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February 2017

Dear Friends and Colleagues,

The Hertel Report is proud to welcome you to the 35th edition of the Arizona State

of the State meetings.

Thank you for allowing us to be your trusted resource during a time of great change

in our industry.

Today, we will present news and data to help inform your understanding of the

market changes of the past year, what’s happening now in Arizona and the complexities

of our nation’s future healthcare policy.

Accountable care expert Jim Whitfill, MD will share his insight and experience with

accountable care organizations, MACRA and value-based payment design.

Leonard Kirschner, MD, a former AHCCCS director and healthcare policy expert,

brings us his unique and humorous perspective on the history of U.S. public health while

providing context for today’s proposed policy challenges.

This is the 22nd State of the State I have the honor of facilitating. Our mission at The

Hertel Report is to provide our Arizona healthcare community with quick access to

reliable, accurate and trusted information about our industry. It is a mission that drives

our work every day and it is what fuels our commitment to the news we curate each

week for our website and the reporting in our monthly, members-only newsletter. With

quarterly data issues and updated Arizona market reports, we’re proud to help our

members become informed voices and leaders in the healthcare community.

We believe you’re here today to connect with colleagues, to learn about the context

and impact of policy changes on our Arizona market and to explore, without partisanship

or rancor, the impact of the ACA repeal & replacement moves of the new administration.

Please join us as we continue these important conversations at The Hertel Report,

where our members know they won’t find fake news; just facts and insight from today’s

most trusted national and local resources.

Thank you for attending the 35th edition of The Hertel Report State of the State

Jim Hammond

Publisher/CEO

The Hertel Report

[email protected]

602.679.4322

P.S. Tell us how we did. Please take our survey.

7AM NETWORKING BEGINS

7:30AM BREAKFAST

8AM PROGRAM BEGINS

WELCOME & INTRODUCTIONS PAULA BLANKENSHIP & JIM HAMMOND

HEADLINE NEWS JIM HAMMOND & JIM WHITFILL, MD

MARKET UPDATE JIM HAMMOND & JIM WHITFILL, MD • AHCCCS • MA • HIM • ACOS

A BRIEF HISTORY OF U.S. PUBLIC HEALTH POLICY LEONARD KIRSCHNER, MD

ACA REPEAL & REPLACE JIM HAMMOND, JIM WHITFILL, MD & LEONARD KIRSCHNER, MD

THANK YOU & CLOSING REMARKS

10:30AM

PROGRAM ENDS

Here’s to good health!

5,000 providers caring for your patients and members at more than

1,300 locations across the Valley

azcarenetwork.org

About Arizona Foundation

Arizona Foundation is an independent, not-for-profit Preferred Provider Organization. Originally established by physicians in 1969 as an alternative to health maintenance organizations, we have grown into Arizona’s largest statewide, independent network by providing highly-accessible, quality care.

We work directly with brokers, consultants, general agents, third party administrators, and insurance companies to provide the freedom of choice by offering and/or endorsing a variety of healthcare solutions.

Our Workers’ Compensation Plan, Foundation Comp, was designed for self-funded employers and workers’ compensation carriers. Foundation Comp offers its clients aggressive discounts and the largest, most accessible network of hospitals, occupational health medical centers, urgent care centers, physical therapy centers, and outpatient surgery centers, as well as a comprehensive network of physicians.

To help control the rising costs of healthcare, Arizona Foundation - through our strategic partnerships - has compiled a comprehensive package of nationwide Medical Management services and Wellness Programs that include:

About VyStream

VyStream - was established in Phoenix, Arizona in 1988 as a "one-stop-shop" medical billing repricing clearinghouse. VyStream utilizes its own proprietary repricing system that is maintained internally. Since its inception over 25 years ago, VyStream has expanded its services to include Medicare-Like Rates Repricing, Chiropractic Cost Containment, and Digital Imaging. VyStream has the experience and our service is impeccable.

Our repricing process is one of the most efficient and accurate in the industry. We have a 99% accuracy rate thanks to our multiple levels of system and quality control measures that are built into our process. With an average turn-around-time of1 hour, we are able to Auto-Adjudicate over 90% of our claims.

The following value-added services integrate with your existing system to reduce your operating costs:

800-624-4277www.azfmc.com

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Connecting People to Healthcare

• Claim Repricing • Clearinghouse

• Claims Management • Digital Imaging

• Medicare-Like Rates Repricing

• EDI Connectivity• Utilization Management • 24-hr Nurse Care Line

• Maternity Management• Case Management

• Telephonic Medicine• Disease Management

Navigating the Healthcare Industry

3016

64-1

6

LEARN. LEAD.C onnect.

