From: Sent: Hogan, Scott W [Scott.Hogan@umr.com] 10/2/2018 5:38:49 PM To: CC: Subject: Czech, Bruce P [Bruce.Czech@umr.com] Ziemer, Scott A [Scott.Ziemer@umr.com] FW: CEO Call-OON Programs Attachments: OON Deep Dive w Local Market CEOs (092818)_fv.pdf Bruce as per our discussion — attached above is what was presented by UHC/UHN on Sept 28 CEO call. The email below that Scott Z sent was in response to what was discussed on CEO call letting Greg and Kathy know we are working to track similar to what UHC/UHN are doing. Thanks. From: Hogan, Scott W Sent: Friday, September 28, 2018 11:47 AM To: Benson, Mike; Braun, Helmut M; Czech, Bruce P; Dahlke, Ann M; Dunn, Lori A; Freiberg, Brian H; Hiatt, Kimberly M; Johnson, Heidi J.; Lattimer, Patrick J; Napier, Donald P; Pavlic, Gregory M Cc: Ziemer, Scott A Subject: FW: CEO Call – OON Programs FY! From: Ziemer, Scott A Sent: Friday, September 28, 2018 11:42 AM To: Pavlic, Gregory M; Wiseman, Katherine E Cc: Freiberg, Brian H; Hogan, Scott W; Aue, Bobbie ] Subject: CEO Call – OON Programs Pav/Kathy, Plaintiffs’ Exhibit 142 Cause No. CJ-2019-482 It is my understanding that on the UHC CEO call, UHN will be laying out a strategy to become more aggressive with their OON programs. They have done some investigation and believe that UHC is reimbursing OON providers at much greater levels than our competition. In order to reduce the gap, they are proposing a move over time towards non-secured (i.e. not a contracted discount) reductions backed by member advocacy to help keep members from being balanced billed. As you are aware, today UMR and UHC have comparable shared savings (CRS and SSP) programs – especially now with our rollout of our new CRS solutions and specifically the solution that impacts RAPLE. However, with this new direction there may be some questions about UMR and our strategy. The good news is that we already have programs available. CRS Benchmark program (30% of savings with $50k savings cap per claim) – we rolled this out as a solution to address reasonableness of OON reimbursement. It achieves reimbursements below an established Medicare benchmark through a program administered entirely through MultiPlan. Multiplan leverages it’s DataiSight program (non-secured) for the most of the reimbursements and has a back end member advocacy program to limit member balance billing. The program gets to lower OON costs (DiS generally is less than 250% of Medicare) while impacting almost all OON claims. о Non Par Cost Containment (NPC^2) program ($3.50 PEPM +30% of savings) – this program rolled out because of pressure on shared savings fees and level of reimbursement. The program leverages MNRP for all services except for those paid at the INN level of benefits as well as radiology, anesthesiology, pathology, lab and emergency claims. Members are not held harmless for the claims that are impacted by MNRP but are for the other claims. Effective 10/1 we made an enhancement to use the CRS Benchmark process, rather than only network and fee UHC_PA_00299725 P142.001
negotiation, to impact the claims not eligible for MNRP. Clients with the new program also get the benefit of a $50k savings cap per claim. When we offer these two programs to clients, adoption depends on the several factors. With CRS Benchmark it depends on the clients willingness to believe in the advocacy programs (limit balance billing) and accept the increased fees. Recently we proposed CRS Benchmark to a very large customer and despite millions in savings, they did not want to live with the potential member disruption due to balance billing. With NPC^2, a client must be willing to allow their members to be balance billed. We will continue to work with UHN (Becky Paradise on John Haben’s team) on improving our all our OON solutions. As part of this we will also discuss fees given the client/broker sensitivity. Please let me know if you have any questions. Thanks, Scott Scott Ziemer UMR Customer Solutions – Networks & PBM/ 11 Scott Street / Wausau, WI 54403/PH: 715-841-6033 / FX 715-841-6140 This e-mail and any documents accompanying this transmission may contain confidential health information that is legally privileged. This information is intended only for the use of the individuals or entities listed above. If you are the intended recipient, you are hereby notified that any disclosure, copying, distribution, or action taken in reliance on the contents of these documents is strictly prohibited. If you have received this information in error, please notify the sender immediately and arrange for the return or destruction of these documents. UHC_PA_00299726 P142.002
Shared Savings: Out of Network Deep Dive Local Market CEO Meeting September 28, 2018 Agenda 1. Current State: UHC vs Competition 2. Distribution of Billed $ by Payment Method 3. Critical Path to Execution UNITEDHEALTH GROUP UHC_PA_00299727 P142.003
Executive Summary CURRENT STATE Spend ($86.4B Total UNET) FI ASO Total UNET OON Spend $1.2B $5.3B $6.5B % of Spend/Funding Type 4.9% 8.5% 7.5% Average discount off billed charges 63% 42% Competitive Information from OON Vendor (MultiPlan): 2019 2020 2021 2022 2023 • • Avg. Non Par Reimb: • . UHC (355% CMS) Competition.(255% to 280%) Application of High Discount programs on ASO claims UHC (70% of claim dollars are not eligible) Competition (limited restrictions) Primary limitation: ASO benefit plan language/interpretation NON PAR ROADMAP & TIMELINE Deliver TCOC savings of $800M – $1.0B by moving ASO clients from low discount programs (Wrap Network) to higher discount programs (i.e. OCM) Promote plan designs that do not have OON coverage for services with broad national network (i.e. Lab, DME, Dialysis) Implement non par reimbursement levels equivalent to par rate using ENRP/MNRP and/or OCM (TCOC Savings=in develp) Transition from dependence on SSP ASO revenue; shifting to ACO type model with TCOC admin fee Transition clients to UHC programs (i.e. ENRP/MNRP) and eliminate vendor fees UHC sole manager of ASO client TCOC • • • • • • CRITICAL SUCCESS FACTORS Adoption Endorsement of incentive program for adoption of higher discount programs (OCM) and dis-incent adoption of low discount programs (Wrap Network) (Golden/Burke/Peterson) Member Advocacy Build robust advocacy programs that work on behalf of our members to protect from egregious billers (Paradise/Naasz) External Communication Better education and collaboration with state and federal government regarding egregious and fraudulent billers (Shivinsky/Pezhman) FWA Expand proactive fraud, waste, and abuse programs (prior to release of payment) vs reactive (post payment) (Haben/Santoro) Benefit Language Modify benefit language (Haben/Cronin) & create system flexibility (Paradise/Venkatesan) to support business needs NEXT STEPS Drive ASO adoption of high discount programs (OCM) with National and Key Account teams upon renewal (Haben/Knorr/Richards) Recalibrate OCM reimbursement amounts downward on 12/1/18 to 250% of CMS from 350% (Paradise) to align with competitors Develop benefit plan language for rollout in 2019 with maximum flexibility for OON reimbursement programs (Haben/Cronin) Design dedicated provider/member call team to handle potential noisy non par providers (i.e. (Paradise/Naasz) • Build proactive messaging with Govt. Affairs and Public Relations to educate regarding non par egregious billers (Shivinsky/Pezhman) Development of client specific value story with Underwriting and Sales team focused on National and Key Accounts (Haben/Wessling) • 2 UHC_PA_00299728 P142.004
