1. Stretching Program Dollars: Creative Solutions in Cost Containment Presentation to aaa+ ADAP Crisis Summit July 6, 2010

2. 2 Agenda Introductions Overview of HMS The ADAP Budget Problem Creative Solutions Questions and Contact Information

3. 3 Our Mission HMS helps protect the integrity of government-sponsored health and human services programs. We are experts in cost management, focused on delivering comprehensive solutions that allow healthcare dollars to reach more people, save taxpayer money, and make the system work better for everyone.

4. 44 What We Do We provide cost containment services for government healthcare programs. We help ensure that claims are paid correctly and by the responsible party. As a result, our clients spend more of their healthcare dollars on the people entitled to them Last year, HMS recovered over $1 billion for our clients, saving billions more in avoided costs.

5. 5 Who We Serve State Programs –Medicaid and Title XXI agencies –State Employee Benefit Plans –Aids Drug Assistance Program and State Pharmacy Assistance Program –Child Support agencies Federal Programs –Centers for Medicare and Medicaid Services –Veterans Administration Commercial Programs –Managed Care Organizations –Pharmacy Benefit Managers

6. Strained Program Budget 6

7. Financial Crisis Impact *NASTAD 2010 Annual Report

8. Impact of Health Reform on ADAPs Additional need for coordination between programs –Medicaid eligibility expansion –Increase in individuals covered by insurance –Changes to coordination between Part D and ADAP Wrap-around Medicare Part D expenditures counting toward True Out Of Pocket (TrOOP) expenditures Narrowing the Medicare Part D doughnut hole

9. Impact of Health Reform on ADAPs (cont.) Drug purchasing changes –An increase in the Medicaid rebate amount for purchased drugs –340B pricing transparency

10. The Budget Problem Traditional approach to cost containment –Reduce formularies –Restrict eligibility (i.e. FPL) –Client cost sharing –Waiting lists Creative solutions do exist that expand access rather than restrict it

11. Creative Cost Containment Strategies for Public Payers Coordination of Benefits –Ensuring Claims are paid by the responsible party Program Integrity –Ensuring that pharmaceuticals are utilized, billed, and paid appropriately Eligibility Services –Streamlining enrollment process through decision support services

12. HMS Services for ADAPs Coordination of Benefits –Recovery from Commercial Carriers –Cost Avoidance –Coordination with other public programs

13. HMS Services for ADAPs Program Integrity –Pharmacy Auditing –Drug Rebates

14. HMS Services for ADAPs Eligibility Integrity –Insurance Continuation –Health Insurance Premium Payment –Medicare Buy-In –Review of Eligibility Criteria

15. HMS ADAP Case Studies NJ ADDP –$6.4 million recovered: 2009 –$58.7 million recovered: 1996 to present CT ADAP –$4.3 million recovered: 2008 to present PA SPAP –Recoveries for the Special Pharmacy Benefits Program –$5.1 million recovered: August 2009 - April 2010

16. Take-Aways ADAP Budget Crisis places pressure on benefits and eligibility Health Reform helps medical coverage, but not costs Creative solutions can relieve financial pressures without impacting clients

17. 17 Contacts Arika Pierce Director Federal Government Relations 202-448-2023 APierce@hms.com Cynthia Jones Sr. Director Enrollment Services 815.455.5016 CJones@hms.com Lori Karaian Director State Government Relations/ADAP SME 704.458.7667 LKaraian@hms.com