THE HEALTHCARE INDUSTRY HAS EXPERIENCED A SEISMIC EVENT. THE COMPETITIVE BEDROCK IS STILL SHIFTING.

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2 THE HEALTHCARE INDUSTRY HAS EXPERIENCED A SEISMIC EVENT. THE COMPETITIVE BEDROCK IS STILL SHIFTING. HOW DO DO YOU YOU FIND FIND SURE SURE FOOTING FOOTING AS YOU AS BEGIN YOU DOWN BEGIN THE PATH DOWN TO ACCOUNTABLE THE PATH TO CARE? ACCOUNTABLE CARE? Today s healthcare executives and providers are at a crossroads. Should they move boldly and blaze a trail to Accountable Care or should they remain observant and adapt to the new rules as they become more concrete? Or is there a navigable path to Accountable Care somewhere between these two extremes? At BCS we believe that such a path exists and that we can provide you with the sure footing to start the journey. the journey down it. BCS OVERVIEW Blue Consulting Services provides consulting services to hospitals, health systems, and physician entities throughout the country with the ultimate goal of helping them achieve sustainable, long-term growth. Specializing in financial, operational and strategic support services, BCS s seasoned healthcare professionals take a progressive approach to applying their firsthand knowledge to the challenges facing their clients and bring the resources of one of the largest consulting firms in America to each of their engagements. BCS s full suite of Physician-Hospital services includes: Alignment services includes: Coding & Compliance Delivery System Transformation Healthcare Reform Internal Audit, Controls & Compliance Leadership Development Physician-Hospital Alignment Planning Practice Management Revenue Cycle Valuation Services

3 C O N S U LT I N G S E R V I C E S advice. g....

4 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] ProgramDetails Definition Medicare Shared Savings Program (MSSP, or Shared Savings Program): a shared savings program that promotes accountability for a patient population, coordinates items and services under Medicare Part A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient care Start-Date Options April 1, 2012 July 1, 2012 Annual January 1 Enrollment Starting 2013 Term of agreement will be three (3) years and nine (9) months Term of agreement will be three (3) years and nine (6) months Term of agreement will be three (3) years First performance year is twelve (12) months in First performance year is twenty-one (21) months in duration First performance year is eighteen (18) months in duration duration Application submission date to-be-determined Submit application to CMS by 5 PM EST on January 20, 2011 Submit application to CMS by 5 PM EST on March 30, 2011 Do not qualify for an interim payment Approval or denial decision by March 16, 2012 Approval or denial decision by May 31, 2012 Qualify for an interim payment which will be reconciled at the end of the first performance period Qualify for an interim payment which will be reconciled at the end of the first performance period ACOs wishing to receive an interim payment must indicate their desire on their application ACOs wishing to participate in the Center for Medicare and Medicaid Innovation s Advanced Payment Program must indicate their desire on their application OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page2

5 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Track Options Track 1 Track 2 One-sided model (shared savings only) Two-sided model (shared savings and losses) First dollar savings if minimum threshold is met First dollar savings and first dollar losses if minimum thresholds are met Total potential shared savings Total potential shared savings o Fifty percent (50%) of savings o Sixty percent (60%) Performance payment limit Performance payment limit o Ten percent (10%) of benchmark o Fifteen percent (15%) of benchmark Minimum savings rate based on a sliding scale determined by the number Minimum savings rate set at a flat two percent (2%) of assigned beneficiaries (see Appendix, Figure 1) No withhold from earned shared savings No withhold from earned shared savings No shared loss potential Shared loss potential set at 1 minus the calculated shared savings rate Minimum loss rate does not apply to ACOs choosing Track 1 Minimum loss rate set at a flat two percent (2%) Loss sharing limit does not apply to ACOs choosing Track 1 Loss sharing limit will increase gradually over the three (3) year term o Year 1: five percent (5%) o Year 2: seven and a half percent (7.5%) o Year 3: ten percent (10%) Those ACOs that execute agreements in 2012 and elect to receive interim Must demonstrate that a repayment system is in place that will ensure the payments must demonstrate that a repayment system is in place that will ability of CSM to recoup potential ACO losses equal to at least one percent ensure the ability of the CMS to recoup potential ACO overpayments as a (1%) of total Medicare Part A and B fee-for-service expenditures for the result of the interim payment most recent performance year or expenditures used to establish the To the extent that an ACO s repayment mechanism does not enable CMS to fully recoup overpayments resulting from the interim payment, CMS will not carry forward unpaid overpayments into subsequent years and agreement periods ACOs that incur overpayments as a result of the interim payment must repay CMS within 90 days of receipt of notification benchmark To the extent that an ACO s repayment mechanism does not enable CMS to fully recoup the losses for a given performance year, CMS will not carry forward unpaid losses into subsequent years and agreement periods ACOs that incur shared losses must repay CMS within 90 days of receipt of notification All ACOs are required to participate in the two-sided model in agreement periods subsequent to their initial agreement period. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page3

6 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Beneficiary Assignment Only beneficiaries enrolled under the original Medicare fee-for-service program under Parts A and B (not including Medicare Advantage or Part C) will be assigned to an ACO Beneficiaries will be assigned to an ACO based on the plurality of primary care services that they receive from an ACO o The CMS assigns beneficiaries in a preliminary manner at the beginning of a performance year based on the most recent data available and updates the preliminary assignment on a quarterly based on the most recent 12 months of data o Final beneficiary assignment is determined retrospectively at the end of each performance year, based on data pertaining to the performance year Beneficiaries will be assigned through a stepwise process as follows: o Step 1 Identify all patients who received at least one primary care service from a primary care physician who is a provider / supplier in the ACO during the most recent year For these patients, patients are assigned to an ACO if the patient s total allowable charges for primary care services received in the most recent year are higher for the ACO than the similar charges attributed to the primary care providers in another ACO or unaffiliated with an ACO o Step 2 Identify patients who have not received any primary care services from a primary care physician either inside or outside of an ACO For these patients, a patient is assigned to an ACO if the patient s total allowable charges for primary care services received in the most recent year attributed to any provider in the ACO (specialists, NP, PA,CNS) is greater than those attributed to any provider in another ACO or unaffiliated with any ACO Primary care services will be defined as: o HCPCP Codes through (Office / outpatient visits) through (Nursing facility / domiciliary home visits) G0402 (Welcome to Medicare visit) G0438 and G0439 (Annual wellness visits) o FQHC and RHC revenue center codes 0521 (Clinic visit by a member to RHC / FQHC) 0522 (Home visit by RHC / FQHC practitioner) 0524 (Visit by RHC / FQHC practitioner to a member, in a covered Part A stay at the SNF) 0525 (Visit by the RHC / FQHC practitioner to a member in a SNF not in a covered Part A stay or NF or ICF MR or other residential facility) In their application to the Shared Savings Program, ACOs that include FQHCs / RHCs must provide the CMS with a list of NPIs reflecting the physicians that provide direct primary care services OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page4

