Dr. Kurt Ransohoff Sansum Clinic: 96 Years of Innovative Healthcare, P.12

health

Volume 11 • No. 1 Spring 2017

Dr. Kurt Ransohoff Sansum Clinic: 96 Years of Innovative Healthcare, p.12

How Will “Repeal and Replace” Affect My State?, p.14

Preparing for MACRA: Leading Physicians Through Change, p.27 For your organization, KNOWING is transformative.

Today, the right lab is far more than a lab. It’s a source of insight and innovation. It’s a catalyst for change. It’s a valuable resource you use to elevate everything you do. It’s a true partner in the pursuit of better outcomes—in the care you provide and the business you operate. Contact [email protected] to schedule a visit with a representative.

Get to know us better. Visit QuestForHealthSystems.com.

© 2016 Quest Diagnostics Incorporated. All rights reserved. 5616 Mitigate financial risk. Improve outcomes and value. Transition your most complex patients to VITAS Healthcare and our enhanced continuum of care for advanced-disease patients.

VITAS addresses the concerns physician groups • Rapid, seamless transitions of patients from have about their “at risk” populations—their most hospitals and other post-acute care settings to complex, medically compromised patients. home, by dedicated VITAS admissions staff But we know you are also concerned with • Improved physician RVU benchmarks providing the optimum in patient-centered, • Clinical criteria of hospice eligibility via the coordinated and accountable care. That’s why VITAS app VITAS offers: • 24/7 access to our Care Connection Center • Personalized care plans that improve patients’ quality of life, resulting in higher CAHPS® • Interoperability and customized patient data scores and impacting multiple HEDIS® indicators exchange • Hospice education and collaterals available to • Benefits of participating as attending when your our partners patient elects the hospice benefit

Transition your most complex patients to VITAS Healthcare.

SINCE 1980 800.93.VITAS • VITAS.com table of contents 4 4 © 2017, Magazine. prohibited. without writtenpermissionisstrictly Reproduction inwholeorpart All rightsreserved. the responsibilityof supplied byitsauthorsarenot Opinions expressedorfacts in the accuracy ofthearticles published precautionistakentoensure Every City, MO third class mailpaidinJefferson onrequest.Advertising rates Bulk two years;$3singlecopy. Subscription rates: $32peryear;$58 [email protected] For advertising, pleasesendemailto Angeles, CA90017 Wilshire Blvd., Suite1620, Los orc/oCAPGHealth,capg.org 915 editorial inquiriestocapghealth@ Please sendpressreleasesand capghealth.com Phone 916.761.1853 95683 PO Box 674, Sloughhouse, CA Valerie OkunamiMedia Health CAPG Stephen L.Rivetti Kurt Ransohoff, MD Amy Nguyen Howell, MD, MBA Mara McDermott Don Crane Bill Barcellona Jim Agronick Contributing Writers Nelson Maldonado Editorial Assistant Kobata Daryn Editor Managing Partners KayPayne,Mary Arch Health Amy Nguyen Howell, MD, MBA Lura Hawkins, MBA Editorial Board Advisory Don Crane Editor-in-Chief Valerie Okunami Publisher l capg health health capg CAPG Health Health CAPG CAPG Health Health CAPG Magazine ispublishedby Magazine Magazine. health CAPG Health CAPG Magazine. Spring 2017 Spring

“ CAPG MemberList 18 2016 Election Aftermath ofthe Federal P 16 P 14 Upcoming E 10 Names intheNews 8 From thePresident 6 Departme S Dr. Kurt Ransohoff O M R olicy Briefing: H y State? ansum epeal and epeal n the C the olicy Update: vents R C eplace” linic: 96 Years of Innovative Healthcare ow Will ov n A ffect ffect t er er s 12 30 Through Change Preparing forMACRA:HowtoLead 27 f Group Physicians Protection forMedical Best Practices:DisabilityIncome 32 Your HandsInsidetheCar! Fasten Your SeatbeltsandKeep California Healthcare2017: eat u re s CAPG Ad Jan2017_FINAL.indd 1 12/15/2016 3:17:25 PM From the President A Message from Donald Crane, President and CEO, CAPG

CAPG Members and Friends:

This spring finds us several months into a new presidential administration and a volatile healthcare environment. Immediately after the inauguration, the Trump administration began acting to repeal and replace the Affordable Care Act as promised. As of this writing, the proposed replacement bill, the American Health Care Act, is under intense scrutiny, with all stakeholders—physicians, health plans, consumers, policy experts, and legislators—furiously weighing in. Donald Crane, CAPG President and CEO What does all this mean for the movement to value-based healthcare? From CAPG’s perspective, it means we’re more committed than ever to staying the course.

The quest to achieve better health outcomes and control costs is bipartisan, as we saw in the near-unanimous Congressional passage of MACRA (the Medicare Access and CHIP Reauthorization Act). While Republicans and Democrats fight over subsidies, credits, and taxes, both sides largely agree that the value movement must continue.

The underlying imperatives of economics are driving this need. Healthcare costs continue spiraling upward, now reaching almost 18 percent of the U.S. gross domestic product (GDP). That trajectory is not just unsustainable. It’s arguably a potential threat to our national security and economic well being, if healthcare co-opts increasing shares of the federal budget that would otherwise go toward education, defense, and other essential sectors.

At CAPG, we believe the market inevitably will reward those that deliver higher quality healthcare at lower cost, and that capitated and alternative payment models are the best bet for achieving both results. While many are predicting a bumpy future for healthcare, we see the opposite: Those who are best prepared to continue the move to value will reap the benefits. If you’re on the journey or just starting, you’re in a good position—and we’re here to support you. It’s our mission.

March onward, coordinated care. o

SAVE THE DATE!

Colloquium 2017

November 8-10, 2017 Hyatt Regency on Capitol Hill Washington, DC

6 l capg health Spring 2017 Ventegra = Truth and Integrity It is our name. It is our core. It is how we do business.

• We EMPOWER OUR CLIENTS to lower costs with our innovative solutions.

• We are your VALUE-ADDED SOLUTION to Pharmacy Services Administration.

• We help you STEER INTEGRATION of medical and pharmacy for enhanced quality of care.

• We offerTRUE TRANSPARENCY on our services demonstrating true costs savings.

Let us show you how Ventegra’s TRUTH and INTEGRITY can work for you.