Blue Cross Blue Shield of Arizona is proud to be a founding sponsor of The Hertel Report and the work

they do on behalf of Arizona’s healthcare community.

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A better way to start Specialty Therapy

Why?

1. The Adherence Impact of a Program Offering Specialty Pharmacy Services to Patients Using Retail Pharmacies. Journal of the American Pharmacists Association, January 2016.2. CVS/caremark, Specialty Connect Dashboard, November 2015.

© 2016 CVS Health. All rights reserved. 75-35282a 012716

Discover more:www.cvshealth.com

From research to reality

Specialty Connect9,500

100,0002

Now available at more than CVS/pharmacy locations, has provided

patientsthis support and improved convenience to over

Specialty Connect provides both convenience and support for patients with challenging drug regimens, helping them stay adherent and get the full benefit of these expensive therapies. That’s good for patients, providers and payors.

Specialty Connect™A unique service offered by CVS Health simplifies access to specialty pharmacy. Here’s how it works:

Patients drop off a prescription at a CVS/pharmacy.

It is automatically routed to CVS/specialty™.

Patient chooses in-store pick-up* or home delivery.**

Prior authorization completion

Help with insurance claims and financial assistance

24/7 support from clinicians who specialize in helping patients with the same condition

And they get personalized support from the specialty pharmacy, which includes...

In a review of pilot program results, the CVS Health Research Institute found that patients using Specialty Connect did better on two important indicators than a control group.1

more likely to refill their first prescription

percentpercentage point improvement in medication adherence

percent of Specialty Connect users value being able to choose how they receive their medication.2 In the pilot, more than half chose to have their medication delivered to their local pharmacy.

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Equality Health is a virtual integrated delivery system focused on improving the health of underserved and ethnic populations.

Our Coordinated Care Organization provides primary care physicians, members of the Equality Health Network (EHN), with the support and tools necessary to optimize the

quality and performance of patient care. These support services include management services, population health software, utilization management, case management, quality management, cultural care services, and credentialing. See what we can do for you at equalityhealth.com or 602-252-7900 x708.

THE NEW CULTURE OF CARE

www.HealthChoicePreferred.com

HEALTHCARE THAT IS BETTER FROM HEAD TO TOE.

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HEALTH CHOICE PREFERRED is a physician-led,

professionally managed, non-exclusive accountable care

organization (ACO) focused on delivering value-based,

patient-centered, integrated healthcare services.

One of the largest and most

established commercial

accountable care organizations

in the southwest United States,

operating in two states.

Working together to achieve

population health via

effective care management

and aligned incentives for

providers and payors.

Focused on delivering value

to patients with high-quality

integrated healthcare services.

Humana has relationship history

with more than million

members are cared for

by , 00 primary care physicians, in more than 900

relationships across 4 states and Puerto Rico.

of diverse expertise

Primary-care centric

Capabilities that support population health

“The partnership with Humana allows

Iora to help improve the lives of seniors

in Phoenix and Seattle.

Seniors deserve care matched to their

specific needs and Iora’s people-first

primary care operating system helps do

just that. We’re thrilled to partner with

Humana to continue to restore

humanity to healthcare.”

Humana’s approach to value-based healthcare

Focused on improved care,

improved population health,

and lower care costs

For more information, Humana rovider ngagement@ umana.com.

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– Rushika Fernandopulle, M.D., M.P.P.CEO and Co-Founder of Iora Health

AZ-16-10-33

Mercy Care Plan and Mercy Maricopa Integrated Care are proud supporters of The Hertel Report. We share your vision of improving the health of Arizonans by connecting the state’s healthcare community.

www.MercyCarePlan.comwww.mercymaricopa.org

Milliman brings substantial experience in healthcare financing and delivery. We advise clients on a wide range of issues—from assessing the impact of healthcare reform on organizations and populations to streamlining operations. We work with organizations to better price premiums, work with complex regulations, and win bids with state and federal agencies. Ultimately, we help clients improve profitability while advancing the quality of patient care. Our services include:

Medicare Advantage pricing and actuarial management. We conduct the actuarial work to price and model various benefit packages for Medicare Parts C and D, Part D standalone plans, and dual Special Needs Plans (SNPs). Our work includes financial analysis, projections, and scenario testing. We also guide clients through the complicated and cumbersome process of bid development.

Medicaid pricing and financial projections. We help carriers navigate the requirements of each state in which they do business, including those of the Arizona Health Care Cost Containment System (AHCCCS) and similar programs in other states.

Traditional actuarial support for ongoing health plan operations. For large HMOs, we provide actuarial departments with the necessary support work they need, including valuations and pricing analysis.

