Medicare Advantage Measurement Period Handbook For Enhanced Personal Health Care

Medicare Advantage Measurement Period Handbook For Enhanced Personal Health Care Measurement Period beginning: 01/01/18 Version 010118

Introduction: Welcome to your Medicare Advantage Measurement Period Handbook. As explained in the Program Description, the Incentive Program gives you the opportunity to share in savings achieved by your Medicare Medical Panel during a given Medicare Measurement Period. If you meet both quality and cost performance targets, your provider organization could share in the cost savings. To determine whether or how much of a shared savings payment for which you are eligible, we measure your performance against quality and cost targets. In this handbook, you will learn more about those targets and how your performance impacts the calculation of shared savings. Below you will see definitions of some of the most important terms used in this handbook and the details of your Incentive Program: Medical Loss Ratio Report. The MLR report shows Total Medical Costs incurred by your Medicare Advantage Attributed Patients divided by the total Premiums received by Anthem Blue Cross and Blue Shield (Anthem) over the course of the MA Measurement Period. You are eligible to earn shared savings when the Measurement Period Medical Loss Ratio (MPMLR) is less than the Medical Loss Ratio Target (MLRT) and your measured performance on quality metrics and outcomes meets or exceeds the Program s Quality Gate. Measurement Period Start Date. The first day of the twelve (12) month period during which we measure MPMLR and quality performance for purposes of calculating shared savings between Anthem and the Medical Panel. If your organization starts a Measurement Period after the first day of a given year, the initial MA Measurement Period would be less than a twelve (12) month period. In the subsequent years, the new MA Measurement Period would begin on the first day of the new year for a complete twelve (12) month period. Your Measurement Period will be from 01/01/18-12/31/2018. Quality Gate. The minimum clinical quality scores that your provider organization must deliver in order to earn any shared savings under the Incentive Program. Your quality gate is set at the four Star level for each measure. Further information about the Quality Gate is reviewed in the shared savings section. Shared Savings Percentage. The percentage of shared savings under the Program to which Provider is determined to be entitled after all other applicable adjustments have been made to the Shared Savings Potential based on the Quality Target scores as shown in the Program Description and this MA Measurement Period Handbook. The Shared Savings Percentage can be the same percent as the Shared Savings Potential if all Quality Targets are fully achieved by Provider under the Program. The Shared Savings Percentage will be less than the Shared Savings Potential if any Quality Targets are not achieved by Provider under the Program. Shared Savings Potential. The maximum percentage of shared savings under the Shared Saving Program to which Provider may be entitled, as delineated in this MA Measurement Period Handbook. The Shared Savings Potential percent shown in this MA Measurement Period Handbook is subject to the performance adjustments described in this Program Description and in the MA Measurement Period Handbook. Your Shared Savings Potential is 50%. Substantial Financial Risk Limit. The limit applied to the total incentive-based payments to Provider from Anthem, inclusive of payments under the Agreement. The Substantial Financial Risk Limit is no more than 25% of the total reimbursement the Provider and Represented Providers receive from Anthem for direct services delivered to Anthem Medicare Advantage Attributed Members during the applicable MA Measurement Period year. Performance Scorecard Report. In addition to the MLR report, you will also be able to access your provider organization s performance scorecard via our secure website (www.availity.com). The performance scorecard shows your performance on the selected clinical quality measures listed in this handbook. The performance scorecard is a tool to help you assess your quality and utilization performance on a quarterly basis. The information included in this handbook is designed to help you understand your MLR report, your performance scorecard and the scoring methodology. It is not intended to change the terms of your EPHC document, and should not be interpreted as such. 2 MA Version 010118

Table of Contents Introduction:... 2 Table of Contents... 3 Section 1: Medical Loss Ratio... 4 Section 2: Performance Scorecard & Your Measures... 7 Performance Scorecard Overview... 7 Performance Benchmarks... 8 Quality Measures for Your Measurement Period... 9 Individual Measure Weighing... 11 Section 3: Calculating Your Shared Savings... 13 Overview... 13 Weighting Composites... 13 Earned Contribution Calculated Calculating the Composite Scores... 14 3 MA Version 010118

Section 1: Medical Loss Ratio Overview As part of our Enhanced Personal Health Care Program, we track overall medical costs incurred by Attributed Members, and under the incentive portion of the Program, we reward participating providers who are able to provide appropriate care in a cost-effect manner while maintain or improving performance against nationally recognized quality measures. The Program is based upon the same structure implemented by the Centers for Medicare and Medicaid Services (CMS) in their Comprehensive Primary Care initiative. The Medical Loss Ratio Report shows Total Medical Costs incurred by a given Medical Panel s Medicare Advantage Attributed Members divided by the total Premiums received by Anthem for the Medicare Advantage Attributed Members associated with the Medical Panel over the course of the Measurement Period. As a reminder, the Measurement Period Medical Loss Ratio used to reconcile your final shared savings payment (should you qualify) uses the following equation: MMMMMMMMMMMMMMMMMMMMMM PPPPPPPPPPPP MMMMMM = TTTTTTTTTT MMMMMMMMMMMMMM EEEEEEEEEEEEEE MMMMMMMMMMMMMMMMMMMMMM PPPPPPPPPPPP PPPPPPPPPPPPPP MMMMMMMMMMMMMMMMMMMMtt PPPPPPPPPPPP Total Medical Expenses - means the costs incurred by Anthem for payment of all Covered Services (including hospital, medical, pharmacy and non-hospital) provided to each Medicare Advantage Attributed member by all providers (participating and non-participating, and including Provider and its PCPs) furnishing such services to Medicare Advantage Attributed Members, adjusted by the Stop-Loss Expense and Stop-Loss Credit where appropriate. Total Medical Expenses include: A. Claims, capitation and PMPM reimbursement, where applicable, incurred during the MA Measurement Period, paid through a three month Claims run-out period. B. Plus a reasonable amount for IBNR C. Plus the Stop-Loss Expense (if included) D. Minus the Stop-Loss Credits (if included) E. Plus the costs associated with supplemental benefits F. Plus payment made to providers for gap closures and/or health risk assessments. Premium - means the total of all payments (including Medicare Part C and Part D premiums) paid by CMS and member to Anthem for the Member Population under a Anthem Health Benefit Plan during a MA Measurement Period less any Part B rebates payable or credited for any Medicare Advantage Attributed Members within the Member Population, less any taxes levied by the Affordable Care Act, less any cost and reinsurance subsidies, and less any other amount otherwise offset against or deducted from amounts payable by CMS to Anthem with respect to the Member Population during such MA Measurement Period, exclusive of any Retroactive Addition Amount or Retroactive Deletion Amount, for such Medicare Advantage Member Population for the same MA Measurement Period. 4 MA Version 010118

