1. Spine Health: A Payer’s Perspective Janet R Maurer, MD, MBA Associate CMO VP, Quality & Compliance NIA Magellan Health Member, Board of Directors NASF

2. Who Are the Payers? Private Sector Commercial Insurance Companies (Private Sector Employers) Individuals Public Sector Medicare (Original and through Commercial Insurers) Medicaid (Mostly through Commercial Insurers) Private and Public Sectors Worker’s Compensation Insurance July 18, 20152NASF 10/25

3. Why Do Payers and Individuals Care About Spine Health? $$$ Comorbid: anxiety, depression, obesity, other chronic conditions, etc Medical/DME : imaging, interventional pain management, surgery, conservative care modalities, assistive devices Pharmacy: opioids, non- opioids, relaxants, anxiolytics, etc. Disability Insurance Costs Productivity/ Absenteeism Worker’s Compensation July 18, 2015NASF 10/253

4. Costs of Back and Neck Problems Through 2012 July 18, 2015NASF 10/254 From Variation in the Care of Surgical Conditions, Dartmouth Atlas Project, Sept 2014 http://www.dartmouthatlas.org/pages/variation_surgery_2

5. What is Causing the Payer Concern? July 18, 2015NASF 10/255 Back pain health care costs are increasing* Disability rates, other outcomes do not seem to be improving * Top cause of Global Disability 1990 and 2013 from Global Burden of Disease Study 2013 Collaborators, published online by The Lancet, June 8, 2015. http://dx.doi.org/10.1016/S0140-6736(15)60692-4 Payer, Employer, Back Pain Patient, Provider

6. How Does the Payer Think About Health Care Outcomes and Costs? Payer’s (Private and Public) Goal is best Value for the health care purchased Value = Outcomes/$$ spent Focus is on achieving best outcomes (best achievable health state) at reasonable cost Ensure use of evidence-based guidelines (standard of care) Avoid unnecessary duplication in diagnostic tests Ensure least invasive approach used when results similar Ensure qualified providers deliver care (networks) High cost, clearly defined areas payers address, e.g. spine health Spine MRI, Interventional Pain Management, Spine surgery Other potentially high cost care: PT, chiropractic, Devices July 18, 2015NASF 10/256

7. Payer Approaches to Improving Value in Spine-related Health Care Prior Authorization of Requested Tests/Procedures/Devices, etc. Pre-approval by medical management of insurer Insurer medical personnel: nurses, physicians using evidence-based guidelines Creation of Networks Contract with providers (physician, PT, etc) that are moderate cost; have high quality ratings Contract with accredited, moderate cost rendering facilities or imaging centers (spine MRI cost can vary from $1500 even in same city) Case Management Identify high cost/risk patients and help ensure appropriate management plan Integrated Care Identify spine patients early and ensure transparency in all aspects of care from pharmacy, behavioral health, imaging, interventions, devices, etc. July 18, 2015NASF 10/257

8. Spine MRIs 8

9. Source: Kaiser Family Foundation analysis of 2013 OECD data: "OECD Health Data: Health expenditure and financing: Health expenditure indicators", OECD Health Statistics (database). doi: 10.1787/health-data-en (Accessed on September 10, 2014). Why Focus on MRIs? The Rise of MRIs and MRI USE in the USA Magnetic Resonance Imaging (MRI) units per million population

10. More availability of medical technology does not always equate to higher utilization; But in the USA It Does Number of MRI units available per million population (2012) Number of MRI exams performed per 1,000 population (2012) Sources: Kaiser Family Foundation analysis of 2013 OECD data: "OECD Health Data: Health care resources", OECD Health Statistics (database). doi: 10.1787/health-data-en (Accessed on September 10, 2014). Notes: In cases where 2011 data were unavailable, data from the countries' last available year are shown. Some countries, such as Japan, are omitted because data are not available for both indicators.

11. Requests undergoing clinical review that do not meet medical necessity guidelines:* Focus on Cervical and Lumbar Spine MRIs: NIA Magellan Snapshot NIA Provides Spine MRI Prior Authorization for: 76 Customers 34 states 25.7 million lives Mix of Commercial, Medicare, Medicaid Spine MRI Requests >30K lumbar/mo; > 17K cervical/mo > 564K/yr = 21.9/1000 request rate Of the 564K, 9% approve immediately Tumor, infection, trauma post-op, progressive neurological deficit, immunosuppression, etc. Lumbar MRICervical MRI Average % Commercial 35 32 Medicare 26 25 Medicaid 44 38 *Office records documentation available

