This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA).
Information contained in this presentation is subject to change as regulations are issued and interpretation
evolves. This presentation should not be considered to be legal guidance regarding ACA or its potential impact.
1
Kelly McGivern
Sr. Director, Government Affairs
December 14, 2012
This presentation is only a high level summary of the Patient Protection and Affordable Care Act (ACA).
Information contained in this presentation is subject to change as regulations are issued and interpretation
evolves. This presentation should not be considered to be legal guidance regarding ACA or its potential impact.
2014 Health Care
Landscape
2
Healthcare Reform Timeline
 Benefit coverage changes
− Preventive Care at 100% in network
– Dependents < age 26
– No pre-ex < age 19
– Prohibits rescissions except fraud
– No lifetime limits/ annual limits on essential benefits
– Patient protections
– Grievance and appeals updates
 Temporary high-risk pool
 Uniform MLR definition (NAIC)
 HHS Web Portal
2010
2011
 Guaranteed issue
 Individual coverage mandate
 Individual subsidy
 State individual and small group
exchanges operational
 Rating rule changes




2012
2013
 Minimum MLR requirements
 Medical device fee

 Exchange coverage
notice



 Patient Centered
Outcomes Research fee
Medicare Advantage plans begin
to have payments frozen
 MLR reporting goes “live”
Medicare Advantage cost sharing  Administrative
limits effective
Simplification begins to
phase in
Pharmaceutical fee
 Uniform summary of
Rate review implementation
coverage
Insurer taxes
Employer “Pay or Play” Mandate
Essential health benefits
Medicaid expansion
Source: Patient Protection and Affordable Care Act
 FSA Cap
 Tax deduction for
Medicare Part D
subsidy eliminated
2014
 90-Day maximum
waiting period
 Auto-Enrollment
 Annual reporting of
employee coverage
 Definition of full-time
employees
 Wellness incentives
2015-2019
 Increased penalties on
individual mandate
 Increased insurer taxes
 States must allow groups
with <100 employees into
exchanges (2016)
 “Cadillac tax” (2018)
3
Prominent ACA Provisions in 2014
Key ACA provisions, which will become effective in 2014, will have a significant impact
on the health insurance marketplace.
Prohibits health plans from denying coverage or
rating applicants based on their health status
Creates government regulated
Individual and Small Group health
insurance marketplaces
Guaranteed Issue
(GI) and Rating
Changes
Risk
Management
Mechanisms
Insurance
Exchanges
Institutes penalties for
employers who fail to offer
affordable comprehensive
coverage
Levels the playing field between
health plans and mitigates the
impact of Guaranteed Issue and
pricing uncertainty in the short term
Employer
Mandate
Taxes and
Fees
Levies against health insurers and
other groups to fund subsidies and
risk management mechanisms
Key ACA
provisions
effective in
2014
Individual
Mandate
Institutes penalties for
failing to purchase health
insurance
Tax Credits
and Subsidies
Lowers the cost of coverage for the
low and middle income populations
in the Individual market
4
Key 2014 Provision: Insurance Exchanges
States have a considerable amount of flexibility in deciding how to structure their Public
Individual and Small Group Exchanges.
Individual Exchange
Small Business Health
Options Program
(SHOP Exchange)
Private Exchange
Exchange Eligibility:
Exchange Eligibility:
Description:
 US citizen or legal alien
 Full-time employees of small
businesses from 1 to 100
employees
 May allow health plans to target employers
that are potentially interested in defined
contribution for their employees
 State option to limit to businesses of
50 or less until 2017
 Potentially more health plan flexibility as
plans may not need to meet QHP (Qualified
Health Plan) standards
 Not incarcerated
 Resident of the state in which
Exchange is based
Access to Premium Tax Credits and
Cost Sharing Subsidies:
 Between 133% and 400% FPL
 Not offered affordable coverage
through an employer
 States will decide on the degree of
choice offered to employees
through the small business
Exchange and how employers can
provide contributions toward
employee coverage
 Beginning in 2017, states will have
the option to open the Exchanges to
large employers
 Regulatory issues to be considered include
state insurance law, rating, anti-selection,
risk management, and antitrust requirements
Access to Premium Tax Credits and Cost
Sharing Subsidies:
 No access to tax credits and subsidies
5
Exchange Implementation Timeline
Health plans currently await additional Exchange guidance from Health and Human
Services and States.
Low
2010
Higher
Degree of Clarity on Exchange Regulations from HHS and States