The items listed in the definitions above are included in the Measurement Period MLR report. An example of an MLR report is shown below. At this time the MLR report is not available for the Medicare Program in PCMS and will be manually delivered. Example: Measurement Period Medical Loss Ratio Report EPHC Medical Panel "A" MP MLR for 1/1/2015-12/31/2015 Measurement Period Member Months 19,081 Average Number of Members 1,590 Average Risk Score 1.034 Medical CMS Revenue 13,883,062 Medical Revenue Adjustments 460,269 Medical Sequestration (306,867) Medical Member Premium 225,863 Medical ACA Tax (279,301) Part D CMS Revenue 672,151 Part D Revenue Adjustments (10,873) Part D Sequestration (16,108) Part D Member Premium 605,638 Part D ACA Tax (27,357) Total Revenue $15,206,476.01 Target Medical Loss Ratio (MLR) 85.0% Total Medical & Part D Expense Target 13,945,505 Inpatient Claims 4,988,618 Outpatient Claims 2,507,963 Professional Claims 3,456,767 Medical Claims IBNR 182,171 Other Claims Payments 52,567 Pharmacy Part D Claims 1,598,468 Pharmacy Rebates (813,959) Stop Loss Expense 279,623 Stop Loss Claims over Deductible (179,608) Quality Improvement Programs 443,788 Mangement Fee 75,317 Total Medical Expenses $12,591,715.46 Actual Panel MLR 82.8% Gross Savings ((Program Target - Actual MLR) * Total Rev) $333,789.15 Passed Quality Gate - yes Shared Savings Potential (50% Maximum Potential) 27.65% Provider Share of Net Surplus/(Deficit) $92,301 In the case above, the Total Medical Expenses divided by the Total Revenue is 82.8% is the Measurement Period MLR. 8888. 88% = $1111, 555555, 777777. 4444 $1111, 222222, 444444. 0000 5 MA Version 010118

Understanding the Medical Loss Ratio (MLR) The MLR is created using two figures (1) the Premiums received by CMS for your Attributed MA Members, and (2) the Medical Expenses it costs to take care of those members for the year. Understanding how to impact both of those is the key to lowering the Measurement Period MLR. The MLR can be impacted by comprehensive documentation of burden of illness on the claims submitted for your Attributed Members and their medical records to insure the Premiums received for your Attributed MA Members are correct for their documented medical conditions, and lowering the Medical Expenses for your Attributed Medicare Members. Below are several ways your groups can impact both of these. Validating Premiums received from CMS: Hierarchical Condition Categories (HCCs) are used in CMS s methodology for determining Premiums for the Medicare Advantage program members. The codes identify the conditions that a patient has and allow payments to be risk-adjusted based on those conditions. The methodology uses a patient s documented 12-month diagnostic coding history to predict future financial utilization and risk. This review of the claims received from Anthem creates a risk adjustment factor (RAF) score for a patient that determines the amount of Premium received for each Attributed Member. At the beginning of each New Year, the patients HCC scores are reset, dropping the codes from the prior year each December 31 st. This means that even if a patient was documented in the prior year with diabetes, at the beginning of the new-year that diagnosis is no longer considered valid for that patient until a claim is received with the diagnosis code reaffirming that the patient has diabetes. Bringing the patient in for their Annual Wellness Visit and reaffirming the previous conditions, or documenting the diagnosis during a sick visit, is referred to as closing an HCC gap. This will allow the Premium received to reflect the health of the patient and provide the revenue needed to cover the expenses associated with the diagnosis. Several times a year, Anthem sends claims to CMS used to determine the RAF (Risk Adjustment Factor) score that will set the Premium received by Anthem for your Medicare Advantage Attributed Members. The claims sent to CMS will include the diagnosis codes that have been submitted by your practice for your Attributed Members, which must properly document the members complete set of Hierarchical Condition Codes. By properly coding the claims with the patient s diagnosis the premiums received will be more accurate to properly reflect the health of your population. Lowering Medical Costs: The second piece of the MLR equation is Medical Expenses. Several key components make up the Medical Expenses, and are identified on the Measurement Period MLR report. The key areas are: Inpatient Outpatient Professional Pharmacy Other Claims This can include but is not limited to Lab and imaging. These costs can be impacted by your practice through: Creating Care Plans, as described in the Program Description, to manage patient s chronic conditions to possibly limit an in-patient stay, frequent office visits, and trips to the Emergency Room. Assure that referrals for specialists, lab and imaging work are In-Network Prescribing generic prescriptions when available Direct a patient to a cost effective free-standing radiology center when appropriate. 6 MA Version 010118

Section 2: Performance Scorecard & Your Measures Performance Scorecard Overview The performance scorecard is comprised of Quality Measures based on CMS Stars Measures along with Improvement Measures. In addition to serving as a basis for Incentive Program shared savings calculations, these measures are used to establish a minimum level of performance expected of you under the Program and to encourage improvement through sharing of information. The performance scorecard allows you to monitor your progress in these measures throughout the year. A complete guide for the scorecard is available in PCMS in the quick links located in the upper right hand corner of the screen. It will show you how to identify the current compliance rates for all measures, the benchmarks, and how many members need to be compliant before achieving the next level and much more. Scorecard Report Example - The scorecard below is an example of the information the scorecard will provide and what it will look like. Your scorecard will be provided through the PCMS once available. The Shared Savings Potential percentages shown below are examples only and do not reflect the percentages for your Measurement Period. Group: Family Practice Program: OH EPHC for Medicare 25.00% 40.00% 5.00% 10.00% 30.00% 50.00% Max 7.5% 75 Services Medication Adherence Cholesterol (G) Max 7.5% 140 Services Max 7.5% 55 Services Max 7.5% 75 Services Max 2.5% 120 Services Max 2.5% 75 Services Diabetes: Eye Exam (G) Breast Cancer Screening (G) Max 2.5% 5 Services Max 2.5% 75 Services (1) Earned Contribution: The proportion of the Shared Savings Potential earned for each measure and for the overall Program. Your earned contribution is shown in each bar that measures your performance. (2) (3) Shared Savings Potential: The maximum percentage of Shared Savings to which a Provider is entitled under the Incentive Program. The scorecard shows this at the measure (2) and composite (3) level. (4) Level of Measurement: If the Measure has been evaluated at the Group or Medical Panel level. 7 MA Version 010118

