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Affordable Care Act: Three A’s and the Triple Aim

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Affordable Care Act: Three A’s and the Triple Aim

  1. 1. Page 1May 9, 2013Prepared for Kansas County Commissioners AssociationAffordable Care Act:Three A’s and the Triple AimKansas County Commissioners AssociationAnnual MeetingMay 8, 2013
  2. 2. Page 2May 9, 2013Prepared for Kansas County Commissioners AssociationACA: Two Intertwined GoalsGoalsMake adequatehealth insurancecoverage moreavailable andaffordableReform deliveryand paymentsystem to providebetter care in amore cost-efficientmanner
  3. 3. Page 3May 9, 2013Prepared for Kansas County Commissioners AssociationAvailable, Adequate, Affordable:The Seven-Part SolutionOffer incentives to expand coverageControl rising costsRegulate health plan coverageImpose individual mandateCreate health insurance exchangesImpose employer penaltiesExpand Medicaid (?)Three A’s
  4. 4. Page 4May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 1: Offer Incentivesto Expand Coverage• Temporary high-risk pools• Early retiree reinsurance program• Tax credits for small employers– Cover at least 50% of health insurance costs– < 25 FTEs, average wage < $50,000– Credit = up to 35% of costs thru 2013; 50% thereafter
  5. 5. Page 5May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 2: Control Rising Costs• Medical loss ratio• Web portal – finder.healthcare.gov• State grants for health insurance premiumreviews
  6. 6. Page 6May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 3: Regulate Health Plan CoverageAll Plans – Now In Effect• No lifetime limits on “essential benefits”• Tighter restrictions on annual limits• No rescission of coverage, except for fraud orintentional misrepresentation• Kids covered through 26th birthday• No pre-existing condition exclusions for kids <19
  7. 7. Page 7May 9, 2013Prepared for Kansas County Commissioners Association• First-dollar coverage for preventive services• New appeals procedures• Emergency care covered without preauthorizationand as if provided in-network• Designation of primary care physician• Extension of non-discrimination provisions (highlycompensated employees) to fully insured plansNo. 3: Regulate Health Plan CoverageNew Plans – Now In Effect
  8. 8. Page 8May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 3: Regulate Health Plan CoverageEffective Later This Year• All plans– W-2 reporting of value of employer-provided health plan– New standardized summary of benefits– 60-day advance notice for any “material modification” ofcoverage• New plans– Reporting to HHS and enrollees on specified qualitymeasures
  9. 9. Page 9May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 3: Regulate Health Plan CoverageGuarantee Issue and Renewal• Effective January 1, 2014• Premium costs differ solely based on:– Age (3:1)– Tobacco use (1.5:1)– Family composition– Geographic location
  10. 10. Page 10May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 4: Impose Individual Mandate• Maintain “minimum essential coverage” unless…– Coverage costs >8% monthly income– Income below the tax filing threshold– Religious objection– Native American• 3 alternatives– Employer/union-sponsored plan– Purchase individual insurance– Qualify for federal health care program
  11. 11. Page 11May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 4: Impose Individual MandateEnforcement• Pay penalty on federal tax return if ≠ maintain healthinsurance for 3+ months• By 2016, penalty = greater of– $695 per person (up to $2,085 per family)– 2.5% of adjusted household income• Failure to pay = lien against future tax refunds– No criminal enforcement– No civil penalties
  12. 12. Page 12May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 5: EstablishHealth Insurance Exchanges• Enrollment starts October 1, 2013• “CarMax” for health insurance• Individual and small employer market– Expand to larger employers in 2017• “Essential health benefits package”– Must provide essential benefits– Cost-sharing ≠ exceed HSA out-of-pocket limits(currently, $5,950 single/$11,900 family)– Annual deductible capped at $4,000 family/$2,000 single
  13. 13. Page 13May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 5: Establish Health Insurance ExchangesIndividual Tax Credit• Used only to purchase coverage through Exchange• Qualify if household income is 100-400% of FPL– Unless eligible for Medicaid or employer-sponsoredcoverage (unless employer coverage not affordable oradequate)– Amount of credit varies with household income and costof Exchange-provided coverage• Also eligible for cost-sharing reductions
