ACO 101: Overview of Dartmouth-Hitchcock Health Pioneer ACO Model and OneCare Vermont ACO Models

1. ACO 101: Overview of Dartmouth-Hitchcock Health Pioneer ACO Model and OneCare Vermont ACO Models Lynn Guillette, CPA, MBA May 3, 2014

2. The Health Care Ecosystem in 2014 The U.S. ranks last or next to last in five key areas¹: Structural Challenges Fragmented delivery system with lack of primary care Lack of evidence based care often drives variation in quality & patient safety Misalignment of incentives Transaction-based payment system Lack of transparency Limited focus on quality • Quality • Access • Efficiency • Equity • Healthy Lives ¹The Commonwealth Fund – June 2010

3. How Can Dartmouth-Hitchcock Health Address These Challenges?

4. Who is Dartmouth-Hitchcock Health? Dartmouth-Hitchcock Health IvyMD New London Health Association D-H OneCare Vermont ACO, LLC (50% owner) Dartmouth-Hitchcock Clinic Mary Hitchcock Memorial Hospital New England Alliance for Health

5. D-HH’s Work is Focused Into 7 Strategic Domains Under 3 Enterprise Core Strategies Create A Sustainable Health System Mission, Vision, Values Improve Quality Outcomes Reduce Cost of Care Performance Imperatives > Population Health Value-Based Care New Payment Models D-H Enterprise Core Strategies > Innovation Integrated Health System Leaders in Value Improve Population Health The strategic domains provide additional focus for the D-H enterprise core strategies Distinctive Education & Research People Finance

6. Creating A Sustainable Health System ME NH VT • DHMC • • D-H Concord • • • D-H Manchester • D-H Keene D-H Putnam D-H Nashua MA -Confidential-

7. End-State Goals – Where Are We Heading? The D-H Strategic Operating Plan Matrix helps us to focus on a single year at a time. The 2015 plan will be designed to expand more on our medium to long-term strategic objectives, including: Provide care and wellness services to 2+ million people Measurably improve population health Implement value-based care processes across D-H Participate to the fullest extent possible in payment models that recognize the value of care delivered Develop an integrated NNE healthcare network Refine and expand an integrated NNE support and management services infrastructure Enable more care and wellness to be delivered at community level and at home Align D-H workforce with enterprise strategies/objectives Align research and education to support achievement of a sustainable health system Establish innovative partnerships with government and industry that improve care and wellness D-H recognized as a national leader in creating value and implementing a sustainable health system FullyIntegrated D-H Care Model Payment Model Fee for Service Global Capitation FragmentedDelivery

8. To Transform the Payment System, We Need to Learn a New Language

9. Payment Model Continuum Fee-For Service - is a payment model where services are unbundled and paid for separately by service Pay-For-Performance- introduces quality and efficiency incentives, instead of solely rewarding quantity Shared Risk - means distributing the cost of health care services across large numbers of participants - including people of various ages and health conditions Global Budget / Capitation - is a payment arrangement for health care services that pays a physician or group of physicians a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care Pay-for-Performance Shared Risk Capitation Fee-For-Service Global Budget Value Focused Volume Focused Accountable Care Organization (“ACO”) - is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients

10. More about ACOs Providers in an ACO may all belong to the same health system, or may include multiple health systems, independent hospitals, physician groups/practices, and other types of healthcare providers Providers work together with a payor to provide high quality coordinated care for patients May include one or more payors May include any one (or more) of the four payment methodologies outlined on slide 9 Quality performance is measured at the aggregate ACO level The ACO would be rewarded for providing the ACO’s patients with a positive patient experience, better health outcomes, and reduction in the growth of total cost of care for the ACO patient population

11. What Does D-H’s Payments Models Look Like Today?

12. Transformation to date at D-H(Directly Managing or Influencing 182,000+ lives)

13. CMS Pioneer ACO Model 17,536 attributed beneficiaries CMS Pioneer ACO Model: Medicare shared risk program that incorporates the ACO concept; ACO has financial risk if actual costs exceed annual cost target but has financial reward opportunity if actual costs are less than annual cost target Through competitive application process, D-HH became one of thirty-two Pioneer ACOs in the country

14. Pioneer ACO Model Attributed Population Requirements Algorithm: Uses a two-stage algorithm for attribution New providers during performance year: Under Pioneer, the annual TIN/NPI roster may only be revised to reflect providers leaving the ACO during the year. New hires may only be added at time of the annual TIN/NPI roster submission. 8 Specialty Types for 2nd stage of attribution: Nephrology Oncology Rheumatology Endocrinology Pulmonology Neurology Neuropsychiatry Cardiology Nurse Practitioners & Physician Assistants: E & M codes billed under the name of a primary care Nurse Practitioner and primary care Physician Assistant “count” for attribution purposes TIN Commitment: Once the TIN is committed to a Medicare ACO, that TIN is then limited to be a vendor/supplier to other Medicare ACOs.

