Post on 21-Jul-2020
CCO 2.0 Financial Policy
Stakeholder Roundtable
April 30, 2018 2:00 p.m. to 5:00 p.m.
800 NE, Oregon Street, Portland, OR 97232 Portland State Office Building Room 1C
# Time Item Presenter
1 2:00 - 2:15 Welcome & Introductions Laura Robison
2 2:15-3:00
OHA Presentation:
CCO 2.0 Project Overview, Timeline, Charge from Governor Brown
First Five Years of the CCO Model, Lessons Learned, OHPB Guidance
Policy Development Focused on Sustainable Costs & Financial Framework
Tim Sweeney &
Chelsea Guest
3 3:00 – 4:30 Roundtable Discussion of CCO 2.0
Policy Goals & Options
Roundtable
Participants
4 4:30 – 5:00 Public Comment Public
Conference Call and Webinar Available: Phone Line: 1-888-398-2342 Participant Code: 3732275 To register for the webinar please click on the following link: https://attendee.gotowebinar.com/register/6508728795268567298
CCO 2.0: Sustainable
Health Care Spending
Public Engagement and Input Sessions
Stakeholder Roundtable
April 30, 2018
HEALTH POLICY
Health Policy and Analytics
Agenda
• Introductions & Your Background
• CCO 2.0 Project Overview
– Timeline & Governor’s Letter
• First Five Years of the CCO Model
– Current Model & Lessons Learned
• CCO 2.0 Policy Development for Sustainable Costs
– Questions and Goals
– Proposed Policy Options
• Roundtable Discussion
• Public Comment
Project Overview and How You Fit In
CCO 2.0 PROJECT OVERVIEW
Overview
• Coordinated Care Organizations (CCOs) started in 2012
with the goal of achieving the Triple Aim:
– Better care
– Better health
– Lower health care costs
• Lots of data have been collected over the past five years on:
– What CCOs are doing well and need to improve on
– What gaps we still have in data
• In the next 5 year contract (CCO 2.0), we have the chance
to change requirements, reward CCOs in new ways, and
test out new ideas
•4
5
• The first contract cycle for CCOs is ending December 31, 2019
• OHA and the Oregon Health Policy Board (OHPB) are
launching the “CCO 2.0” process to explore and develop new
ideas and policy recommendations to improve CCOs in the
future
High-level Timeline for CCO 2.0
• CCO 2.0 contracts begin
2020
• Procurement process = (OHA puts out a request for proposals or applications and the CCO submits a proposal or application)
2019
• Policy development
• Public input
2018
• CCO 2.0 OHPB listening sessions
• Committee reports
• CCO 1.0 maturity assessment
2016-2017
We are here
6
The Governor has asked the Oregon Health Policy Board
to provide recommendations in four areas:
• Maintain sustainable cost growth
• Increase value-based payments and pay for
performance
• Focus on social determinants of health and equity
• Improve the behavioral health system
Governor Brown’s Vision
Oregon Health Policy Board Policy development process
1. Created policy questions from looking at data from first
five years of CCOs
2. Policy options drawn from previous work (e.g. state
committees, stakeholder recommendations) and
research into best practices
3. Narrowed list based on applicability to CCO 2.0,
feasibility, readiness, impact, and timelines
Work plans available at: www.Health.Oregon.gov
7
What we hope to do today
• Share an overview of CCO 2.0 and describe the ongoing
work focusing on ensuring sustainable spending and
adequate financial oversight of CCOs
• Hear from you!
– Are we missing any important strategies to reach our policy
goals and advance the CCO model?
– Do you have any significant concerns or feedback on the
potential strategies?
• Feedback will help shape the straw model of policy
options presented to OHPB in June
8
Lessons Learned and Areas to Improve Upon
FIRST FIVE YEARS OF CCOS
Importance of Sustainable Healthcare Costs
Ensuring the fiscal sustainability of the Oregon Health Plan
is critical to Oregon’s efforts to make sure that Oregonians
have access to high quality health care services they need
• Coordinated Care Model aims to control spending not by
reducing access, but by:
– Investing in preventive care,
– Paying for value,
– Integrating services, and
– Improving health outcomes to reduce health care costs in the
long run
10
11
Lessons Learned: CCO 1.0
• What’s working?
– Oregon’s sustainable growth rate targets work
– CCOs respond to incentive payments by improving the health
quality measures targeted by incentives
– Investing in preventive care helps limit state spending growth
and reduces high-cost services
• What challenges exist?