7 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] ACO Expense Benchmark Setting The Benchmark Initial ACO expense benchmarks will be based on Medicare Parts A and B expenditures of beneficiaries who would have been assigned to the ACO in any of the 3 years prior to the start date of the ACO s agreement CMS will determine the per capita Parts A and B fee-for-service expenditures that would have been assigned to the ACO in any of the 3 most recent years prior to the agreement period using the ACO participants TINs identified at the start of the agreement period o CMS calculates the payment amounts included in Parts A and B fee-for-service claims using a 3-month run-out of claims with a completion factor IME & DSH payments will be excluded from the benchmark calculation GME, PQRS, erx, and EHR incentive payments to eligible professionals and hospitals will be excluded from the benchmark calculation Other adjustments based in Part A and B claims such as geographic payment adjustments and HVBP payments will be included in the benchmark calculation o Benchmark expenditures will be calculated by categorizing beneficiaries into the following cost categories End stage renal disease (ESRD) Disabled Aged / dual eligible Medicare and Medicaid beneficiaries Aged / non-dual eligible Medicare and Medicaid beneficiaries o Calculated expenditures will be adjusted for changes in severity and case mix using prospective CMS-HCC risk scores o Assigned beneficiaries per capita expenditures will be truncated at the 99 th percentile of national Medicare fee-for-service expenditures BY1 and BY2 will be trended forward to BY3 dollars based on the projected absolute growth rate in national Medicare Part A and B expenditures in years BY1 and BY2 Each year of the benchmark will be weighted using the following percentages o BY3: sixty percent (60%) o BY2: thirty percent (30%) o BY1: ten percent (10%) Updating The Benchmark The benchmark will be adjusted for the addition and removal of ACO participants or ACO provider / suppliers during the term of the agreement CMS will update the historical benchmark annually for each year of the agreement period based on the flat dollar equivalent of the projected absolute amount of growth in national per capita expenditures for Parts A and B services under the original Medicare program An ACO s benchmark will be reset at the start of each agreement period OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page5

8 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Quality Of Care Multiplier ACOs will be held accountable for their performance in regards to a set of thirty-three (33) quality measures in four (4) domains (see Appendix, Figures 2 a & b) o Primary care provider EHR adoption will be removed as a requirement for ACO eligibility and will become a double-weighted measure within the Care Coordination / Patient Safety domain ACOs will be required to report completely and accurately on all thirty-three (33) measures for all reporting periods in each performance year of their agreement In the first year of an ACO s contract, the ACO will only need to meet the aforementioned reporting requirement to qualify for shared savings and pay-forperformance will be phased in during years two (2) and three (3) of the ACOs initial agreement (see Appendix Figure 2c) o When pay-for-performance measures are phased in, ACOs must meet the minimum performance level for seventy percent (70%) of the measures in each domain to qualify for shared savings o Minimum performance for pay-for-performance measures will be set at a flat thirty percent (30%) or the national Medicare FFS or MA thirtieth (30 th ) percentile of performance ACOs will use a number of methodologies to report these thirty-three (33) measures (survey, claims, EHR incentive reporting, GPRO web interface) Patient / caregiver experience measures will be measured by a survey based on CAHPS o CMS will fund the patient / caregiver experience survey for ACOs participating in the Shared Savings Program in 2012 and 2013 but ACOs participating in 2014 will be required to choose a CMS certified vendor Overall quality score will be calculated by: o Determining the points earned for each of the thirty-three (33) quality measures (see Appendix Figure 2d); o Summing the total points earned for each individual measure in each of the four (4) domains; o Dividing the total points earned in each domain by the total available points in each domain; o Multiplying each domain score by the uniform twenty-five percent (25%) weight for each domain; and o Summing the weighted scores for each domain to arrive at the ACO s total quality score for the year of reference. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page6

9 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Shared Savings (Losses) Calculation For each performance year, CMS will determine whether the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries of Parts A and B services are below the applicable updated benchmark ACOs prospective risk scores will be updated annually as follows: o Newly assigned beneficiaries The CMS-HCC model will be used to account for changes in the overall severity and case mix as a result of newly assigned beneficiaries o Continuously assigned beneficiaries Demographic factors will be used to account for changes in the overall severity and case mix for the ACO s continuously assigned beneficiaries If the ACO s CMS-HCC risk score declines for the continuously assigned beneficiaries, the CMS will lower the risk score for the ACO In order to qualify for shared savings (losses), an ACO must: o Achieve lower (higher) per capita Medicare expenditures for the performance year as compared to the applicable updated benchmark by at least the minimum savings (losses) rate (see Appendix Figure 1) o Meet the minimum quality performance standards If both of these conditions are met, the ACO will capture: o Track 1 savings: fifty percent (50%) of the realized shared savings pool times (x) the realized quality multiplier Not to exceed ten percent (10%) of the relevant benchmark o Track 2 savings: sixty percent (60%) of the realized shared savings pool times (x) the realized quality multiplier Not to exceed ten percent (15%) of the relevant benchmark o Track 2 losses: realized shared losses pool times (x) one minus the product of sixty percent (60%) times (x) the realized quality multiplier Not to exceed Sixty percent (60%) Year 1: five percent (5%) of the relevant benchmark Year 2: seven and a half percent (7.5%) of the relevant benchmark Year 3: ten percent (10%) of the relevant benchmark Shared savings payments will be made directly to the ACO as identified by its TIN ACOs will receive first dollar savings if minimum threshold is met The CMS will not withhold any of an ACO s earned shared savings ACOs that incur shared losses must repay CMS within 90 days of receipt of notification OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page7