15. The Triple Aim

16. Pioneer ACO Model – Quality Comes First in Achieving the Triple Aim4 Domains; 33 Individual Measures; 48 Possible Points in 2013

17. Cost Target Expected cost per beneficiary per year times number of attributed beneficiaries $10,000 * 30,000 = $300,000,000 Actual Cost Expenditures Actual cost per beneficiary per year times number of attributed beneficiaries $9,800 * 30,000 = $294,000,000 D-HH Pioneer ACO Financial Model – For Illustrative Purposes Only Gross Savings Cost Target less Actual Cost Expenditures $300,000,000 -$294,000,000 = $6,000,000 Minimum Savings Rate (MSR) Threshold Cost Target times 1% $300,000,000 * 1% = $3,000,000 Gross Savings Rate Gross Savings divided by Cost Target $6,000,000/$300,000,000 = 2% ACO Shared Savings Gross Savings times 70% $6,000,000 * 70%= $4,200,000 If Gross Savings or Gross Loss is 0% to 1%, CMS keeps total savings or absorbs total loss If Gross Savings Rate > MSR Quality Multiplier Applied (0.00-100.00) Gradient quality scores impact eligible shared savings

18. D-HH Pioneer ACO in 2013 • For year two, expanded ACO participation by adding one Critical Access Hospital and its employed physicians • Criteria for adding NLHA: • D-H & NHLA affiliation discussions were underway; ACO inclusion would foster continued clinical integration • NLHA’s Chief Medical Officer was a former D-H physician who had championed accountable care, shared-decision making, evidence-based medicine, and shared the same care coordination philosophy • NLHA’s patients generally used D-H for specialty care 25,413 attributed beneficiaries

19. D-HH Pioneer Expansion in Year 3 • D-H determined that it needed to expand Pioneer ACO participants beyond D-H and NLHA • Why? • To move closer to achieving our vision of creating a sustainable health system with the healthiest population possible • To lead the transformation of health care in our region and to set the standard for the nation • How? • Create rigor and structure to the expansion identification, selection, and implementation process • Adequately assess business risk to D-H and its ACO because of changes in composition of ACO provider participation

20. D-HH Pioneer ACO in 2014 46,700 attributed beneficiaries Clinical Advisory Council Leadership Council Performance Reporting

21. Medicare Shared Savings Program (“MSSP”) Model • Medicare Shared Savings Program Model: Medicare shared savings program that incorporates the ACO concept; initial 3-year contract; ACO has no financial risk in any of the first 3 years if actual costs exceed annual cost target but has financial reward opportunity if actual costs are less than annual cost target in any of the first 3 years • OneCare Vermont ACO, LLC was jointly formed by Fletcher Allen Health Care and Dartmouth-Hitchcock Health in summer of 2012 • Through application process, OneCare Vermont ACO became one of 218 MSSP ACOs in the country (# of ACOs has since grown to 341) • Others in VT or NH: • Accountable Care Coalition of Green Mountains, LLC (Independent physician practice model in VT) • Community Health Accountable Care, LLC (FQHC-led model in VT and NH) • Concord Elliot ACO, LLC (Hospital system-led model in NH) • North Country ACO (FQHC-led advanced payment model in NH)

22. MSSP Model Attributed Population Requirements Nurse Practitioners & Physician Assistants: E & M codes billed under the name of a primary care Nurse Practitioner and primary care Physician Assistant DO NOT “count” for attribution purposes TIN Commitment: Once the TIN is committed to a Medicare ACO, that TIN is then limited to be a vendor/supplier to other Medicare ACOs. Algorithm: Uses a two-stage algorithm for attribution but not the same one used for the Pioneer model

23. MSSP ACO Model – Quality Comes First in Achieving the Triple Aim4 Domains; 33 Individual Measures; 48 Possible Points in 2013

24. Organizational Structure • OCVT Board of Managers Composition (16 seat board): • D-HH = 3 seats • FAHC = 3 seats • Gifford Medical Ctr = 1 seat • Private/community practice physician = 1 seat • Medicare beneficiary = 1 seat • CHS of Lamoille Valley = 1 seat • Southwestern VT Medical Ctr = 1 seat • Primary Care Health Partners = 1 seat • The Howard Center = 1 seat • The Pines at Rutland = 1 seat • Medicaid beneficiary = 1 seat (vacant) • Commercial Exchange consumer = 1 seat (vacant)

25. OneCare Vermont 2014 MSSP Network • Statewide ACO Provider Network • 2 Academic Medical Centers • 14 Community Hospitals • 1 Behavioral Health/Substance Abuse Facility • 2 Federally Qualified Health Centers • 5 Rural Health Clinics • 58 Private Practices • 280 Primary Care Physicians across Network Participants • Approximately 42,000 attributed Medicare beneficiaries Hospitals with Employed Attributing Physicians Significant Participation from Community Physicians

26. OneCare Vermont ACO MSSP Model

27. NNEACC • NNEACC: Northern New England Accountable Care Collaborative • Data Trust owned by Dartmouth College, Dartmouth-Hitchcock, Eastern Maine Health, Fletcher Allen Health Care, and MaineHealth • Used by both D-HH Pioneer ACO and OneCare Vermont • Proprietary software tools for: • Care Coordination/Management • Quality Management • Physician/Practice Administrator Management • User Help Desks

