1. Rate Update May 16, 2012

2. Primary Care Medicare Rate Parity Federal mandate effective January 1, 2013 –Primary care services (as defined in the Act) –Evaluation & Management codes that are covered by Medicare, and 8 vaccine administration codes –Furnished by a physician (MD or DO) with a primary specialty designation family medicine general medicine internal medicine pediatric medicine At a rate not less than the Medicare rate OR the Medicare rate that would result from applying the 2009 Medicare conversion factor, whichever is greater

3. Primary Care Medicare Rate Parity The following E/M codes reflect our understanding of current CMS coverage status (CMS coverage determinations are subject to change prior to 1/1/2013) E/M codes: 99201-99239, 99281-99374, 99377, 99379- 99380, 99406-99407, 99455-99499 The listed vaccine codes are those expressly identified in the legislation, however, four of the codes are obsolete AHCCCS anticipates that the CMS Proposed Rule will specify the replacement codes Vaccine codes: 90465*, 90466*, 90467*, 90468*, 90471, 90472, 90473, 90474. (* denotes obsolete code)

4. Primary Care Medicare Rate Parity Estimated cost of $135 million if ACA found constitutional All information contained herein is based on ACA legislation and has not been updated to reflect the Proposed Rule released last week AHCCCS will post similar information to its website in the near future, updated based on the Proposed Rule

5. Inpatient Hospital Reimbursement Laws 2012, Second Regular Session, Chapter 122, ends the inpatient hospital tiered per diem methodology utilized by AHCCCS and its Contractors effective September 30, 2013 This payment structure is the default methodology, as required by Arizona State law, that must be used by AHCCCS' Managed Care Organizations (MCOs) when no contract exists between an MCO and a hospital Pursuant to law, AHCCCS is required to obtain legislative approval of an alternative reimbursement methodology for inpatient dates of service on and after October 1, 2013 AHCCCS is exploring the benefits of the APR-DRG payment methodology and will be establishing workgroups to seek stakeholder input on such a methodology