A better state of health careOur Enhanced Personal

A better state of health careOur Enhanced Personal Health Care payment innovation model AUGUST 20, 2014 1 Welcome Todays presentation will begin shortly. In order to hear the audio for this presentation, please turn up your speakers. If you would rather use a toll free dial in number and access code, click on the Info tab above this presentation in the upper-left hand corner of your screen. All lines have been placed on mute. If youd like to ask a question, please use the Q&A window on the right A copy of this presentation is available on Time Well Spent. Access the URL for your state: CA: http://timewellspent-ca.anthem.com NY: http://timewellspent.empireblue.com GA: http://timewellspent.bcbsga.com/ All other states: http://timewellspent.anthem.com/ 2 We are Leading the Charge to Transform the System Introduction of Value-Based Payment Fee-for-Service

Without value-based payment Healthcare Costs Drivers of Cost Fragmentation With value-based payment Lack of accountability & coordination Bending the Cost Curve Narrower focus of providers Aligned reimbursement Empower with data Invest in practice transformation Waste; repetitive units 1960

40 years of FFS Today 3 3 National Blue Footprint Blue Distinction Total Care PCMHs in 48 Patient-Centered Medical States Home programs in 48 states, including D.C. and Puerto Rico ACOs in 41 Accountable Care States Organizations in 41 states 12 million members participating in

PCMH/ACO care delivery models 130,0 Participating 00 ACO/PCMH providers Beginning in 2015 all Blue Plans will use a common data exchange platform (Blue Distinction Total Care) to recognize resident BlueCard members in the host plan payment innovation programs. 4 $65 in Blue claims spend billion is tied to ALL valuebased payment programs 4 Common building blocks to drive transformation Driving change by rewarding and empowering PCPs

PAYMENT INNOVATION moving from volume to value-based payment models. DATA AND INSIGHTS we empower providers by providing information, tools, practice support and resources to thrive under an outcome-based compensation model. POPULATION HEALTH PERSONALIZED CARE PLANS promoting accountability and care coordination across the healthcare continuum to improve the overall health of the population. we are providing the tools

and strategies to help strengthen the doctorpatient relationship, even outside of office visits. 5 5 Information Standard reports and advanced analytics Risk stratification Identifying gaps in care Avoidable ER use Brand vs. prescription drugs Interpretive guidance Empowering Providers Tools Information Sharing Toolkits for Enhanced Care Management Practice Advisor tool by the American College of Physicians for PCMH evaluation MMH+ Advanced Longitudinal Patient Record Resources Dedicated local Anthem resources with hands-on assistance for practices. Help with use of the new data, reports, and

tools and support practice transformation Guidance on appropriate toolkits and Anthem Care Management resources We will meet providers where they are and help them move forward 6 6 Foundation: Defining the Population Attribution is the method we use to identify the providers patient population It is the foundation for clinical coordination payments as well as shared savings calculations and payments. There are two processes used for attribution depending on the product type: Open Access Products (PPO) Attribution is based on: historical claims data incurred in a 24-month period Products Requiring PCP Selection

Attribution is based on: covered individuals selection during a 12-month period 7 7 Clinical Coordination Payments Clinical coordination payments compensate primary care providers for work such as preparing care plans for patients with multiple and complex chronic conditions, maintaining health registries, and following up with patients to ensure they understand and are following their treatment plan These activities improve health and reduce costs Upfront PMPM payments enable PCPs to invest in supporting infrastructure (outreach staff, IT) and transform their practices to manage the health of their patients While a new form of payment for the physicians receiving them, these payments are included in our unit cost forecasts and are managed just like we manage fee schedule adjustments today 8 8 Provider Performance Payments (shared savings) Shared savings applies in all of our Enhanced Personal Health Care arrangements. These payments reward PCPs when they successfully manage the

quality and overall health care costs for their patient population Quality metrics met Savings achieved Provider group qualifies for shared savings payment Amount of shared savings payment based on: Scores on quality of care and either utilization and/or patient engagement metrics both designed to measure the impact of PCP activity. Total amount of savings calculated during the measurement period 9 9 How will ASO Customers Fund Provider Performance Payments? We will charge ASO customers a uniform, per-attributed member per-month (PaMPM) amount that we actuarially determine will cover shared savings payments. Because the cost of care varies by market and each program rolls out at a different time within each market the PaMPM will vary by program and by market to align with their unique expectations for that year. The PaMPM will be updated from year to year based on our experience and projections.

The shared savings payment will appear on invoices alongside clinical coordination payments, listed under other provider payments. All funds collected will be used to pay shared savings payments to providers. Customers do not need to accrue anything. 10 10 What kind of savings might customers experience? We estimate that in their first year of participation, providers will generate savings that produce 1%-2% lower than projected medical spend, increasing to a cumulative 8% by their third year of participation. The evidence tells us that patient-centered care saves money in several ways: Better management of chronic conditions like diabetes and asthma and better access to care resulting in reduced admissions and ER visits Care based on the best available clinical evidence reducing waste in the system. Value-based decisions by physicians, such as higher rates of generic drug substitutions, lowering the overall cost of prescription drugs. Many factors, including the number of patients attributed to participating providers, and the length of time each provider has been participating in the program impacts the savings projections for any one customer. 11

11 Preliminary results Enhanced Personal Health Care $8.75 PaMPM (2%) savings over first 3 quarters1 Trends from providers indicate they are changing their practice behaviors. Increased rates of provider visits post discharge Significant increase in referral to preferred lab arrangements (NY, NH, VA and OH) Significant decrease in the number of the low intensity (potentially avoidable) ER visits (VA & OH) 1 Greater number of weekend visits for attributed members Improvement in Inpatient and ER utilization

12 Gross savings before provider gain share. Performance period (4/1/13 12/31/13). Per attributed member per month. Providing timely and evolving data on: Measure the merits with value-based reporting. Projected participation and savings Quality, cost and patient experience Targeted populations for improvement 13 Proposed Value Based Reporting Roadmap Anticipated Delivery Comment Contracting Network Evolution

Available Report on number of in-networks providers under an Enhanced Personal Health Care contract Demographic Reports Demographic Summary Available Demographic profile of members attributed to Enhanced Personal Health Care Non-Attributed Members Available Breakdown of members not attributed to a provider Invoice Backup Available Provides back up of ASO invoice at subgroup and member level

Panel Performance Available Report at intersection of provider panel and ASO customer Trend Management Q42014 Report on financial metrics Available Report on clinical and quality metrics Q42014 Report on utilization metrics Financial Reports Program Overview clinical/ Value Reports quality Program Overview Utilization

Value reports supplement current client reporting Identifies members that could be targeted Quarterly reports at the customer level State and industry level reports available Reports are actionable, timely, and evolving Metrics span quality, utilization and cost Future reports will include provider transformation 14 and patient experience 14 Coming soon Program enhancements New financial value reporting Benefit steerage Beginning in Q4 2014, in addition to the clinical value reports we offer, a new suite of financial value reports will show you what these programs mean to you and your bottom line. 2014

Q4 - Group level financial value reports Subject to change 2015 Enhanced Personal HealthCare fully integrated into Blue Distinction Total Care 2016 Introduction of benefits steerage around Blue Distinction Total Care 15 15 Questions? 16 16

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