28. Beneficiaries Don’t Join the ACO? Providers and provider organizations join an ACO, not Medicare beneficiaries Medicare Beneficiaries assigned to a Pioneer ACO or MSSP ACO: Still have traditional FFS Medicare as primary payor Can’t be in a Medicare Advantage Plan Must have Part A and Part B Medicare coverage Can choose any provider or provider organization that accepts Medicare – are not locked into seeing only ACO participating providers Medicare beneficiary ID card does not indicate or reference ACO assignment

29. Do the Beneficiaries Know They’ve Been Assigned to the ACO? Beneficiaries get a one-time notice in the year that they are first assigned to a Pioneer or MSSP ACO Excerpt of notice NOTICE TO BENEFICIARIES LETTER: Your Doctor is Participating in an Accountable Care Organization <BENEFICIARY FULL NAME> <ADDRESS> <file creation date> <CITY STATE ZIP> ACOs: A Way to Better Coordinate Your Health Care Your doctor or primary care provider has chosen to participate in Dartmouth-Hitchcock Health, our Medicare Accountable Care Organization (ACO). An ACO is a group of doctors, hospitals, and health care providers working together with Medicare to give you more coordinated service and care. We’re Working to Improve Your Care The goal of an ACO is for your doctors or primary care providers to communicate closely with your other health care providers, so they can deliver high-quality care that meets your individual needs and preferences. ACOs may be rewarded for providing you with high quality, more coordinated care.

30. Can the Beneficiaries Opt-Out of ACO Assignment? Beneficiaries cannot opt-out of being assigned to a Pioneer ACO or MSSP ACO, but they can opt-out of allowing CMS to share their personal health information with us Decline to Consent to Share Information “opt-out” forms mailed out with the Notice to Beneficiaries Letter If they opt-out, they are still assigned to ACO but ACO will not receive any claims or clinical data from CMS for services provided to these beneficiaries All Medicare Beneficiaries are automatically opted-out of sharing alcohol & substance abuse data Excerpt of form Date: January 28, 2013 Declining to Share Personal Health Information Please sign this form if you do NOT want Medicare to share information about care you have received from other healthcare providers with the Dartmouth-Hitchcock Health ACO for use in coordinating your care. You can also call 1-800 MEDICARE (1-800-633-4227) instead of completing this form. TTY users should call 1-877-486-2048. Your decision not to share this personal health information with the Dartmouth-Hitchcock Health ACO will remain in effect until you tell us that you have changed your preference. You may change your decision not to share your personal information at any time. Your request will take effect in approximately 60 business days. Note: Even if you don’t want to share your personal information with the Dartmouth-Hitchcock Health ACO for use in coordinating your care, Medicare will still need to use your information for some purposes, including certain financial calculations and determining the quality of care provided by the Dartmouth-Hitchcock Health ACO. Also, Medicare may share some of your personal health information with the Dartmouth-Hitchcock Health ACO as part of assessing the quality of care your healthcare providers at the Dartmouth-Hitchcock ACO are providing.

31. What can Specialists do to impact ACO models? • Development of “Anchor Specialists” and “Medical Neighbors” • Special expertise/focus to support PCP ‘s management of chronic care conditions (e.g. heart failure “expert” within cardiology; Vascular support from Surgery) • Need for rapid consult access • Special clinics for commonly encountered problems • Special focus on fragile patients at risk for hospital care • Are bookable office hours per week available to meet this demand? • Assess OR Efficiency in order to support ACO Hospital • Are case start times inconsistent? • Are block times altered for low volume days? • Are surgeons returning to office on low case OR days? • Are supplies and high-cost implants standardized? • Do current clinical “standard protocols” need to be revised to be more attractive in ACO environment? • Diagnostic work-ups • Use of shared-decision making • Location of surgery (inpatient, hospital outpatient, ASC, other?) • Greater emphasis/involvement in post-acute care planning • Use of SNFs/rehab facilities vs. home health services • Encouraging “pre-hab” prior to surgery to potentially reduce post-acute care recovery times and increase patient functional restoration

32. What can Specialists do to impact ACO models? • Coordinate care with primary care providers • Encourage beneficiaries to see their primary care provider for annual Medicare Wellness preventative care visit • Collaboration between primary care coordinators and specialty care staff/nurses/care coordinators for complex patients (e.g. chronic kidney disease, oncology) and those with rare diseases (e.g. hemophilia) • Enhance patient satisfaction; what patients think about their specialty care visits matter • Assist in closing gaps in care • Emphasis on more precise coding and medical record documentation • Focus on quality performance measures that could be applicable to specialists

33. APPENDIX – Pioneer ACO’s 33 Quality Measures

34. Pioneer ACO Quality Performance Standards Measures

35. Pioneer ACO Quality Performance Standards Measures

36. Pioneer ACO Quality Performance Standards Measures

37. Pioneer ACO Quality Performance Standards Measures