: o Send letters to each IowaCare member before October 1 notifying them of this change in the verification/transfer process o Coordinate with medical homes on outreach o Reach out to members multiple times to make sure they are aware of transition

Questions? Marni Bussell SIM Project Director Iowa Medicaid Enterprise Lindsay Buechel Communications Manager Iowa Medicaid Enterprise