Performance Scorecard Measurement Interval Calendar Year View The scorecard is based on Calendar Year View compliance. This means that at the beginning of every New Year, the compliance rate will be zero for all measures that show compliance on an annual basis, and will remain non-compliant until the MA Attributed Member fulfils the specifications to show compliance for that measure. Timing: the initial scorecards will be available with the dates of service from January 1 st through January 31 st toward the end of March. The Medication Adherence measures will not be available until a month later with January 1 through February 28 th claims included. This is due to the Medication Adherence measures requiring two months data for the initial evaluation. Example: Kidney Disease Monitoring A member must have a test performed each year to be compliant for this measure. In the previous Rolling twelve Medicare Scorecards, if that member had the test on November 10 th of the previous year, that member would still show as compliant on January 1 st, and would remain compliant until November 9 th of the next year. In the Calendar Year View Scorecard, that member will show as non-compliant as of January 1 st, even if they had the test in December of the previous year, and will remain non-compliant until the member has the test performed during the calendar year. Measures that have a compliance time frame outside of a calendar year may have members showing as compliant in January, at the beginning of the Measurement Period. Example: Breast Cancer Screening the compliance time period for a mammography is 27 months. In this case, if a member has a mammogram in November of the previous year, the MA Attributed Member would still be compliant on January 1 st of the next year because the MA Attributed member has met the criteria of having a mammogram in the past 27 months. Once a member is shown as compliant during the Measurement Period, they will remain compliant all year, even if they happen to fall outside of the 27 month window during the Measurement Period. Performance Benchmarks The benchmarks that will be used for the Program are internally created projections to more accurately reflect the anticipated results for the 2018 Measurement Period, which will be reported by CMS in October of 2019. These internally created benchmarks will be available prior to the start of the Measurement Period. 8 MA Version 010118

Quality Measures for Your Measurement Period Clinical Quality Measures Overview The Medicare Advantage Program scorecard is comprised of Quality Targets that align with the Centers for Medicare & Medicaid Services ( CMS ) Stars Program. The applicable Quality Targets are listed below under Standard Measures and Enhanced Measures. In addition to serving as a basis for Medicare Advantage Incentive Program savings calculations, these measures are used to establish a minimum level of performance expected of you under the Medicare Advantage Program, and to encourage improvement through sharing of information. The measures encourage efficient, preventive, high quality and cost-effective health care practices for the Medicare Advantage (MA) Attributed Member population. Eligible providers who meet the Quality Gate can participate in the Medicare Advantage Incentive Program as described in Section 8, Incentive Program- Medicare Advantage Business. The Quality Targets included in the scorecard for the Medicare Advantage Incentive Program are divided into two categories, referred to as composites, in the Quality Scorecard: (1) Standard Measures and (2) Enhanced Measures (3) Improvement Measures. All measures that have at least 20 MA Attributed Members in the denominator will be scored at your provider organizations level. If a measure is categorized as information only, that measure will be evaluated for the compliance rates and Stars ranking but do not have any shared savings potential assigned to them. If your provider organization does not have 20 MA Attributed Members in the denominator of a given measure, that measure will be scored at your assigned MA Medical Panel s level. Measures that have been scored at the MA Medical Panel level are marked with a (P) next to the measure name on the scorecard, whereas measures that have been scored at your individual group level will have a (G) next to the measures name. Composite Overview: Standard Measures are measures that are scored using the procedure and diagnosis codes submitted on medical or prescription drug Claims that are readily available, widely used by many providers, and that provide conclusive evidence as to whether or not the measure has been achieved. These measures results are derived solely based on an evaluation of Claims submitted to Anthem. An example of a Standard Measure is Breast Cancer Screening. A review of Claims we receive during a Measurement Period for Medicare Advantage Attributed Members that fit the specifications for the Breast Cancer Screening Measure and will provide all the information needed to conclusively determine if the test was performed per the technical specification and is the member compliant for that measure during the current MA Measurement Period. The Standard Measures that will be included on the scorecard for this MA Measurement Period are: o Diabetes Care Eye Exam o Diabetes Care Kidney Disease Monitoring o Breast Cancer Screening o Colorectal Cancer Screening o Readmission Rate Info Only o COA: Medication Review Info Only o COA: Functional Status Assemt: Info Only o Medication Adherence- Oral Diabetes o Medication Adherence- Hypertension o Medication Adherence- Cholesterol o Diabetes/Statin o COA: Pain Screening Info Only o Rheumatoid Arthritis Info Only o Osteoporosis Info Only 9 MA Version 010118

