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Dual Eligible and Managed Care Contracting

AAHCM May, 2015

Christopher Van AntwerpDirector, Managed Care ContractingUS Medical ManagementNo Disclosures

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Change

The Medicare-eligible population is shifting

Medicare Advantage Plans represent 30% of total

From 2010 to 2013 there was a 28% increase in MA enrollment

CBO predicts another 30% in growth by 2020

Duals plans will have up to 2M patients

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Race to the Bottom

Valu

e B

ase

d R

eim

burs

em

ent

Low Risk

High Risk

Status QuoFFS P4P

Gain Share

Risk Share

Incentives

Capitation

Time

Effi

cient

Care

Deliv

ery

High QualityEvidence BasedBest PracticeInnovation

X

Y1 Y2

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So What is Different?

Consumerism

Out-of-pocket spending on the rise

Exchanges allow people to shop

Transparency compares providers on price

Hospitals move toward market share protection and growth

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Managed Care Organizations Change

ACA Brings New Forces

Mandated benefits and limits on underwriting

Quality goals – HEDIS and Stars

Member satisfaction becomes paramount

Diversity of network offerings a necessity

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Duals Plans – MCO Perspective

Three party contract

Enrollment

Opt-in followed by passive

Not as many as hoped

Enhanced benefits – dental, vision, hearing, palliative care

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Duals Plans – Financing (one state example)

Capit

ate

d R

educt

ion t

o M

CO

Yr1 Yr2 Yr3

1%

3%

5%

Baseline

New Baseline?Yearly WithholdIncentive payment

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Contracting with MCOs

Giving us leverage

Their focus has changed

Cost pressure is huge

Patient satisfaction matters like never before

Hospitals looking to reduce utilization

Change is good

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Negotiation - what is different?

Partnerships

MCOs need help

Old school negotiation is out

Risk is back in (but doesn’t need to be complex)

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Negotiation – who is best to speak to?

CEOCFOVP MedicareAdvantage

CMOContractorProviderRepresentative

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Negotiation - what do MCOs like?

Healthcare is local

1. Relationships, Relationships, Relationships2. Market share3. Cost reduction results4. Patient satisfaction5. Delivery on quality metrics6. You maximize your current contracts7. You are part of the larger picture8. You talk their language

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Negotiation - Preparation

1. What do you want and what do you need?2. Research the MCO3. Expect the results you want4. On specific terms: What can you justify? What is your

floor?5. What can’t you give away? What can you trade? What is

in your pocket?6. Test it with a colleague and discuss technique

7. Data8. Use time and control environment9. Leverage their competition and bureaucracy10. What is your limit and how will other people to help?

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Negotiation

1. It is all about the patient and the business – it is not all about you

2. Keep it professional3. Try not to burn relationship equity, but

know that you might have to4. Ask a ton of questions – expose their limits5. Keep track of what is on the table and what is off the

table6. Change conflict into problem solving7. Time can be a good thing8. Be creative

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Questions?

Christopher Van AntwerpDirector, Managed Care ContractingUS Medical Managementcvanantwerp@usmmllc.comUSMMLLC.com