2011
Award Funding and
Publish Legislation
2012
2013
Build
Exchange
Certify
Exchange
Health Plan
Implementation Milestones
Q1 – Determine Exchange
technology solutions
Q2 – Finalize Exchange
go-to-market strategy
– Begin technology build
Q4 – Networks configured
– Products developed and filed
2014
…2017
IVL/SG
LG
Exchange Coverage
Exchange
Exchange
Effective
Effective
Effective
Summer
States notify HHS of intent to operate Exchange
6
Exchange Implementation Timeline
Health plans currently await additional Exchange guidance from Health and Human
Services and States.
Low
2010
Higher
Degree of Clarity on Exchange Regulations from HHS and States
2011
Award Funding and
Publish Legislation
2012
2013
Build
Exchange
Certify
Exchange
Health Plan
Implementation Milestones
Q1 – Rates filed for 2014
Q2 – Submit applications to States for
qualified health plans
Q3 – Ready to quote / enroll
Q4 – Ready to service
2014
…2017
IVL/SG
LG
Exchange Coverage
Exchange
Exchange
Effective
Effective
Effective
January
HHS decides on Fallback Exchanges
Fall
Exchanges finalize available options
Initial enrollment
7
Exchange Implementation Timeline
Health plans currently await additional Exchange guidance from Health and Human
Services and States.
Low
2010
Higher
Degree of Clarity on Exchange Regulations from HHS and States
2011
Award Funding and
Publish Legislation
Health Plan
Implementation Milestone
Q1 – Fully operational on the
Exchange
2012
2013
Build
Exchange
Certify
Exchange
2014
…2017
IVL/SG
LG
Exchange Coverage
Exchange
Exchange
Effective
Effective
Effective
January
Exchange coverage
becomes effective
8
Exchange Implementation Timeline
Health plans currently await additional Exchange guidance from Health and Human
Services and States.
Low
2010
Higher
Degree of Clarity on Exchange Regulations from HHS and States
2011
Award Funding and
Publish Legislation
2012
2013
Build
Exchange
Certify
Exchange
2014
…2017
IVL/SG
LG
Exchange Coverage
Exchange
Exchange
Effective
Effective
Effective
January
States may permit large
employers in Exchange
9
Value-Based
Contracting
Michelle Mathieu Daniels
Vice President Network Management
December 14, 2012
10
Aetna Works with Providers to Create
Incremental Value
Population-Based Management
ACO’s
Accountable Care Organizations
Narrow Networks
Medical Homes
Narrow
Networks
Bundled Payments
Pay for Performance
Provider Alignment
Transparency Tools
IOEs/IOQs/Steerage
Quality & Cost Transparency
Utilization Management
Site of Service
Managing Medical Costs
Discounts/Unit Cost
11
What is Value?
“Value” is the patient health outcome achieved per healthcare dollar
spent.
Our strategy is to provide improved value through population health management, which is built on the
foundation of the Triple Aim: 1) Improve patient experience/engagement; 2) Improve population health;
3) Reduce aggregate cost of care.
Member/Patient Experience
Provider Experience
Plan Sponsor Experience
* Improves system-wide patient
experience and improves member/patient
ownership of care.
* Value is achieved if improvement in
aggregate health is achieved.
* Reducing disparity in cost/procedure,
utilization, key to reducing cost of care.
* Provider's role: Develop a strong
member/provider relationship.
* Network participants are rated on
overall management of their population
of members.
* With focus on outcomes, high unit
costs and utilization are no longer
advantageous.
* Hospital's role: Offer an optimized
environment for health improvement.
* Doctors' and hospitals' role: focus
attention on prevention and treatment of
most serious needs (i.e., chronic
conditions).
* Providers' and hospitals' role: Reduce
cost, volume of care in partnership with
payers.
* Expected Outcome: Member has
improved access to care, exhibits a
willingness to actively engage and be
better-informed to manage their own
health.
* Expected Outcome: Focus on PHM
means aggregate gains in overall
population health status, access to
aggregated clinical and claims-based
data to inform clinical decision-making.
* Expected Outcome: Lower aggregate
medical costs, improved population
health, a more productive work force and
healthier employees and dependents.
Definition of “value” from: Porter ME. What is value in health care? N Engl J Med 2010; 363:2477-81. (10.1056/NEJMp1011024). http://www.nejm.org/doi/suppl/10.1056/NEJMp1011024/suppl_file/nejmp1011024_appendix1.pdf.
“Triple Aim” from: “Triple Aim Initiative.” IHI. http://www.ihi.org/offerings/Initiatives/TripleAim/Pages/default.aspx.
12
Charting the Payment Reform Path
Continuum of Payment Models
Episodic Cost Accountability
Traditional
Fee-forService
Minimal
Pay-forPerformance
Total Cost Accountability
Bundled
Payments