Ventegra, Inc., a California Benefit Corporation 450 North Brand Boulevard, Suite 600, Glendale, California 91203 858.551.8111, Ext. 109 • www.ventegra.com

Client: Ventegra #2549 Created by: GSS Communiqations, 323.939.1181 Publication: CAPG 2017 / Ad #1 Dimensions: 8.125” x 10.875” trim Agency contact: Andrea Graham [email protected] Client contact: Peggy Frank ([email protected]) Names in the News

“I’m extremely proud of our member groups selected by Welcome to Our Newest Members CMS as Next Generation participants,” said Donald Crane, CAPG’s CEO. “CAPG stands ready to do all we can to CAPG warmly welcomes these members who have advance accountable care organization models and other recently joined: innovative payment and delivery approaches in the future.” Organizational Members The CAPG Next Generation participants are: Advantage Medical Group, LLC, Orlando, FL • Allina Integrated Medical Network (Minnesota and Canopy Health, Emeryville, CA Wisconsin) Central Oregon IPA, Bend, OR • Arizona Care Network, LLC (Arizona) Comprehensive Geriatric Care of San Juan, • DaVita Medical ACO California, LLC (California) San Juan, PR • Hill Physicians Medical Group (California) East Coast Medical Services, Inc., Fajardo, PR • KentuckyOne Health Partners, LLC (Indiana and Innovare Health Advocates, St. Louis, MO Kentucky) Jefferson Health, Philadelphia, PA • MemorialCare Regional ACO, LLC (California) Key Medical Group, Inc., Visalia, CA • Monarch Health Plan (California) Managed Care Management and Educational, LLC, • Optum Accountable Care Organization (Arizona) San German, PR • Physicians of Southwest Washington (Washington) Medicos Selectos del Norte, Inc., Vega Alta, PR • Prospect ACO CA, LLC (California) Methodist Le Bonheur Healthcare, Nashville, TN • Prospect ACO Northeast, LLC (Connecticut and Oak Street Health, Chicago, IL Rhode Island) Pediatric Associates, Plantation, FL • Regal Medical Group dba Heritage California ACO Privia Medical Group, LLC, Arlington, VA (California) Signature Partners Network, Falls Church, VA • Sharp HealthCare ACO – II, LLC (California) • Triad Health ACO Inc. (North Carolina) Corporate Partner Continuum Health Alliance Jennifer Jackman Named CEO of Edinger Associate Partners Medical Group Natera, Inc. Edinger Medical Group, an Soleo Health, Inc. award-winning physician-owned practice serving Orange County, Affiliate Partners California patients for over 50 Canvas Medical years, has appointed Jennifer Financial Recovery Group, Inc. Jackman as chief executive U.S. Advisors, Inc. officer. Jackman, a highly respected healthcare leader and public policy advocate for physician organizations, has over 25 years of experience Fourteen CAPG Members Selected in the healthcare industry. Previously, she was COO of as 2017 Next Gen ACOs MemorialCare Medical Foundation, overseeing strategy The Centers for Medicare & Medicaid Services and operations of the Foundation, MemorialCare has confirmed more than 350,000 clinicians will Medical Group, Greater Newport Physicians IPA, participate in four alternative payment models in MemorialCare Regional Accountable Care Organization 2017: the Medicare Shared Savings Program, Next (ACO), and multiple ambulatory surgery and imaging Generation Accountable Care Organization (ACO), centers. She also was senior VP of medical group Comprehensive End Stage Renal Disease Care model, operations for Monarch Healthcare, responsible for the and Comprehensive Primary Care Plus model. The OptumCare Medical Group operations, including the Next Gen ACO model participants include 14 CAPG successful Pioneer ACO initiative, and president and members. CEO of Bright Health Physicians. continued on page 34

8 l capg health Spring 2017 Healthcare Facilities & Services

Who We Are Leading Independent Advisory Firm Comprehensive Capabilities • Independent financial, valuation, and strategic advisory CORPORATE DEVELOPMENT • Significant experience and tenure; partners average over 25 years of experience Buy‐Side M&A Advisory Asset and Service Line Divestitures • Nationwide presence with offices in Chicago, Cleveland, Affiliations and Joint‐Venture Formations Irvine, Philadelphia, and San Antonio Sell‐Side M&A Advisory • Deep healthcare industry experience in hospitals, health systems, physician groups, and ancillary services FINANCIAL & STRATEGIC ADVISORY

• Widely recognized expertise in physician group alignment Fair Market Value Opinions with health systems; especially with respect to transaction Fairness Opinions structure formation, incentive alignment, and risk mitigation Litigation Support and Benchmarking Regulatory Compliance Advisory • Broad, national, health system client base Strategic Options Assessments • Subgroup dedicated to healthcare real estate advisory and General Finance and Strategy Advisory Healthcare Real Estate Brokerage & Advisory brokerage

Transactions involving securities are conducted at the Chicago and Cleveland offices. Who We Serve

HOSPITAL & HEALTH SYSTEMS POST‐ACUTE CARE OUTPATIENT SERVICES S • For‐Profit & Not‐for‐Profit Health • Long‐Term Care Hospitals • Urgent Care Centers A L Systems • Physical Therapy & • Ambulatory Surgery Centers TERN A TE SITE • Academic Medical Centers Rehabilitation Providers • Diagnostic Imaging Centers • Specialty Hospitals • Senior Living • Laboratory Services

TH F A CILITIE • Rural Health Providers • Home Health & Hospice • Other Ancillary Service Providers • Primary Care &

HE A L Specialty Medical Groups • Cancer Treatment Centers

Select Experience

Transactions involving securities are completed through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and member FINRA. bglco.com 10 10 l capg health health capg upcoming events C T C S Orlando, JW T S C T C P T S Web T F Riverside, T Inlan Web T Human Resou Denver, T C Web T S uesday, uesday, uesday, uesday, uesday, hursday, hursday, hursday, hursday, e hoenix, AP AP tate Gove out out tate Pol omm ont olo d Spring 2017 Spring capg.org/conference2017 Diego, San June 22-24 CA E E E G G e x x x r r h h r d PG M i al Pol a A A A A A ttee acts A east Re west Re

arriott arriott A A M M M E pril 25 pril 25 pril 17 pril 11 pril 4 irport irport d pril 20 pril 13 arch 30 arch 16 ission Inn m A o Re M i nnual pir c arriott Grande arriott M r y T M C ech Center i anchester Grand nment P