State licensure and regulatory requirements. For start-up health plans looking to get licensed or existing plans looking to expand to other states, we are expert at meeting the mandated actuarial requirements. We help clients navigate challenging filing requirements, including those for managed care plans, such as the Knox-Keene licensing process in California.

Pharmacy benefit manager (PBM) consulting. We help health plans assess the value and efficacy of PBM services and related issues, including formulary composition, contracts with pharmacies, and discounts with manufacturers.

Provider contracting consulting. We help physician groups, independent practice associations (IPAs), and provider organizations negotiate with health plans on contracting and financial analysis. We work to ensure that the structure of contracts is fair and reasonable, helping develop realistic compensation and risk-reward mechanisms. We also assist in negotiating equitable division of financial responsibility (DOFR) between providers and health plans.

Correctional healthcare. We assist various correctional healthcare systems to better manage utilization of services and cost containment through routine actuarial work, including pricing, pro-forma projections, and extensive trend analysis. We also help institutions with requests for proposals and evaluation of bids.

In today’s constantly shifting healthcare landscape, Milliman consultants help healthcare organizations navigate policy and market changes. We offer clients the deep knowledge they need in today’s environment, with unparalleled industry experience in actuarial science, pricing analysis, policy developments, and regulatory matters.

We help health plans estimate pricing and the financial impact of the ACA and the law’s developments.

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Arizona��

State�of�the�State�February�2017�

The�Hertel�Report�

•  Trusted & Respected •  Impartial & Timely •  Solutions Focused •  Locally Owned

•  Weekly News •  Monthly Newsletter •  Quarterly Data •  Networking & Conferences

•  Jim�Hammond�–  Publisher & CEO of The Hertel Report –  Managing Consultant, Professional Healthcare Solutions –  State-wide Payor & Provider Relations Expert –  Conference Speaker & Resource to:

CMSA, AzHHA, AHE, MCMS, HFMA - Ariz., CBIZ, ASPA, AMN, HCAA, Humana, Dignity Health, U of A, Money Radio, CNBC, Wall�Street�Journal, NPR, Modern�Healthcare, Phoenix�Business�Journal, Arizona�Daily�Star, Vitalyst Health Foundation, Web AZ, and more

–  Former HFMA President

Introduction�

•  Introductions •  Founding Sponsors •  Headline News •  Arizona Marketplace Update

–  Medicare Advantage –  AHCCCS –  HIM –  MACRA, ACOs and APMs

•  History of U.S. Public Health-Dr. Kirschner •  Repeal and Replace Update •  Discussion

Today’s�Agenda�

Thank�You�SponsorsThank You Sponsors

Thank�You�Sponsors�Thank You Sponsors

Corporate�Members�

Corporate�Members�

Corporate�Members

Community�Partners

THANKS�for�our�Programs�HANKS for our Program

Introduction�

Jim�Whitfill,�MD��

•  Chief Medical Officer Innovation Care Partners •  Consultant, Lumetis LLC. •  Professor, Arizona State University

–  Informatics, Graduate Level •  Clinical Associate Professor, UofA College of Medicine,

Phoenix –  Department of Internal Medicine and Bioinformatics

•  Sought After Speaker: –  Clinical & Operational Improvement –  Workflow-focused & Population Health, Information Technology –  MACRA, Advanced Payment Models

�

Medicare�Advantage�Update�

Statewide Enrollment Total 460,605

Growth�in�AHCCCS�Enrollment�

1.00�

1.10�

1.20�

1.30�

1.40�

1.50�

1.60�

1.70�

1.80�

Jan-1

3

Feb-13

Mar-13

Apr-13

May-13

Jun-1

3

Jul-1

3

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-1

4

Feb-14

Mar-14

Apr-14

May-14

Jun-1

4

Jul-1

4

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-1

5

Feb-15

Mar-15

Apr-15

May-15

Jun-1

5

Jul-1

5

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-1

6

Feb-16

Mar-16

Apr-16

May-16

Jun-1

6

Jul-1

6

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-1

7

AHCCCS�Population�(in�Millions)�Acute Population

June�2013�to�January�2017��

AHCCCS Update –  AHCCCS�Care�/�1115�Waiver�Approved�

•  Limited�to�small�number�of�enrollees�

–  Expansion�lawsuit�still�undecided�–  Acute Growth – 577K since 1/1/14 total 1.67M –  Maricopa Health Plan Transition to UHC – Wellcare�Buys�Care�1st��and�Phoenix�Health�Plan�–  Next Bid Cycles

