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 , co nfer ence ID#: 25 6 38 4 1
Webinar Agenda 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 2
CONTRACTED REFERENCE BASED March 7, 2019 PRICING DISCUSSION
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
What did we find? • Health Plan Condition Financial Condition of Plan – Late 2014 • • Montana Legislature – Senate Bill 418
How are the plan costs distributed? HCBD Admin 2% Health Centers 3% Third Party Admin 3% Dental Claims 4% RX Claims 18% Montana Hospital Facilities 43% Out of State Providers 15% Other Montana Providers 11%
MONTANA HOSPITALS - Charge less Discount
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
Outpatient Cost Comparison 650.0% 600.0% 550.0% 500.0% 450.0% 400.0% 350.0% 300.0% 250.0% 611% 336% 335% 323% 200.0% 305% 300% 296% 254% 254% 250% 239% 150.0% 100.0% 50.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11
Inpatient Cost Comparison 400.0% 350.0% 300.0% 250.0% 200.0% 322% 320% 314% 268% 266% 260% 150.0% 233% 234% 224% 221% 191% 100.0% 50.0% 0.0% L F K O B H G J N M TOTAL
Cleaverly & Associates
Distribution of Participating Providers Plains Superior Not Signed, CAH Signed, PPS Signed, CAH
Contracted Reference Based Pricing
Contracted Reference Based Pricing Projection
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
Reference-based Pricing for State Health Plans North Carolina Approach National Academy for State Health Policy Webinar March 7, 2019
Today’s Objectives • Background on North Carolina • North Carolina’s Approach to Referenced-based Pricing • Hurdles • Next Steps 17
Background Population: 10.2 Million (significantly rural) Metropolitan areas: 10 Counties: 100 Major Health Care Systems: 10 W-S GSO (2) D-CH (2) RAL GVL ASH CLT WIL ASH: Asheville D-CH: Durham – Chapel Hill CLT: Charlotte RAL: Raleigh W-S: Winston-Salem GVL: Greenville GSO: Greensboro WIL: Wilmington • 725,000 + members • Self-funded • 324 employing units • $3.3 billion dollar total cost 18
Financial Picture Employer Contributions to 2023 NC State Health Plan Solvency $755 million = 4% Appropriations (yellow) $629 million = the medical/pharmacy trend above 4% (green) $5B $1.4 Billion 167 Spend Spend w/PRS 170 $4B 146 GA Contribution/Premiums 162 132 $3B 155 129 54 151 117 $2B $1B Cash Reserve w/PRS 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Additional Expense Trend Above 4% Cash Reserve w/out PRS Expense Covered by 4% Appropriations Expense 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 19
NC Approach to Referenced-based Pricing Alternative Payment Arrangements Bundles Reference- based Pricing 20
Path to Success • Resources • Alignment with Vendor Partners • Provider Partnerships • General Assembly 21
Next Steps Develop the NC • Contracting State Health • Key Providers • Reimbursement rate tables Plan Network • Legislative requests 2019 Legislative • Legislation Session • Education • Work with TPA for Operationalize 2020 Go Live 22
Today’s Objectives • Background on North Carolina • North Carolina’s Approach to Referenced-based Pricing • Hurdles • Next Steps Questions? 23
Questions & Discussion Please type your questions into the chat box. 24
Thank you! 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. 25
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