Enhanced Measures are measures that, for scoring purposes, require additional information to be submitted in addition to the Claim (in addition to standard CPT IV codes) or sent in as supplemental Information, and also require documentation in the Medicare Advantage Attributed Member s medical record. In order to evaluate success with Enhanced Measures, you must either submit a CPT II code or Z code on the Medicare Advantage Attributed Member s Claim along with a corresponding note in their medical record that supports the use of this code, or work with you Medicare Quality Lead to arrange the intake of a supplemental file with the outcomes for these measures. An example of an Enhanced Measure is Diabetes: Blood Sugar Controlled. A review of Claims received for a given Medicare Advantage Attributed Member with diabetes, during the Measurement Period, requires the inclusion of the CPT II code that identifies the member s HbA1c level. The technical specifications for the measure state that a member s HbA1c needs to be equal to or less than 9. There is a corresponding CPT II code that can be entered on the claim that reports the value of the HbA1c that should be sent in on the claim. The use of CPT II codes and Z codes are further explained below. The Enhanced Measures that will be included on the scorecard for this MA Measurement Period are: o Diabetes Care Blood Sugar Controlled o Controlling Blood Pressure o Adult BMI Assessment o Medication Reconciliation Information Only The use of CPT Category II (CPT II) & Z codes to evaluate Enhanced Measures: As mentioned above, Enhanced Measures require additional information to be submitted on a Claim, in addition standard CPT IV codes, in order to be evaluated and scored as the measure being compliant, or controlled. A CPT II code or Z code needs to be included on a MA Attributed Member s Claim to demonstrate a patient s compliance for the Enhanced Measures. The information reflected by the CPT II and Z codes also needs to be documented in their medical record to support the use of this code. What is a Category II Code? CPT II codes are tracking codes that facilitate data collection for performance measurement in the Program for the Medicare Advantage Attributed Members. The use of these codes enables us to monitor performance for the Enhanced Measures throughout the MA Measurement Period. How does a CPT II code work in capturing quality data for measurement? An example of the process and outcome measurement of Comprehensive Diabetes Care HbA1c testing and control includes the following: The process of caring for a diabetic patient by testing for the HbA1c to monitor the patient s blood sugar control over time. The outcome part of that measure is the result or value of the HbA1c, i.e. result level <7.0%. The CPT II coding allows for the results data to be captured easily on a claim, rather than sending in medical records. See example-1 below: o Process: CPT IV - HbA1c Testing: 83036=Glycosylated (A1C) or 83037=at home glycosylated (A1C). The CPT IV code captures the fact that the test was indeed performed at the point of care. o Outcome: CPT Category II - HbA1C Result: 3044F=Most recent HbA1c level <7.0%. The CPT Category II code captures the outcome or result of the screening above and completes the measure without performing an onsite chart review or submission of a medical record. What is a Z Code? Z codes identify circumstances when a patient presents with issues other than a disease or injury. Z codes are also used to report problems or factors that may influence care. The Z code is a supplemental classification of ICD-10- CM For example, Z23 indicates an Encounter for Flu vaccine under ICD-10-CM. 10 MA Version 010118

Where are CPT II and Z codes captured on a standard claim form? o CPT II CODES: Box D on a standard claim form captures CPT codes, since the CPT II code is a category of CPT, it also is placed in Box D (see Diagram 1 below). o Z CODES: Z codes are a supplemental classification of ICD-10-CM; therefore, the Z code will appear in box 21 below (see Diagram 1below). Diagram 1: Placement of CPT II and Z Codes (Note: Please refer to CMS for rules and regulations on coding for payment.) Z Codes: Box 21 CPT II Code: Box 24D Improvement Measures are non-hedis measures that are tracked year over year and reward Providers who achieve a high level of success with each measure. The measures included in this composite are: o PCV % Measure: the percentage of Medicare Advantage Member HCCs that persist from year to year, due to the non-acute, chronic status of the condition itself. Asthma, Chronic Obstructive Pulmonary Disease and Diabetes are examples of chronic conditions that persist from year to year. Coding Accuracy: Provider is responsible for submitting diagnosis codes that are complete, accurate and supported by clinical findings and proper documentation in the Medicare Advantage Attributed Member s medical records. As such, diagnoses for any of the following situations should be excluded from the calculation of the PCV %: The diagnosis represented by the HCC is no longer applicable due to the fact that the medical condition was cured for the MA Attributed Member; OR The diagnosis represented by the HCC is an acute rather than chronic condition; OR A diagnosis code represented by the HCC was submitted to Anthem in error the year prior to the MA Measurement Period. o Annual Comprehensive Physical Percentage: A routine physical will help aid in appropriately diagnosing, monitoring, assessing, evaluating, and/or treating conditions that may not otherwise be captured, closing gaps in care, and creating a comprehensive care plan to manage possible chronic conditions. When the routine physical is completed by an in-network Provider in an HMO and/or PPO plan, there are no out-of-pocket costs for the member. This measure will evaluate the percentage of your Attributed Medicare Advantage Members that have received an annual routine physical during the measurement period. Individual Measure Weighing 11 MA Version 010118

Each measure has a weighting of 1, 2 or 3, as determined by Anthem. The measure weighting plays a direct role in determining the Shared Savings Potential; for instance, a triple weighted measure is worth three times the amount of shared savings than a single weighted measure. Measures that are informational only have a zero weighting. Those measures are made available to your practice to evaluate the compliance rates, but do not have any Shared Savings Potential assigned to them. Table 1 below illustrates the weighting and Shared Savings Potential for each of the measures for your Medicare Scorecard. Table 1: Measure weighting and Shared Savings Potential for each measure for 2018 Tier One Level of SS Tier Two Level of SS Composite Measure Weighting 4 Stars 5 Stars 4 Stars 5 Stars Composite Quality Gate potential potential potential potential weighting Standard Diabetes Care: Eye Exam 2 2.04 2.86 2.86 4.00 4 Stars 60% Standard Diabetes Care: Kidney Disease Mntr 1 1.02 1.43 1.43 2.00 4 Stars Standard Breast Cancer Screening 1 1.02 1.43 1.43 2.00 4 Stars Standard Colorectal Cancer Screening 3 3.06 4.28 4.28 6.00 4 Stars Standard Medication Adherence: Oral Diabetes 3 3.06 4.28 4.28 6.00 4 Stars Standard Medication Adherence: Hypertension 2 2.04 2.86 2.86 4.00 4 Stars Standard Medication Adherence: Cholesterol 2 2.04 2.86 2.86 4.00 4 Stars Standard Diabetes/Statin 1 n 1.02 1.43 1.43 2.00 4 Stars Standard Rhumatoid Arthritis: Info Only 0 0.00 0.00 0.00 0.00 Info Only Standard Osteoporosis: Info Only 0 0.00 0.00 0.00 0.00 Info Only Standard Readmission Rate: info Only 0 0.00 0.00 0.00 0.00 Info Only Standard COA: Medication Review: Info Only 0 0.00 0.00 0.00 0.00 Info Only Standard COA: Funct. Status Assmt: Info Only 0 0.00 0.00 0.00 0.00 Info Only Standard COA: Pain Screening: Info Only 0 0.00 0.00 0.00 0.00 Info Only Enhanced Diabetes Care: Blood Sugar Controlled 2 2.04 2.86 2.86 4.00 4 Stars 24% Enhanced Controlling Blood Pressure 3 3.06 4.28 4.28 6.00 4 Stars Enhanced Adult BMI 1 1.02 1.43 1.43 2.00 4 Stars Enhanced Medication Reconciliation: Info Only 0 0.00 0.00 0.00 0.00 Infor Only Level 1 Level 2 Level 1 Level 2 Improvmt Persistent Condition Validation 3 3.06 4.28 4.28 6.00 Level One 16% Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Improvmt Annual Comprehensive Physical Exam 1 0.73 1.02 1.43 1.43 2.00 Level One 50.00 100% 12 MA Version 010118