10 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] CMS Data Sharing Policies CMS will provide ACOs with aggregate metrics on the historically assigned beneficiary population: o At the start of the ACO s agreement period; o Along with the annual financial and quality reports submitted to the ACO; and o Quarterly based on a rolling 12 months of data from potentially assigned beneficiaries. CMS will provide ACOs with limited beneficiary identifiable information: o From a list of prospectively identified beneficiaries whose data was used to generate the prospective aggregate reports; o From a list of other beneficiaries who receive primary care services from an ACO participant upon whom assignment is based; and o In conjunction with the quarterly rolling 12 month updates. CMS will allow ACOs to request beneficiary identifiable claims data on a monthly basis o Before receiving any data, ACO s must sign a Data Use Agreement (DUA) and submit a formal request to CMS o ACOs may notify preliminary prospectively assigned beneficiaries of their intent to request this data o If after 30 days the ACO and CMS has not received a response, ACOs would be able to request this data o The ACO must notify patient of right to decline the sharing of this data at next face-to-face encounter Physician Quality Reporting System (PQRS) PQRS reporting requirements and incentive payment will be incorporated into the Shared Savings Program EPs that are ACO providers / suppliers will be considered a group practice under their ACO participant TIN for the purposes of qualifying for a PQRS incentive EPs within an ACO participant TIN that satisfactorily report the ACO GPRO measures during the reporting period will receive a PQRS incentive equal to 0.5 percent (0.5%) of total Medicare Part B PFS allowed charges for covered professional services EPs within an ACO participant TIN that satisfactorily report the ACO GPRO measures during the reporting period will receive a PQRS incentive even if the ACO does not qualify for shared savings PQRS metrics will be reported through the GPRO web interface CMS will report the ACO s GPRO measure scores on Physician Compare along with other PQRS group practices The calendar year for PQRS will remain January 1 to December 31 under the Shared Savings Program Voluntary Termination ACOs may voluntarily terminate their agreement in those instances where regulatory standards are established during the agreement period which the ACO believes will impact the ability of the ACO to continue to participate in the Shared Savings Program ACOs must provide CMS with 60 days notice of their intention to terminate their agreement ACOs that terminate early will not share in any savings earned in the performance year in which they terminate their agreement OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page8

11 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Involuntary Termination In addition to termination, CMS will use a variety of sanctions such as warning letters and CAPs to address non-compliance CMS may terminate ACOs for non-compliance with the requirements of the Shared Savings Program, including: o Failing to maintain eligibility o Failing to notify beneficiaries of participation in the Shared Savings Program o Failing to meet quality standards ACOs failing to achieve the minimum attainment level on at least seventy percent (70%) of the measures in each quality domain will be given a warning in their first year of underperformance. ACOs not meeting the minimum attainment level for a second consecutive year will be terminated from the Shared Savings Program. o Failing to report on quality measures ACOs failing to report on one or more measures will be sent a written request to submit the required data by a specified date with an explanation for their failure to report the data. ACOs not meeting this deadline will be immediately terminated from the Shared Savings Program. ACOs that exhibit a pattern of incomplete reporting or fail to make timely corrections following notice to resubmit may be terminated from the Shared Savings Program o Misusing beneficiary identifiable data o Avoiding at-risk beneficiaries: High risk score on the CMS-HCC risk adjustment model; Considered high cost due to having two (2) or more hospitalizations or emergency room visits each year; Dually eligible for Medicare and Medicaid; High utilization pattern; One or more chronic disease; Recent diagnosis that is expected to result in increased cost; Entitled to Medicaid due to disability; or Diagnosed with a mental health or substance abuse disorder o Violating the: Physician self-referral prohibition; The CMP law; The Federal anti-kickback statute; Antitrust laws; Any other applicable Medicare law, rule, or regulation; or The imposition of sanctions by an accrediting organization, State, Federal, or local governmental agency leading to the inability of an ACO to comply with the requirements of the Shared Savings Program CMS will provide written notification to ACOs being terminated from the Shared Savings Program An ACO that is terminated from the program is disqualified from sharing any realized shared savings for the year in which it was terminated Previously terminated ACOs, ACO participants, providers / suppliers that wish to participate in the Shared Savings Program in the future: o May not do so until the end of their initial agreement with the CMS; o Must enter the two-sided model unless it was terminated less than half way through its original agreement under the one-sided model; and o Must describe the reason for the termination of its initial agreement and what safeguards have been put in place to enable the ACO to successfully participate in the program for the full term of the new agreement. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page9

12 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Regulations Eligibility The following ACO participants or combinations of ACO participants are eligible to form an ACO that may apply to the MSSP: o ACO professionals in a group practice; o Networks of individual practices of ACO professionals; o Partnerships or joint venture arrangements between hospitals and ACO professionals; o Hospitals employing ACO professionals; o Community Access Hospitals (CAHs) that bill under Method II; o Rural Health Centers (RHCs); o Federally Qualified Health Centers (FQHCs); o Other ACO participants may participate in an ACO that is formed by one or more of the aforementioned participants The ACO must be a legal entity under State, Federal, or Tribal law and authorized to conduct business in each State in which it operates o ACOs composed of more than one of the ACO participants listed above must provide evidence in its application that it is a separate legal entity from any of the individual ACO participants ACOs may not participate in the MSSP if they participate in duplicative shared savings programs including any one of the following programs (list will be updated regularly): o The Independence at Home Medical Practice Pilot Program; o The Medicare Healthcare Quality Demonstration Programs; o The North Carolina Community Care Network; o The Indiana Health Information Exchange Demonstration; o The Multipayer Advanced Primary Care Practice Demonstrations involving shared savings; o The Physician Group Practice Transition demonstration; o The Care Management for High-Cost Beneficiaries Demonstrations; or o The Pioneer ACO Model through the Innovation Center. ACOs must include a network of primary care professionals that is large enough so that at least 5,000 Medicare beneficiaries are assigned to the ACO The ACO must identify all ACO participants on their application by the participant s Tax Identification Numbers (TIN) and National Provider Identifiers (NPI) o Each ACO participant and each ACO provider / supplier must demonstrate a meaningful commitment to the vision of the ACO to ensure the ACO s likely success which can be proven by: Significant financial or human investment in the ACO s operations; or A formal agreement to comply with the implementation of the ACO s processes. o The ACO must provide a copy of its participation agreement with CMS to all ACO participants, ACO providers / suppliers, and other individuals and entities involved in ACO governance o ACO participants upon whom beneficiary assignment is dependent must be exclusive to a single ACO This applies to the TINs for FQHCs, RHCs, NPs, RAs, and specialists providing primary care services o ACOs must notify CMS of any additions / subtractions to ACO participants or provider / suppliers or of any significant change to the ACO that would cause the ACO to be unable to continue to meet the Shared Savings Program eligibility requirements within 30 days OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page10

