When appropriately designed, the current shift to value-based reimbursement allows healthcare organizations to compete based on their ability to provide high quality and low-cost care that patients value. To address this challenge many healthcare organizations have successfully developed programs designed to deliver this type of high-value care. These programs typically focus on the needs of a specific segment of a patient population. The most successful programs are artfully crafted to address clinician preferences for providing outstanding care, patient desires for convenience and affordability, and detailed nuances of payment contracts to optimize reimbursement. The complexities of value-based healthcare reimbursement provide tremendous opportunities for organizations that develop thoughtful strategies to provide highly demanded care in a financially sustainable structure. In this workshop, we will interactively review case studies of innovative healthcare programs that have effectively created higher quality care and improved financial outcomes. This discussion will illustrate the concrete steps to develop programs and innovations that will enable your organization to thrive in a value-based environment. AGENDA Define value, common reimbursement arrangements and critical reimbursement levers Discuss the types of risk associated with each reimbursement arrangement Case studies that examine real-world examples of opportunity, revenue impact, and expense impact SPEAKERS Mason Roberts, ASA, MAAA, MBA, Associate Actuary Stoddard Davenport, Healthcare Management Consultant Nick Creten, FSA, MAAA, Consulting Actuary

1. Thriving in a Value
Based Health
Environment
Mason Roberts, Stoddard Davenport, and Nick Creten
December 12, 2017

2. Caveats
This presentation is intended solely for the original presentation participants and may
not be distributed to any other party. Milliman does not intend to create a liability to third
party recipients of its work. This material relies on information available as of
12/12/2017 and may become outdated as regulations and other events change.
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3. Presenters
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Mason RobertsStoddard Davenport Nick Creten

4. Agenda
 Define value
 Common reimbursement arrangements
 Critical reimbursement levers
 Case Study – Denver Health
 Background
 Potential Opportunities
 Common reimbursement arrangements
 Critical reimbursement levers
 Additional Case Studies
 Value based success nuances
 Examples of opportunity, revenue impact, and expense impact
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5. Today’s Theme
Value-based reimbursement affords providers the
opportunity to improve care delivery AND be
compensated for these improvements
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6. What is Value?
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 Starts with a contract!
 Contractual agreement to reimburse based on value provided
 Ways to define value as a commodity
 Difficult to reimburse on outcomes
 Instead, define value to promote better outcomes
 Quality, process improvements, etc.

7. Opportunities for Change
 Behavioral Health and Substance Abuse
 Complex/High-Risk Patient Targeting
 Community Resource Planning and Prevention
 Disease-Specific
 Hospital-Setting
 Primary Care Redesign
 Shared Decision Making and Medication Management
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8. IHI Model to Improve Care
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9. Value Based Reimbursement Structures
 Each payment model is exposed to risk in different ways
 Fee for Service
 Global capitation
 Shared Savings
 DRG/case rates and bundled payments
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10. Key Reimbursement Levers and Considerations
 Fee for Service
 Utilization
 Cost per service
 Aggregate cost: Per member per month (PMPM)
 Quality adjustments
 Penalties
 CMS program examples
 Readmission reduction program
 Hospital acquired condition reduction program
 MIPS
 Quality, practice improvement, utilizing care information,
 Risk adjustment
 Care management fees
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11. MIPS Quality Measures
 Quality Measures
 Improvement Activities Measures
 Advancing Care Information Measures
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MEASURE NAME MEASURE DESCRIPTION MEASURE ID
PERFORMANCE
SCORE WEIGHT
Clinical Data Registry
Reporting
The MIPS eligible clinician is in active engagement to submit data to a clinical data registry.
Earn a 5 % bonus in the advancing care information performance category score for
submitting to one or more public health or clinical data registries.
ACI_PHCDRR_5 Up to 5%
Clinical Information
Reconciliation
For at least one transition of care or referral received or patient encounter in which the MIPS
eligible clinician has never before encountered the patient, the MIPS eligible clinician
performs clinical information reconciliation..
ACI_HIE_3 Up to 10%
ACTIVITY NAME ACTIVITY DESCRIPTION ACTIVITY ID SUBCATEGORY NAME
ACTIVITY
WEIGHTING
Additional improvements in
access as a result of QIN/QIO TA
As a result of Quality Innovation Network-Quality Improvement
Organization technical assistance, performance of additional
activities that improve access to services
IA_EPA_4 Expanded Practice Access Medium
Administration of the AHRQ
Survey of Patient Safety Culture
Administration of the AHRQ Survey of Patient Safety Culture and
submission of data to the comparative database
IA_PSPA_4
Patient Safety And Practice
Assessment
Medium
Measure Title NQF
Quality
ID
Measure Description Measure Type
Diabetes: Hemoglobin A1c (HbA1c)Poor Control (>9%) 59 001
Percentage of patients 18-75 years of age with diabetes who had
hemoglobin A1c > 9.0% during the measurement period.
Intermediate
Outcome
Heart Failure (HF): Angiotensin-Converting Enzyme
(ACE) Inhibitor or Angiotensin Receptor Blocker (ARB)
Therapy for Left Ventricular Systolic Dysfunction
(LVSD)
81 005
Percentage of patients aged 18 years and older with a diagnosis of heart
failure (HF) with a current or prior left ventricular ejection fraction (LVEF) <
40% who were prescribed ACE inhibitor or ARB therapy either within a 12
month period when seen in the outpatient setting OR at each hospital
discharge
Process