•  ALTCS Oct. 2017 •  ACUTE Oct. 2018

dRequested�Again�

January�2017�

Arizona HIM Update •  Continue to use Healthcare.gov •  Choice Limited – 2017 HIM Exits�

•  United Healthcare •  Health Choice •  Humana and Aetna •  Health Net in Maricopa County •  Blue Cross exits Maricopa, plans available in Pima

and rural counties only •  Cigna and Phoenix Health Plans bail out in

September •  From 12 Plans to 2

Arizona�Exchange�Plans�2015�

HIM�Arizona�Plans�2016�

HIM�Arizona�Plans�2017�

Final�Lineup�

�

Centene steps up in Maricopa and Pima only

Steps up in Pinal County Exclusive in all rural counties plus Pima (catastrophic only). No plans in Maricopa

y

�National�2016�ACA�HIM�Enrollment�

2017 Total Marketplace results are shown through��December�24,�2016

Arizona�2016�ACA�HIM�Enrollment�

2017 Total Marketplace results are shown through��December�24,�2016

2016�HIM�Enrollment�Statistics�

National�

•  11.5 million enrollments by December 26th

•  76% renewal / 24% new •  83%�of�all�enrollments�received�financial�

assistance�compared to 83% last year

•  36%�of�enrollment�is�under�age�35�compared to 35% last year

Arizona�

•  183,236 million enrollments by December 26th

•  74% renewal / 26% new enrollment

•  84%�of�all�enrollments�received�financial�

assistance�compared to 74% last year

•  41%�of�enrollment�is�under�age�35�compared to 44% last year

CMS�and�Accountable�Care�

Organizations�(ACOs)�

• Pioneer ACO Model (CMMI) • Medicare Shared Savings Program

(CMS) • Next Generation ACO (CMMI)

– CMS ACO models grants FTC protection without having to form a CIN

– All Models offer paths to waivers from some CMS rules

Arizona�Medicare�ACOs�

ACO�Results�to�Date�

33

Arizona�MSSP�Winners�&�Losers�2015�

•  Arizona�Connected�Care Generated�Savings:�$4.9M Earned�Shared�Savings:�$2.2M�

•  Commonwealth�Primary�Care�ACO Generated Savings: $15.5M Earned Shared Savings: $7.4M

•  Scottsdale�Health�Partners Generated Savings: $9.9M Earned Shared Savings: $4.6M

�ASPA Connected Community �Spent�$409,156 under�the�benchmark,�but�not�enough�to�generate�earned�

shared�savings�

•  Arizona�Care�Network $6.1M

•  John�C.�Lincoln�ACO $17.4M

•  North�Central�Arizona�Accountable�Care $1.3M

•  Yavapai�Accountable�Care $4M�(left�program)

34

Banner�Pioneer�Results��Performance�Year� Beneficiaries� Measure� Financial�Results��

Percentage�

2012� 42,890� Actual� $453�M�

Benchmark:�$472�M� Savings� $�19�M��4%�

Quality:�P4R� Share� $�13�M�

2013� 49,303� Actual� $536�M�

Benchmark:�$551�M� Savings� $�15�M��2.75%�

Quality:�81%� Share� $��9�M�

2014� 52,772� Actual� $556�M�

Benchmark:�$585�M� Savings� $�29��M��4.96%�

Quality:�87.6%� Share� $�19�M�

2015� 59,298� Actual� $607�M�

Benchmark��$642�M� Savings� $�35�M��5.47%�

Quality:�95.2%� Share� $�25�M�

ACO�Name� 2017�Track� 2018�Track�

Banner Health Network MSSP Track 3 MSSP Track 3 Arizona Connected Care MSSP Track 1 ? Arizona Care Network Next Generation Next Generation Commonwealth PCACO MSSP Track 1 ? John C. Lincoln ACO MSSP Track 1 MSSP Track 1 Scottsdale Health Partners MSSP Track 1 MSSP Track 2 ASPA Connected Community MSSP Track 1 ? North Central Arizona AC MSSP Track 1 ? Abacus ACO MSSP Track 1 MSSP Track 1 Optum ACO Next Generation Next Generation

Future�ACO�Tracks�

Other�ACOs�

•  Cigna Medical Group •  Pathfinder ACO •  District Medical Group •  Health Choice Preferred •  Arizona Integrated Physicians •  Iora Health •  Arizona Priority Care •  Equality Health •  More?