13 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Eligibility (Continued) ACO must agree, and must require its ACO participants, ACO providers / suppliers, and other individuals or entities performing functions or services related to the ACO s activities to agree, or to comply with all applicable laws including, but not limited to the following: o Federal criminal law o The False Claims Act o The anti-kickback statue o The civil monetary penalties law o The physician self-referral law ACOs must describe how they plan to use shared savings payments, including: o The criteria it plans to employ for distributing shared savings among its ACO participants and ACO providers / suppliers; o How the plan will achieve the specific goals of the Shared Savings Program; and o How the plan will achieve the general aims of better care for individuals, better health for populations, and lower growth in healthcare expenditures. ACOs must maintain and make available all books, contracts, records, documents, and other evidence sufficient to enable the audit, evaluation, investigation, and inspection of the ACO s compliance and performance for ten (10) years from the final date of the ACO s agreement period or from the date of completion of any audit, evaluation, or inspection, whichever is later OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page11

14 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Governance ACOs must maintain an identifiable governing body with authority to execute the functions of the ACO ACOs must publically report the identity of all individuals on the ACO s governing body In cases where: o The ACO is composed of more than one ACO participant, the governing body must be separate and unique to the ACO but governing body members may serve in a similar or complementary role for an ACO participant o The ACO is composed of a single participant and is an existing entity, the ACO s governing body may be the same as the existing governing body of the existing entity The governing body must have the following composition (or document why the governing body does not): o At least 75% ACO participants o At least one (1) Medicare beneficiary representative who is served by the ACO o At least one (1) community stakeholder representing community resources that will be utilized by the ACO (optional, but helps meet care coordination requirements) Members of the governing body must have a fiduciary duty to the ACO and act in line with that duty The ACO must have a conflict of interest policy that applies to all members of the governing body that: o Requires each member of the governing body to disclose relevant financial interests; o Provides a procedure to determine whether a conflict of interest exists; o Sets forth a process to address any conflicts that arise; and o Addresses any remedial actions for members of the governing body that fail to comply with the policy. The governing body s governing process must be transparent The governing body will have the following responsibilities: o Provide oversight and strategic direction; o Hold ACO management accountable for ACO activities; and o Define processes for: Promoting evidence-based medicine and patient engagement; Reporting on quality and cost measures; and Coordinating care. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page12

15 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Leadership & Management ACOs must have a leadership and management structure that includes clinical and administrative systems that support the goals of the Shared Savings Program ACOs operations must be managed by an executive, officer, manager, or general partner whose appointment and removal are under the control of the governing body o Executive must have demonstrated ability to influence or direct clinical practice to improve efficiency, processes, and outcomes o Executive must enter into an agreement with the Secretary to participate in the Shared Savings Program for not less than three (3) years o Executive must certify that ACO participants are willing to become accountable for, and to report to, CMS on the quality, cost, and overall care of the Medicare beneficiaries assigned to the ACO An ACO s clinical management and oversight must be managed by a senior level Medical Director with the following characteristics: o Is an ACO physician; o Is physically present on a regular basis at an ACO location; and o Is board-certified and licensed in one of the States that the ACO operates. An ACO must have a qualified healthcare professional who is responsible for the ACO s quality assurance and improvement programs An ACO must have a compliance officer that does not serve as legal counsel to the ACO and have a compliance plan that meets the following criteria: o A mechanism for identifying and addressing compliance problems; o A method for the anonymous reporting of suspected problems to the compliance officer; o Compliance training for the ACO, ACO participants, and ACO providers / suppliers; o A requirement for the ACO to report probable violations of law to an appropriate law enforcement agency; and o Be updated from time to time to reflect changes in laws and regulations. As part of their application, ACOs must document their leadership and management structure, including clinical and administrative systems including at least the following: o ACO documents sufficient to describe the ACO participants and ACO providers / suppliers rights and obligations Participation agreements Employment contracts Operating policies o Documentation of the management structure Organizational charts Committee lists with names of committee members Job descriptions o Documents effectuating ACO s formation Charters, by-laws Articles of incorporation Partnership, joint venture, management, or asset purchase agreements OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page13

16 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] PromotionofEvidenceBasedMedicine,BeneficiaryEngagement,&PatientCenteredness General ACOs must describe how they will establish and maintain ongoing quality assurance and improvement efforts ACOs must provide documentation describing its plans to: o Promote evidence-based medicine; o Promote beneficiary engagement; o Report on quality and cost metrics; and o Coordinate care. For all of the categories listed in this table, ACOs must document the ACO s plans to: o Require providers / suppliers to comply with and implement processes; o Remediation processes and penalties for non-compliant participants or providers / suppliers; and o Assess and continuously improve the cost and quality of care. BeneficiaryEngagement ACOs must define, establish, implement, and periodically update their processes for promoting patient engagement ACOs must describe how they intend to: o Evaluate the health needs of the ACO s assigned population; o Communicate clinical knowledge / evidenced-based medicine to beneficiaries in a way that is understandable to them; o Engage beneficiaries in shared decision-making that takes into account the beneficiaries unique needs, preferences, values and priorities ; o Provide written standards for beneficiary access and communication; and o Provide beneficiaries access to their medical records. ACOs must define a process for promoting patient engagement that, at a minimum, addresses the following areas: o Compliance with the patient experience of care survey requirements; o Compliance with the beneficiary representative requirement; and o A process for evaluating the health needs of the ACO s assigned population. ACOs must describe how they intend to partner with community stakeholders to improve the health of their populations CoordinationOfCare ACOs must coordinate care across primary care physicians, specialists, and acute and post-acute providers and suppliers ACOs must define its process for coordinating care throughout an episode of care and during its transitions ACOs must submit a description of its individualized care plan that includes: o An explanation of how these plans will be used to promote improved outcomes for, at a minimum, its high-risk and multiple chronic condition patients; o An explanation of how available community resources will be incorporated into the care plan; o A sample individual care plan; and o Identification of target populations in addition to high-risk and multiple chronic condition patients that would benefit from the development of individual care plans. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page14