Section 3: Calculating Your Shared Savings Overview The opportunity to share in savings that are realized for your MA Attributed Members is a key characteristic of the Program. After savings are determined, the proportion of shared savings that you can earn depends on your organization s performance on a scorecard. Your scorecard serves two functions: (1) it will let you know if you met the Quality Gate, and (2) it will show you the overall percentage of the shared savings you earn. Below, we review the four major steps to determine your shared savings: STEP 1: Were Gross Savings Demonstrated? 1. Gross Savings Demonstrated 2. Quality Gate Passed 3. Earned Contribution Calculated 4. Overall Shared Savings Percentage Calculated In order to participate in shared savings, the Gross Savings must be demonstrated. For that to happen, your Medical Panel s MA Attributed Member population must demonstrate savings over the course of your Measurement Period. As described more fully in the Program Description; Section 8: Incentive Program - Medicare Advantage Business, Anthem will calculate Gross Savings by comparing the Measurement Period Medical Loss Ratio for your MA Attributed Member population for a specified 12 month Measurement Period to the established Medical Loss Ratio Target (MLRT). In the event that the MPMLR is less than the MLRT, the Gross Savings can be calculated. Ultimately, the Gross Savings is multiplied by your Shared Savings Percentage to calculate your shared savings payout. STEP 2: Quality Gate Did you pass the Quality Gate? Your provider organization must meet a minimum threshold of performance on the clinical quality measures in order to share a portion of the Gross Savings. That threshold, referred to as the Quality Gate, is based on each individual Stars Measure. Your provider organization s clinical quality score must meet or exceed a four Star rating for each measure in order to earn shared savings for that measure. Weighting Composites As mentioned above, the measures that form the composites contribute differently to the Shared Savings Potential depending on their weighting (Table 1). This same concept applies to the weighting of the composites that make up the scorecard. The Standard Measure Composite is weighted at 60% of the Shared Savings Potential. The Enhanced Measure Composite is weighted at 24% of the Shared Savings Potential. The Improvement Measure Composite is weighted at 16% of the Shared Savings Potential The composite weighting is determined by the sum of Shared Savings Potential for the measures in that composite, divided by the Maximum Shared Savings Potential. Table 1 illustrates the Shared Savings Potential for each measure and the percentage of each composite. 13 MA Version 010118

STEP 3: Earned Contribution Calculated Calculating the Composite Scores As mentioned above, there are three composites that are calculated for the scorecard, and the Quality Gate sits at each individual measure at 4 Stars or Level One. Minimum Member Threshold the minimum member threshold for all measures is 20, with the exception of the information only measures. These measures will have a Minimum Member Threshold of 5 members to allow the work your practice does with these members to be more accurately captured, rather than defaulting to the Medical Panel scoring. New for 2018 Tiered levels of Shared Savings There are two tiers of shared savings available. The levels are determined by the number of measures which meet the Quality Gate. Tier One shared savings is achieved when less than four (4) measures have met the Quality Gate Tier Two shared savings is achieved when four (4) or more measures have met the Quality Gate Below is an example using one Provider group in two different scenarios. In example A, the Provider passed the Quality Gate for three measures, in example B, that same Provider passes the Quality Gate for six measures. Please note that the weighting and Shared Savings Potential used in the examples below are only examples. Refer to Table 1, Measure Weighting and Shared Savings Potential for the details specific to your Measurement Period. 14 MA Version 010118