c e Re arriott omm C gi r y gi omm gi ces onal

C onal onal C gi omm i onfe ttee i onal C ttee L r omm M akes i M o M ttee eet r eet gr eet ence 2017 H M i yatt i ttee ams eet n i i n n g g g i n g P P T N Oakland, T C Gene C Wednesday, Gene Chicago, T Mid C Saturday, June 24 C C C Wednesday, June 7 C Web T S C T C information on these events: 213.624.2274. Unless otherwise noted, C contact uesday, uesday, hursday, hursday, hursday, hiladelphia, Courtyard hiladelphia, Courtyard AP AP AP AP h tate Pol al omm l omme al o i a r n E G G G G west Re i i r t fo fo i x cal Qual A maceut h r r i nnual Conference 2017 al al M M ttee east Re M H r r M M M r ay 16 ay 2 ilton Oakland n n arriott O’ arriott c ay 11 ay 25 ay 18 M M M i i i a a i al ay 10 c embe embe gi y

i ACO C cal onal i H gi t omm are y r r onal

s s L C C A hiladelphia ea hip hip irport a omm M i ttee r eet d e — — M e C r N S eet i ttee i AP omm s out o n A hip g r G for more irport i t n h h g i ttee e e r r n n CAPG Annual Conference 2017 From Volume to Value in the New World Order: What Now? #CAPGInnovates June 22-24, 2017 @CAPGVoice Manchester Grand Hyatt, San Diego, CA

With the new presidential administration taking steps to “repeal and replace” the Affordable Care Act, many are anxious about the future of value-based healthcare. Regardless of the political jockeying, however, industry leaders agree that alternative payment models are the key to improving healthcare quality and controlling spiraling costs.

With that in mind, our Annual Conference 2017 is designed for all who are committed to staying the course. Our new three-day format offers you concentrated learning from industry experts, with both the high level politico-economic forecast for healthcare and practical knowledge to thrive in risk-based contracting and care delivery.

Featured Sessions Include:

J. Mario Molina, MD Robert E. Moffit, PhD President and CEO, Molina Healthcare Senior Fellow, Center for Health Policy Studies, Amidst the Uncertainty, What Should Heritage Foundation the Delivery System Do? New Market-based Policy Changes

Ian Morrison Panel—Healthcare Post-Election: Author, Consultant, and Futurist Whither the Value Movement? Just Change the Name to Trumpcare Moderated by Donald H. Crane, and Let’s Move On President and CEO, CAPG

Visit capg.org/conference2017 for the latest information Fall 2016 capg health l 11 on the cover Sansum Clinic: 96 Years of Innovative Healthcare

By Kurt N. Ransohoff, MD, CEO and Chief Medical Officer, Sansum Clinic

The Sansum Clinic to the multispecialty model of the Mayo Clinic, the first of today—the integrated group practice in the nation. oldest independent multispecialty provider Our forward-thinking founders established models of of outpatient healthcare healthcare that have enabled us to weather the 1925 services on the Central Santa Barbara earthquake, the Great Depression, World Coast, and the last War II, the advent of Medicare, the formation of a nonprofit remaining independent foundation, a merger of the two organizations to form medical foundation in a single outpatient clinic (now called Sansum Clinic) to California—is the result of better serve the community through economies of scale the happy and successful and administrative efficiencies, and the current alphabet marriage of two clinics: soup of modern healthcare: HMOs, PPOs, the ACA, and the original Sansum most recently MACRA. The common themes from the last Medical Clinic and the Santa Barbara Medical Clinic, both century closely mirror those we face today—innovation, founded in 1921. growing to meet the needs of the community, changes in payment models, and partnering for increased efficiency. Recently we worked with the Santa Barbara Historical Today, Sansum Clinic’s 180 physicians in 30-plus specialties Museum to document the history of Sansum Clinic. I was serve more than 129,000 patients, with 800,000 patient amazed by how strong a role our history has played in visits annually at 22 care facilities. The Clinic is administered preparing us to care for patients, despite the ever-evolving by a Board of Trustees for the benefit of the community, and changes we face in our industry. is among the top dozen employers in Santa Barbara County. Sansum Medical Clinic’s founder, Dr. William David Sansum, In 2012, Sansum Clinic adopted a comprehensive electronic was the first doctor in the U.S. to use insulin to treat patients health record system from Epic, which allows patients to with diabetes. The Clinic’s underlying concept was to have online access to their personal health records. That examine and treat health problems of patients who did not same year, we merged with our local nonprofit Cancer require hospitalization, using the latest research and medical Center of Santa Barbara with a vision for enhancing cancer advances. As the Clinic thrived and expanded, prominent care on the Central Coast, and today we are building a patients traveled from places like Las Vegas and Mexico to world-class regional Cancer Center slated to open later this receive thorough examinations without the “exorbitant price year—thanks to the generosity of grateful patients and other tag” of a hospital stay, then $10 to $12 a day. community donors. The Santa Barbara Medical Clinic was created with an We have seen some of the key features of the Affordable innovative and almost revolutionary approach to healthcare. Care Act (ACA) take effect. Since 2014, we have Doctors Rexwald Brown, Benjamin Bakewell, and Hilmar experienced a notable increase in new patient visits, Koefod formed a group practice to make comprehensive and we have proudly adapted in an attempt to meet the specialty care available to all segments of Santa Barbara community’s needs amid this changing environment. at a time when solo practitioners provided most of the care. Dr. Brown in particular believed in the team approach In 2014, we built the Foothill Medical & Surgical Center, our to providing higher quality healthcare more affordably by first new facility in Santa Barbara in decades, which gave pooling resources and skills and sharing costs—a novel us the opportunity to put specialties with similar needs premise before it became the standard for excellence it is under one roof, and created much-needed space to expand today. He was passionate about the idea that this model primary care, urgent care, and same-day appointments. It could make healthcare more affordable for people of also afforded the Clinic with four operating rooms, allowing moderate circumstances. This group approach was similar us to transition care that previously could only be provided in

12 l capg health Spring 2017 a more costly hospital setting to an outpatient setting. That The shift toward value-based payment models also means same year, our new Patient Access Department allowed us we are becoming increasingly reliant on data in order to to make great strides in streamlining the scheduling and document, measure, and report our quality and cost. We registration processes for primary care services, including must be able to report on the high-value care we provide internal medicine, family medicine, and pediatrics. The while also monitoring it for improvement opportunities. We Department’s centralized scheduling process reduces are making investments in our internal data warehouse and scheduling time and increases the efficiency and accuracy electronic health record to ensure we have the ability to of registration, improving patients’ ability to get the right meet these needs now and well into the future. care at the right time, in the right place. Other current efforts to improve our system include The Clinic has made a dedicated effort in disaster expansion of clinical hours, pharmacy services, the use preparedness for our community. As part of the expansion, of mid-level providers (nurse practitioners and physician we are installing emergency power that will enable us to assistants), and patient health and wellness education, plus serve the community in the case of natural disaster. Sansum addition of important programs like lung cancer screening. Clinic joined the County of Santa Barbara’s Emergency Preparedness Program and now participates in the We are proud that these efforts have earned us national Disaster Healthcare Partnership Coalition, which assures recognition for medical quality, including 4.5 Medicare Stars collaborative planning and efficient emergency response. and CAPG Standards of Excellence™ Elite status.