17 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] PromotionofEvidenceBasedMedicine,BeneficiaryEngagement,&PatientCenteredness(Continued) EvidenceBasedMedicine ACOs must promote evidence-based medicine ACOs must define, establish, implement, and periodically update their processes for promoting evidence-based medicine Taking the circumstances of individual beneficiaries into account, ACOs must identify diagnoses that hold a significant potential for the ACO to achieve quality improvement and develop guidelines to address those diagnoses PatientCenteredness ACOs must adopt a focus on patient-centeredness that is promoted by the governing body and integrated into practice by leadership and management team members ACOs must define, establish, implement, and periodically update their processes for promoting patient centeredness InternalReportingOnCost&QualityOfCare ACOs must develop the infrastructure for its ACO participants and ACO provider / suppliers to internally report cost and quality metrics that enables the ACO to monitor, provide feedback, and evaluate its ACO participants and ACO provider / suppliers performance over time OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page15

18 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Marketing Notification ACOs must notify beneficiaries of their participation in the Shared Savings Program at the point of care ACO participants must post signs at their facilities indicating their associated ACO provider / suppliers participation in the Shared Savings Program ACO participants must make available standardized written notices, developed by CMS, indicating their associated ACO provider / suppliers participation in the Shared Savings Program o ACOs may provide notification of their participation in the Shared Savings Program to beneficiaries who appear on the preliminary prospective assignment list and quarterly assignment lists Should an ACO not renew its agreement with CMS or be terminated from the program by CMS, neither the ACO nor its providers / suppliers will have to provide their beneficiaries with notice that the ACOs participants and its providers / suppliers will no longer be participating in the Shared Savings Program Marketing Materials Marketing materials are defined as materials, used to educate, solicit, notify, or contact Medicare beneficiaries or providers and suppliers regarding the Shared Savings Program including: o Brochures; o Advertisements; o Outreach events; o Letters to beneficiaries; o Web pages; o Data sharing opt out letters; o Mailings; o Social media; or o Other activities conducted by or on behalf of the ACO, or by ACO participants, or ACO provider /suppliers participating in the ACO when used to educate, solicit, notify, or contact Medicare beneficiaries or providers and suppliers regarding the Shared Savings Program. ACOs may use marketing materials 5 days after filing them with CMS if the organization certifies that the materials comply with the applicable marketing requirements OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page16

19 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] CoordinationWithOtherAgencies Center For Medicare & Medicaid Innovation (Innovation Center): Funding The Innovation Center developed the Advanced Payment Model (APM) as a response to concerns regarding the initial capital investment required to develop and operate an ACO Provides up to $170M to promote participation in the Shared Savings Program as an ACO Payment consists of 3 components: o Up-front fixed payment: $250,000; o Up-front variable payment: $36 x # of prospectively assigned beneficiaries; and o Monthly variable payment: $8 x # of prospectively assigned beneficiaries. Targeting up to 50 ACOs The APM will only be made available to: o Physician-based ACOs No associated inpatient facility < $50M in total annual revenues (the average of the sum of all ACO provider and suppliers total annual revenues for the last 3 years) o Rural ACOs Inpatient facilities designated as CAHs or LVRH < $80M in total annual revenues Interested ACOs must indicate their desire to participate in the APM as part of their application to the Shared Savings Program ACOs will be selected for the APM based upon a formula that considers the ACO s total revenue, reliance on Medicaid, rural location, and the quality of its submitted spending plan (see Appendix, Figure 4) The Innovation Center will not attempt to recoup advanced payments in excess of earned shared savings from ACOs that: o Complete their contractual term as part of the Shared Savings Program; and o Allocate APM funds in a manner that is consistent with their approved spending plan. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page17

20 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Federal Trade Commission (FTC) & U.S. Department Of Justice (DOJ): Antitrust The FTC and DOJ published their final guidance in their Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program o This guidance applies to collaborations among otherwise independent providers and provider groups that are eligible and intend, or have been approved, to participate in the Shared Savings Program o This guidance does not apply to merger transactions Acceptance of an ACO into the Medicare Shared Savings Program represents no judgment by CMS about the ACO s compliance with the antitrust laws or the ACO s competitive impact in a commercial market o All participants in the Shared Savings Program will remain subject to the antitrust laws The Agencies will treat joint negotiations with private payers as reasonably necessary to an ACO s primary purpose of improving healthcare delivery and will apply the rule of reason treatment to ACOs that: o Meet CMS s eligibility requirements for, and participate in, the Shared Savings Program; and o Use the same governance and leadership structures and clinical administrative processes to serve patients in commercial markets that they use in the Shared Savings Program. There will be no mandatory review of Shared Savings Program participants by the FTC or DOJ o ACOs must agree to share a copy of their application to the Shared Savings Program with the FTC and DOJ o CMS will collect and evaluate cost, utilization, and quality metrics relating to each ACO s performance in the Shared Savings Program and will share this information with the Agencies to assist in their monitoring of Shared Savings Program participants o ACOs are entitled to a voluntary expedited review (90 days) by the FTC and DOJ (see Appendix, Figure 3a) For ACOs to fall in the antitrust safety zone they must: o Have a combined share of no more than thirty percent (30%) of each common service in each participants PSA, wherever two or more ACO participants provide that service to patients from that PSA (see Appendix, Figure 3b); or o Qualify for the rural exception (located in a zip code designated as isolated rural or other small rural ); and o Ensure that any participant that commands greater than fifty percent (50%) market share in its PSA of any service that no other ACO participant provides to patients in the PSA remains non-exclusive to the ACO. ACOs that fall outside of the established safety zone may be procompetitive and lawful and will not raise competitive concerns if they do not impede the competitive market as would be signified by engaging in any of the following actions: o Engaging in improper exchanges of prices or other competitively sensitive information among competing participants; o Preventing or discouraging private payers from directing or incentiving patients to choose certain providers, including providers that do not participate in the ACO; o Tying sales of the ACO s services to the private payer s purchase of other services from providers outside the ACO; o Contracting on an exclusive basis with ACO physicians, hospitals, or other providers; or o Restricting private payers access to cost, quality, efficiency, and performance information to aid its enrollees in evaluating providers in the health plan. The FTC & DOJ will continue to consider other proposals (non-aco models) for clinical integration OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page18