– Integrating care is challenging and silos continue to exist at the
provider level
– Comparing CCOs to each other is challenging on multiple fronts
– Tackling cost drivers with sustainable solutions
12
External (OHSU) Waiver Evaluation
• Informed Lessons Learned, Overall CCO 2.0 Policy
Development & OHPB Direction to OHA
• Key Recommendations for Costs-Related Policy
Development:
– Increase the portion of CCO payments awarded for quality &
access, and raise the bar for awards
– Greater CCO reporting on VBPs
– Evaluate options for limiting prescription spending growth
13
Questions to Guide Policy Development
• Is 3.4% still the proper growth target for the entire CCO
2.0 contract period?
• What cost drivers threaten achievement of sustainable
growth rate (3.4%) in future years?
• What cost drivers warrant additional analysis to help
OHA and CCO partners continue to meet growth
targets?
• What strategies could increase CCO financial
accountability while preserving flexibility to operate within
global budget?
14
Continue to Achieve Cost Containment and Sustainable
Health Care Spending Growth in the CCO Model
CCO 2.0 POLICY
DEVELOPMENT & DISCUSSION
Financial Policy Framework
• The following are the financial categories OHA is
currently exploring under the sustainable cost policy
topic for CCO 2.0:
1. Sustainable Spending Targets
2. Rate Development & Reimbursement
3. Financial Incentive Payments
4. Risk Mitigation
5. Financial Reporting and Reserves
6. Encounter Data
16
Sustainable Spending TargetsPotential Strategies
Policy Goal: Maintain an aggressive spending target, and evaluate the
drivers of health care spending at CCO and program level using data-
driven solutions
17
Evaluate and inform adjustments to Oregon’s
sustainable spending target based on national
trends and emerging data
2 Build a evaluation program to measure CCO
performance and efficiency
1
Evaluating Efficiency and Performance
• Types of tools that may be used to evaluate CCO
performance and efficiency:
1. Episode Groupers: Generally evaluates and groups episodes
of care for a specific illness/condition to identify waste and
inefficiencies at a variety of levels
2. Total Cost of Care: Generally evaluates the average cost
and/or resource intensity of services against multiple
benchmarks
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-4
-3
-2
-1
0
1
2
3
4
-6 -4 -2 0 2 4 6Cost
Resource Intensity
Rate Development & ReimbursementPotential Strategies
Policy Goal: Ensure rate development methodology rewards and promotes cost containment, quality, and efficiency
19
Implement a variable profit margin (specified in the
waiver) to reward CCOs for high performance
based on efficiency and quality
2 Revise the reimbursement policy for hospital and
non-hospital services to incentivize quality and
promote utilization in high-value services
1
Variable Profit & CCO Performance
• Current waiver specifies details underlying
the variable profit strategy:
– Payment Mechanism: CCO-specific adjustment to
profit load in capitation rates based on the CCO’s
performance (paid throughout the year)
– Payment Accountability: CCOs held to Medical
Loss Ratio standard of 85%; expenses evaluated in
rate development
20
Reimbursement & CCO Payment Flow
21
CCO Provider Network
CCOs Receive Capitation
Rates from OHA Coordinated Care
Organizations
CCOs pay providers
to provide care to
their Members
CCO
Members
CCO members
access services
OHA reviews costs and
services provided to
members in rate
development
Reimbursement Background
• Importance of Reimbursement
– Cost per service, or unit cost, continues to rise for medical services,
driving overall cost growth in the program
– Reimbursement can be used as a cost containment strategy
• Current State
– OHA only adjusts reimbursement in rate development if the CCO’s
overall rate of growth is not sustainable or is an outlier in the program
• Regulations: Per CMS rule, OHA can adjust reimbursement
in rate development or require CCOs to reimburse at specific
levels to achieve quality/value, either by:
1. Setting a min/max reimbursement schedule
2. Tying a uniform dollar/percentage to quality
22
Reimbursement - Non-Hospital
Policy Goal: Adjust reimbursement in rate development process to
promote quality and evidence-based practices, and discourage low-
value care
Policy options to explore for non-hospitals:
• Option 1: Identify evidence-based bundles of care most likely to
drive value and take into account during rate development
• Option 2: Use rate development to incentivize (dis-incentivize)
high (low) value treatments outside current performance metrics
Ensuring CCO flexibility: A reimbursement policy that focuses on rate setting
evaluation would financially incentivize CCOs to provide high quality care, without
requiring specific levels of reimbursement that may inhibit VBP adoption and CCO
flexibility
23
Reimbursement Background - Hospitals
CMS Requirements: OHA needs to adjust how hospitals are
reimbursed to meet the recent CMS Managed Care Rule, which
requires OHA to reduce “pass-through” payments not tied to quality
and/or value
Current State: All Oregon hospitals participate in a provider
assessment program, which splits reimbursement into two types:
24
CCO Reimbursement68%
OHA Directed Payment32%
Current State
1. CCO reimbursement by service (OHA sets
minimum reimbursement)
2. OHA directed payments based on the
hospital assessment program; most of
these payments are not tied to
quality/value
Reimbursement - Hospital
Policy Goal: Meet CMS’s requirement, and tie hospital
reimbursement to value and quality that is partially paid as a “pass -
through” arrangement
Policy options to explore for hospital reimbursement:
• Option 1: Create a hospital efficiency and quality metrics program that
governs the amount of OHA directed payments that go to hospitals and
align with CCO performance program
• Option 2: Set a minimum and/or maximum reimbursement schedule
for hospital reimbursement based on efficiency and/or quality metrics
• Option 3: Mixture of Option 1 and 2
25
Rate Development & ReimbursementPotential Strategies
Policy Goal: Ensure rate development methodology rewards and promotes cost containment, quality and efficiency
26
Create a risk-sharing arrangement with CCOs
(bonus or variable profit) when savings are
achieved across the program to incentivize
reductions in costs
4 Include the sustainable rate of growth target as a
contract requirement and hold CCOs accountable to
achieving the target or reducing costs
3
Financial Incentive PaymentsPotential Strategies
Policy Goal: Incentivize CCOs to continue to improve quality and spend
payments on activities that improve quality, and ensure accountability
27
1 Adjust the operation of the CCO Quality Pool to
function as a withhold, versus a bonus
• Align incentives for CCOs, providers, and
communities to achieve quality metrics
• Create consistent reporting of all CCO
expenses related to medical costs and
incentive arrangements
CCO Quality Pool: Bonus vs. Withhold
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Bonus Arrangement
(current)
Withhold Arrangement
(policy option)
Timing of PayoutBy June 30th the year following the contract period
MetricsSelected by Metrics & Scoring Committee
Quality Pool
MaximumQuality pool limited to 5% of
actuarially sound rates (CMS
regulation)
Capitation rates excluding
withhold amounts must be
actuarially sound (CMS
regulation)
Rate
Development Quality pool revenue and
expenses are excluded from
capitation rate development
Quality pool revenue and
expenses from withhold are
included in actuarially sound
rate development
Bonus
29
Certified
Capitation Rate
$100 PMPM
Bonus $5
CCO Quality Pool: Bonus vs. Withhold
Withhold
Certified
Capitation Rate
$105 PMPM
(paid $100 and $5
withheld)
Withhold $5
Risk MitigationPotential Strategies
Policy Goal: Develop strategies to mitigate risk related to
low frequency, high-cost conditions and treatments
30
2 Expand current risk corridor programs
1 Establish a statewide reinsurance pool for CCOs
administered by OHA to spread the impact of low
frequency, high cost conditions and treatments
across program
Risk Corridor Background
• OHA instituted a few risk corridors in the first five years
to share risk related to specific services and members
(i.e., Hepatitis C DAA drugs, etc.)
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Upper 120%
Lower 80%
CCO Expenses
CCO ExpensesCCO Expenses
Payment to OHA
Payment to CCO
Low CCO Expenses compared to
Revenue
(CCO owes money to OHA)
Higher CCO Expenses compared
to Revenue
(OHA owes money to CCO)
Expenses close to revenue
(no sett lement)
Risk Corridor
Financial Reporting and ReservesPotential Strategies
Policy Goal: Enhance financial oversight and reporting framework
to ensure CCO solvency, accountability, and consistency
32
Enhance current reporting tools (i.e., Exhibit L) and
reevaluate reserve requirements1
Move to NAIC reporting standards including Risk
Based Capital (RBC) approach to evaluate solvency2
Create a statewide reserve pool in addition to CCO-
specific reserve requirements in the event of an
insolvency
3
NAIC vs. Current Reporting
33
• NAIC Reporting
– Consistent, national reporting standards already in use by
insurers
– Risk-based solvency standards and robust oversight framework
– Reconciliation to rate development and additional CCO program-
specific supplementary schedules would be needed
• Current Reporting (Exhibit L)
– Unique to Oregon’s CCO program
– Flexible based on financial reporting needs but will continue to
require ongoing work by OHA and CCOs to achieve consistency
in reporting and risk-based solvency standards
– Reconciliation incorporated within Exhibit L to rate setting reports
Current Reserve Calculation Versus RBC
• Current CCO Reserve Calculation
– Each CCO is required to maintain restricted reserves of
$250,000 plus an amount equal to 50% of the CCO’s average
fee-for-service liability above $250,000
– For purposes of calculating the average fee-for-service liability,
the CCO can elect to use enrollment data or historical expense
data
• NAIC Risk Based Capital (RBC)
– Method developed by the NAIC to measure the minimum
amount of capital that an insurance company needs to support
its overall business operations
– Risk-based capital is used to set capital requirements
considering the size and degree of risk taken by the insurer.