In 2015, we strengthened our partnership with CenCal Sansum Clinic’s vision continues to build upon the founding Health to ensure the growing Medi-Cal patient population goals of the two original clinics. As a premier integrated is served with adequate access to care, health promotion delivery system, we provide high-value healthcare to the and wellness activities, care coordination and disease communities we serve, managing the population’s care management, and health information technology. We needs while also creating a model of care that will thrive continue our decades-long commitment to the health of in California’s rapidly changing healthcare arena. It is a those who could not otherwise afford medical services by pleasure to share how our history has developed to forge providing more than $250,000 each year in free diagnostic what is today an exceptional healthcare provider serving services to patients of the Santa Barbara Neighborhood our small but forward-thinking community, and how we are Clinics. poised to navigate the healthcare landscape of the future.

We are now focused on navigating our way through the Our predecessors practicing at “The Clinic” in the 1920s next monumental changes in healthcare: Medicare’s shift in or during WWII would not recognize the newfangled payment models to focus on performance-based payment. technologies and interventions utilized every day at the One value-based model we are pursuing is the patient- current Sansum Clinic, but in other ways they would very centered medical home (PCMH), in which a primary care much recognize the same dedication to meeting the doctor leads a clinical care team that oversees the care of community’s needs through a group practice model that each patient in a practice. The goal is more coordinated started almost 100 years ago. o patient care and improved outcomes. With a team-based Dr. Kurt Ransohoff, CEO and Chief Medical Officer of approach to care, all members of the Sansum Clinic, is the new chair of CAPG's Board of clinical staff can assist with Directors for 2017-18. ensuring the patient’s needs are met and that valuable care is provided. Medical staff are trained to identify individual needs, whether preventive, chronic or acute, and to deliver or coordinate the most appropriate care. As part of that transition, we are making great strides in measuring and reporting the quality of care our practitioners and our practice provide.

Spring 2017 capg health l 13 Policy Briefing How Will “Repeal and Replace” Affect My State?

By Bill Barcellona, Senior VP for Government Affairs, CAPG

Having achieved a trifecta in the November 2017 election, the Republican Caucus now controls the White House, Senate, and House of Representatives and they have at least 23 months to pass legislation to repeal and replace the signature accomplishment of the eight-year Obama Administration—the Affordable Care Act. Whether you prowl the halls of Congress or the local state house, no one really knows what to expect or where things will end up. In this article, I want to explore what is at stake for the states from the changes to come.

The Republican plan. Or is it “plans,” plural? Although I’m writing this in February, I doubt we’ll really know for certain by the time you read this. Some similarities exist between most or all of these proposals, with the exception of the recent plan introduced by Senator Cassidy, which allows states to keep Obamacare or propose a replacement. The loss of “ Each seeks to cap the federal budget increase in Medicaid spending. Most Medicaid include the abolishment of subsidies in the individual and small group coverage markets–and most of all, dropping the individual and employer mandates, the expansion essential health benefits standard and certain coverage mandates–like free birth control and access to reproductive services. Most seem to keep the inclusion of funding could coverage for dependents to age 26 and the ban against pre-existing condition underwriting. New mechanisms are included to increase access to coverage– potentially like cross-state insurance sales, high deductible consumer-driven plans, and throw millions taxpayer deductions for premium expenditures. Aspirational goals are included, such as incorporating greater state-level flexibility to design coverage systems in of people out the commercial and Medicaid programs. of covered How will these changes impact states? States that took advantage of the Obamacare coverage expansion generally enjoyed improved health status ambulatory within their population and lower cost trend in healthcare spending. Many of the expansion states are now evaluating the negative hit to their economy care and return resulting from a loss of ACA coverage and reporting local impacts to members them to seeking of Congress. It may be that a gradual phase-in of any replacement plan could moderate the negative economic impact. The loss of Medicaid expansion [emergency funding could potentially throw millions of people out of covered ambulatory care and return them to seeking treatment at the local emergency services room department. Hospitals are facing the prospect of increased unpaid debt without a commensurate replacement of their lost Disproportionate Share treatment].” Hospital (DSH) funding (for those that care for large numbers of Medicaid and uninsured patients). The loss of 90-10 Medicaid expansion funding would place an immediate burden on each state’s general fund to make up the lost funding share. Or, the state legislature would have to consciously cut Medicaid benefits or change eligibility thresholds to ration coverage. Larger states like California face a potential loss of over $14 billion in Medicaid funding.

14 l capg health Spring 2017 The ACA also had an indirect positive impact through general funds and reinvesting savings to build better creating tens of thousands of healthcare jobs. The infrastructure for healthcare delivery. The states will loss of those jobs, especially in the middle class, will need both increased flexibility to administer local have a serious impact on voter attitudes going into the versions of Medicaid and federal innovation funding 2018 midterm election. to capitalize new infrastructure for data analytics, cost and quality transparency, and care management. Is there a potential upside? The Affordable Care Act was far from perfect and some elements, Examining specific Republican proposals such as tax reconciliation of subsidies or the long- for insurance market reform. Republicans term sustainability of the risk adjustment program, propose to replace the current ACA Exchange may have been fatally flawed. States now have the Marketplace model, which utilizes an individual opportunity to honestly evaluate the potential for mandate to purchase coverage with premium and change and suggest improvements. Allowing state cost share subsidies. The new arrangement would flexibility to design localized Medicaid systems include a combination of tax deductions/credits for may prove more efficient in the long run. The Ryan premium costs coupled with an individual mandate to proposal to move away from the FMAP formula maintain continuous coverage to preserve the right (federal medical assistance percentage—the federal of guaranteed issuance. The Republican safety net government’s share of a state’s expenditures) to a for those who cannot afford continuous coverage is per-capita expenditure model has generated fear and the reintroduction of high-risk pools as mechanism uncertainty within the safety net. More analysis, like for coverage of last resort. Risk pools could use the one recently issued by Avalere Health, are needed some updating. To stay financially viable, states to evaluate potential impacts on state budgets. could develop delivery networks for their risk pool populations that are designed to deal with sicker, Assuming that expansion states could keep their more complex patients, rather than using leased PPO expansion funding, perhaps their most important networks. potential gain would be the ability to garner 100 percent of any savings realized through a more States must evaluate whether their own tax policies efficient Medicaid system. In many states, any can support a tax deduction/credit model. A recent shared savings that were negotiated with the UCLA study challenged the viability of the tax credit federal government were mostly passed back to model, since deductions are mostly used by those in CMS. Providers did all the hard work to create the upper income strata. If deductions or credits are only savings, but saw none of the benefit. States could useful to those with higher incomes, the mechanism maximize the value of such savings by doesn’t replace the use of subsidies, which are more reducing pressure on their own continued on page 34

