1. The View from States Advancing Financial Alignment Demonstrations: Program Administration and Oversight, Plan Selection and Financial Viability Tom Standring tom.standring@molinahealthcare.com Vice President, Medicare November 2, 2012 tom.standring@molinahealthcare.com tom.standring@molinahealthcare.com

2. CaliforniaOhioIllinoisWisconsin Mass a chusetts Number of Duals eligible to participate 685,000114,972156,00015,000-16,000115,000 Beneficiaries Included/Eligibility Restrictions Full duals age 18 and over, no PACE Full duals age 18 and over, no PACE or intellectual disabilities Full duals age 21 and over, no PACE or intellectual disabilities Full duals age 18 and over residing in institutional settings, with long-term (100 or more days in a calendar year) FFS Medicaid-funded stays. Full duals age 21-64, no PACE or HCBS waiver duals Procurement DateApril, 2012August, 2012TBD (November, 2012?)TBD Plan selection processIncumbents onlyCompetitive procurement- allows new market entrants Notices of contracts awardedApril 4, 2012August 20, 2012 (Selected plans chose regions on August 27, 2012) Pending SNAPSHOT -- STATES GOING LIVE IN 2013

3. Plans SelectedAnthem Blue Cross, Alameda Alliance for Health, LACare, Health Net, CalOptima, Molina, Inland Empire Health Plan, Care 1 st, Community Health Group, SCAN,: Health Plan of San Mateo, Santa Clara Family Health Plan Aetna, Buckeye, Molina, CareSource, United pendingPending. Four applicants: iCare, Milwaukee County Department of Family Care, Southwest Family Care Alliance and United Healthcare of WI. Of the four applicants, DHS has approved one (iCare) to proceed to Phase Two, and is working with the other three on unmet Phase One requirements. pending Proposed Start Date6/1/20134/1/2013 and 6/1/20134/1/2013January, 20134/1/2013 Notable carved out servicesCounty-administered mental health and substance use treatment. Eligibility for IHSS and assessment and authorization of hours will be done by counties. Plans must contract with outside entity (including AAAs) to provide HCBS waiver service coordination. Certain LTSS for HCBS waiver participants. Custodial Nursing Home Covered? Yes Planned savingsTBD $1.6 million in year 1 to $7.5 million in year 3. 1%, 2%, 4% in years 1, 2, 3. Quality withholdPerformance based quality withhold of 1%, 2%, 3% in years 1, 2, 3 May include pay for performance; final details to be available following MOU release. Pay for performance withhold of 1% in year 1, 1.5% in year 2, 2% in year 3. Quality bonuses and/or withholds in years 2 and 3. Quality withhold of 1%, 2%, 3% in years 1, 2, 3. Not applied to Part D. Quality measuresCA has initial list of 90+ measures OH has an initial list of 65+ measures TBDMA measures and Medicaid measures. Will include NQF list of 12 long stay quality measures. 9 measures for year1; 10 more measures for years 2 and 3. CaliforniaOhioIllinoisWisconsinMassachusetts SNAPSHOT -- STATES GOING LIVE IN 2013

4.  Auto assignment methodology  Opt out rate  Timing of State LTSS and Medicare checklists  Timing and content of rates (except what we know from CMS’s 5/29/12 announcement)  Timing of CMS and state readiness reviews  Timing of MOUs

5.  California Coordinated Care Initiative (CCI) will include Medi-Cal LTSS as a managed care benefit in 8 counties with authority for the duals demo, along with full Medicare and Medi-Cal benefits.  685,000 Duals (full duals age 18 and over, no PACE) will be eligible to participate  Eight counties, with 12 plans selected to participate for 2013  There are three Medi-Cal managed care models in California: 1.Geographic managed care - DHCS sets a number of contractors it agrees to work with, and awards contracts based on a competitive procurement (San Diego County) 2.County organized health system (Santa Clara, Orange Counties) 3.2 plan model (Los Angeles- LA Care and Health Net have the contracts- any other plan that wants to participate has to subcontract with one of them).