12. Example 1: Denver
Health

13. Denver Health 21st Century Care:
Health Care Innovation Award
 Background:
 Denver Health is an integrated, academic safety-net delivery system and the largest provider
of Medicaid and uninsured services in Colorado
 The Center for Medicare and Medicaid Innovation (CMMI) awarded Denver Health's
integrated, safety net health care system $19.8 million to implement a "population health"
approach into the delivery of primary care.
 The major practice transformation builds on the Patient Centered Medical Home to achieve
the Triple Aim.
 Target Population: Entire patient population, with initial outcome measurements for adult
Medicaid and Medicare beneficiaries.
13Source: http://www.ihi.org/Engage/Initiatives/TripleAim/Pages/TripleAimReady.aspx

14. Denver Health 21st Century Care: Analytics
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START =
Create a team
Choose
population
Develop rules
Evaluate tiers
Develop care
models by tier
Identify
individuals for
care model
Develop
workflows
Monitor &
evaluate
Model For Improvement
GOAL
Better meet patients’
medical, behavioral, and
social needs
MEASURE
-Patient experience
-Quality of care
-Cost of care
CHANGE
Use population health
strategies and predictive
modeling to match
resources to patients’
needs

15. Denver Health 21st Century Care:
Segmentation Approach
 Tiered population health approach to
primary care
 All patients (tiers 1-4) were provided
“usual care” medical home services,
complemented by new, optional
electronic messaging reminders
 Expanded primary care staffing to
include new team members to include
new team members to provide disease
management, care transition, and
patient navigation services (tiers 2-4).
 More comprehensive multidisciplinary
care management support was
available to complex patients (Tiers 3-
4) during and between visits.
 For tier 4, separate high-intensity clinics
were established for targeted
subpopulations.
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16. Denver Health 21st Century Care:
Clinical Enhancements
 Enhanced clinical services through
redesigned health teams
 Clinical pharmacists
 Behavioral health consultants
 RN care coordinators
 Patient navigators
 Social workers
 Specialized high intensity teams
 Patient navigators worked to ensure
responsibility standardization and
dissemination so that other practitioners
could learn how to best utilize their new
coworkers.
 Patients were no longer restricted to one
professional per visit
 Enhanced ability to clear social hurdles to
care
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Source: http://www.lpfch.org/sites/default/files/simon_hambidge_symposium_slides.pdf

17. Denver Health 21st Century Care: Results
 Program reach:
 Improvement in patient experience metrics
 DH achieved a cumulative $15.8 million (1.7%) reduction in the total cost of care for its
adult Medicaid and Medicare populations across the two program implementation
periods (26 months).
 Saw large savings in tier 4 ($22.4 million) partially offset by an increase in spending in
tier 2.
 Outcome measurements for pediatric population are pending
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Tier Reached by DH interventions
Tier 1 1.4%
Tier 2 12.9%
Tier 3 24.6%
Tier 4 56.4%
Source: http://www.ajmc.com/journals/ajac/2017/2017-vol5-n3/population-health-in-primary-care-cost-quality-and-experience-impact?p=1

18. Additional Examples
• Consider the best opportunities for value-based
success example structures
• Consider the best examples of impacts of
reimbursement levers and expense impacts

19. Example 2: Identifying Depression
Problem:
 Depression often goes
undiagnosed for years, and
drives up costs for at least 2
years prior to diagnosis
 Depression significantly
increases the impact of other
health conditions
Solution:
 Identify members that are at
high risk for depression but
have not yet been diagnosed
 Start treating depression
sooner
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Source: http://us.milliman.com/uploadedFiles/insight/Research/health-rr/pdfs/cost-of-undiagnosed-depression.pdf

20. Example 3: ER Frequent Fliers
Problem: High ER
utilization
Solution: Identify patients
likely to incur ER visit or IP
admit
Example: Community
Resource Planning and
Prevention HCIA Awards
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21. Example 4: Diabetes Management
Problem: Diabetes
progression
associated with
failure of each of the
Triple Aims
Solution: Tier risks
of patients with
diabetes and identify
those likely to
migrate to higher
risk
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22. Diabetes: Clinical Risk Progression
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Diet & Exercise
Maintenance
Insulin Maintenance
Single Comorbidity
Multiple Comorbidities

23. Social Determinants of Health
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75% Exercise
64% Diet
52% Employment
Assistance
49% Education
43% Housing

24. Example 5: Transportation
Problem: Patient
unable to adhere to
treatment plans
leading to decrease
in health outcomes
and increased cost
Solution: Provide
non-emergency
transportation to
patients without
access
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25. Example 6: Violence
Problem: Violence
leads to increased
ER utilization
Solution: Community
partnerships and
intervention
programs
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26. Example 7: Hunger
Problem: Hunger
has adverse impact
on obesity, asthma,
and hypertension
Solution: Create a
multipronged
strategy to meet the
needs of your
community
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27. Thank you for attending
Value-based reimbursement affords providers the
opportunity to improve care delivery AND be
compensated for these improvements
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Mason Roberts
mason.roberts@milliman.com
303-672-9083
Stoddard Davenport
stoddard.davenport@milliman.com
303-672-9007
Nick Creten
nick.creten@milliman.com
303-672-9012