UnitedHealthcare Patient-Centered Medical Home Program Status September 2012 Confidential property of UnitedHealthcare Do not reproduce Patient-Centered Medical Home Defined* Patient-Centered Medical Home (PCMH) is an approach to providing comprehensive primary care to adults, youth and children. Principal Characteristics of PCMH: Personal Physician Physician Directed Practice Whole Person Care Orientation Coordinated Care Quality and Safety Enhanced Care Access Full Value Payment Optimization through HIT integration (eRx, patient registry) The PCMH is a health care setting that facilitates partnerships between individual patients, their personal physicians and, when appropriate, the patient’s family. * United currently uses the NCQA PPC-PCMH recognition program as a basis for defining “medical home” capabilities but will review other alternative assessment and recognition programs as they become endorsed by the medical professional societies. 2 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Network Strategy & Innovation A shift toward increased collaboration between payors and providers, outcome-based payment and new benefit design is driving innovation in payment models and delivery system configuration. We are developing and implementing a suite of value-based incentive programs that reward care providers for improvements in quality and efficiency. Payment Reform Strategy Delivery System Strategy Aligned Product Strategy We are supporting delivery systems as they become more integrated and accountable for cost, quality and experience outcomes. Alignment across our Network, Product and Clinical innovations allows us to increase value for customers and consumers. 3 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Value-Based Contracting • Performance-Based Contracting: Pay for performance incentive program that rewards hospitals and physician practices for performance against quality and cost of care measures on top of fee-for-service base. • Episode/Bundled Payments: Provider receives a lump sum for all health services delivered for a single episode of care and/or over a specified time period - integrates risk and creates a continuum of care. • Shared Savings/Shared Risk: Payer and provider share upside and downside risk against an agreed-upon budget after meeting quality and experience thresholds. • Capitation: Provider is responsible for the quality, cost and experience outcomes of specific population of patients and receives payments based on per member per month, rather than fee-for-service – promotes efficient and high quality care and coordination among providers for population health management. Value-Based Payment Initiatives Go Hand In Hand With Practice Transformation • Patient-Centered Medical Home (PCMH): Promotes comprehensive primary care for a population of patients, facilitating partnerships between individual patients and their personal physicians. Incorporates shared savings payments on top of fee-for-service base. • Accountable Care Organizations (ACOs): Integrated provider organizations take accountability for care of a specific, defined population. Reimbursement is primarily capitated and incorporates shared savings/risk based on quality, cost and patient experience. Benefit Designs • 4 Navigate - New lower cost alternative in our broad product portfolio, Cost savings come from: Primary care physician, Referral management and Prior authorization Proprietary information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Network Innovation: Value-Based Contracting CT DE DC MA MD NH NJ RI Hospital PBC Active ACO Pilot PCMH Pilot Physician PBC ACO Pilot Candidate Specialty Network Pilot PCP Incentive Shared Savings Episodic Payment Capitation 5 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Commercial Medicare Medicaid All LOBs Comm & Mcare Comm & Mcaid Mcare & Mcaid UHC PCMH Snapshot Expected Benefits: Commercial Activity: Eleven active programs; five started in 20008/2009, others started in 2011 and 2012 • Eight multi-payer: NY, CT, MD, RI, OH, CO, TX, MO • Two single-payer in AZ and TX • More time for patients • Better care continuity • Improved care transitions • Chronic care medical home pilot in MO – partnering with BOEING, MONSANTO, GE, and UNITED • Improved clinical indicators • Membership: 100K+ members impacted • Lower per capita costs • Physician Practices: 150+ • Primary Care Providers: 1200+ • Participating employer groups: 650+ New activity: CMS Comprehensive Primary Care Initiative (CPCi) Demonstration Project in CO, NJ, and OH starting November 2012 • Increased patient participation in health care decisions and adherence to care plans • Increase in practice profitability and satisfaction • Simplified and less fragmented coordinated health care experience • Projected 200+ additional practices 6 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Pilot Reimbursement Model This is the primary reimbursement model adapted to each pilot market. FEE FOR SERVICE + CARE MANAGEMENT FEE + PERFORMANCE BONUS / GAIN SHARE = TOTAL REIMBURSEMENT PCMH reimbursement model builds on the current Fee for Service (FFS) schedule with a PMPM Care Management Fee and in some cases a bonus / gain share option based on performance. FFS: Physicians remain on current contracted fee schedules and continue to be reimbursed based on actual services provided (no plan redesign or FFS payment schedule changes) CARE MANAGEMENT FEE: Prospective fixed-rate, PMPM payments for anticipated quality, efficiency and satisfaction improvements under the PCMH Model [note. contract addendum required] BONUS: For some Programs, practices are eligible for a periodic performance bonus or rate adjustment that aligns with clearly defined clinical quality, medical cost and operational measures GAIN SHARE: For some Programs, the practices have a lower Care Management Fee in consideration for sharing in the risk/benefit of realized cost reduction outcomes 7 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Program Observations and Learning’s • Observations – Practices need to be ready and willing to change – Need clearly defined, engaged physician and administrative leadership – Structure alone does not drive outcomes – Processes need to be adopted and sustained to realize clinical and operational efficiency improvements – Multi-stakeholder pilots provide the economies for sustainable change • Early Learning’s – Dedicated embedded, care manager and coordination is key to success of overall patient population management – Two-way data sharing enables better care management actions – Performance payments can affect change in behavior – Practice collaboration is key to leveraging best practices – This is hard stuff which requires heavy lifting..….if there were easy answers, primary care wouldn’t be in crisis! 8 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. UHC’s PCMH Guiding Principles • Clearly defined, engaged physician and practice administrative leadership • Motivated practice transformation engagement • Proactive engagement of patients in the practice • On-site, dedicated care manager role • Improved access for patients/members • Performance management processes centered around access, population management, care coordination, care transitions – E.g. registries, data reports, care protocols, etc. • Incentives to reward quality and cost outcomes 9 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Update on Results - Overall •The commercial Patient-centered Medical Home model in our Rhode Island, Ohio, Colorado and Arizona markets has demonstrated: – 4-4.5% medical cost reduction – 2:1 Return on Investment (ROI) •Each are in various stages of reporting data •Clinical quality measures are demonstrating improvement across all pilots •Too early to publish statistically validated utilization results •Measurement to date shows mixed results with respect to Emergency Room Visits, Inpatient Stays and Readmissions and Costs for each pilot. However, on average, measurement to date shows 4% to 5% impact on total allowed cost and a 2:1 Return on Investment (ROI). •Third party aggregators are currently compiling data across pilots and we anticipate we will have more robust evaluation of results by the end of 2012 or early 2013. 10 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Update on Results – Rhode Island In comparison to propensity matched controls the current evaluation indicates: • Adjusted Total Cost (PMPM) impact of 5% in Year 1 • Admits/1000 impact of 15% to 18% over two years *Adjusted: Members with >$99k in annual allowed and/or members with >21 ERG (episode risk grouper) score (top 2% of high risk members) are excluded. 11 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group. Questions [email protected] 12 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.