21 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Office Of The Inspector General (OIG): Fraud & Abuse Guidance pertains to Shared Savings Program participants compliance with the Physician Self-Referral Law, the Federal anti-kickback statue, and the Civil Monetary Penalties (CMP) law provisions addressing inducements to beneficiaries and hospital payments to physicians to reduce or limit services The OIG seeks to waive application of these fraud and abuse laws for ACOs formed in connection with the Shared Savings Program o These waivers only apply to ACOs participating in the Shared Savings Program but may be applied to arrangements involving both Medicare and non- Medicare beneficiaries The OIG has developed five waivers including: ACO pre-participation waiver Intended to protect bona fide ACO investment for items, services, facilities, or goods used to create or develop an ACO Typically begins one year prior to an ACO s start date and terminates on the ACO s start date or the date of denial notice ACOs can only use the ACO pre-participation waiver once but may be granted an extension of a previous waiver ACO participation waiver Intended to protect bona fide ACO investment to support the operations of ACOs participating in the Shared Savings Program The waiver would start on the start date of the ACO s participation agreement and end 6 months following the earlier of the expiration of the participation agreement, including renewals, or the date on which the ACO voluntarily terminates its agreement Shared savings distribution waiver Intended to protect arrangements created by the distribution of shared savings within an ACO as well as arrangements created by the use of shared savings to pay parties outside an ACO that are reasonably related to the purposes of the Shared Savings Program Shared savings must: Be earned as part of the Shared Savings Program; Be earned during the term of the ACO s participation agreement (even if the savings are distributed after the expiration of the agreement); Be distributed to participants, provider / suppliers, or individuals or entities that were participants in the ACO during the year the savings were earned; and Not be made directly or indirectly from a hospital to a physician to knowingly induce a physician to reduce or limit medically necessary items or services to patients under the direct care of the physician; This waiver does not apply to private payer arrangements at this time Compliance with Physician Self-Referral Law waiver Intended to ease the compliance burden on providers that might elect to use existing Physician Self-Referral Law exemptions for their ACO arrangement The waiver would start on the start date of the ACO s participation agreement and end at the earlier of the expiration of the ACOs agreement or its termination date Patient Incentive waiver Intended to help ACOs foster preventative health care and patient compliance There must be a reasonable connection between the incentives and the medical care of the individual Will protect incentives that are in-kind items or services, but not financial incentives or the provision of free or below fair market value items or services by manufacturers or other vendors The waiver would start on the start date of the ACO s participation agreement and end at the earlier of the expiration of the ACOs agreement or its termination date OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page19

22 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Internal Revenue Service (IRS): Tax-Exempt Status The IRS s guidance pertains to: o Section 501(c)(3) of the Code that provides, in part, for the exemption from federal income tax of corporations organized and operated exclusively for charitable, scientific, or educational purposes, provided that no part of the organization s net earnings inures to the benefit of any private shareholder or individual; and o Section 511(a) of the Code that, in part, provides for the imposition of tax on the unrelated business taxable income of organizations described in Section 501(c)(3). At this time, the IRS anticipates that tax-exempt organizations typically will be participating in the Shared Savings Program through an ACO along with private parties, including some that may be considered insiders with respect to the tax-exempt organization. To avoid tax consequences, the tax exempt organization must ensure that its participation in the Shared Savings Program through an ACO is structured so not to result in its net earnings to inure to the benefit of its insiders or in its being operated for the benefit of private parties participating in the ACO As a general matter, the IRS expects that it will not consider a tax-exempt organization s participation in the Shared Savings Program through an ACO to result in private inurement or impermissible private benefit to the private parties where: o The terms of the tax-exempt organization s participation in the Shared Savings Program through the ACO, including its share of payments or losses, are set forth in advance in a written agreement negotiated at arm s length; o CMS has accepted the ACO into, and has not terminated the ACO from, the Shared Savings Program; o The tax-exempt organization s share of economic benefits derived from the ACO is proportional to the benefits or contributions the tax-exempt organization provides to the ACO; o The tax-exempt organization s share of the ACO s losses does not exceed the share of ACO economic benefits to which the tax-exempt organization is entitled; and o All contracts and transactions entered into by the tax-exempt organization with the ACO and the ACO s participants and any other parties, are at fair market value. The IRS expects that any shared savings payments received by a tax-exempt organization from an ACO would derive from activities that are substantially related to the performance of the charitable purpose of lessening the burdens of government The IRS anticipates that, in contrast to activities conducted as part of the Shared Savings Program, many non-shared Savings Program activities conducted by or through an ACO are unlikely to lessen the burdens of government OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page20

23 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Appendix FIGURE1:MINIMUMSAVINGSRATESFORTRACK1ACOs #ofbeneficiaries MSR(lowendofassignedbeneficiaries) MSR(highendofassignedbeneficiaries) 5,000to5, % 3.6% 6,000to6, % 3.4% 7,000to7, % 3.2% 8,000to8, % 3.1% 9,000to9, % 3.0% 10,000to14, % 2.7% 15,000to19, % 2.5% 20,000to49, % 2.2% 50,000to59, % 2.0% 60, % 2.0% FIGURE2a:QUALITYDOMAINOVERVIEW Domain TotalIndividualMeasures TotalMeasuresForScoring TotalPotentialPoints DomainWeight Patient/CaregiverExperience 1with6surveymodule 7 measurescombine,plus1 4 25% individualmeasure CareCoordination/PatientSafety 6measures,plustheEHR 6 measureddoubleweighted 14 25% (4points) PreventativeHealth 8 8measures 16 25% AtRiskPopulation 7measures,including5 12 componentdiabetes compositemeasuresand % compositecadmeasures Total % OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page21