MACRA�

Medicare�Access�and�CHIP�Reauthorization�Act�

of�2015

MACRA�FACTS�•  Bipartisan�landslide��

–  The House of Representatives approved the bill by a vote of 392 to 37 –  The Senate voted 92-8 to approve the ending of the SGR formula, less than

three hours before federal officials would have had to reduce Medicare physician payments by 21 percent. �

•  CHIP expansion 2 years •  Higher�premiums�for�wealthy��No first dollar coverage

for Medicare Supplements •  Commitment�to�value-based�payment�systems�•  FFS revenue tied to quality •  Quality�definition�includes�resource�use�•  Increased�burden�to�track,�report,�improve�Q�•  5%�bonus�for�APMs�=�ACOs�

Medicare�Access�and�CHIP�Reauthorization�Act�of�2015�

•  MU, PQRS, VBM combined 2019

•  Budget-neutral adjustments

•  Incentives for Quality and Resource use

•  Significant share of provider revenue in two-sided risk

•  5% bonus and exemption from MIPS*

MIPS brings threats of fee schedule cuts and incentives based on scores

•  All�providers�are�required�to�participate�in�MIPS�in�2017, proposed rule

•  First reporting period 1/1/2017 to 12/31/2017

•  Payments adjusted in 2019 based on performance in the 2017 period

•  MIPS is budget neutral so any incentives are paid for via cuts to other providers

•  However, there is a budget exempt $500 million dollars for “exceptional” performance in the first 5 years

The Advisory Board Health Care Cheat Sheet Series MACRA: Educational Briefing for IR Professionals, April 2016

Examples: •  Medicare ACOs:

–  MSSP Track 2 and Track 3 New in 2018 – Track 1+ –  Pioneer sun-setting –  Next Generation ACOs

•  Bundled Payments •  Episode-based payments with shared savings/losses •  Patient-Centered Medical Home •  Population-based payments Key Ingredients: •  Quality�affects�payments�•  Payment�tied�to�cost�performance�against�benchmark�

CMS�Estimates�of�MACRA�Impacts�

•  Solo Providers: 87% will suffer falling reimbursement rates •  Practices with 2-9 Providers: 70% will experience falling

reimbursement rates •  Practices with 25-99 Providers: 55% will experience a rise in

reimbursement •  Practices with >100 Providers: 81% projected to see a rise in

reimbursement https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program-merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm

MIPS�Score:�First�Year�

Quality Category 50% of score in year 1; replaces the Physician Quality Reporting System

Advancing Care Information Category* 25% of score in year 1; formerly Meaningful Use

Clinical Practice Improvement Activities Category 15% of score in year 1

Cost Category* 10% of score in year 1; replaces the Value Modifier Program, also known as Resource Use) *For clinicians who do not meet these category

requirements, CMS proposes reweighting the score to 0 and recalculating the other categories.

Proposed�Qualifying�Advanced�APMs�

Advanced Alternative Payment Models vs. Alternative Payment Models only former counts for incentives

& MIPS exemption

AAPM�Incentive�Payments�

CMS�Expects�Most�Providers�to�

Be�Subject�To�MIPS�j

Interactions�between�MIPS�and�

MSSP�and�APMs�and�AAPMs�Financial��

•  AAPM Qualified Providers receive a 5% bonus in 2019 based on 2018 payments and are not affected by MIPS

•  Partially qualified providers can be exempted from MIPS or choose to be subjected to MIPS (in the case of a + adjustment under MIPS)

•  Shared savings distributions from MSSP not affected by MACRA

Reporting�•  AAPM Qualified Providers do not

need to report after 2017 PY •  No APM providers will be judged

on cost/resource use •  No APM providers need to report

quality measures from their TIN •  APM providers will need to report

ACI and CPIA measures •  APM providers will receive 50%

credit in the CPIA category

s

CMS’�Push�to�Value�&�Quality�

CMS Goals for Medicare FFS Payments*

*Obama Administration

Leonard�Kirschner,�MD,�MPH��

Should�the�United�States�

Government�

Be�Involved�in�Health�Care?�

The�U.S.�Government�and�Healthcare�

George�Washington,�

The�Continental�Congress�

&�

Smallpox:�1777�


John�Adams�

&�

The�Merchant�Marine�Health�Act;�

1798�


“Doctors�do�more�harm�than�good”�

�

� �Thomas Jefferson


Honest�Abe�

and�

Civil�War�Medicine�


Otto von Bismark’s enactment of employer-employee shared health insurance in 1884 in Germany inspired

President Theodore Roosevelt proposed employer-employee shared health insurance in 1912.

