1. The Affordable Care Act: Opportunities and Risks for Special Needs Plans Presentation to SNP Leadership Forum, October 29, 2010

2. Overview “Affordable Care Act” is two laws: Patient Protection and Affordable Care Act (PPACA) passed by the Senate and then the House Health Care and Education Reconciliation Act (HCERA) passed by the House and then the Senate Covers 32 million Americans with health insurance Largest single set of payment and delivery system reform measures Congress has passed in decades Moves away from volume-based care toward quality-based care, in a context of coordinating services via “systems” of providers Focus on high-risk, chronic illness and prevention 10/29/10Presentation to SNP Leadership Forum

3. Overview ACA presents opportunities and risks for all participants of the health delivery system Special needs plans are directly affected by MA payment, SNP-specific and revenue provisions Financial risks are substantial Several other ACA provisions present opportunities that could expand the role of SNP organizations beyond MA ACA offers guidelines, but implementation will be the key 10/29/10Presentation to SNP Leadership Forum

4. Key Areas of ACA for SNPs Title III: Improving Quality and Efficiency of Health Care Subtitle E: Medicare Sustainability Subtitle A: Transforming the Health Care Delivery System Parts 2/3: Quality of Care and New Patient Care Models Subtitle D: Part D Improvements Subtitle F: Health Care Quality Improvements (HHS Grants) Title II: Role of Public Programs (Medicaid) Subtitle E: New Options for States to Provide LTC Services and Supports Subtitle H: Improved Coordination for Dual-Eligible Beneficiaries Title IV: Prevention of Chronic Disease and Improving Public Health New Research Title III, Subtitle F: Health Care Delivery System Research Title VI, Subtitle D: Patient-Centered Outcomes Research This review is preliminary—and a work in progress 10/29/10Presentation to SNP Leadership Forum

5. Title III: Medicare Sustainability Sec 3401: Specified reductions in FFS updates begin 2010 Productivity adjustments for 14 FFS sectors Market basket reductions for all hospitals and hospice FFS reductions will lower updates to MA benchmarks Sec 3403: Unspecified changes to FFS, MA and Part D through IPAB begin 2015 IPAB recommends payment and delivery system changes if growth rate in total Medicare spending exceeds target Secretary authorized to act if IPAB recommendations not provided Goal is to keep Medicare growth in the range of GDP+1% No benefit reductions or increases in premiums permitted Reductions to bid payments for MA and Part D plans allowed 10/29/10Presentation to SNP Leadership Forum

6. Title III: Medicare Sustainability Medicare sustainability provisions add financial risks for SNP plans SNPs should seek to neutralize these risks: Incorporate provider payment reductions commensurate with FFS (where appropriate and feasible) to keep cost growth in line with FFS Demonstrate value to beneficiaries and Medicare 10/29/10Presentation to SNP Leadership Forum

7. Title III: Quality of Care Sec 3013/3014: Quality Measure Development HHS must identify gaps in measures Develop provider-level outcomes measures 10 in acute and chronic disease and 10 in prevention and primary care CMS must develop quality/efficiency measures i.e., for hospital acquired conditions HHS/CMS will contract with NQF and consult AHRQ NQF must consult with multi-stakeholder groups $95m appropriated each year 2010-2014; over 50% dedicated to Medicare ACA creates several quality-based payments programs in FFS Begins value-based payment for hospitals (2012) and physicians (2015) Reduces hospital payment for hospital acquired infections 10/29/10Presentation to SNP Leadership Forum

8. Title III: Quality of Care Quality measurement will be key to demonstrating SNP value ACA provides substantial resources and authority for development of measures needed to more accurately evaluate chronic care management of high risk populations, primary care integration and patients outcomes in SNPs SNPs should participate in NQF measure development as soon as possible SNPs should also implement quality-based payment arrangements with hospitals and providers 10/29/10Presentation to SNP Leadership Forum

9. Title III: New Patient Care Models Sec 3021: Center for Medicare/Medicaid Innovation (CMMI) Purpose to support innovation in health care payment and delivery approaches Authorized to spread successful models nationally and on a permanent basis Incubator environment—evaluations will be on going One of 3 criteria must be met: Increase quality, maintain costs Reduce costs, maintain quality Increase quality, reduce costs Rapid learning and diffusion expected CMS will need to establish a process for selecting models $10b available over 10 years; begins January 1, 2011 10/29/10Presentation to SNP Leadership Forum

10. Title III: New Patient Care Models 20 projects outlined in law – none binding on CMMI Several recommended projects reflect SNP principles Patient-centered medical homes for high need benes Use of geriatric assessments and care plans to coordinate care for benes with multiple chronic conditions States allowed to test fully integrated care for dual eligibles Use of diverse network of providers to coordinate care for benes with 2 or more chronic conditions and history of hospitalizations States and private sector will play key roles in developing additional models CMMI authorized to: waive Title 18, 21, certain parts of Title 19 (1902(a)(1)/(13), 1902(m)(2)(A)(iii)) integrate funding from Medicare and Medicaid 10/29/10Presentation to SNP Leadership Forum