Spring 2017 capg health l 15 Federal Policy Update Aftermath of the 2016 Election: The State of the Value Movement

by Mara McDermott, Vice President of Federal Affairs , CAPG

In November 2016, Donald Trump was elected the 45th President of the United States by a decisive Electoral College margin. In 2017, Republicans will hold majorities in the House of Representatives and the Senate. As described below, we believe that the election outcome creates new opportunities and challenges for CAPG members on priority issues, including delivery system reform, the move from volume to value, and Medicare Advantage.

The Impact of Repeal and Replace Throughout the campaign, President Trump promised to repeal and replace the Affordable Care Act (ACA). In the days and months following the election, conversation among health policy thought leaders has turned to how that campaign promise could become a reality. We continue to believe that redesigning the delivery system will be a priority and that there is substantial opportunity to design and implement risk-bearing alternative payment models. “[CAPG remains] Although Republicans control the White House, House, and Senate, they do not optimistic about have the necessary votes in the Senate to repeal the entire ACA, due to the Senate’s 60-vote filibuster requirement.R epublicans may, however, proceed under the budget our ability reconciliation process to repeal parts of the ACA that relate to budgetary and financial matters. This approach requires only a simple majority to pass in the Senate, which to continue means that repeal will likely be piecemeal, with some aspects of the law remaining advancing intact. the value The Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) were created as part of the ACA. However, these provisions seem unlikely movement, to be repealed, even if other parts of the law are successfully repealed. In addition, we believe that the Trump Administration could bring about some positive regulatory including changes to the Medicare ACO program—loosening restrictions and bringing about promoting and more success in the program than we have seen to date. expanding Alongside possible improvements to the ACO program, we see potential for the development of new alternative payment models. Recall that CAPG worked on a capitated, bipartisan basis to develop and advance a delivery model called the Third Option—a direct contracted, capitated accountable care model. We will continue to work with coordinated members of Congress on both sides of the aisle and the Administration to further risk- ” bearing delivery models. care.

Future of MACRA In 2015, Congress passed and President Obama signed into law the Medicare Access and CHIP Reauthorization Act (MACRA). The law, which exists separately from the ACA, creates a new system of pay-for-performance in traditional Medicare, along with a financial incentive for participation in risk-bearing alternative payment models.

At the end of 2016, the Obama Administration released a final rule implementing MACRA, which takes a soft, phased-in approach to the first year of performance

16 l capg health Spring 2017 measurement in 2017. We expect that MACRA will Opportunity for Medicare Advantage carry forward as planned in 2017, with a soft launch and Since the enactment of the ACA, the Medicare Advantage relatively low bar for avoiding financial penalties in the (MA) program has faced intense regulatory and legislative lfirst year.H owever, we see opportunity for additional pressure. The program faced cuts under the ACA and rule making and regulatory changes in 2018 and beyond. has seen additional downward pressure from policies that CAPG welcomes the opportunity to work with the new include risk adjustment changes, the phase-in of encounter Administration to design MACRA implementation for data, and program audits. The new Administration and future years. Congress are expected to take a more favorable approach to MA, creating opportunities for CAPG members. CMS Innovation Center Vulnerable In particular, CAPG has sought out opportunities to incent At the end of 2016, the Centers for Medicare & Medicaid participation in risk contracts between MA health plans and (CMS) Innovation Center, or CMMI, faced intense physician organizations. We look forward to working with scrutiny, particularly from Congressional Republicans. the new Administration to achieve the goals of a reformed With introduction of proposed mandatory models like delivery system in MA that rewards the CAPG member the joint replacement bundled payment program and model. a nationwide Part B drug demonstration, CMMI came under fire from theH ill and stakeholders alike. This has led many to wonder if the CMMI will be repealed or CAPG Remains a Strong Voice for Value otherwise modified in 2017. We see opportunities and challenges in the year to come. CAPG continues to pursue value-based reforms in While the future of CMMI remains cloudy, we think it will Washington, DC. We remain optimistic about our ability continue, but perhaps with some changes and certainly to continue advancing the value movement, including with new types of models being tested. We believe this promoting and expanding capitated, coordinated care. will bring opportunities for CAPG members to improve We look forward to working with all of you in this new upon existing CMMI offerings and potentially test new environment to bring the message of coordinated care to models. the Administration and the 115th Congress. o