US�entry�on�the�side�of�England�and�France�in�WWI�led�to�a�rejection�of�any�“German”�ideas.�

The Birth of the Blues Premium $6.00/Year

Dallas,�Texas��

December�20,�1929�

The�1932�Election�

The New Deal�Social�Security�or�a�

National�Health�System?��

Franklin�Roosevelt�

Hill-Burton�Act�of�1946�

�

“BRING�THE�COST�OF�MODERN�

MEDICAL�CARE�WITHIN�THE�REACH�

�OF�ALL�THE�PEOPLE.”��

Harry�Truman�

State�of�the�Union�1952�

*Community�Based��Mental�Health�Services�

�

*Health�Manpower�Legislation�

��

��1961-1963�

JFK�

“…And�through�this�new�law…�every�

citizen�will�be�able,�in�his�productive�

years�when�he�is�earning,�to�insure�

himself�against�the�ravages��

of�illness�in�his�old�age…”�

��LBJ��July�30,�1965�

“The Compromise and the Afterthought”

Emily Friedman, July 30, 1965

LBJ�

A Forgotten Fact!�In�1966,�as�a�condition�for�receiving�

Medicare�reimbursement,�hospitals�

in�America�desegregated!��

LBJ�

Medicare�and�Medicaid�were�

supposed�to�last�5�or�6�years;�

they have lasted 50 �

� ��

LBJ�

“The�Father�of�Managed�Care”�

The�HMO�Act�of�1973��

Richard�Nixon�

Carter�

vs.�

Kennedy�

1977-1980�

�*�DEFRA�

*�TEFRA�

*�COBRA�

*�SOBRA�

*EMTALA�

�

��

HEALTHCARE�1980s�

Medicare�Catastrophic�

�� 1988-1989��

REAGAN�&�BUSH�

The�Americans�

with�Disabilities�Act�

�� 1990 ��

GEORGE�H.�W.�BUSH�

“It’s�the�economy�stupid�

and�don’t�forget��

healthcare!”�

BILL�CLINTON�&�JAMES�CARVILLE�

*The�HIPAA�

*The�BBA�(SGR)�

*The�BBRA�

*The�BIPA�

*SCHIP�

THE�CONGRESS�

1996-2000�

Tuesday,�March�23,�2010�

Bush Signing Medicare Modernization Act December 8, 2003

LBJ Signing Original Medicare Act July 30, 1965

Obama�Signs��

“Patient�Protection�and�Affordable�

Health�Care�for�America�Act,”�

�

H.R. 3590 — the Patient Protection and Affordable

Care Act �

3/25,�Reconciliation:�H.R. 4872 — the Health Care and Education

Affordability Reconciliation Act of 2010. �

The�Supremes�vs.�Obamacare�Act�I�

03/29/16 Dan Derksen MD

BREAKING NEWS: THIS JUST IN…

03/29/16 Dan Derksen MD

�MEDPAC/MACPAC�

“Report�to�the�Congress;�

Medicare�and�the�Health�Care�

Delivery�System”�

�� June�2016�

21st�CENTURY�HEALTHCARE�

�MACRA�2015�

SGR�to�MIPS/APM�


Top 10 Issues in 2016

1. Health�Insurance�Exchanges�

2. Medicaid�Expansion�

3. Medicare�Physician�Payment�Reform 4. 340B/Drug�Pricing�

5. Information�Technology�

6. Cybersecurity�

7. Insurance�Consolidation�

8. Opioids/Behavioral�Health�

9. Hospital�Star�Ratings 10.Hospital�“Bill”�

�

“Healthcare�reform�to��

make�America�great�again.”�

�� President�Donald�Trump��


�“A�Better�Way:�

Our�vision�for�a�confident�

America:�Health�Care”�

�� Paul�Ryan�

� ��June�22,�2016�

��


�

The�Only�Thing�Constant��

Has�Been�Change��

US�HEALTHCARE�SYSTEM�

The�Nominated�Players�

Dan Derksen, MD

Sen.�Tom�Price�Secretary�HHS�

Seema�Verma,�MPH�Director�CMS�

House�Speaker�Paul�Ryan�

Helped�Gov.�Pence�Obtain�from�CMS�Healthy�Indiana�Plan�

Medicaid�1115�Waiver�

�“The�moral�test�of�government�is�how�it�treats�

those�who�are�in�the�dawn�of�life,�the�children;�

those�who�are�in�the�twilight�of�life,�the�aged;�

and�those�who�are�in�the�shadows�of�life,�the�

sick,�the�needy

�and�the�handicapped.”�

��

HUBERT�HUMPHREY�NOVEMBER�1,�1977�

Election Outcome and Policy Agenda

The�ACA�“Iceberg”�

Affordable Care Act

Accountable Care Act

g

AffordableCare Act

AccouCare A

Mandate��

��Medicaid�Expansion�

�

Marketplace�Subsidies�

Guarantee�Issue��No�Pre-X��No�lifetime�Max��Community�Rating��

MLR�Rule ��Dependents�to�age�26�

Hospital�Cuts��Full-time=�30�hrs/wk��

�MA�Plan�Cuts��Readmission�Reduction�

Accountable�Care�Organizations��Patient�Centered�Medical�Homes��

Device�Taxes��Bundled�Payments��

Pay�for�Performance�

Value-based�modifier��

Merit�Based�Incentives��Meaningful�Use�of�EHR��Innovation�Funding�

Repeal�and�Replace�

•  Reconciliation •  Executive Order •  Legislation •  Trump Administration May Not Defend

