Thursday, March 7, 2019 2:00pm-3:30pm Eastern F o r Au di o , ple - - PowerPoint PPT Presentation

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Thursday, March 7, 2019 2:00pm-3:30pm Eastern F o r Au di o , ple - - PowerPoint PPT Presentation

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Reference-Based Pricing -- Leveraging State Purchasing Power to Lower Health Care Spending Thursday, March 7, 2019 2:00pm-3:30pm Eastern F o r Au di o , ple ase l ist en th ro u gh yo ur co mpute r spe ak er s o r cal l: (8 66 ) 5 19- 2 79 6

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Thursday, March 7, 2019 2:00pm-3:30pm Eastern

Reference-Based Pricing -- Leveraging State Purchasing Power to Lower Health Care Spending

F o r Au di o , ple ase l ist en th ro u gh yo ur co mpute r spe ak er s o r cal l: (8 66 ) 5 19- 2 79 6, co nfer ence ID#: 25 6 38 4

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Welcome and Introductions Trish Riley, MS, Executive Director, NASHP Marilyn Bartlett Special Projects Coordinator, Office of the Montana State Auditor Dee Jones Executive Director, State Health Plan, State of North Carolina Questions and Discussion

Webinar Agenda

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CONTRACTED REFERENCE BASED PRICING DISCUSSION

March 7, 2019

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State of Montana Employee Health Plan

  • 12,700 Employee Lives; 2,000 Retirees
  • 31,000 Total Lives
  • Self-Funded Plans for Medical, Dental, RX,

Montana Health Centers, Vision

  • Largest Self-Funded Plan in Montana
  • 5 On-site Employee Health Centers
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What did we find?

  • Health Plan Condition
  • Financial Condition of Plan – Late 2014
  • Montana Legislature – Senate Bill 418
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How are the plan costs distributed?

Montana Hospital Facilities 43% Other Montana Providers 11% Out of State Providers 15% RX Claims 18% Dental Claims 4% Third Party Admin 3% HCBD Admin 2% Health Centers 3%

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MONTANA HOSPITALS - Charge less Discount

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Develop Fair, Transparent Hospital Pricing

Goal = Montana Hospital Reimbursement will be a multiple of Medicare for ALL facility services

  • Selected Medicare as reference point:
  • Common reference to overcome variation in charge masters and

differences in billing practices

  • Largest healthcare payer in country
  • Adjusted for case mix and geography
  • Calculation process publicly available
  • Moves Plan to DRG reimbursement methodology
  • State of Montana Plan “constraints”:
  • No Balance Billing = Contracting
  • No steerage or narrow network = Include all facilities, if possible
  • Needed quick financial results
  • Control over future reimbursement increases
  • State Procurement Regulations
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Outpatient Cost Comparison

296% 254% 254% 250% 323% 335% 611% 336% 239% 305% 300%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 400.0% 450.0% 500.0% 550.0% 600.0% 650.0%

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260% 233% 234% 191% 268% 221% 322% 314% 224% 320% 266%

0.0% 50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 400.0%

L F K O B H G J N M TOTAL

Inpatient Cost Comparison

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Cleaverly & Associates

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Distribution of Participating Providers

Plains Superior

Signed, PPS Signed, CAH Not Signed, CAH

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Contracted Reference Based Pricing

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Contracted Reference Based Pricing Projection

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So what happened in December 2017?

  • Reserves reached $112 million
  • No rate increases for 3 years (2017, 2018, 2019)
  • OPEB Liability: $374 million (2015) to $54 million (2017)
  • What we didn’t expect: Health Plan Reserves larger than MT General

fund in 2017

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North Carolina Approach

March 7, 2019

Reference-based Pricing for State Health Plans

National Academy for State Health Policy Webinar

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Today’s Objectives

  • Background on North Carolina
  • North Carolina’s Approach to Referenced-based Pricing
  • Hurdles
  • Next Steps

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Background

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Population: 10.2 Million (significantly rural) Metropolitan areas: 10 Counties: 100 Major Health Care Systems: 10

ASH CLT GSO D-CH RAL GVL WIL

(2)

ASH: Asheville D-CH: Durham – Chapel Hill CLT: Charlotte RAL: Raleigh W-S: Winston-Salem GVL: Greenville GSO: Greensboro WIL: Wilmington

W-S

(2)

  • Self-funded
  • $3.3 billion dollar total cost
  • 725,000 + members
  • 324 employing units
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Financial Picture

Employer Contributions to 2023

NC State Health Plan Solvency

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117 151 155 162 170 54 129 132 146 167

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Additional Expense Trend Above 4% Expense Covered by 4% Appropriations Expense

$755 million = 4% Appropriations (yellow) $629 million = the medical/pharmacy trend above 4% (green) $1.4 Billion

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 GA Contribution/Premiums Spend Spend w/PRS Cash Reserve w/PRS Cash Reserve w/out PRS

$5B $4B $3B $2B $1B

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NC Approach to Referenced-based Pricing

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Reference- based Pricing Bundles Alternative Payment Arrangements

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Path to Success

  • Resources
  • Alignment with Vendor Partners
  • Provider Partnerships
  • General Assembly

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Next Steps

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Develop the NC State Health Plan Network

  • Contracting
  • Key Providers
  • Reimbursement rate tables

2019 Legislative Session

  • Legislative requests
  • Legislation
  • Education

Operationalize

  • Work with TPA for

2020 Go Live

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Today’s Objectives

  • Background on North Carolina
  • North Carolina’s Approach to Referenced-based Pricing
  • Hurdles
  • Next Steps

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Questions?

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Questions & Discussion

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Please type your questions into the chat box.

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Thank you!

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Your opinion is important to us. After the webinar ends, you will be redirected to a web page containing a short

  • survey. Your answers to the survey will help us as we

plan future NASHP webinars.