. • • • Distribution of Spend by Payment Method ASO is accessing low discount programs that provide member protection; delivers significant revenue ($1.1B) FI is accessing high discount programs with no member protection unless state regulated (9 states; DE, FL, IL, IN, KY, MO, MS, NH, TX); ⚫ High discount programs such as ENRP and MNRP programs have been in place for>5 years with minimal member noise Constant evaluation of non-par provider spend vs. risk of balance billing to determine if provider should be moved to high disc. program Opportunity to improve discounts for ASO clients by incenting adoption of high discount programs and retain revenue stream using OCM Payment Method (UNET Billed Spend/Year) Funding ASO Fully Insured ENRP MNRP OCM R&C SSP/WRAP NETWORK No member protection (unless state reg.) Member protection w/ Fee Negotiation Member Protection 50% 45% 41% 42% 40% 35% 30% 70% to 79% disc 70% to 79% disc 60% to 69% disc 50% to 59% disc 30% to 40% disc 20% 10% 0% $69M 1% $42M 0% 12% $1.5B 13% $1.2 B $28M 0% 9% $874M $5.1B $3.3B $5.6B $4B ASO REVENUE FOR UHC 49% 50% 45% 40% % of Spend Applying to Program % of Spend Applying to Program 30% 70% to 79% disc 70% to 79% disc 60% to 69% disc 50% to 59% disc 30% to 40% disc 20% 20% 16% 16% 12% 13% 10% 11% 10% 0% 2017 $465M $539M 2018 HIGH DISCOUNT $1.7B $1.6B 7% $285M $345M $604M $439M $756M $360M 2017 2018 2017 2018 2017 2018 2017 2018 *2018 Non-par spend is down vs 2017 for FI (25%) and ASO (29%) LOW DISCOUNT UHC_PA_00299729 3 P142.005
Critical Path to Execution • • • • Today Optimization of Programs Reduce reimbursement levels for specific programs/services such as lab and ER (OCM); ASCs (R&C) Operational improvements to decrease frequency of processor override Increase FWA/PI activities on egregious non-par billers Drive ASO adoption of high discount programs to 12m members by 1/19 Evaluation of low discount Wrap Network providers and “shut off” in favor of high discount programs Creation of dedicated member/provider call team to ensure consistent support of potential volatile non-par providers Near-term 2019-2021 Identify opportunities and deploy tactics to reduce TCOC ① Optimize Reimbursement Levels Implement Outlier Cost Management on out of network benefit level claims Reduce % of CMS for reference price based programs (ENRP/MNRP/OCM) to align more closely with average par rates by service type ② Increase ASO Program Adoption • Incent ASO client adoption of OCM; disincent client adoption of low discount programs (Wrap) 3 Capability Requirements Develop more robust benefit plan language to support referenced based pricing methodologies for non-par services Build out advocacy programs to protect members and clients from exploitation of egregious billing practices Further leverage UHG Govt. Affairs team to advance consumer protections at the state and federal level Redesign Shared Savings revenue model to transition into TCOC model Long-term 2022 – Beyond Shift to UHG managed programs Migrate all ASO clients to referenced based pricing programs (ENRP/MNRP) at levels at or below average par rates • Creation of TCOC revenue stream to replace Shared Savings revenue Superior member support and protection against egregious billers Demonstration of increased value to clients of improved TCOC management to ensure retention Increased IT capabilities to ensure flexibility in order to meet industry demands UHC_PA_00299730 P142.006
Appendix 5 UHC_PA_00299731 P142.007
Out of Network Claim Flow No Scenario Claim Flow Claim is received by UnitedHealthcare UnitedHealthcare Participating Provider? Process Overview UHC defines hierarchy of programs for MultiPlan, two examples: • Claims eligible for ENRP/MNRP could have Wrap Network discount applied if discount is deep enough since Wrap Network has member protection UHC may instruct MultiPlan to “shut off” a Wrap Network provider to force claims to price at a high discount program (i.e. OCM) due to egregiousness Scenario on 1/19: • • ENRP will be applied to eligible Fully Insured claims (states not eligible are CO, HI, MA, MD, NJ, NY, and PA) OCM will be applied to: 577 • Fully Insured that are not eligible for ENRP • ASO clients that adopted the program Route to MultiPlan UnitedHealthcare adjudicates and pays claim ⚫ Clients without ENRP or OCM; MultiPlan likely able to negotiate 20% discount MultiPlan routes back to UHC No – use ENRP/MNRP Discount applied to claim Should Shared Eligible for ENRP/MNRP? Savings Programs be Yes used? Wrap Net vork Agreement or Outlier Cost Management (OCM) or Facili R&C or Extender Networks or Claim Specific Negotiation ENRP/MNRP Rate: Primarily Fully Insured Step #1 of OCM Rate: Primarily ASO Claim hierarchy based on customer specific benefit plan Step #2 of OCM: If OCM Rate Not Accepted 6 UHC_PA_00299732 P142.008
