These are exciting times. Payers and physicians are combining resources to create innovative approaches to care. Together, we’re improving how health care is delivered and how clinical information is shared among physicians and across practices. Aetna’s Patient-Centered Medical Home (PCMH) programs are one of the leading examples of this new collaborative approach.

We believe PCMH programs will improve the quality and cost of care our members receive. We’re pleased to share more information about our PCMH programs. We also want to explain how the initial costs and associated savings will impact our self-funded plan sponsors. We have also shared this communication with Aetna Plan Sponsors accordingly.

Why Patient-Centered Medical Homes; Why Now?

The current health care delivery system has led, in some cases, to poorly coordinated, inefficient, and duplicative care. A patient may receive the same tests multiple times. One doctor may prescribe a drug, only to have another doctor prescribe another drug that combines with the first to create negative effects for the patient. Patients may be left to navigate the system with little clinical oversight, primarily because doctors often do not communicate with each other effectively.

Patient-Centered Medical Homes are designed to help reduce the risks of poor care coordination and improve patient quality-of-care. This should reduce overall medical costs over time.

What Does PCMH Mean to Members of participating Plan Sponsors?

Employees should expect to have improved access to their physician and staff and receive better coordinated care, knowing their physician is PCMH certified.

As an example, a diabetic member’s endocrinologist would know that the patient had already been to their general practitioner three times since the last endocrinology appointment. The doctor would know how the patient’s vital signs had changed in that time. A PCMH arrangement means improved information for doctors, which results in better care for the patient.

What Does PCMH Mean to Plan Sponsors?

Through the PCMH contract model, physicians receive a prospective payment of $2-$3 per member per month. This payment is a contractual payment between Aetna and the primary care physician.

The PCMH transforms how care is delivered, which means comprehensive improvement in care and data exchange across the doctor’s full patient population.

This charge will come through to Plan Sponsors as a one-time payment on a quarterly basis. Medical cost reduction realized by plan sponsors as a result of the PCMH program (i.e., related to specific cost measures in the agreement) will occur in real-time through improved care management. At the end of an annual period, the total savings achieved through the PCMH savings model is weighted by each plan sponsor’s membership. The physician group is eligible to share in the savings they helped facilitated. 50 percent of medical cost savings, less the aggregate $2-$3 per member per month payments, will be paid to qualifying PCMH physicians on an annual basis.

An example of the savings calculation is below

Total PMPM payments: $3 x 3,000 members x 12 months = $108,000

Total PCMH savings (based upon specific measures and metrics): $700,000

Plan sponsor savings: $350,000

PCMH Payment: $350,000 – 108,000 = $242,000

A study of North Carolina’s Medicaid PCMH program found that the state saved nearly $1 billion over 4 years, mostly by reducing hospitalizations. Savings accelerated each year of the study, from $8.73 PMPM for 983,356 members in 2007 to $25.40 PMPM for 1,253,292 members in 2010.^[^i]

Better coordinated care should result in improved health and productivity for employees. Studies show results in reduced aggregate use of the health system and reduced medical costs for your clients and ultimately for the overall health system.

How Does This Impact the Return on Your Client’s Investment?

Paying doctors to be PCMH-recognized means paying doctors to better coordinate, deliver and streamline care.

We believe that support of PCMH contracting models is a down-payment on future, larger reduction in health costs and utilization incurred by your clients. This should result in the improved health, happiness, well-being and productivity of their workforce.

Here’s how Patient-Centered Medical Homes work

Aetna’s PCMH programs start with proven care improvement options. Then we add a financial framework that encourages quality and effectiveness.

Our programs include:

the use of health information technology, including electronic medical records
comprehensive disease management programs
improved patient access to health services through the hiring of physician extenders, such as nurse practitioners and physician assistants
improved care coordination through case management and patient health education classes

The result is more coordinated, streamlined care for patients. They now have a team of doctors working for them, instead of many individual doctors who may not know what care the patient is getting from the others.

A recent PCMH study found that, across and within countries, where medical homes were present, gaps in care decreased. In the US, 54 percent of those without medical homes experienced gaps in care, while only 33 percent of those with medical homes experienced such gaps. That’s a 39 percent reduction.^[^i]

Aetna’s PCMH Programs

Our programs pay doctors who are recognized as medical homes by the National Committee for Quality Assurance (NCQA). The NCQA certification tells us doctors have made the necessary investments in their practice to efficiently coordinate care for patients.

Aetna has developed two PCMH programs:

1. PCMH Recognition Program: We are recognizing PCHM-certified physicians and practices with a prospective care coordination payment of $2-$3 Per-Member-Per Month (PMPM). This payment supplements fee-for-service payments. The payment helps cover the physicians’ costs associated with additional activities required to improve care delivery and health outcomes.

This program recognizes PCMH-certified physicians that agree to offer coordinated care.
We identify these physicians as medical homes in Aetna’s proprietary DocFind navigation tool.
This program features baseline clinical and efficiency performance monitoring.