6. Plans selected by County:  Alameda: Anthem Blue Cross and Alameda Alliance for Health  Los Angeles: LACare and Health Net  Orange: CalOptima  Riverside/SB: Molina and Inland Empire Health Plan  San Diego: Care 1 st, Community Health Group, Health Net, Molina and SCAN  San Mateo: Health Plan of San Mateo  Santa Clara: Anthem Blue Cross and Santa Clara Family Health Plan  Implementation delayed until 6/1/2013  MOU expected sometime in mid to late November, 2012. State and CMS readiness criteria/tools to follow release of MOU and anticipate 3-way contracts to be executed by mid-February, 2013 (no update as to when readiness reviews will occur)

7.  Rates are still being discussed between CMS and the State  Supplemental benefits (dental, vision, hearing, etc.) filed in PBP are expected to be modified once final rates are announced.  Enrollment and marketing details are still TBD. Awaiting confirmation as to passive enrollment and enrollment data processes, but State has indicated there will be phased in passive enrollment with opt out. State has indicated imminent release of a Marketing Plan Letter which will address marketing for demo plans and D-SNPs in demo counties.  State has released preliminary list of 90+ quality measures; awaiting additional details  State has proposed a performance based quality withhold of 1%, 2%, 3% in years 1, 2, 3 of demo

8. Challenges  Lack of updated information on core processes (passive and voluntary enrollment, marketing, A&G, etc.), rates, timing of MOUs, readiness reviews and 3-way contracts  Potential impact of beneficiaries opting out or disenrolling after passive enrollment  Difficulty in contracting with providers without having final rates  Financial viability

9.  Ohio’s Integrated Care Delivery System (ICDS) model will create a fully integrated care system that comprehensively manages the full continuum of Medicare and Medicaid benefits for Medicare ‐ Medicaid enrollees, including Long Term Services and Supports (LTSS).  115,000 Duals (Full duals age 18 and over, no PACE or intellectual disabilities) will be eligible to participate  Seven regions with 2-3 plans selected for each region (five plans in total will participate)  Plans selected: Aetna, Buckeye, Molina, CareSource, United. Both Medicare and Medicaid experience was considered during plan selection process.  Implementation was scheduled for April and June, 2013, varying by region, but State has indicated that implementation will be postponed (no new dates announced yet)  No firm date for release of MOU, readiness criteria/tools or 3-way contracts, but State hopes to have a signed MOU by the end of November.  Rates are still being negotiated between CMS and the State

10.  Passive enrollment may be limited to 3 of the 5 plans, presumably due to past performance issues, which would conflict with CMS requirement that at least 2 plans be eligible for passive enrollment in a county.  Ohio is using a Medical Home Model for Behavioral Health patients, but will be initially rolled out in a few counties and is on a phase in approach for other counties over time. It will not be effective in all counties in all FAD/ICDS regions.  Plans must contract with outside entity (including Area Agencies on Aging or AAAs) to provide HCBS waiver service coordination.  State has released preliminary list of 65+ quality measures; awaiting additional details in MOU  May include pay for performance; final details on this and quality withholds to be available following MOU release.  State facilitation of enrollments and/or plan marketing option?  Marketing restrictions in SNP contract which prohibit demo plans that are also D-SNPs from trying to persuade demo beneficiaries to move to the plan’s D-SNP.

11. Challenges  Lack of updated information on core processes (enrollment, marketing, A&G, etc.), rates, timing of MOUs, readiness reviews and 3-way contracts  Potential impact of beneficiaries opting out or disenrolling after passive enrollment, as well as passive enrollment not being available to all participating plans  Difficulty in contracting with providers without having final rates  Financial viability

12. Appendix B Ohio ICDS Regions by MCP EC – 16,225 Non-ICDS Demonstration County *MHO currently serves the Central, WC, and SW ICDS regions. NEC – 9,284April 1, 2013 NE – 31,712May 1, 2013NW – 9,884April 1, 2013Central – 16,029 June 1, 2013WC – 12,381June 1, 2013SW – 19,456June 1, 2013 Roll Out Date