11. Title III: New Patient Care Models CMMI represents a significant opportunity for SNPs to develop new care and payment approaches SNP models could integrate Medicare/Medicaid benefits and payments in ways that aren’t possible under MA rules May focus on duals or chronically ill patients SNPs could be integral to States’ models of integrating/coordinating care for dual eligibles Potential for cost shifting will be scrutinized Models need to be concrete and include appropriate quality measures Must meet criteria for cost/quality 10/29/10Presentation to SNP Leadership Forum

12. Title III: New Patient Care Models Sec 3022: Medicare Shared Savings or “ACOs” Offers financial incentives for providers to coordinate care across a continuum of care ACOs can be doctors/practices, hospitals or joint ventures Requirements: Must be accountable for cost, quality and care for 3 yrs Have minimum of 5,000 FFS beneficiaries assigned Use evidence-based care coordination practices Collect/share data internally and with CMS May be paid on FFS basis with gain sharing, full or partial capitation, or under other arrangements Begins January 1, 2012 SNPs could be “integrators” for ACOs in terms of patient management, data collection, sharing and submission 10/29/10Presentation to SNP Leadership Forum

13. Title III: New Patient Care Models Sec 3024: Independence at Home Demonstration Financial incentives for physicians/nurses to direct home-based primary care teams Providers include physicians, nurses, PAs, pharmacists, and social workers Targets high risk Medicare beneficiaries with 2 or more chronic conditions, hospitalization and rehab within past 12 months Financial incentives and goals similar to ACOs $5m appropriated in each year 2010-2015 Sec 3026: Community-Based Care Transitions Program New benefit of care transition services for high-risk Medicare beneficiaries Delivered by hospitals or community-based entities 5-year program with $500m appropriated 2011-2015 SNPs could be administrators and “integrators” for independent at home medical teams SNPs may partner with or create community-based entities that provide care transitions 10/29/10Presentation to SNP Leadership Forum

14. Title III: Part D and HHS Grants Part D Improvements Sec. 3301: Coverage Gap Discount Sec. 3309: Eliminate Cost Sharing for Certain Duals Sec 3310: Reducing Wasteful Dispensing in LTC Will reduce prescription drug costs for SNPs HHS Grant Programs Sec 3502: Community Health Teams for Patient Centered Medical Homes States or designated entities may receive grant/contract Entities must contract with primary care providers to support medical homes Not limited to Medicare or Medicaid populations Sec 3503: Medication Therapy Management Services for Chronic Diseases Entities that provide MTM qualify Not limited to Medicare or Medicaid populations No direct funding but HHS may be able to use Prevention Fund; SNPs may partner with States or create entities to provide these services if funded 10/29/10Presentation to SNP Leadership Forum

15. Title II: New Options for States and LTC Sec 2401: Community First Choice Option Allows States to offer HCBS with enhanced FMAP States may contract with health plans or provide vouchers Sec 2402: Removal of Barriers to HCBS HHS must produce regulations to ensure States can provide HCBS Allows broader benefits, scope and duration of HCBS Sec 2403: Money Follows Person Rebalancing Demo Reduces institutional stay for HCBS to 90 days SNPs may help States meet increased demand for HCBS through managed care contracts 10/29/10Presentation to SNP Leadership Forum

16. Title II: New Options for States Sec 2602: Creates FCHCO Purpose to integrate benefits and coordinate programs so dual eligibles get “full access” to entitled benefits Improve quality of care Simplify access to care Remove regulatory conflicts Eliminate cost shifting between programs New Director intends to advocate for new patient care models and agency actions that help meet these goals Sec 2801: MACPAC/MedPAC Requires MACPAC and MedPAC to coordinate with each other and with FCHCO with respect to dual eligibles SNPs must find common ground with FCHCO and bring concrete ideas models and regulatory solutions to problems to the table SNPs must actively participate in MACPAC/MedPAC meetings 10/29/10Presentation to SNP Leadership Forum

17. Title IV: Prevention of Chronic Disease Sec 4001-4003: Creates HHS council, national advisory body, and task force on chronic disease prevention, health promotion and public health Creates Prevention and Public Health Fund Provides $15b to be allocated by HHS over 10 years SNPs may want to provide input and expertise to advisory body or task force Funding vulnerable to repeal or reduction 10/29/10Presentation to SNP Leadership Forum

18. New Research in ACA Sec 3501: Health Care Delivery System Research AHRQ will provide for conduct of research on best practices in delivery of care and quality improvement $20m appropriated 2010-2014 Sec 6301: Patient Centered Outcome Research Institute Creates non-profit Institute to identify gaps in clinical evidence and provide for conduct of studies May compare protocols for treatment and care management, as well any item or service used to diagnose, treat or prevent illness or injury $6b trust fund includes $2 per person tax on private health plans SNPs may recommend studies of care processes or protocols for care coordination Programs and funding vulnerable to Republican attacks and repeal 10/29/10Presentation to SNP Leadership Forum

19. Summary SNPs must expand quality measures to demonstrate value ACA focus on care coordination, integration, and special populations creates opportunities for SNPs beyond MA SNPs have a lot to offer CMS and HHS to help them transform delivery of care in the U.S. to emphasize care coordination and prevention SNPs will need to be creative, proactive, committed and organized to have an impact and connect to opportunities Carpe Diem! 10/29/10Presentation to SNP Leadership Forum