Lawsuit Funding Cost-Sharing Payments for Low Income Beneficiaries

RECONCILIATION�1.12.17

Guarantee Issue No Pre-X No lifetime Max Community Rating

MLR Rule Dependents to age 26Hospital Cuts Full-time= 30 hrs/wk

MA Plan Cuts Readmission ReductionAccountable Care Organizations Patient Centered Medical Homes

Device Taxes Bundled Payments Pay for PerformanceValue-based modifi er

Merit Based Incentives Meaningful Use of EHR

Innovation Funding

EXECUTIVE�ORDER�1.20.17

LEGISLATION� Newly Appointed

HHS Secretary Tom Price “Empowering�Patients�First�Act”�

Themes�•  Privatization •  State Flexibility •  Tax Code Changes

LEGISLATION�

LEGISLATION�

Senators Susan Collins, R-Maine Bill Cassidy, MD, R-LA

PATIENT�FREEDOM�ACT�OF�2017�

States�Can�Choose�Option�1�

•  Reimplement the ACA •  Continue to Receive:

•  Federal Premium Tax Credits

•  Cost-Sharing Subsidies

•  Medicaid Dollars


•  State Can Create a Market-based System

•  Pre-existing conditions •  States Receive 95 percent of ACA

Funded Premium Tax Credits, Cost-Sharing Subsidies and Medicaid Expansion

•  Per Beneficiary Grant or •  Advanceable Refundable Tax

Credits •  Either Option Would Fund Roth HSA

Patient Owned


•  State Freedom to Design & Regulate Insurance Market With No Federal Assistance

Future�of�Cost�Sharing�Payments�Under��

Trump�Administration�

In�2014�U.S.�House�Filed�Suit Argument:�Cost-Sharing Payments Illegal – No Congressional Appropriation 2016:�District�Court�Provides�Favorable�Ruling�to�House�

Result:�

Decision Stayed by Judge – Revisit Decision Post Election Possible�Impact:�Cost-Sharing Support Eliminated for Beneficiaries at or below 250% FPL or $29,700 for a single person. May not be politically viable.

• 

– 

• 

– 

Affordable�Health�Insurance�for�Everyone�

IDEAS & POLICY Everyone�Will�Have�Access�to�Health�Insurance�

•  One Exchange Fits All •  Individual Mandate/Penalty •  Medicaid Expansion •  Minimum Essential Benefits

–  Maternity, Contraception, Mental Health/Substance Abuse etc.

•  Special Enrollment Periods •  Mandated Essential Health

Benefits

•  Pre-Existing Conditions –  Must Have Continuous Coverage

•  Continuous Coverage Protection –  No upcharges for qualifying event

•  Dependent Coverage to Age 26 •  End Lifetime Limits •  Sale of Insurance Across State Lines •  Age Rating Change

–  From 3 to 1 to 5 to 1

States�Given�Choice�to�Expand�or�Narrow�

•  State Run, High-Risk Pools •  State Innovation Grants

–  Rewards for Reducing Individual & Group Premiums & Uninsured Rate

•  Medicare Innovation Initiatives –  ACOs –  Bundled Payments –  Primary Care Transformation –  New Payment & Delivery Models –  Speed Best Practices –  Part B Rx Changes

•  Price Transparency from All Healthcare Providers

•  Reform Mental Health Programs & Institutions

• • 

• 

ACA�Details�to�Watch�

Medicare Provider Cuts

Employer Taxes & Fees

Medical Device Taxes

Single Open Enrollment

Plan Taxes & Fees

Individual Tax Deductibility

MLR Rules

MA Plan Cuts

THE�FUTURE�OF�MEDICAID�

“The�primary�driver�of�our�national�debt�is�our�healthcare�programs.�There’s�no�one�magic�bullet–�like�pass�this�and�it’s�fixed–�but,�save�the�healthcare�system�and�you’re�saving�the�country�from�its�debt�crisis.”��

Paul�Ryan�Speaker of the House

Modern�Healthcare�

THE�FUTURE�OF�MEDICAID�

“Medicaid’s�rigid,�complex�rules�designed�to�protect�enrollees�[do�not]�foster�efficiency,�

quality�or�personal�responsibility.”�

�

“…1115�waivers�provide�a�pathway�for�state�innovation.�However,�the�approval�rout�is�so�

daunting�that�states�often�abandon�

promising�ideas�if�a�waiver�is�necessary.”�

Seema�Verma�CMS Director Nominee

Medicaid�Changes��

•  Block Grants •  Per-capita Funding •  Major Levers

– Eligibility (% FPL) – Benefits – Provider Rates – Other Changes

Other�Medicaid�Changes�

•  Premiums with penalties for non-payment •  Co-pays or other cost sharing •  Work requirements •  Lifetime limits •  Low-income HSA arrangements

Seema�Verma,�Nominated�to��

Lead�CMS�

“States should be provided with flexibility to achieve [Medicaid’s goals] and successful states should be rewarded with reduced oversight.” Seema Verma, Testimony before U.S. House Energy and Commerce Committee, Health Subcommittee, June 12, 2013.

Potential�Medicare�Reform�

•  Combine Medicare Parts A & B •  Increase Eligibility Age to 67 •  Expand Medicare Advantage •  Implement Premium Support Model •  Create a Medicare Exchange

•  Traditional Medicare •  Private Plans

•  Repeal Independent Payment Advisory Board

•  Repeal CMMI •  Repeal ACA Mandated Cuts to

MA Plans

Thank�You�for�Your�Attendance�and�

Continued�Support!�

�Remember�to�visit�our�website�at: www.thehertelreport.com�

Be�part�of�our�membership�community�and�sign�up�today�for�timely,�impartial�

�market�news,�data�and�exclusive�reports!�

Medicare�Advantage�Update�

(201

5 to

201

7)

www.thehertelreport.com

The Source that Connects the Arizona Healthcare Community

A VOTE FOR CHANGEREPUBLICANS DUST OFF

REPEAL & REPLACE

INTRODUCINGBANNER | AETNA

Continued Page 2

DUPLICATION WITHOUT WRITTEN AUTHORIZATION VIOLATES FEDERAL LAW


Path to Repeal & ReplaceMHP TO UHC TRANSFER

PAID SICK TIME IN ARIZ

ASU & Mayo Clinic Announce Formal Partnership

Repeal & Replace Continued From Page 1

67%

Continued Page 3

86%

57%

INDUSTRY INSIDER VIEWS

Pre-Election

Post-Election



Repeal & Replace Continued from Page 2

Bye-Bye MandateWELLCARE EXPANDS

Continued Page 4

AREAS OF AGREEMENT

CMMI



Medicaid Expansion in ArizonaRepeal & Replace Continued from Page 3

Shrinking Medicaid

Source: Levitt Partners

RECONCILIATION PROCESS

Repeal

Medical Device Tax Health Insurance Tax

Penalty TaxesIndividual Mandate Employer Mandate

Cadillac Tax

FUTURE LEGISLATIVE MOVESRegulation Reforms

3:1 Age-bandingGuaranteed Issue

Lifetime Limits

Repeal/Modify Consumer Subsidies

Metal TiersMedical Loss Ratio

Readmission Reduction

BLAST FROM THE PAST: ARIZONA’S PRE-EXISTING CONDITION INSURANCE PLANBLA T FROM HE PAS

Continued Page 5



Medicare & Medicare Advantage


WINTER 2017STATE OF THE STATE

Tucson: Phoenix:

WINTER 2017 STATE OF THE STATE

Link to Republican Platform Above

ARIZONA BROKER POV

Better Way

CLICK HERE TO REGISTER

TODAY

Continued Page 6 WINTER SOS




Value-Based InitiativesCMMI INNOVATION MODELS

InitiativesAccountable Care (9)

Episode-Based Payment Initiatives (7)Primary Care Transformation (7)Medicaid & CHIP Populations (7)

Speed Adoption of Best Practices (9) Accelerate Development & Testing of

New Payment & Service delivery Models (20)

NEWSLETTER SPONSOR

The Hertel Report

Linda Hunt,

Tom Salerno

William Cance M.D.

Barbara Eckstein, M.D.

Kristyn Meza Kerri Akers,

Nicole Wegrzyn

Dawn Jaroszewski, M.D.

Jennifer Sommers

Claire Stout

Jean Tkachyk

COMINGS & GOINGS


The Hertel Report TTThTheThehe He He HeHeHerHerterterteltel el Rel ReReRepRepoepoporportort rt t

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