1. LEADERSHIP IN MEDICINE: POSITIONING THE NCMS FOR THE FUTURE OF HEALTH CARE Government Affairs and Health Policy, North Carolina Medical Society

2. CATALYSTS FOR CHANGE  Unsustainable increases in health care costs  Increased numbers of uninsured  Premium increases that are more than 5x the rate of inflation and wage growth  Future viability of Medicare and other public programs

3. CATALYSTS FOR CHANGE  Both sides of the aisle agree that change to our health care delivery system is needed (even though there is a lack of consensus on specific reforms)  Private sector, including health care providers, health plans, employers, and consumers all recognize the need for change  Increased emphasis on quality, safety, and accountability  Patient Protection and Affordable Care Act (“The Act”) is a reality and unlikely to be changed significantly

4. MAJOR THEMES OF “THE ACT”  Insurance reforms  Access to care / workforce  Payment reforms  Quality / health information technology

5. INSURANCE REFORMS  Insurers cannot rescind coverage of enrollees; deny coverage to kids with pre-existing conditions; place lifetime caps on coverage (all 2010)  New private plans must cover preventive services without cost-sharing (2010)  Insurers must offer COBRA dependent coverage to cover children up to age 26 (2010)  State Insurance Exchange to sell “qualified health plans” to individuals and small businesses (by 2014, or else feds will do it)  Individual and employer mandate takes effect (2014)

6. MEDICAID  Eligibility expanded to all people under age 65 with incomes up to 133% FPL – FMAP available only for newly eligible (2014)  States must reimburse PCPs at 100% Medicare (2013-14)

7. ACCESS TO CARE / WORKFORCE  Increase in the number of insured / covered persons  More health care providers, especially in primary care, will be needed  More medical school and residency slots  More limited scope practitioners  Increase pressure to expand scope and recognize new classes of providers  Autonomy and fragmentation are contrary to the general direction of and consensus on health care reform

8. PAYMENT REFORMS  Medicare Shared Savings Program utilizing Accountable Care Organization (ACO) model—interim step using fee for service as foundation  Increase focus on quality, care coordination, efficiency, and accountability  Numerous pilots, demos, boards, commissions, grants  What is clear:  Feds are moving away from passive, volume-based, purchaser (FFS) to a move active, results-oriented, value- based purchaser  Feds don’t have the answer yet--hence the # of demos, pilots, boards, grants, etc…

9. QUALITY AND HEALTH INFO TECH  Process and outcomes measures  Data collection  Meaningful use  Patient and caregiver engagement  Patient-centeredness  Coordination of care  Safety  Accountability  Prevention and wellness  Health disparities

10. HANDOUTS  At least 33 new boards, commissions or task forces established  At least 62 new grant programs  At least 35 pilot programs and demonstration projects created

11. LESSER-KNOWN PROVISIONS  Medical loss ratio minimums established (80% individual, 85% large group); state can increase: 2010 -2013 (s.1001)  Secretary and States to review “unreasonable premium increases” and require explanation: 2010 (s.1003)  Those in the NC high risk pool will be excluded from all coverage for 6 mos prior to enrollment in federal HRP: 2010 (s.1101)  A qualified health plan may K with provider only if the provider implements mechanisms to improve quality: 2015 (s.1311)

12. LESSER-KNOWN PROVISIONS  PQRI extended through 2014, with penalties after 2015; meaningful use measures to be incorporated by 2012; Sec shall provide timely feedback re satisfactorily reporting; new informal appeals process added (s. 3002)  Confidential reports to physicians measuring resources used to furnish care. 2012 (s. 3003)  Value-based payment modifier (based on risk adjusted health outcomes) for physician fee schedule ;Jan 2015 – implement for selected physicians (TBD); Jan 2017 – implement for all physicians (s. 3007)

13. LESSER-KNOWN PROVISIONS  Payment adjustments for hospital-acquired conditions - 2015 (s. 3008) and excess readmissions 10/1/12 (s. 3025)– expand concept to other settings, including clinics (p.258)  National strategy for quality improvement – Jan 2011. (s.3011)  Data collection and public reporting (via website) of aggregated performance data on quality measures: 2010- 2014 (s. 3015)  Center for Medicare & Medicaid Innovation (CMI) established to develop and test innovative payment and service delivery models to reduce expenditures: 2011 (s.3021)  Shared Savings Program (ACO) to be implemented: 2012 (s. 3022)

14. LESSER-KNOWN PROVISIONS  Secretary to periodically review “misvalued” codes in Physician Fee Schedule (s.3134)  Modification of equipment utilization factor for advanced imaging services (expects to save $3 b from 2010-19) (s. 3135)  Independent Physician Advisory Board established to reduce Medicare per capita growth; Sec shall implement recommendations; however, Congress can supersede by enacting legislation: created 2010/ reports and proposals 2014 (s. 3403)  Grant money available to professional societies if they have demonstrated expertise in QI support and assistance (s.934)

15. LESSER-KNOWN PROVISIONS  Community health team grants for programs to provide capitated payments to be made to primary care practices (s. 3502)  Accessibility standards to be promulgated for physician offices with diagnostic equipment: 2012 (s.4208)  Data collection re race, ethnicity, sex, primary language, disability; provided practicable and funded (s. 4203)  Disclosure requirements for in-office ancillary services exception to the prohibition on physician self-referral for certain imaging services: 2010 (s. 6003)

16. LESSER-KNOWN PROVISIONS  National Health Care Workforce Commission will recommend (to Congress) changes to meet medical workforce needs: Sept 2010 (s. 5101)  $240 million over 6 years to be spent on increased fraud & abuse and program integrity efforts (s.10606)  Expansion of the RAC program to state Medicaid: Dec 31, 2010 (s. 6411)  Medical Reimbursement Data Centers: physician rates posted on internet (related to medical-loss ratio prv.)

17. STATE LEGISLATIVE AND REGULATORY ISSUES  Individual Mandate (opposition and support)  Insurance Regulation (massive)  Medical Loss Ratio Adjustment  High Risk Pool  Health Insurance Exchange  Medicaid Program Expansion (500K lives est.)

18. STATE LEGISLATIVE AND REGULATORY ISSUES  State Option - Medicaid Health Homes  State Option - Community First Choice  Scope of Practice & Professional Regulation  Medical Schools, Health Workforce Funding  Medical Facilities Planning  Alternatives to Medical Tort Litigation Demonstration Project (NCMS, NCHA & others are looking at this)  Adapt Laws to New Corporate Forms

19. BURNING QUESTION  How can NCMS help our members adapt to the changes?  Current strengths: state lobbying; health policy; legal analysis; private sector (health plan) advocacy  New areas of increased focus:  Regular updates on health system reform activity  Education & training availability re: quality improvement & measurement  Access to effective & affordable health information technology  Federal level advocacy  Strategic partnerships  Facilitation in development of physician-led ACOs