Shared
Savings
Savings Potential
Partial
Capitation
Full
Capitation
Substantial
Source: The Advisory Board Company: Accountable Care Forum-Briefing for Health Plan Executives
13
Medicare Collaboration
• Our objective is to align resources and incentives to
improve outcomes
• National and local focus
14
The Building Blocks of Collaboration
Collaborative Care Management
• Nurse Case Manager in the Participating Provider’s Group Practice
• Care Managers work in collaboration with physicians to
• Develop care plans
• Monitor ongoing symptoms
• Coach patients to manage their conditions
• Continuity of care
• Performance Based Compensation
• Provide enhanced payment opportunities for achieving defined
performance measured focus on quality, recognition and
management of chronic conditions and reductions in avoidable
hospital admissions and readmissions
15
The Building Blocks of Collaboration
• Medicare Data Analysis
• Sharing actionable information to improve recognition of chronic
conditions for risk scores and achievement of quality measures
• Collaboration Results
• Overall Aetna MA inpatient utilization results are 31% - 34% better
than FFS Medicare
16
Creating Alignment with PatientCentered Medical Homes
Aetna supports the development of Patient Centered Medical Homes
through pilots in eight states --- the early returns are promising
Features:
•Three levels of PCMH certification from the National Committee on Quality Assurance
•Emphasis: Coordinated team-based primary care focused on the needs of members, populations
•Standards: Access, continuity, self-care, population mgt, treatment goals, performance improvement
Aligning Incentives:
 Per member per month coordination-of-care fee to support practice infrastructure
 Members are “attributed to the practice using standard attribution logic
 Gain sharing model so practices can benefit from incremental efficiency and clinical
improvements
Sample Clinical Measures:
Sample Efficiency Measures:
• Diabetic: A lipid management: LDL-C control <100
• Diabetes: medical attention for nephropathy
• Diabetic: hemoglobin A1c management
• 30-day readmissions rate
• Bed days per thousand (excluding trauma/maternity)
• Inpatient cost savings PMPM
• ER visits per thousand
17
Aetna’s PCMH Models
• Multi-Payor Collaboratives, CMS, and Comprehensive
Primary Care Initiative (CPCI)
• Direct Contractual Relationship
• Region specific contracting pipeline
• Care Coordination Fee and Shared Savings
• Efficiency and Clinical Performance Monitoring
• PCMH Recognition Model
• Market based program
• Care Coordination Fee
• Efficiency and Clinical Performance Monitoring
18
More PCMH Proof Points
State
Cost Improvement
Quality Improvement
Florida
40% fewer inpatient days
37% lower ER visits
18% lower total costs
Increased primary care visits by 250%
Michigan
10% lower adult ER visits
17% lower ambulatory care sensitive inpatient
admissions
60% better access to care
Minnesota
39% lower ER visits
24% lower inpatient admissions
Reduced appointment wait time from 26 days to 1
day
New Jersey
Reduced PMPM costs by 10%
26% lower ER visits
21% lower inpatient admissions
31% increase in ability to self-manage blood sugar
24% increase in LDL screening
North Carolina
52% fewer visits to specialists
70% fewer visits to ER
Medicaid saved $900 million in 3 years
Medicaid:
21% increase in asthma staging
112% increase in flu innoculations
Ohio
34% decrease in ER visits
22% decrease in patients with uncontrolled blood
pressure
Rhode Island
17-33% lower costs among PCMH members
44% increase in quality scores for family/children’s
health
35% increase for women’s care
Texas
23% lower readmission rates
$1.2 million in estimated cost savings
Results compiled by the Patient-Centered Primary Care Collaborative at: “Benefits of Implementing the Primary Care Patient-Centered Medical
Home.” PCPCC. 2012. http://www.pcpcc.net/files/benefits_of_implementing_the_primary_care_pcmh.pdf.
19
Definition of Bundled Payments
Bundled Payments can be defined as payments that reimburse providers on the
basis of expected costs for clinically-defined episodes of care. They are a mid-point
on the road to payment reform.
Where Bundled Payments Have Succeeded
Medicare Participating Heart
Bypass Center Demo
CMS (HCFA) spending declined by 15.5% in
the first 2 years.
CMS Acute Care Episode
demonstration
20% reduction in supply costs at Hillcrest
Savings of $4 million in device/supply costs
at Baptist Health.
Congressional Budget Office Only 1 demonstration program saved a
(CBO) Study of 34
significant amount of money – using
Demonstration Programs
Bundled Payments.
RAND Health study of
payment reform options
Bundling had the most to offer – the