  14. 14. Page 14May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 5: Establish Health Insurance ExchangesWhat Happens In KansasSources of Health Insurance:Kansans Under Age 6549.2% Large Employer10.2% Small Employer4.1% Direct Purchase15.3% Uninsured15.7% Medicare/Medicaid5.5% Other
  15. 15. Page 15May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 6: Impose Employer Penalties
  16. 16. Page 16May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 6: Impose Employer Penalties• Avoid penalty by offering affordable andadequate insurance to employee + kids under 26– Employee portion of self-only premium for employer’slowest coverage that provides minimum value is< 9.5% of employee’s W-2 wages)– Plan’s share of total allowed costs plan is expected tocover is > 60%
  17. 17. Page 17May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 6: Impose Employer Penalties• Required notice of coverage options available throughthe Exchange (this summer)• Automatic enrollment of FT employees (200+ FTemployees) (delayed)• Value-based benefit design• Employee wellness programs– No required disclosures regarding firearms• www.dol.gov/ebsa/healthreform/
  18. 18. Page 18May 9, 2013Prepared for Kansas County Commissioners AssociationNo. 7: Medicaid Expansion• Starting in 2014, state that expands Medicaid eligibilityto 138% FPL will receive higher FMAP for newly eligible– 100% in 2014-16; 95% in 2017; 94% in 2018; 93% in 2019; 90%in 2020+– Administrative costs still 50/50• Coverage must be at least as good as the minimumessential health benefits available through Exchanges
  19. 19. Page 19April 19, 2013Prepared for Kansas County Commissioners AssociationNo. 7: Medicaid Expansion“No, Thanks”• 365,000 uninsured in Kansas• 141,000 eligible under Medicaid expansion• 38,000 between 100-138% FPL (exchange subsidies)– Employer penalties• 103,000 left out if Kansas opts out• 10-year cost to State– Kansas Health Institute: $811M– Brownback Administration: $1.1B (vs. $519M withoutexpansion)– Cato Institute: $4.7B
  20. 20. Page 20April 19, 2013Prepared for Kansas County Commissioners AssociationNo. 7: Medicaid ExpansionImpact on Hospitals• Less-than-expected decline in uncompensated care• Reductions in disproportionate share payments– Medicaid DSH reduced 50% by 2019oHHS has not yet published methodology– Medicare DSH reduced 75% in 2014 (with some amountreturned based on documented uncompensated care)
  21. 21. Page 21April 19, 2013Prepared for Kansas County Commissioners AssociationNo. 7: Medicaid ExpansionPremium Assistance Option?• “Arkansas Bandwagon”• State-subsidized health insurance available throughstate exchange– Coverage for 100,000 in Medicaid/subsidy gap– Medicaid waiver?
  22. 22. Page 22April 19, 2013Prepared for Kansas County Commissioners Association“Back Half” of the ACA: Triple Aim• Improve quality of care• Improve population health• Achieve efficiencies
  23. 23. Page 23May 9, 2013Prepared for Kansas County Commissioners AssociationBundledPaymentsPartialCapitationGlobalPaymentFee forServiceSharedSavingsVisitorSymptomaticAcute NeedsServices & SuppliesUnit BasedNo Financial RiskPatientEpisodeMost Common ConditionsPackaged TreatmentsEfficiency BasedPartial Financial RiskPersonOverall HealthCommunity HealthCharacteristicsManage Well BeingOutcome BasedFull Financial RiskEvolution of Reimbursement
  24. 24. Page 24May 9, 2013Prepared for Kansas County Commissioners AssociationTwo StrategiesPaymentbased onQualityRewardsfor clinicalintegraion
  25. 25. Page 25May 9, 2013Prepared for Kansas County Commissioners AssociationPayments Based on QualityFour Tactics1. Hospital readmissionreduction program2. Hospital value-basedpurchasing3. Physician qualityincentives/penalties4. Physician value-basedpurchasing
  26. 26. Page 26May 9, 2013Prepared for Kansas County Commissioners AssociationClinically Integrated CarePillar 1:CollaborativeleadershipPillar 2:AlignedincentivesPillar 3:ClinicalProgramsPillar 4:TechnologyinfrastructureGovernance bodyCompliant legalstructurePayer strategyCulture changePhysiciancompensationPrograminfrastructurePhysician supportDisease programsCare protocolsClinical metricsPopulation healthmanagementHealth informationexchangePatientlongitudinal recordDisease registryPatient portal
  27. 27. Page 27May 9, 2013Prepared for Kansas County Commissioners AssociationRewards for Clinical IntegrationThree Tactics1. FFS Payment for Care Management2. Accountable Care Organizations3. Bundled Payments
  28. 28. Martie RossPershing Yoakley & Associates, PC9900 W. 109th Street, Suite 130Overland Park, KS 66210mross@pyapc.com(913) 232-5145

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