24 MedicareSharedSavingsProgram AIM:BetterCareForIndividuals Measure # Domain MeasureTitle 1 Patient/Caregiver CAHPS:Gettingtimelycare, Experience appointments,andinformation 2 Patient/Caregiver CAHPS:Howwellyourdoctors Experience communicate 3 Patient/Caregiver CAHPS:Patients ratingof doctor Experience 4 Patient/Caregiver CAHPS:Accesstospecialists Experience 5 Patient/Caregiver CAHPS:Healthpromotionandeducation Experience 6 Patient/Caregiver CAHPS:Shareddecisionmaking Experience 7 Patient/Caregiver CAHPS:Healthstatus/functionalstatus Experience 8 CareCoordination/ Riskstandardized,allcondition PatientSafety readmission 9 CareCoordination/ Ambulatorysensitiveconditions PatientSafety admissions:cops(ahrqpqi#5) 10 CareCoordination/ Ambulatorysensitiveconditions PatientSafety admissions:chf(ahrqpqi#8) 11 CareCoordination/ PercentofPCPswhosuccessfullyqualify PatientSafety foranehrincentiveprogrampayment 12 CareCoordination/ Medicationreconciliation:reconciliation PatientSafety afterdischargefromaninpatientfacility 13 CareCoordination/ Falls:screeningforfallrisk PatientSafety [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE2b:QUALITYMEASURELIST NQFMeasure/ Measure Steward NQF#5, AHRQ NQF#5, AHRQ NQF#5, AHRQ NQF#5, AHRQ NQF#5, AHRQ NQF#5, AHRQ NQF#6, AHRQ NQF#TBD CMS NQF#275, AHRQ NQF#277, AHRQ CMS NQF#97, AMAPCPI/NCQA NQF#101, NCQA Methodof Data Submission PayForPerformancePhaseIn R=ReportingP=Performance Year1Year2Year3 Survey R P P Survey R P P Survey R P P Survey R P P Survey R P P Survey R R R Survey R R P Claims R P P Claims R P P Claims R P P EHRIncentive ProgramReport GPROWeb Interface GPROWeb Interface R P P R P P R P P OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page22

25 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE2b:QUALITYMEASURELIST(CONTINUED) AIM:BetterCareForPopulations NQFMeasure/ Methodof Measure Measure Data # Domain MeasureTitle Steward Submission 14 PreventativeHealth Influenzavaccination NQF#41, GPROWeb AMAPCPI Interface 15 PreventativeHealth Pneumococcalvaccination NQF#43, GPROWeb NCQA Interface 16 PreventativeHealth Adultweightscreeningandfollowup NQF#421, GPROWeb CMS Interface 17 PreventativeHealth Tobaccouseassessmentandtobacco NQF#28, GPROWeb cessationintervention AMAPCPI Interface 18 PreventativeHealth Depressionscreening NQF#418, GPROWeb CMS Interface 19 PreventativeHealth Colorectalcancerscreening NQF#34, GPROWeb NCQA Interface 20 PreventativeHealth Mammographyscreening NQF#31, GPROWeb NCQA Interface 21 PreventativeHealth Proportionofadults18+whohadtheir CMS GPROWeb bloodpressuremeasuredwithinthe Interface preceding2years 22 AtRiskPopulations Diabetescomposite(allornothing NQF#0729, GPROWeb Diabetes scoring):hemoglobina1ccontrol MNCommunity Interface (<8percent) Measurement AtRiskPopulations Diabetes AtRiskPopulations Diabetes AtRiskPopulations Diabetes Diabetescomposite(allornothing scoring):lowdensitylipoprotein(<100) Diabetescomposite(allornothing scoring):bloodpressure(<140/90) Diabetescomposite(allornothing scoring):tobaccononuse NQF#0729, MNCommunity Measurement NQF#0729, MNCommunity Measurement NQF#0729, MNCommunity Measurement GPROWeb Interface GPROWeb Interface GPROWeb Interface PayForPerformancePhase R=ReportingP=Performance Year1Year2Year3 R P P R P P R P P R P P R R P R R P R R P R P P R P P R P P R P P R P P OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page23

26 MedicareSharedSavingsProgram AIM:BetterCareForPopulations Measure # Domain MeasureTitle AtRiskPopulations Diabetescomposite(allornothing 26 Diabetes scoring):aspirinuse AtRiskPopulations Diabetes AtRiskPopulations Hypertension AtRiskPopulations IschemicHealth Dz AtRiskPopulations IschemicHealthDz AtRiskPopulations HeartFailure AtRiskPopulations CoronaryArtery Dz AtRiskPopulations CoronaryArtery Dz [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE2b:QUALITYMEASURELIST(CONTIUNED) NQFMeasure/ Measure Steward Diabetesmellitus:hemoglobinA1cpoor control(>9percent) Hypertension(HTN):bloodpressure control Ischemicvasculardisease(IVD): compositelipidprofileandldlcontrol <100mg/dl Ischemicvasculardisease(IVD):useof aspirinoranotherantithrombotic Heartfailure:betablockertherapyfor leftventricularsystolicdysfunction (LVSD) Coronaryarterydisease(CAD)composite (allornothingscoring):drugtherapyfor loweringldlcholesterol Coronaryarterydisease(CAD)composite (allornothingscoring):angiotensin convertingenzyme(ace)inhibitoror angiotensinreceptorblocker(arb) therapyofpatientswithcadand diabetesand/orleftventricularsystolic dysfunction(lvsd) NQF#0729, MNCommunity Measurement NQF#59, NCQA NQF#18, NCQA NQF#75, NCQA NQF#68, NCQA NQF#83, AMAPCPI NQF #74,CMA (composite)/ AMAPCPI (individual component) AHRQ NQF#66,CMA (composite)/ AMAPCPI (individual component) AHRQ Methodof Data Submission GPROWeb Interface GPROWeb Interface GPROWeb Interface GPROWeb Interface GPROWeb Interface GPROWeb Interface GPROWeb Interface GPROWeb Interface PayForPerformancePhaseIn R=ReportingP=Performance Year1Year2Year3 R P P R P P R P P R P P R P P R R P R R P R R P OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page24

