1. Accountable Care Organizations: Perspectives on the Proposed Rule Susan DeVore President and CEO May 13, 2011

2. Working toward population health Process Improvement (Evidence-Based Care) Systematic improvement (Inpatient/outpatient value) Population total value 1

3. 42 States redesigning care 2

4. What we like Timely data from CMS: (A,B, and D data as often as monthly) CMS and ACOs educating beneficiaries Multiple payment models Consensus-based measures Clinically integrated for anti-trust purposes Safe harbor under anti-kickback and CMP Anti-trust safety zones and 90 day expedited advisory opinion process 3

5. Priority payment issues Model with no downside risk : In both of the proposed models, hospitals must accept two-sided risk. Only some of our members are prepared to take that risk. We also believe that CMS should reduce the 25% withhold in the two-sided model and eliminate it if there is an option without risk. Higher shared savings : CMS should reconsider its savings split to share back 70-80%of the total in preliminary years of the program, instead of 52.5/65%, or adjust the confidence interval requirement. Capitation : While CMS does propose multiple payment models, it does not include a partial capitation model. We encourage this be offered either through the program or the Center for Medicare and Medicaid Innovation. 4

6. Priority issues with standards, incentives and risk Quality measures : Reduce the proposed 65 measures and 50% primary care meaningful use requirements. Value-added services : Expand beneficiary communications and services including: pay for travel, technologies, seminars, co- pay waivers, etc. Risk adjustment : Allow the ACO risk score to grow rather than holding it constant to the baseline period. Legal waivers : Support waiving Stark, anti-kickback and CMP laws for distributions of shared savings, but ACOs should be allowed broader exceptions for specialists not part of the ACO. Calculations : Exclude add-ons such as IME and DSH as well as wage adjust the benchmarks and expenditures as these factors cannot be affected and are unrelated to care transformation. 5