Example A: In example A, the Provider met the Quality Gate for three Measures at 5 Stars. Less than four measures means the Shared Savings Potential from Tier One is achieved. The Shared Savings Earned in this example is the sum of the Shared Savings Potential, for five Stars, in level onetier One which equals 7.44%. 3 measures have passed the Quality Gate Tier One - Less than 4 measures at QG Tier Two - 4 or more measures at QG SS % Earned Quality Gate Compliance Measure Rate Weight Four Star Five Star Four Star Five Star passed Diabetes Care: Eye Exam 5 Star 1 1.06 1.49 1.49 2.08 1.49 passed Diabetes Care: Kidney Disease Mntr 5 Star 1 1.06 1.49 1.49 2.08 1.49 Breast Cancer Screening 2 2.12 2.98 2.98 4.17 Colorectal Cancer Screening 2 2.12 2.98 2.98 4.17 Medication Adherence: Oral Diabetes 3 3.19 4.46 4.46 6.25 Medication Adherence: Hypertension 3 3.19 4.46 4.46 6.25 passed Medication Adherence: Cholesterol 5 Star 3 3.19 4.46 4.46 6.25 4.46 Diabetes/Statin 2 2.12 2.98 i 2.98 4.17 Rhumatoid Arthritis: Info Only 0 0.00 0.00 0.00 0.00 Osteoporosis: Info Only 0 0.00 0.00 0.00 0.00 Readmission Rate: info Only 0 0.00 0.00 0.00 0.00 COA: Medication Review: Info Only 0 0.00 0.00 0.00 0.00 COA: Funct. Status Assmt: Info Only 0 0.00 0.00 0.00 0.00 COA: Pain Screening: Info Only 0 0.00 0.00 0.00 0.00 Diabetes Care: Blood Sugar Controlled 1 1.06 1.49 1.49 2.08 Controlling High Blood Pressure 1 1.06 1.49 1.49 2.08 Adult BMI 1 1.06 1.49 1.49 2.08 Medication Reconciliation: Info Only 0 0.00 0.00 0.00 0.00 Persistent Condition Validation 3 3.19 4.46 4.46 6.25 Annual Comprehensive Physical Exam 1 1.06 1.49 1.49 2.09 Total SS % earned Max Shared Savings Potential 50.00 7.44% Example B: In example B, the Provider met the Quality Gate for six measures at 4 and 5 Stars, qualifying for Tier Two. The Shared Savings Earned in this example is 22.61%. 6 Measures have passed the Quality Gate Tier One - Less than 4 measures at QG Tier Two - 4 or more measures at QG SS % Earned Quality Gate Compliance Measure Rate Weight Four Star Five Star Four Star Five Star passed Diabetes Care: Eye Exam 5 Star 1 1.06 1.49 1.49 2.08 2.08 passed Diabetes Care: Kidney Disease Mntr 5 Star 1 1.06 1.49 1.49 2.08 2.08 Breast Cancer Screening 2 2.12 2.98 2.98 4.17 Colorectal Cancer Screening 2 2.12 2.98 2.98 4.17 Medication Adherence: Oral Diabetes 3 3.19 4.46 4.46 6.25 passes Medication Adherence: Hypertension 4 Star 3 3.19 4.46 4.46 6.25 4.46 passed Medication Adherence: Cholesterol 5 Star 3 3.19 4.46 4.46 6.25 6.25 Diabetes/Statin 2 2.12 2.98 ti 2.98 4.17 Rhumatoid Arthritis: Info Only 0 0.00 0.00 0.00 0.00 Osteoporosis: Info Only 0 0.00 0.00 0.00 0.00 Readmission Rate: info Only 0 0.00 0.00 0.00 0.00 COA: Medication Review: Info Only 0 0.00 0.00 0.00 0.00 COA: Funct. Status Assmt: Info Only 0 0.00 0.00 0.00 0.00 COA: Pain Screening: Info Only 0 0.00 0.00 0.00 0.00 Diabetes Care: Blood Sugar Controlled 1 1.06 1.49 1.49 2.08 Controlling High Blood Pressure 1 1.06 1.49 1.49 2.08 passed Adult BMI 4 Star 1 1.06 1.49 1.49 2.08 1.49 Medication Reconciliation :Information Only 0 0.00 0.00 0.00 0.00 passed Persistent Condition Validation 5 Star 3 3.19 4.46 4.46 6.25 6.25 Annual Comprehensive Physical Exam 1 1.06 1.49 1.49 2.09 Total SS % earned Max Shared Savings Potential 50.00 22.61 15 MA Version 010118

COMPOSITE SCORING STANDARD and ENHANCED MEASURES: Step 1. Calculate compliance rate for each measure. Each measure is calculated by identifying the compliance rate for providers Medicare Advantage Attributed Members eligible for that measure. The compliance rate is the numerator (the number compliant with measure) for each of the measures divided by the denominators (eligible population). In order to be measured for compliance, your practice must have at least 20 members qualify for that measure. If you do not, the measure will default to the Medical Panel Level. Step 2. Compare compliance rate to measure benchmark to assign Star rating achieved. The compliance rate is compared to the benchmarks to assign a Star rating achieved for each measure. Step 3. Identify earned shared savings contribution for each measure. If the compliance rate achieved meets the Quality Gate of 4 Stars or better, shared savings will be earned. Step 4. Sum the total of shared savings earned for all measures in the standard and enhanced composites. After the percentage of earned contribution for each measure is determined, the shared savings earned is calculated by summing the earned contribution across all measures within the composite. Example: Diabetes Care: Kidney Disease Monitoring The compliance rate is 970 divided by 1000 for 97% compliance. When compared to the 4 and 5 Star Benchmarks, the Provider scores a 4 Star ranking for that measure. Depending on the overall number of measures that meet the Quality Gate, the Provider will either achieve Tier One or Tier Two of shared savings. For this example we are assuming Tier Two. The Provider has earned 1.43% Shared Savings for this measure. The Shared Savings earned will be added up for each measure that passes the Quality Gate and will be the total for the Standard and Enhanced Shared Savings Earned. M COMPLIANCE- determined by the Benchmarks - CMS LEVEL ONE SHARED LEVEL TWO SHARED POTENTIAL Denominat Compliance Shared Saving e MEASURES - STANDARD AND ENHANCED Numerator 4 Stars 5 Stars Tier One Tier Two or Rate Earned t eproposed 2018 Measures Benchmarks 4 Star SS 5 Star SS 4 Star SS 5 Star SS Quality Gate STEP 1 STEP 2 STEP 3 STEP 4 Diabetes Care Eye Exam 725 1000 72.50% 75.00% 82.00% 1.02 1.43 1.43 2.00 4 Stars Diabetes Care: Kidney Disease Mntr 970 1000 97.00% 96.00% 99.00% 1.02 1.43 1.43 2.00 1.43 4 Stars Breast Cancer Screening 620 1000 62.00% 69.00% 76.00% 2.04 2.86 2.86 4.00 4 Stars Colorectal Cancer Screening 720 1000 72.00% 71.00% 87.00% 2.04 2.86 2.86 4.00 2.86 4 Stars Medication Adherence: Oral Diabetes 840 1000 84.00% 83.00% 85.00% 3.06 4.28 4.28 6.00 4.28 4 Stars Medication Adherence: Hypertension 870 1000 87.00% 83.00% 87.00% 3.06 4.28 4.28 6.00 6.00 4 Stars Medication Adherence: Cholesterol 700 1000 70.00% 81.00% 87.00% 3.06 4.28 4.28 6.00 4 Stars Diabetes/Statin 760 1000 76.00% 78.00% 80.00% n 2.04 2.86 n 2.86 4.00 4 Stars COA: Medication Review: Info Only 700 1000 70.00% 56.00% 60.00% 0.00 0.00 0.00 0.00 0.00 N/a COA: Funct. Status Assmt: Info Only 679 1000 67.90% 67.00% 70.00% 0.00 0.00 0.00 0.00 0.00 N/a COA: Pain Screening: Info Only 860 1000 86.00% 87.00% 89.00% 0.00 0.00 0.00 0.00 N/a Rhumatoid Arthritis: Info Only 450 1000 45.00% 56.00% 65.00% 0.00 0.00 0.00 0.00 N/a Osteoporosis: Information Only 750 1000 75.00% 75.00% 85.00% 0.00 0.00 0.00 0.00 0.00 N/a Readmission Rate: Information Only 680 1000 68.00% 68.00% 78.00% 0.00 0.00 0.00 0.00 0.00 N/a Diabetes Care: Blood Sugar Controlled 840 1000 84.00% 81.00% 84.00% 1.02 1.43 1.43 2.00 2.00 4 Stars Controlling Blood Pressure 600 1000 60.00% 75.00% 82.00% 1.02 1.43 1.43 2.00 4 Stars Adult BMI 900 1000 90.00% 90.00% 96.00% 1.02 1.43 1.43 2.00 1.43 4 Stars Medication Reconciliation: Info Only 300 1000 30.00% 50.00% 55.00% 0.00 0.00 0.00 0.00 N/A 18.00 16 MA Version 010118