27 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE2c:PAYFORPERFORMANCEPHASEIN Methodology PerformanceYear1 PerformanceYear2 PerformanceYear3 PayForReporting PayForPerformance Total FIGURE2d:SLIDINGSCALEMEASURESCORING ACOPerformanceLevel QualityPoints(exceptEHR) EHRMeasureQualityPoints 90+percentileFFS/MArateor90+percent percentileFFS/MArateor80+percent percentileFFS/MArateor70+percent percentileFFS/MArateor60+percent percentileFFS/MArateor50+percent percentileFFS/MArateor40+percent percentileFFS/MArateor30+percent <30percentileFFS/MArateor30percent Nopoints Nopoints FIGURE3a:PSASHARECALCULATION Step1:IdentifyEachServiceProvedByAtLeast2IndependentACOParticipants For physicians, a service is the physician s primary specialty, as designated on the physician s Medicare Enrollment Application and as identifies by the Medicare Specialty Code (MSC) For inpatient facilities, a service is a MDC For outpatient facilities, a service is an outpatient category, as defined by CMS Step2:IdentifyThePSA(s)ForEachParticipantInTheACOThatProvidesAnyCommonService For each participant, the PSA is defined as the lowest number of postal codes from which the participant draws at least seventy-five percent (75%) of its patients Each independent physician solo practice, each fully integrated physician group practice, each inpatient facility, and each outpatient facility will have its own PSA Each inpatient facility will have a separate PSA for inpatient services, outpatient services, and physician services provided by its physician employees Step3:CalculateTheACO spsashare Calculate the ACO s PSA share for each common service provided by more than one participant to patients from that PSA OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page25

28 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE3b:EXPEDITEDFEDERALTRADECOMMISSION/U.S.DEPARTMENTOFJUSTICEANTITRUSTREVIEW RequiredDocumentation Supplementary(Optional)Documentation The ACO s application to the Shared Savings Program along with all Evidence that the ACO is not likely to have market power in the relevant supporting documentation to the application market Documentation of: Substantial procompetitive justification for why the ACO needs its o The ACO s business strategies or plans to compete in the Medicare proposed composition to provide high-quality, cost-effective care to and commercial markets including the expected impact Medicare beneficiaries and patients in the commercial markets o The level and nature of competition among participants in the An explanation as to why the ACO engaging in any of the four types of ACO, and the competitive significance of the ACO and ACO inappropriate conduct specified in the guidance would not be participants in the markets in which they provide services anticompetitive Information to show: o o o o o The common services that two (2) or more ACO participants provide to patients from the same PSA, and the identity of the ACO participants or providers providing those services The PSA of each ACO participant and either the PSA share calculations or other data that shows the current competitive significance of the ACO or its participants in their PSA Restrictions to prevent ACO participants from obtaining information regarding prices that other ACO participants charge private payers that do not contract through the ACO The five largest commercial health plans or other private payers for the ACO s services The identity of any other existing or proposed ACO in the ACO s market OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page26

29 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] FIGURE4:ADVANCEDPAYMENTMODELSELECTIONCRITERIA PhysicianOnlyACOs ACOsWithCAHSorLVRHs ScoringOfSpendingPlanQuality TotalRevenue $30Mto$50M Pts 4 TotalRevenue $60Mto$80M Pts 4 TheQualityofACOs spendplanwill bebasedonthefollowingcriteria: $15Mto$30M 6 $45Mto$60M 6 <$15M MedicaidReliance (%ofrevenuederivedfrommedicaid) <5% 10 Pts 0 <$45M MedicaidReliance (%ofrevenuederivedfrommedicaid) <5% 10 Pts 0 Procurements, activities, and hiringsaredescribedindetail, along with estimated costs (e.g., type and number of staff,expectedsalaries,etc.) 6to10% 2 6to10% 2 >10% 4 >10% 4 RuralLocation %ofproviderswithpracticelocationsineither: 1. Nonmetropolitancounties,or 2. InareaswithRUCAcodes410in metropolitancounties Pts RuralLocation %ofproviderswithpracticelocationsineither: 1. Nonmetropolitancounties,or 2. InareaswithRUCAcodes410in metropolitancounties <65% 0 <65% 0 65to85% 2 65to85% 2 >85% 4 >85% 4 SpendPlanQuality Pts SpendPlanQuality Pts Acceptable 0 Acceptable 0 Good 4 Good 4 Exceptional 8 Exceptional 8 Pts Feasible timeframe for procurement, activities, and hiring within the first 18 monthsoftheagreement Compellingrationalesforhow each procurement, activity, hiringsupportpopulationcare management, financial management, or other essentialacofunctions Documentation and level of ACO s own investment in infrastructure Overall strength of plan and businesscaseforinvestment OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page27

30 MedicareSharedSavingsProgram [OVERVIEWOFTHEFINALACOREGULATIONS] Authors MICHAELGLICK SeniorManager PhysicianHospitalJointVentures Michael Glick is a Senior Manager at Blue Consulting Services. Over the last 15 years, Mike has served as a healthcare consultant and business advisor to hospitals, physician groups, and businesses across the country. His primary areas of focus have been physicianhospital joint venture development, physicianhospital alignment, clinical service line planning, and financialplanning.mikehasextensiveexperienceacrossabroad spectrum of specialties facilitating physicianhospital joint ventures including but not limited to: foundation model; physicianemploymentandpracticeacquisition;comanagement; leasingarrangements;andmedicaldirectorships. JOHNREDDING,MD,MBA Manager PhysicianHospitalAlignment jredding@blueandco.com John Redding, MD, MBA is a Manager at Blue Consulting Services. John brings over 15 years of healthcareexperience to BCS andhas servedas a trusted advisor to providers and healthcare executives for the last 6 years. In his role at BCS,Johnworkswithhealthsystems,hospitals,andphysician organizations to develop collaborative physicianhospital working relationships and business ventures. John has extensive experience leading and supporting a broad spectrum of physicianhospital alignment initiatives, from developing and implementing physician employment strategies to providing interim management for a Clinically Integrated Physician Network / Accountable Care Organization. OneAmericanSquare,Suite2200 Box82062 Indianapolis,IN46282 Page28

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