potential for a 5.4% reduction in prices.
20
Aetna and Bundled Payments
With Bundled Payments, Aetna aims to support the “Triple Aim” of improved
population health, improved patient experience and reduced cost of care.
First Procedures for Bundled Payments
Knee Replacement
Hip Replacement
Bariatric Surgery
Infertility Services
CABG Surgery
Angioplasty
First Principles for Bundled Payments
In designing our Bundled Payment program, Aetna principles include:
•
•
In pursuing bundles, or any payment innovation, Aetna aims to improve quality of
care while reducing costs.
Aetna puts a premium on quality measurement in bundles and sees the
opportunity to align incentives to ensure quality care as a key advantage of
bundled payments.
Yet, it’s also true that:
•
•
When it comes to Bundled Payment contracts, one size doesn’t fit all.
It is important to meet providers where they are (on risk and integration).
21
Pay-for-Performance –
Payment Reform’s Underpinnings
Pay-for-Performance (P4P) can mean a stand-alone program, but there are P4P
components to any payment mechanism that ties payment to achievement of
quality metrics, including most programs whose results are on these slides.
Aetna Uses P4P Principles In:
ACO
Bundled Payments
PCMH
Standalone P4P Programs
Aetna’s Hospital and Specialty P4P programs offer hospitals and providers
scorecards that assess their proficiency at improving outcomes and following
evidence-based processes of care. They also reward facilities and providers that
publicly report on the quality of the care they offer. Aetna’s goals for the program
include:
• Ensure quality care for the money hospitals receive.
• Ensure hospitals operate efficiently.
• Closing the gap between low-and-high performers.
22
Pay-for-Performance – Payment
Reform’s Underpinnings
P4P Details
Hospital P4P
# of Measures
Types of Measures
39 across 3 types
15-20
Outcomes, Processes, Quality
Reporting
Quality, Clinical Efficiency
2%-3% of Projected Costs
Reductions in ALOS, 30-Day
Readmissions, alignment with
Sample Improvement in Quality hospitals
Voluntary, transitioning to
Approach to P4P in Contracting Mandatory
Expected Reduction in Spend
Specialty P4P
2%-3% of Projected Costs
Improved outcomes, cost
containment, alignment
with physicians
Voluntary, transitioning to
Mandatory
23
Aetna’s Way Forward
2013
PCMH
Hospital P4P
Specialty P4P
2014
2015
Continue implementation of national
PCMH contracting strategy
Nearly all eligible PCMH Primary Care
Physicians in PCMH model by end of 2015
Begin implementing performancebased contracting methodology for top
30 2013 non-ACO contract renewals
Hospital P4P a component of nearly all
contracts by end of 2015
Begin strategically implementing
performance-based payment with top
contract renewals in the specialties of
orthopedics, cardiology, endocrinology
and OB/GYN
Specialty P4P a component of nearly all
contracts by end of 2015
Bundled
Payments
Implement Bundled payment
methodologies for 14 cardiac &
orthopedic Institutes of Quality around
the country
General
Continue reporting to physicians and plan sponsors on progress on and performance of valuebased contracting strategies.
24
Quality health plans & benefits
Healthier living
Financial well-being
Intelligent solutions
Accountable Care
Margaret Anson, SVP Strategy and Operations
Accountable Care Solutions
December 14, 2012
25
We see Accountable Care as a Broad,
Transformational Commercial Model
Aetna Perspective
All patient model – Medicare, Medicaid, Commercial
All payor model – not limited to Aetna members
Committed to quality and total cost management
Symmetrical risk sharing
CMS Model
Medicare only
Defined network
Shared savings
Quality measures and reporting
Aetna’s Accountable Care Solutions offering is a sustainable long-term
model for change
26
Accountable Care Benefits All
Stakeholders
Lower cost, higher quality, enhanced member experience
Consultants/Brokers
Employers
• Cost savings
• Sustainable solution
• Improved quality
• Enhanced wellness and
care management
• Improved employee
productivity
Members
• Quality-based, coordinated
care
• Lower out-of-pocket costs
• Enhanced member
experience
• Tools to support a healthy
lifestyle
Aetna
and
Health
System
Partner
• Innovative client
cost savings
solution
• Increased growth
through opportunity
to differentiate
• Quality indicator
reports
Care Providers
• Infrastructure to
manage populations
and risk
• Payment aligned with
quality and
outcomes
• Improved
compensation
27
This Is How It Works
ACOs allow providers to counter significant profitability reductions via a sustainable
business model
Growth
Performance Gap
(e.g., Rate Pressure,
Competitive Market
Forces)
Shared
Savings
Current
Performance
Future
Performance
