Next Generation ACO Models Legal and Operational Design

Outline The CMS Next Gen ACO Model I. III. IV. Core Principles Scope Legal

I. Core Principles • Protect Original Medicare beneficiaries’ freedom of choice • Engage beneficiaries

I. Core Principles (cont’d) • Utilize prospectively-set benchmarks – Reward quality; – Reward improvement

I. Core Principles (cont’d) • Mitigate fluctuations in aligned beneficiary populations • Smooth cash

II. Scope Next Gen Two-sided risk model • 21 participants: 7 from MSSP and

III. Legal Components • Legal Entity requirements • Governing Body structure, responsibilities, composition and

IV. Operational Design Elements A. Benchmark B. Risk Arrangements Increased Shared Risk • •

IV. Operational Design Elements C. Payment Mechanisms 1. Normal FFS Payment 2. Infrastructure Payments

Infrastructure Payments Conceptual Diagram All Other Medicare Providers CMS Next Generation Affiliates Next Generation

IV. Operational Design Elements D. Beneficiary Eligibility and Alignment E. Benefit Enhancement F. Quality

V. Conclusion: Future Development A. Evaluation B. Application Scoring & Selection C. Duration of

Thank You Thomas N. Shorter, JD, FACHE Godfrey & Kahn, S. C. One East

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Next Generation ACO Models: Legal and Operational Design Strategies Friday, May 27, 2016, H 20 Session (11: 15 -12: 15 pm) Thomas N. Shorter, JD, FACHE Godfrey & Kahn, S. C. Madison, WI 1

Outline The CMS Next Gen ACO Model I. III. IV. Core Principles Scope Legal Components Operational Design Elements 2

I. Core Principles • Protect Original Medicare beneficiaries’ freedom of choice • Engage beneficiaries in their care through benefit enhancements • Create long-term financial sustainability 3

I. Core Principles (cont’d) • Utilize prospectively-set benchmarks – Reward quality; – Reward improvement and attainment of efficiency; and – Transition away from an ACO’s recent expenditures when setting and updating the benchmark. 4

I. Core Principles (cont’d) • Mitigate fluctuations in aligned beneficiary populations • Smooth cash flow by seeking alternative payment mechanisms • Incentivize greater coordination of care 5

II. Scope Next Gen Two-sided risk model • 21 participants: 7 from MSSP and 8 from the Pioneer Model • 2 WI - based participants: Bellin Health DBA/Physician Partners and Theda. Care ACO Comprehensive ESRD Care Oncology Care Model 6

III. Legal Components • Legal Entity requirements • Governing Body structure, responsibilities, composition and control requirements • Leadership and Management requirements 7

IV. Operational Design Elements A. Benchmark B. Risk Arrangements Increased Shared Risk • • 80% sharing rate (PY 1 -3) 85% sharing rate (PY 4 -5) 15% savings/losses cap Discount Full Performance Risk (100% Risk) • 15% savings/losses cap • Discount 8

IV. Operational Design Elements C. Payment Mechanisms 1. Normal FFS Payment 2. Infrastructure Payments 3. Population Based Payments 4. Capitation Conceptual 9

Infrastructure Payments Conceptual Diagram All Other Medicare Providers CMS Next Generation Affiliates Next Generation Preferred Providers Next Generation Providers/Suppliers Claim Payment Per-beneficiary per- month ACO 10

IV. Operational Design Elements D. Beneficiary Eligibility and Alignment E. Benefit Enhancement F. Quality and Performance G. Monitoring and Oversight 11

V. Conclusion: Future Development A. Evaluation B. Application Scoring & Selection C. Duration of Agreement(s) 1. 2. Three performance periods for 2016 Two performance periods for 2017 12

Thank You Thomas N. Shorter, JD, FACHE Godfrey & Kahn, S. C. One East Main Street, Suite 500 Madison WI 53703 (608) 284 -2239 tshorter@gklaw. com 13