Program Impact Scenarios: Member, Client, UHC FI Billed Charges (unless state reg.) ENRP MNRP $1,000 $1,000 w/ Fee Negotiation OCM R&C $1,000 $1,000 Member Protection SSP/Wrap Network Charges Billed $1,000 $1,000 Program Disount% 70% 70% 60% 50% 30% 0% Discount $ $700 $700 $600 $500 $300 $0 Allowed Amount $300 $300 $400 $500 $700 $1,000 Member Benefit Cost Share % 20% 20% 20% 20% 20% 20% Member Benefit Cost Share $ $60 $60 $80 $100 $140 $200 Vendor Fee Percent Vendor Fee (disc $ x vendor fee %) Net Impact to Member best case $60 $60 $80 $100 $140 $200 Net Impact to Member worst case $760 $760 depends on fee neg $140 $200 UHC Liabl best case (Allw-Mbr Shr+Fee) $240 $240 $800 ASO ENRP MNRP OCM Billed Charges $1,000 $1,000 $1,000 R&C $1,000 SSP/Wrap Network B.C. $1,000 $1,000 Program Disount % 70% 70% 60% 50% 30% 0% Discount $ $700 $700 $600 $500 $300 $0 Allowed Amount $300 $300 $400 $500 $700 $1,000 Member Benefit Cost Share % 20% 20% 20% 20% 20% 20% Member Benefit Cost Share $ $60 $60 $80 $100 $140 $200 Shared Savings Fee Rate % 30% 30% 30% Client Fee to UHC (UHC Rev $) $180 $150 $90 Vendor Fee Percent Vendor Fee (pd by UHC) Net Impact to Member best case $60 $60 $80 $100 $140 $200 Net Impact to Member worst case $760 $760 depends on fee neg $140 $200 Emp Liabl best case (Allw-Mbr Shr+Fee) $240 $240 $500 $550 $650 $800 Net Revenue to UHC (cint fee-vnd fee) $0 $0 $0 Fully Insured Key Take Aways Deeper discount results in a lower member coinsurance=coinsurance % calc’d off allowed $ No member protection for ENRP and MNRP could put member at risk for discount amount (unless state reg) ENRP/MNRP provides UHC the least liability and no vendor fee ASO Key Take Aways Deeper discount results in a lower member coinsurance=coinsurance % calc’d off allowed $ No member protection for ENRP and MNRP could put member at risk for discount amount (no ASO state regs) OCM provides a very favorable impact to client and member ENRP/MNRP provides our client the least liability and but no ASO SSP Revenue for these two programs UHC_PA_00299733 7 P142.009
OCM for National and Key Accounts (B. Paradise, A. Richards) Top 10 National Account Clients w/o OCM (as of August 2018) • Aligned with National and Key Account teams to ensure adoption of>12m members on OCM by 1/19 Client Name Region Shared Savings Eligible lives SSP Enhanced Adoption % • Working ASO client list without OCM (Top 10 as of 8/18) • Since 8/18 report, added 4 major clients to OCM: AT&T INC.-CARE PLUS Northeast 733,028 0.00% HCA, INC. Southeast 138,298 0.00% • AT&T>730k lives GENERAL ELECTRIC Northeast 107,544 0.00% • T Mobile>81k lives CATERPILLAR INC. Central 101,361 0.00% • Nestle>74k lives AMERICAN POSTAL WORKERS UNION Northeast 83,129 0.00% T-MOBILE West 81,243 0.00% • American Airlines>35k lives NESTLE USA, INC West 74,470 0.00% PRICEWATERHOUSECOOPERS Northeast 71,964 0.00% AMERICAN AIRLINES Central 55,868 0.00% GEICO CORPORATION Northeast 54,888 0.00% • Examples of other service types for further decreases ⚫ Anesthesia • ER Physician . • IP Surgery ⚫ OP Surgery Top Service Types based on % of CMS (allowed by ASO) Service Type (as of August 2018) Avg Par % CMS FI Avg NP % ASO Avg NP % CMS CMS Anethesia Emergency Room Phy 306% 288% 510% In Patient Surgery Out Patient Surgery UHC_PA_00299734 8 P142.010
ENRP – Program By State March 2018 British Nikam 4slands- Canada WA ND MT MN ME SD WI OR ID NH WY MI NY IA MA S NE PA IL IN OH NV UT MO CO MO ww 3 KY VA OK TN NC AZ NM AR SC MS AL GA TX LA ENRP Program 7/1/2018 VI 10/1/2018 No Yes Mexico 9 UHC_PA_00299735 P142.011
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