Without
Defensible
Strategy
Clinical
Integration
Steerage
Operating Cost
(Commercial,
Improvement
Medicare,
Medicaid)
Invest in New
ACO Capability Clinical Efficiency
and Enhanced Care
Management/HIT
28
Three models of collaboration
Model
Clinical
Integration
Support All Payers
Build Population
Specific Models
Private Label
Health Plan
Description
 Governance
 Network Development
 Business, Payment and Clinical Model Development
 Workflow Redesign, Clinical, IT, Care Management Infrastructure Development
 Change management
 Role and Responsibility Definition
 Medicare: Pioneer, Medicare Shared Savings Program, Medicare Advantage
 Medicaid
 System Employees
 Commercial Fully Insured
 Large, self funded customers
 Federal Employees
 Use of Aetna insurance license and expertise (e.g., actuarial) to enable private
label or co-branded health plan offering and manage risk
 Leverage Aetna scale/operations – claims processing, customer service, call
center, & care management (e.g., staff, programs, technology)
29
A la Carte and Turn-Key
Solutions
Payment
Payment
& Incentive
Reform
Models
Provider
Branded
Health Plan
Any Payer, Any Insurance
Segment
Strategy Development and
Consulting
Change
Management
Care
Management
HIT/HIE
•
•
•
•
•
•
Telephonic CM
Embedded
/ Embedded
Telephonic
CM
UM,
DM, CM,
BH, MM
DM, UM, CM
Training,
Staff & Programs
Wellness and Lifestyle
Senior Programs
Clinical
/ IT Platform
Implementation Services
Physicians
Hospitals
CT Suite
Team Suite
• Care
• HIE
• CDS
Pt PortalPortal
• PHR / Patient
• Analytics & Reporting
• Implementation Services
Out Patient Facilities
Pharmacy
Health
Plan Services
•
•
•
•
•
•
License
Claims
Member Services
Sales and Marketing
Actuarial / Underwriting
Implementation Services
Staff
Home Health
30
We are better prepared this time around
ACOs are not HMOs by another name
THEN …
… NOW
Limited transparency and access to information;
Absence of public policy to drive systematic
change
1980s
HMO
Gatekeeper
Model
Policy and cost pressures are forcing change;
Technology is available to enable transparency
and collaboration with providers through aligned
incentives
2000s
Advent of
the PPO
2012
Consumer
Directed
Health Plans
TODAY
 Cost-shifting to members  Care coordination through
 UM functions as barrier  Broad networks with
out-of-network
moderates utilization
HIT
to care
benefits increase cost  Insufficient data to
 Aligned incentives
 Insufficient data to
change consumer
between payers and
support care coordination  Disjointed care
delivery
behavior and coordinate
providers
 Limited payer/provider
 FFS reimbursement
care
 Cost savings and
collaboration
encourages volume
 FFS reimbursement
sustainable solutions
over value
encourages volume over
value
31
31
Diverse Suite
of Unique
Tools and
Services
Hospital Employee
Benefit Plan Administration
• Dedicated service model
• Clinically Integrated Delivery
Model that has the ability to
drive improved performance
• Clinical coordination with on
site programs
• Business model that
Rewards both partners
• Population-based clinical
intelligence, decision support
and alerts
Powered by
• Creation of meaningful
Payment and incentives for
triple aim improvement on a
defined population(s)
• Custom network
administration
• Reporting/Data analytics
• Decision support tools
• Leading consumer mobile
app
• Symptom-to-Provider
pathway
• Care Management,
communication and workflow
technology
• Navigation, access,
appointments, registration
• Clinical Data Integration
• Provider interface
• Secure Data Exchange
• Cloud-based applications
• Rapid / viral distribution
32
Our Strategies Deliver Benefits to all Stakeholders
Consumers
• Improved access,
quality,
affordability,
and convenience
• Flexible and
customizable
Providers
Employers
• Payment aligned with
quality and outcomes
• More affordable
benefits
• Infrastructure to manage
populations and risk
• Increased and
improved engagement
• Workforce productivity
and human capital
33
What is Your ACO Readiness?

Do you have a population based care management program?

How strong is your commitment to the triple aim of better care, better
health, reduced costs?

Have you embraced the PCMH philosophy?

Can you embrace payer discipline?

Are you ready to share risk with payers or the government?

Do you have an organizational commitment to transformation?

How are you perceived by your community (do employers see you as a
partner in helping manage their benefit costs)?

Does your existing “owned” or “clinically integrated” provider network
provide adequate geographic coverage for your targeted population or do
you need more partners?

Does your technology plan support population health management?
34
Questions?
35
Thank you
36