12. Why the High Percent Not Meeting Medical Necessity Guidelines? More than 90% of not medically necessary Spine MRI requests is related to lack of (or lack of documentation of) an adequate period of conservative care Per NASS and multiple other societies and guidelines, conservative care is required prior to advanced imaging: NASS Choosing Wisely: ‘Don’t recommend advanced imaging (e.g., MRI) of the spine within the first six weeks in patients with non-specific acute low back pain in the absence of ‘red flags’ How many second requests for MRI for same patient are received between 6 weeks and 6 months after the initial non-approval (presumed failed conservative care)? 9 % of initial ‘Does not meet medical necessity’ requests July 18, 2015NASF 10/2512

13. Interventional Pain Management 13

14. Rapid Increase in Interventional Pain Management Procedures in Medicare Fee-For-Service July 18, 2015NASF 10/2514 Manchikanti L, et. al. Pain Physician 2015: 18: E115-27

15. Provider Variation is Observed in the Use of Repeat Facet Joint Injections (FJI) Each diamond below reflects a provider with 15 or more patients during the data period.  Generally, NIA would expect the average patient to receive 1 to 2 Facet Joint Injections and rarely more than 3 in a six month period.  15% of high volume FJI providers have more than one patient receiving in excess of 3 FJI in a six month period.  Providers designated with orange diamonds represent care that is well outside the standard of care represented by the clustering of IPM Providers whose patients receive 1-2 FJI and 0% of patients with more than 3 in a six month period. IPM Provider Variation Facet Joint Injection Sample Outlier Provider Care (orange diamonds)  Provider A is a mid volume provider with an average of 3.3 visits per patient. 54% of provider’s patients had 4 or more Facet Joint injections in a 6 month period. (highest %)  Provider B is the 4 th highest volume provider for the plan with an average of 3.0 visits per patient. This provider had 29% of patients with 4 or more Facet Joint injections in a 6 month period. 15 Provider A Provider B

16. How to Manage the Rapid Increase in Interventional Pain Procedures? Is the increase in IPM procedures justified? Standard of care elusive; guidelines often vague and based on poor data Many ‘medical necessity’ determinations made on expert consensus standards Recent articles question overall impact of IPM and suggest need for better studies/approaches ‒ Pain Management Injection Therapies for Low Back Pain, AHRQ Technology Assessment, pub. March 20, 2015 www.AHRQ.govwww.AHRQ.gov ‒ Several studies question impact of steroids in spinal stenosis, e.g., NEJM 2014; 371:11 NIA Magellan initial experience with IPM (epidural, facet, sacroiliac) July 18, 2015NASF 10/2516 Requests/1000‘Not medically necessary’ Rate 1230%

17. Lumbar Spine Surgery

18. Lumbar Spine Surgery for Spinal Stenosis: Example of Issues that Concern Payers Medicare Fee-For-Service: rates of surgical decompressions Increased 67% between 2001-2011 from 31.6 to 52.7/100,000 Variation in rates is huge across country July 18, 2015NASF 10/2518 From Variation in the Care of Surgical Conditions, Dartmouth Atlas Project, Sept 2014 http://www.dartmouthatlas.org/pages/variation_surgery_2

19. Lumbar Spine Surgery for Spinal Stenosis: Example of Issues that Concern Payers Medicare Fee-For-Service: rates of surgical fusions Rate of fusions between 2001-2011 was 41.1/100,000 Variation in rates is huge across country: from 9.2 to 127.5/100,000 July 18, 2015NASF 10/2519 From Variation in the Care of Surgical Conditions, Dartmouth Atlas Project, Sept 2014 http://www.dartmouthatlas.org/pages/variation_surgery_2

20. Lumbar Spine Surgery for Spinal Stenosis: Is The Treatment Worse Than The Disease? July 18, 2015NASF 10/2520 From Variation in the Care of Surgical Conditions, Dartmouth Atlas Project, Sept 2014 http://www.dartmouthatlas.org/pages/variation_surgery_2

21. Summary: The Payer’s View Payers are Confused : Why is care so variable for these diseases across the country? Where is the definitive research on outcomes to allow the creation of truly evidence-based standards of care (guidelines)? Why don’t many of the practitioners in this area follow the guidelines that are there? What Payers Want: Better comparative effectiveness studies that truly compare outcomes of different approaches Development of a holistic model of care ‒ Including conservative management, pharmacy, weight loss approach, behavioral health, appropriate interventional management, culture change? ‒ Able to be implemented by payers Overall better outcomes for patients July 18, 2015NASF 10/2521 IOM, 2011