Spring 2017 capg health l 17 18 18 l capg health health capg CAPG MEMBERS San Francisco, California A C New York, New York C San Diego, California C Bend, Oregon C Columbus, Ohio Inc.* C Beverly C A E C M C E C Downey, California C Cypress, California Group, Inc. C Oakland, C B R H H H Colorado B Dover, Delaware B Bakersfield, California B A A Buena A L A L A M A A A M A A A P A L A Orlando, F A M I California I A L A L A ORGANIZA PA os os os ong Beach, California ong Beach, California nglewood, Colorado meryville, California rchitrave ccess inole, California edlands, California ustin, lhambra, California lameda, California ealth Network • ealthCare Network ealth ssociation ustin Regional pple ngel lta llina Health llied Physicians of ll lameda Health Partners ffinity dventist Health Physicians dvantage dvanced ccountable Health hinese hinese hildren’s Physicians entral entral edars- atholic Health Initiatives* are anopy Health are alifornia Pacific Physicians rown & ayhealth Physician akersfield edical Group ount Kisco, New York inneapolis, odesto, California eaver eaver C • A A A M are IP M M M ngeles, California ngeles, California ngeles, California ed Health P C ediChoice I P T M M ount ore H artners • exas ark, California are M H O O edical Group/ M S ills, California edical Group H PA L C A ealth Neighborhoods • KentuckyOne A T edical Group inai regon IP hio Primary edical Group* edical ealth • A oland Physicians* merican IP ommunity Health M M M • Community Care I M M TIONAL MEMBERS M F edical Group edical innesota edical Group, Inc.* edical Group, amily S edical, P. M M T Spring 2017 Spring ystem PA ri A edical Group* ercy H S C rkansas P • ealth • UniNet ervices linic* rimeCare Select • St. A P M A M H remier Care I C ccess Senior C anagement, Inc. ealth Network • A edical A C alifornia are IP M C lliance, are Physicians, H edical Group . ealth Network • C PA orporation* LLC C A C N M enter • Future Care are LLC etwork IP PA edical H ealth Care • • Seoul M L ission uke’s A A C P C A C Newport Beach, California Greater L Good Bakersfield, C Golden M F E T Scottsdale, E E E Fountain Valley, California E Fajardo, E San Francisco, California Dignity Health P Desert A T Da M C A E C San Juan, C Denver, Colorado C Covina, California L High Desert H Group • • Desert Oasis Desert I California Coastal Care A R Heritage Provider H Hawaii Pacific Health Sayre, Guthrie Seattle, Washington Group Health Physicians Group, Inc.* H P M • A Group • Family Choice Group • L M • Group, Division of DaVita E orrance , California akeside Community verett Clinic P H ong Beach, California ancaster, California verett, Washington artners • Colorado Springs l ncino, California acey he BQ lta ffiliated Doctors of Orange County • lliance • hoenix, alm Springs, California pple Valley, California eseda, California quality Health - Q Point l Paso Integral dinger ast eritage ealthCare ssociation onolulu, itrus igna hoice ontinucare onifer Health omprehensive Geriatric olorado Permanente edical Group edical Group • ission iami, Florida P remier Care of Northern California • Saint ealthCare V M aso, ita Health P H E ed C lus • Bakersfield Family P verett ealth S PA M M oast R V ennsylvania H H P T H O P A amaritan M egal E M alley Independent Physicians exas M N edical Group edical ills, California uerto H M ealthCare ealth Services • • Coastal Communities hysician Network • P Z asis Healthcare mpire id Cities I edical Group A P ewport Physicians awaii edical Group* uerto edical Group P P artners • rizona artners, Division of DaVita M A M H artners South Florida • JS C M C R edical Group • Sierra H edical ealthcare • Greater Covina linic, P. C orporation edical Group ico P igh Desert F R F S are Partners* M hysician Network • California oundation ico oundation* C olutions P PA M H anaged artners, I are, IP H N M ealthcare • edical Practice • OmniCare ealthCare etwork* edical Group • Family S H S E ervices, Inc. ealthCare .* xceptional Care M H M H ealth A edical Group, P. M PA edical Group • eritage Victor Valley C C edical Group • are, Inc. are of , P L P A M P akeside artners Nevada hysician Network Z and NY • M artners • P edical M A edical Group artners • rizona edical Group H A S

ealthCare M M an Juan M M A edical edical P gnes edical edical H riority T ealth he C . E M San German, M L L Doral, Florida L A L L Glendale, California L A L Visalia, California Key Walnut Creek, California John P Jefferson Health Boston, Iora Health, Inc. St. Innovare Health San Hill Physicians Coachella Valley Ontario, California NAMM Walnut Creek, California M San Juan, MSO New York, New York M M M Irvine, California M L M R P M M M Novato, California M Cincinnati, Ohio M T M • H Del Barrio, Inc. • Global Care Group I A Woodland M Vega M Glendale, California M P • P Group • Watts Group, Inc. • ustin, California P P oma akewood, California ong Beach, California oma eon akewood IP akeside akeside hysicians rimeCare lamitos I ccountable hiladelphia, goura ockville, ducational, C ealthCare edical Group • onterey, California emphis, averick anaged uir ount onterey onarch Health olina id- ethodist eritage ercy Health Physicians emorial edPoint edicos ioneer remier L ouis, R M A A of Puerto Rico* M H amon, California L M M tlantic Permanente PA lta, edical Group L inda, California ealthcare Corporation P H

M edical Group, IP S uir Physician C M edical inda rimeCare P PA P M ills, California M • Centinela Valley I assachusetts inai Health Partners* T P alifornia* H P M rovider Network, M edical S hysicians Network • C ennessee M M issouri M C LA aryland C uerto B R M uerto • St. ills, California edical Group • H electos del edical Network • L are P ommunity Healthcare edical edwood Community P edical Group are edical Group, Inc. ay IP e anagement ealth Care I I ennsylvania U uerto LLC PA A P P B niversity Health C M rimary Care M hysicians of R R onheur Healthcare M M • Jewish enters, Inc. M C ary I C ico ico A A edical Group* edical Group, Inc.* anagement and enters* edical Group of Chino • R are* N dvocates ico PA etwork N PA • Brookshire I etwork* N M A A H M • Bella Vista PA orte, Inc.