13.  Illinois’ proposal to integrate care for individuals eligible for both Medicare and Medicaid under one managed care program is one in a series of initiatives undertaken by the State through its Innovations Project.  156,000 Duals (full duals age 21 and over, no PACE or intellectual disabilities) will be eligible to participate  State has not yet selected plans to participate for 2013, but will have at least two plans in each contracting area, with up to five plans in the Greater Chicago service area  For Year 1, there will be two service areas, with a total of 21 counties included. State plans to expand into 3 more service areas in year 2, with a total of 9 additional counties.  Implementation currently scheduled for 4/1/2013

14.  No firm date for release of MOU, readiness criteria/tools or 3-way contracts.  Rates are still being discussed between CMS and the State  Enrollment and marketing details are still TBD. State has indicated that beneficiary participation is voluntary, and will use phased-in passive enrollment with ability to opt out or change plans later. Awaiting confirmation and details as to passive enrollment and enrollment data processes.  State plans to use contracted Client Enrollment Broker to facilitate enrollment.  At a minimum, the State will use 30 quality measures from the existing Integrated Care Program (ICP) to assess plan performance and will work with CMS to identify additional measures and finalize the measures to be used as pay ‐ for ‐ performance; awaiting additional details.  State has proposed a pay for performance withhold of 1% in year 1, 1.5% in year 2, 2% in year 3.

15. Challenges  Delays in plan selection  Lack of updated information on core processes (enrollment, marketing, A&G, etc.), rates, timing of MOUs, readiness reviews and 3-way contracts  Potential impact of beneficiaries opting out or disenrolling after passive enrollment  Difficulty in contracting with providers without having final rates  Financial viability

16.  First signed MOU with a State participating in a managed fee-for-service demonstration. MOU is limited to the first of three strategies proposed by Washington for the demonstration. Focus of Strategy 1 is on incorporating high-risk duals into chronic care management Health Homes.  Target Population: All full benefit Medicaid-Medicare enrollees, approximately 115,000, will be eligible to participate in the demonstration, with 21,000 in Strategy 1. Enrollment is voluntary.  Geographic Location: Strategy 1 will be offered in all counties that have qualified health home providers except the counties that are pursuing the Capitated Financial Alignment Demonstration (Strategy 2)  Health Home Network – defined as an entity qualified by the State to provide health Home services to qualified beneficiaries. Each network has a lead entity and a broad representation of Health Home Care Coordination Organizations.  Health Home Services - The purpose is to coordinate the full breadth of clinical and social service expertise for high-cost/high risk beneficiaries with complex chronic conditions, mental health and substance use disorder issues and or long term service needs and supports.

17.  Summary of Covered Benefits  Comprehensive care management, using team-based strategies;  Care coordination and health promotion;  Comprehensive transitional care between care settings;  Individual and family support, which includes authorized representatives;  Referral to community and social support services, such as housing if relevant;  The use of web-based clinical decision support tool (PRISM) and other health information technology to link services, as feasible and appropriate.  All other Medicaid and Medicare Services available through managed care or fee for service  Proposed Implementation Date: April 1, 2013

18.  Financial Viability  Quality  Care Model

19.  MA rate cuts under ACA  Threat of sequester  No quality bonus, instead quality withhold  Assumed savings  CMS is encouraging M/M plans to remove the limited medical management tools they have on drugs, LICS copayments  No risk corridor on Part D payments- will Part D rates adequately capture current subsidies and adjustments?  Medicaid, PCP payment increase under ACA in 2013; not clear that will be factored into rates

20. Provider Participation  Cross over payment rules- states generally pay Medicare cost share up to Medicaid limits today, exception Ohio Part B  ACA reduction of DSH payments  Challenge getting providers to accept fee schedules in some markets  Incentive comp arrangements Critical Mass of Membership  2006 passive enrollment for SNPs – mixed results  Challenge of getting providers and patient influencers (CBOs/FBOs) on board

21.  Measures that make sense  The right number of measures

22.  Incorporate LTSS  Opportunity to develop better programs for behavioral health issues  Olmstead accelerant