COMPOSITE SCORING IMPROVEMENT MEASURES Persistent Condition Validation: Example shown below: Calculation: 1. Each month the PCV % will be calculated. The PCV% represents the percentage of Medicare Advantage Member HCC s that by nature persist from year to year, and have been re-validated during the current year and submitted on a claim received by [Legal Entity Title] and noted in the medical record following an office visit with the Attributed Medicare Advantage Member.. 2. The Persistent Condition Validation Percentage will be compared to the benchmarks for the measure and if the percentage falls within the benchmarks, the shared savings associated with that benchmark will be earned. This measure will increase during the year as claims are received. Annual Comprehensive Exam: Example shown below: Calculation: 1. Each month the percentage of your Attributed Medicare Advantage Members who have been seen for a comprehensive Annual Wellness Exam will be calculated. The denominator will be all Attributed Medicare Advantage Members and the numerator will be all Attributed Medicare Advantage Members for whom [Legal Entity Title] has received a claim during the Measurement Period. 2. The percentage will be compared to the benchmarks for the measure and if the percentage falls within the benchmarks, the shared savings associated with that benchmark will be earned. This measure is likely to increase during the year as claims are received.. Example: Improvement Composite Examples for PCV % and Annual Wellness Exam Visit. In this example, the PCV % is 72%, when compared to the benchmarks, and Level One is met. For this example, we are assuming that the Provider has passed the Quality Gate for four or more measures and has reached Tier Two Shared Savings Potential. Level 1, Tier Two is 2.86% Shared Savings Earned. The same logic applies to the Annual Comprehensive Physical measure, with 1.43% being earned in shared savings. COMPLIANCE- WEIGH LEVEL TWO SHARED SAVINGS POTENTI STEP 1- identify PCV and Annual Wellness Visit Percentages STEP 2 - compare compliance rate to the benchmarks for the various levels STEP 3 - Determine the SS earned depending on the benchmark achieved and the level of shared Savings. In this example, Tier Two is being assumed. e Persistent Condition Validation Level 1 Level 2 Weight Tier One Tier Two SS earned 72.00% 70% 80% 3 2.04 2.86 2.86 4.00 2.86 Level 1 Quality Gate e Annual Comprehensive Physical Exam Level 1 Level 2 Level 3 Tier One Tier Two 65.00% 55% 65% 80% 1 0.73 1.02 1.43 1.02 1.43 2.00 1.43 Level 1 17 MA Version 010118

STEP 4: Overall Shared Savings is calculated by adding the total of shared savings earned for each measure in which the Quality gate was passed. In the example above, the Quality Gate was for a total of 12 measures. Some did not have shared savings attached to them because they are information only, others reach 4 or 5 Star ranking or Level Two scoring for the Improvement Measures. The Total Shared Savings Earned in this example is the sum of all of those for 23.71%. M e t MEASURES - STANDARD AND ENHANCED r i c N e Compliance Rate 4 Stars 5 Stars Tier One Shared Savings Potential Less than 4 measures Tier Two Shared Savings Potential 4 or more measures Proposed 2018 Measures Benchmarks 4 Star SS 5 Star SS 4 Star SS 5 Star SS STEP 1 STEP 2 STEP 3 STEP 4 Diabetes Care: Eye Exam 72.50% 75.00% 82.00% 1.02 1.43 1.43 2.00 4 Stars Diabetes Care: Kidney Disease Mntr 97.00% 96.00% 99.00% 1.02 1.43 1.43 2.00 1.43 4 Stars Breast Cancer Screening 62.00% 69.00% 76.00% 2.04 2.86 2.86 4.00 4 Stars Colorectal Cancer Screening 72.00% 71.00% 87.00% 2.04 2.86 2.86 4.00 2.86 4 Stars Medication Adherence: Oral Diabetes 84.00% 83.00% 85.00% 3.06 4.28 4.28 6.00 4.28 4 Stars Medication Adherence: Hypertension 87.00% 83.00% 87.00% 3.06 4.28 4.28 6.00 6.00 4 Stars Medication Adherence: Cholesterol 70.00% 81.00% 87.00% 3.06 4.28 4.28 6.00 4 Stars Diabetes/Statin 76.00% 78.00% 80.00% n 2.04 2.86 n 2.86 4.00 4 Stars Rhumatoid Arthritis: Info Only 70.00% 56.00% 60.00% 0.00 0.00 0.00 0.00 0.00 N/A Osteoporosis: Info Only 67.90% 67.00% 70.00% 0.00 0.00 0.00 0.00 0.00 N/A Readmission Rate: info Only 86.00% 87.00% 89.00% 0.00 0.00 0.00 0.00 N/A COA: Medication Review: Info Only 45.00% 56.00% 65.00% 0.00 0.00 0.00 0.00 N/A COA: Funct. Status Assmt: Info Only 75.00% 75.00% 85.00% 0.00 0.00 0.00 0.00 0.00 N/A COA: Pain Screening: Info Only 68.00% 68.00% 78.00% 0.00 0.00 0.00 0.00 0.00 N/A Diabetes Care: Blood Sugar Controlled 84.00% 81.00% 84.00% 1.02 1.43 1.43 2.00 2.00 4 Stars Controlling Blood Pressure 60.00% 75.00% 82.00% 1.02 1.43 1.43 2.00 4 Stars Adult BMI 90.00% 90.00% 96.00% 1.02 1.43 1.43 2.00 1.43 4 Stars Medication Reconciliation: Info Only 30.00% 50.00% 55.00% 0.00 0.00 0.00 0.00 N/A Level 1 Level 2 ewpersistent Condition Validation 72.00% 70% 80% 3.06 4.28 4.28 6.00 4.28 Level One Level 1 Level 2 Level 3 ewannual Comprehensive Physical Exam 65.00% 55% 65% 80% 1.02 1.43 1.43 2.00 1.43 Level One Shared Saving Earned Quality Gate Total Shared Savings Earned 23.71 18 MA Version 010118