We launched our PCMH Recognition program in Connecticut and New Jersey in January 2012. We are currently evaluating several additional markets across the country for the introduction of this program in 2012.

2. PCMH Savings Sharing Program: This program includes the prospective PMPM payment, but goes beyond that. It sets robust quality and cost metrics. Physician groups that meet these metrics receive additional payments, typically referred to as shared savings.

Aetna will negotiate with larger provider groups that are PCMH-certified that want to be part of this program. We now have more than 100 PCMH negotiations under way nationally.

Core areas of measurement include:
- Efficiency measures in Inpatient Services, Outpatient Services, Prescription Services and Behavioral Health.
- Quality reporting, particularly in Diabetes, Cardiovascular and Preventive Screening.
The Efficiency and Quality components will operate hand in hand:
- Patients are assigned or ‘attributed’ to PCPs based upon the following criteria: 1) the PCP the patient saw the most frequently during a 12 month period; or, 2) if there were several single visits to multiple PCP practices, the patient is assigned to the physician he/she most recently visited.
- The plan sponsor will be charged for the PMPM prospective care coordination payment based upon the number of its plan members attributed to the medical home through Aetna’s attribution logic.
- Savings calculations are based upon the evaluation of 7 efficiency and 17 clinical measures, including reduction of non-emergent ER visits and inpatient hospital stays. These cost reductions and quality improvements are expected to be achieved through improved care coordination, increased patient engagement, data sharing and clinical integration.
- 50 percent of the savings over a given period of time (i.e., 12 months) will be paid to the PCMH practices. Savings are defined as the cumulative PMPM medical cost reduction calculated through Aetna’s PCMH efficiency model. The results are shared with plan sponsors and physicians.
- Aetna’s analytics team will review the savings calculation annually. Their reports will be available for plan sponsor review.

We look forward to continuing our dialogue with you as we share additional updates on our evolving Patient-Centered Medical Home (PCMH) programs and our collaborative approach to care with physicians.

^[i]“New 2011 Survey Of Patients With Complex Care Needs In Eleven Countries Finds That Care Is Often Poorly Coordinated.” Commonwealth Fund. November 9, 2011. http://www.commonwealthfund.org/Publications/In-the-Literature/2011/Nov/2011-International-Survey-Of-Patients.aspx.