ercy P A M ome for the P edical Group I P M rimeCare of Citrus ssociated edical Group, Inc. rimeCare • • rospect edical Group, E P H l hysicians ealth Network • P C royecto are PA M M M A edical E edical ging I edical PA mpire • PA Valley • PrimeCare of Corona • PrimeCare of Hemet St. Joseph Heritage Healthcare* Torrance Hospital IPA Valley • PrimeCare of Inland Valley • PrimeCare of Fullerton, California Torrance, California Moreno Valley • PrimeCare of Redlands • PrimeCare of Riverside • PrimeCare of San Bernardino • Hoag Medical Group • Mission Heritage Medical Triad HealthCare Network, LLC* PrimeCare of Sun City • PrimeCare of Temecula • Group • St. Mary High Desert Medical Group Greensboro, North Carolina Redlands Family Practice Medical Group St. Vincent IPA Medical Corporation UC Irvine Health New West Physicians, PC* Cerritos, California Irvine, California Golden, Colorado San Bernardino Medical Group UCLA Medical Group* Northwest Permanente, P.C. San Bernardino, California Los Angeles, California Portland, Oregon Sansum Clinic* USC Care Medical Group, Inc. Northwest Physicians Network of Santa Barbara, California Los Angeles, California Washington, LLC Santa Clara County IPA (SCCIPA) Tacoma, Washington Valley Organized Physicians Foster City, California Harlingen, Texas Oak Street Health Santé Health System, Inc. Chicago, Illinois Verity Medical Foundation Fresno, California San Jose, California Omnicare Medical Group Scripps Coastal Medical Center Lynnwood, California WellMed Medical Group, P.A.* Oceanside, California San Antonio, Texas One Medical Group Scripps Physicians Medical Group San Francisco, California San Diego, California CORPORATE PARTNERS Pediatric Associates SeaView IPA Plantation, Florida abbvie Oxnard, California Anthem Blue Cross of California The Permanente Medical Group, Inc. (North)* Sharp Community Medical Group* athenahealth Oakland, California San Diego, California Boehringer Ingelheim Pharmaceuticals, Inc. Continuum Health Alliance Physicians DataTrust Arch Health Partners • Graybill Medical Group Evolent Health San Diego, California Humana, Inc. Greater Tri-Cities IPA • Noble AMA IPA • St. Vincent Sharp Rees-Stealy Medical Group* Merck & Co. IPA San Diego, California Nestle Health Science Physicians Choice Medical Group of San Signature Partners Network* Novartis Pharmaceuticals Luis Obispo Falls Church, Virginia Novo Nordisk San Luis Obispo, California Patient-Centered Primary Care Collaborative The Southeast Permanente Medical Group, Sanofi, US Physicians Medical Group of Santa Cruz* Inc. SCAN Health Plan Santa Cruz, California Atlanta, Georgia Shionogi, Inc. Physicians Choice Medical Group of Santa Southern California Permanente Medical Maria Group* ASSOCIATE PARTNERS Pasadena, California Santa Maria, California Arkray Physicians of Southwest Washington, LLC Southwest Medical Associates Astellas Pharma US, Inc. Olympia, Washington Las Vegas, Nevada AstraZeneca Pharmaceuticals Avanir Pharmaceuticals, Inc. PIH Health Physicians Summit Medical Group, PA* Bio-Reference Laboratories, Inc. Whittier, California Berkeley Heights, New Jersey Bristol-Myers-Squibb Pioneer Medical Group, Inc.* Sutter Health Foundations & Affiliated Easy Choice Health Plan, Inc. Cerritos, California Groups* Genentech, Inc. Sacramento, California Incyte Corporation Preferred IPA of California Johnson & Johnson Family of Companies Central Valley Medical Group • East Bay Physicians Glendale, California Medical Group • Gould Medical Group • Marin Kaufman, Hall & Associates Headlands Medical Group • Mills-Peninsula Medical Kindred Healthcare, Inc. Privia Medical Group, LLC Lumara Health Arlington, Virginia Group • Palo Alto Foundation Medical Group • Palo Alto Medical Foundation • Peninsula Medical Clinic Natera, Inc. Prospect Medical Group* • Physician Foundation Medical Associates • Sutter Pfizer, Inc. Orange, California East Bay Medical Foundation • Sutter Gould Medical Ralphs Grocery Company Foundation • Sutter Independent Physicians • Sutter Soleo Health, Inc. AMVI/Prospect Medical Group • Genesis Healthcare Medical Foundation • Sutter Medical Group • Sutter of Southern California, A Medical Group • Nuestra Medical Group of the Redwoods • Sutter North Sunovion Pharmaceuticals Inc. Familia Medical Group • Pomona Valley Medical Group Medical Group • Sutter PacificM edical Foundation Surgical Care Affiliates, Inc. • Prospect HealthSource Medical Group • Prospect The Doctors Company NWOC Medical Group • Prospect Professional Care Swedish Medical Group Medical Group • Prospect Provider Group RI, LLC • Seattle, Washington Prospect Provider Group CT, LLC • Prospect Provider AFFILIATE PARTNERS Group CTW, LLC • Prospect Provider Group NJ, LLC Synergy HealthCare, LLC Acurus Solutions, Inc. • Prospect Health Services TX • StarCare Medical Nashville, Tennessee Alignment Healthcare Group • Upland Medical Group, a Professional Medical Corporation SynerMed* Altura Monterey Park, California ASPiRA LABS Providence Health & Services Axene Health Partners Adventist Health Plan • Alpha Care Medical Group Torrance, California • Alvarado Hospital Medical Center • Angeles IPA Cal INDEX • Coordinated Care Plan of California • Crown City Canvas Medical Providence Medical Management Services Children’s Hospital Los Angeles Medical Group Burbank, California Medical Group • EHS Inland Valleys IPA • EHS Medical Group – Central Valley • EHS Medical Group CVHCare Korean American Medical Group • Providence Care – Los Angeles • EHS Medical Group – Sacramento Financial Recovery Group, Inc. Network • Employee Health Systems • IPA of Georgia • Mills Peninsula Medical Group MultiCultural Medical Group • PacificA lliance Medical Nifty After Fifty Monarch LLC Renaissance Physician Organization Center • Torrance Hospital IPA • XiMed Clare Hawkins, MD, IPA Board Chair Partners in Care Foundation Tenet Healthcare Pharmacyclics, Inc. River City Medical Group, Inc. Dallas, Texas Redlands Community Hospital Sacramento, California Saint Agnes Medical Group The Portland Clinic SullivanLuallin Group Riverside Medical Clinic Portland, Oregon U.S. Advisors, Inc. Riverside, California The Vancouver Clinic, Inc., P.S.* Ventegra, LLC Riverside Physician Network Vancouver, Washington Riverside, California * Indicates 2017-18 Board Members

Spring 2017 capg health l 19 B:16.5 in T:8.125 in T:8.125 in S:7.25 in S:7.25 in

#1 PRESCRIBED ORAL CLL THERAPY.* RESONATETM-2 FRONTLINE DATA 1† MORE THAN 20,000 PATIENTS TREATED SINCE APPROVAL RESONATETM-2 was a multicenter, randomized 1:1, open-label, Phase 3 trial of IMBRUVICA® vs chlorambucil in frontline CLL/SLL patients ≥65 years (N=269)2,3 Patients with 17p deletion were not included in the RESONATETM-2 trial3

EXTENDED PROLONGED MAKE IMBRUVICA® OVERALL SURVIVAL PROGRESSION-FREE IMBRUVICA® signifi cantly extended SURVIVAL 2 OS vs chlorambucil IMBRUVICA® signifi cantly extended PFS vs chlorambucil2,3 YOUR FIRST STEP Statistically signifi cant 2 reduction in risk of death 2,3 Approved in frontline CLL with or without 17p deletion2 56% HR=0.44 (95% CI: 0.21, 0.92)

2,3

41% of patients crossed over to IMBRUVICA®

Estimated survival rates at 24 months 95% IMBRUVICA® (95% CI: 89, 97) 84% chlorambucil PRIMARY ENDPOINT: PFS (95% CI: 77, 90) • Median follow-up was 18 months3 • IMBRUVICA® median PFS not reached2 • Chlorambucil median PFS was 18.9 months SECONDARY ENDPOINT: OS (95% CI: 14.1, 22.0)2 2 3 B:11.125 in • Median follow-up was 28 months • PFS was assessed by an IRC per revised IWCLL criteria T:10.875 in S:9.875 in