Benchmarks for 2018 Standard 1.0 Stars 2.0 Stars 3.0 Stars 4.0 Stars 5.0 Stars Diabetes Care Eye Exam <47% 47% 59% 72% 81% Diabetes Care Kidney Disease Monitoring <92% 92% 94% 96% 98% Osteoporosis Management in Women Who H <24% 24% 42% 52% 71% Rheumatoid Arthritis Management <65% 65% 72% 78% 86% Breast Cancer Screening <56% 56% 70% 78% 84% Colorectal Cancer Screening <54% 54% 63% 72% 80% Medication Adherence- Diabetes <72% 72% 78% 81% 86% Medication Adherence- Hypertension <74% 74% 78% 82% 85% Medication Adherence- Cholesterol <66% 66% 76% 80% 85% Diabetes/Statin <73 73% 75% 78% 80% COA: MedicationReview <59% 59% 79% 88% 93% COA: Functional Status Assessement <46% 46% 67% 78% 92% COA: Pain Assessement <40% 40% 62% 80% 94% Readmission Rate <18% 18% 11% 9% 6% Enhanced 1.0 Stars 2.0 Stars 3.0 Stars 4.0 Stars 5.0 Stars Adult BMI Assessment <72 72% 81% 94% 98% Diabetes Care Blood Sugar Controlled <40 40% 64% 73% 80% Controlling Blood Pressure <55 55% 67% 75% 86% Medication Reconciliation Post Discharge <19 19% 37% 55% 68% Improvement Measures Level One Level Two Persistent Condition Validation 75% 80% Level One Level Two Level Three Annual Wellness Exam 55% 65% 80% 19 MA Version 010118

Measure Member Description Requirements Codes Adult BMI Assessment (ABA) Medicare Health Plan Rating Measure 18-74 year old members BMI documented during the measurement year or the year prior to the measurement year: BMI: date and result Weight: date and result Note: For patients age 18-19 on date of visit, a height, weight & BMI percentile must be recorded. BMI: ICD-10-CM: Z68.1, Z68.20-Z68.39, Z68.41- Z68.45 BMI Percentile: ICD-10-CM: Z68.51-Z68.54 Outpatient Visits: CPT : 99201-99205, 99211-99215, 99241-99245, 99341-99345, 99347-99350, 99381-99387, 99391-99397, 99401-99404, 99411, 99412, 99429, 99455, 99456 HCPCS: G0402, G0438, G0439, G0463, T1015 UB Revenue: 0510-0517, 0519-0523, 0526-0529, 0982, 0983 Exclusions: Pregnancy Breast Cancer Screening (BCS) Women 50 74 years of age One or more mammograms any Mammography: time on or between October 1 two years prior to the measurement CPT : 77055, 77056, 77057, 77061-77063, 77065-77067 year and December 31 of the HCPCS: G0202, G0204, G0206 measurement year. UBREV: 0401, 0403 Exclusions: Members who have had a bilateral mastectomy or two unilateral mastectomies during any time in the member s history can be excluded. Absence of Right Breast - ICD-10: Z90.11 Absence of Left Breast ICD-10: Z90.12 History of Bilateral Mastectomy ICD-10: Z90.13 Unilateral Mastectomy CPT : 19180, 19200, 19220, 19240, 19303-19307 Unilateral Mastectomy Right - ICD10 PCS: 0HTT0ZZ Unilateral Mastectomy Left - ICD10 PCS: 0HTU0ZZ Bilateral Mastectomy ICD-10 PCS: 0HTV0ZZ Right/Left Modifier: RT/LT Bilateral Modifier: 50, 09950 20 MA Version 010118

Measure Member Description Requirements Codes Colorectal Cancer Screening (COL) Medicare Health Plan Rating Measure 50-75 year old members Documentation (date and result) of one or more of these screenings: Colonoscopy during measurement year or 9 years prior; FOBT during measurement year; CT Colonography during measurement year or 4 years prior: FIT-DNA test during measurement year or 2 years prior Flexible Sigmoidoscopy during measurement year or 4 years prior Exclusions: Diagnosis of colorectal cancer Total Colectomy Colonoscopy: CPT : 44388-44394, 44397, 44401-44408, 45355, 45378, 45379, 45380-45393, 45398 HCPCS: G0105, G0121 FOBT: CPT : 82270, 82274 HCPCS: G0328 LOINC: 12503-9, 12504-7, 14563-1, 14564-9, 14565-6, 2335-8, 27396-1, 27401-9, 27925-7, 27926-5, 29771-3, 56490-6, 56491-4, 57905-2, 58453-2, 80372-6 CT Colonography: CPT : 74261-74263 FIT-DNA: CPT : 81528 HCPCS: G0464 LOINC: 77353-1, 77354-9 Flexible Sigmoidoscopy: CPT : 45330-45335, 45337-45342, 45345-45347, 45349-45350 HCPCS: G0104 Exclusions: Colorectal Cancer: ICD-10-CM: C18.0 C189.9, C19- C20, C21.2, C21.8, C78.5, Z85.038, Z85.048 HCPCS: G0213-G0215, G0231 Total Colectomy: ICD-10-PCS: 0DTE0ZZ, 0DTE4ZZ, 0DTE7ZZ, 0DTE8ZZ CPT : 44150-44153, 44155-44158, 44210-44212 21 MA Version 010118

Care for Older Adults (COA) 1. Medication review 2. Functional status assessment 3. Pain assessment Members 66 years and older during the measurement year Documentation of each of the following during the measurement year: Medication review Functional status assessment Pain assessment Medication Review: CPT : 90863, 99605, 99606 CPT-CAT-II: 1159F, 1160F HCPCS: G8427 Functional Status Assessment: CPT-CAT-II: 1170F Pain Assessment: CPT-CAT-II: 1125F, 1126F TCM 7 Day: CPT : 99496 TCM 14 Day: CPT : 99495 22 MA Version 010118