34
Encounter DataPotential Strategies
Policy Goal: Ensure services provided and associated costs are
reported consistency and accurately
35
Institute a validation study that samples CCO
encounter data and reviews against provider
charts for accuracy (AZ Model) with financial
implications
2 Require complete encounter data with paid
amounts and additional detail for value-based
payment arrangements
1
Final ThoughtsIntersection with Other CCO 2.0 Focus Areas
36
Value Based Payment
Sustainable Costs
Social Determinants
of Health
Behavioral Health
CCO 2.0 POLICY DISCUSSION
ROUNDTABLE
Policy Options Revisited
Sustainable Spending Targets
1. Evaluate and inform spending targets
2. Evaluation tool to assess total costs of care
Rate Development & Reimbursement
1. Variable profit margin
2. Reimbursement policies for hospital & non-hospital services
3. Risk-sharing arrangements and shared-savings policies
4. Growth targets in CCO contracts
Financial Incentive Payments
1. Move Quality Pool to a withhold arrangement
38
Policy Options Revisited
Risk Mitigation
1. Statewide reinsurance pool administered by OHA
2. Expand current risk corridor programs
Financial Reporting and Reserves
1. Enhance financial reporting framework and solvency
standards
2. Statewide reserve pool in addition to CCO-specific
reserves
Encounter Data
1. Validation study
2. Requirements for additional detail for VBP
39
Roundtable & Input
• Thoughts about evaluating efficiency in the CCO model?
– Are there other types of tools we should be looking at?
• Is variable profit is a viable financial incentive to improve
efficiency and quality?
• How else can we better align the financial framework with
policy goals?
• How do we improve consistency and transparency in
financial and data reporting for the CCO program?
• How do we better align solvency and reserves requirements
with the risk of the CCO program?
• How do we manage risk and outlier costs across the
program?40
PUBLIC COMMENT
NEXT STEPS
Next Steps
• Please send in written public comments and feedback by
May 15
– Send input to the CCO 2.0 email address: CCO2.0@state.or.us
• Next Meeting: May 22nd 10:00 a.m. – 1:00 p.m.
– What else do you want to explore during the next meeting?
– What else do you need by next meeting to review?
– Will have additional window for written comment after May 22
meeting
• Oregon Health Policy Board Meeting on June 5, 2018
– Present draft policy recommendations
– Continued public input in the summer
43
March April May June July August Sept Oct Nov Dec
2018
March 6Oregon Health Policy Board(OHPB)
3/15 Introductory Webinar on CCO
Development of draft policy recommendations
Review/refinement of policy recs
PHASE I
Operationalizing recommendations
CCO 2.0 Policy Development Timeline
Topic Area Work PlansDeveloped
MILESTONES
June 5 OHPB EXTENDED PUBLIC COMMENT
Aug 7 OHPBPublic
Meetings
Draft Policy RecommendationsDeveloped
Final Policy Recommendations Review
Online survey open for
2.0 feedback
Public input collected for policy development phase
PHASE IIPHASE III
Public Input
on proposed recs
Public input summarized for OHPB review
Oct 2OHPB
CCO 2.0 Final OHPB review
Policy options reviewed and discussed at existing public
committee meetings
Tribal Engagement
March 1 Meeting:Overall Timelines/ Structure Presented
April 11 Meeting: • Review tribal
engagement plan• Identify Tribes wanting
1:1 consultations• Share work plans• Request written feedback
on any initial ideas they’d l ike for consideration
May Meeting: Tribal webinars in each of the four topic areas on the policy options
June/July Monthly Meetings: • Review feedback from
Tribes• Discuss 1st straw
proposal
Individual 1:1 tribal
consultations
Statewide
Forums
August Meeting: Review draft OHPB report
Written Comments
Due
CCO
2.0
QUESTIONS?