	Upfront with Aetna November, 2012		Payers and Physicians Combining Resources to Create Innovative Approaches to Care These are exciting times. Payers and physicians are combining resources to create innovative approaches to care. Together, we’re improving how health care is delivered and how clinical information is shared among physicians and across practices. Aetna’s Patient-Centered Medical Home (PCMH) programs are one of the leading examples of this new collaborative approach. We believe PCMH programs will improve the quality and cost of care our members receive. We’re pleased to share more information about our PCMH programs. We also want to explain how the initial costs and associated savings will impact our self-funded plan sponsors. We have also shared this communication with Aetna Plan Sponsors accordingly. Why Patient-Centered Medical Homes; Why Now? The current health care delivery system has led, in some cases, to poorly coordinated, inefficient, and duplicative care. A patient may receive the same tests multiple times. One doctor may prescribe a drug, only to have another doctor prescribe another drug that combines with the first to create negative effects for the patient. Patients may be left to navigate the system with little clinical oversight, primarily because doctors often do not communicate with each other effectively. Patient-Centered Medical Homes are designed to help reduce the risks of poor care coordination and improve patient quality-of-care. This should reduce overall medical costs over time. What Does PCMH Mean to Members of participating Plan Sponsors? Employees should expect to have improved access to their physician and staff and receive better coordinated care, knowing their physician is PCMH certified. As an example, a diabetic member’s endocrinologist would know that the patient had already been to their general practitioner three times since the last endocrinology appointment. The doctor would know how the patient’s vital signs had changed in that time. A PCMH arrangement means improved information for doctors, which results in better care for the patient. What Does PCMH Mean to Plan Sponsors? Through the PCMH contract model, physicians receive a prospective payment of $2-$3 per member per month. This payment is a contractual payment between Aetna and the primary care physician. The PCMH transforms how care is delivered, which means comprehensive improvement in care and data exchange across the doctor’s full patient population. This charge will come through to Plan Sponsors as a one-time payment on a quarterly basis. Medical cost reduction realized by plan sponsors as a result of the PCMH program (i.e., related to specific cost measures in the agreement) will occur in real-time through improved care management. At the end of an annual period, the total savings achieved through the PCMH savings model is weighted by each plan sponsor’s membership. The physician group is eligible to share in the savings they helped facilitated. 50 percent of medical cost savings, less the aggregate $2-$3 per member per month payments, will be paid to qualifying PCMH physicians on an annual basis. An example of the savings calculation is below Total PMPM payments: $3 x 3,000 members x 12 months = $108,000 Total PCMH savings (based upon specific measures and metrics): $700,000 Plan sponsor savings: $350,000 PCMH Payment: $350,000 – 108,000 = $242,000 A study of North Carolina’s Medicaid PCMH program found that the state saved nearly $1 billion over 4 years, mostly by reducing hospitalizations. Savings accelerated each year of the study, from $8.73 PMPM for 983,356 members in 2007 to $25.40 PMPM for 1,253,292 members in 2010.^[^i] Better coordinated care should result in improved health and productivity for employees. Studies show results in reduced aggregate use of the health system and reduced medical costs for your clients and ultimately for the overall health system. How Does This Impact the Return on Your Client’s Investment? Paying doctors to be PCMH-recognized means paying doctors to better coordinate, deliver and streamline care. We believe that support of PCMH contracting models is a down-payment on future, larger reduction in health costs and utilization incurred by your clients. This should result in the improved health, happiness, well-being and productivity of their workforce. Here’s how Patient-Centered Medical Homes work Aetna’s PCMH programs start with proven care improvement options. Then we add a financial framework that encourages quality and effectiveness. Our programs include: the use of health information technology, including electronic medical records comprehensive disease management programs improved patient access to health services through the hiring of physician extenders, such as nurse practitioners and physician assistants improved care coordination through case management and patient health education classes The result is more coordinated, streamlined care for patients. They now have a team of doctors working for them, instead of many individual doctors who may not know what care the patient is getting from the others. A recent PCMH study found that, across and within countries, where medical homes were present, gaps in care decreased. In the US, 54 percent of those without medical homes experienced gaps in care, while only 33 percent of those with medical homes experienced such gaps. That’s a 39 percent reduction.^[^i] Aetna’s PCMH Programs Our programs pay doctors who are recognized as medical homes by the National Committee for Quality Assurance (NCQA). The NCQA certification tells us doctors have made the necessary investments in their practice to efficiently coordinate care for patients. Aetna has developed two PCMH programs: 1. PCMH Recognition Program: We are recognizing PCHM-certified physicians and practices with a prospective care coordination payment of $2-$3 Per-Member-Per Month (PMPM). This payment supplements fee-for-service payments. The payment helps cover the physicians’ costs associated with additional activities required to improve care delivery and health outcomes. This program recognizes PCMH-certified physicians that agree to offer coordinated care. We identify these physicians as medical homes in Aetna’s proprietary DocFind navigation tool. This program features baseline clinical and efficiency performance monitoring. We launched our PCMH Recognition program in Connecticut and New Jersey in January 2012. We are currently evaluating several additional markets across the country for the introduction of this program in 2012. 2. PCMH Savings Sharing Program: This program includes the prospective PMPM payment, but goes beyond that. It sets robust quality and cost metrics. Physician groups that meet these metrics receive additional payments, typically referred to as shared savings. Aetna will negotiate with larger provider groups that are PCMH-certified that want to be part of this program. We now have more than 100 PCMH negotiations under way nationally. Core areas of measurement include: Efficiency measures in Inpatient Services, Outpatient Services, Prescription Services and Behavioral Health. Quality reporting, particularly in Diabetes, Cardiovascular and Preventive Screening. The Efficiency and Quality components will operate hand in hand: Patients are assigned or ‘attributed’ to PCPs based upon the following criteria: 1) the PCP the patient saw the most frequently during a 12 month period; or, 2) if there were several single visits to multiple PCP practices, the patient is assigned to the physician he/she most recently visited. The plan sponsor will be charged for the PMPM prospective care coordination payment based upon the number of its plan members attributed to the medical home through Aetna’s attribution logic. Savings calculations are based upon the evaluation of 7 efficiency and 17 clinical measures, including reduction of non-emergent ER visits and inpatient hospital stays. These cost reductions and quality improvements are expected to be achieved through improved care coordination, increased patient engagement, data sharing and clinical integration. 50 percent of the savings over a given period of time (i.e., 12 months) will be paid to the PCMH practices. Savings are defined as the cumulative PMPM medical cost reduction calculated through Aetna’s PCMH efficiency model. The results are shared with plan sponsors and physicians. Aetna’s analytics team will review the savings calculation annually. Their reports will be available for plan sponsor review. We look forward to continuing our dialogue with you as we share additional updates on our evolving Patient-Centered Medical Home (PCMH) programs and our collaborative approach to care with physicians. ^[i]“New 2011 Survey Of Patients With Complex Care Needs In Eleven Countries Finds That Care Is Often Poorly Coordinated.” Commonwealth Fund. November 9, 2011. http://www.commonwealthfund.org/Publications/In-the-Literature/2011/Nov/2011-International-Survey-Of-Patients.aspx. Aetna is the brand name used for products and services provided by one or more the Aetna group of subsidiary companies, including Aetna Life Insurance Company and its affiliates (Aetna). This material is for information only. Health insurance plans contain exclusions and limitations. Information is believed to be accurate as of the production date; however, it is subject to change. For more information about Aetna plans, refer to www.aetna.com. We are located at 151 Farmington Ave, Hardford, Connecticut 06156. ©2012 Aetna Inc. 51.22.001.1 (10/12)