Adverse reactions ≥20% across CLL/SLL registration studies2 IMBRUVICA® is a once-daily oral therapy indicated for: • Neutropenia • Musculoskeletal pain • Fatigue CLL 2 • Chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) • Thrombocytopenia • Nausea • Pyrexia SLL 2 • CLL/SLL with 17p deletion • Anemia • Rash • Hemorrhage • Diarrhea • Bruising

IMPORTANT SAFETY INFORMATION WARNINGS AND PRECAUTIONS drug is used during pregnancy or if the patient becomes pregnant while taking this DRUG INTERACTIONS Hemorrhage - Fatal bleeding events have occurred in patients treated with cardiac risk factors, hypertension, acute infections, and a previous history of atrial drug, the patient should be apprised of the potential hazard to a fetus. CYP3A Inhibitors - Avoid coadministration with strong and moderate CYP3A IMBRUVICA®. Grade 3 or higher bleeding events (intracranial hemorrhage [including fi brillation. Periodically monitor patients clinically for atrial fi brillation. Patients who inhibitors. If a moderate CYP3A inhibitor must be used, reduce the IMBRUVICA® dose. subdural hematoma], gastrointestinal bleeding, hematuria, and post-procedural develop arrhythmic symptoms (eg, palpitations, lightheadedness) or new-onset ADVERSE REACTIONS CYP3A Inducers - Avoid coadministration with strong CYP3A inducers. hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, dyspnea should have an ECG performed. Atrial fi brillation should be managed The most common adverse reactions (≥20%) in patients with B-cell malignancies including bruising and petechiae, occurred in approximately half of patients treated appropriately and if it persists, consider the risks and benefi ts of IMBRUVICA® (MCL, CLL/SLL, and WM) were neutropenia‡ (64%), thrombocytopenia‡ (63%), SPECIFIC POPULATIONS ‡ with IMBRUVICA®. treatment and follow dose modifi cation guidelines. diarrhea (43%), anemia (41%), musculoskeletal pain (30%), rash (29%), nausea Hepatic Impairment - Avoid use in patients with moderate or severe baseline hepatic The mechanism for the bleeding events is not well understood. IMBRUVICA® may Hypertension - Hypertension (range, 6% to 17%) has occurred in patients treated (29%), bruising (29%), fatigue (27%), hemorrhage (21%), and pyrexia (21%). impairment. In patients with mild impairment, reduce IMBRUVICA® dose. increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant with IMBRUVICA® with a median time to onset of 4.6 months (range, 0.03 to 22 ‡Based on adverse reactions and/or laboratory measurements (noted as platelets, neutrophils, or therapies and patients should be monitored for signs of bleeding. Consider months). Monitor patients for new-onset hypertension or hypertension that is not hemoglobin decreased). Please see the Brief Summary on the following pages. the benefi t-risk of withholding IMBRUVICA® for at least 3 to 7 days pre- and adequately controlled after starting IMBRUVICA®. Adjust existing antihypertensive The most common Grade 3 or 4 non-hematologic adverse reactions (≥5%) in MCL postsurgery depending upon the type of surgery and the risk of bleeding. medications and/or initiate antihypertensive treatment as appropriate. patients were pneumonia (7%), abdominal pain (5%), atrial fi brillation (5%), diarrhea *Based on market share 2016 July YTD data from IMS. †Based on IMS data February 2014 to date. Infections - Fatal and nonfatal infections have occurred with IMBRUVICA® therapy. Second Primary Malignancies - Other malignancies (range, 5% to 16%) including (5%), fatigue (5%), and skin infections (5%). Grade 3 or greater infections occurred in 14% to 29% of patients. Cases of non-skin carcinomas (range, 1% to 4%) have occurred in patients treated with Approximately 6% (CLL/SLL), 14% (MCL), and 11% (WM) of patients had a dose CI=confi dence interval, CLL=chronic lymphocytic leukemia, HR=hazard ratio, progressive multifocal leukoencephalopathy (PML) have occurred in patients treated IMBRUVICA®. The most frequent second primary malignancy was non-melanoma reduction due to adverse reactions. with IMBRUVICA®. Evaluate patients for fever and infections and treat appropriately. skin cancer (range, 4% to 13%). IRC=Independent Review Committee, IWCLL=International Workshop on CLL, OS=overall Approximately 4%-10% (CLL/SLL), 9% (MCL), and 6% (WM) of patients discontinued survival, PFS=progression-free survival, SLL=small lymphocytic leukemia. Cytopenias - Treatment-emergent Grade 3 or 4 cytopenias including neutropenia Tumor Lysis Syndrome - Tumor lysis syndrome has been infrequently reported due to adverse reactions. Most frequent adverse reactions leading to discontinuation (range, 19% to 29%), thrombocytopenia (range, 5% to 17%), and anemia (range, with IMBRUVICA® therapy. Assess the baseline risk (eg, high tumor burden) and were pneumonia, hemorrhage, atrial fi brillation, rash, and neutropenia (1% each) References: 1. Data on fi le. Pharmacyclics LLC. 2. IMBRUVICA® (ibrutinib) Prescribing 0% to 9%) based on laboratory measurements occurred in patients treated with take appropriate precautions. Monitor patients closely and treat as appropriate. in CLL/SLL patients and subdural hematoma (1.8%) in MCL patients. Information. Pharmacyclics LLC 2016. 3. Burger JA, Tedeschi A, Barr PM, et al; for the ® single agent IMBRUVICA . Monitor complete blood counts monthly. Embryo-Fetal Toxicity - Based on fi ndings in animals, IMBRUVICA® can cause fetal RESONATE-2 Investigators. Ibrutinib as initial therapy for patients with chronic lymphocytic Atrial Fibrillation - Atrial fi brillation and atrial fl utter (range, 6% to 9%) have harm when administered to a pregnant woman. Advise women to avoid becoming leukemia. N Engl J Med. 2015;373(25):2425-2437. occurred in patients treated with IMBRUVICA®, particularly in patients with pregnant while taking IMBRUVICA® and for 1 month after cessation of therapy. If this To learn more, visit IMBRUVICAHCP.com

Date: 11/23/16 Customer Code: PRC-02242 Group 360 Job #: 768999 File Name: PRC-02242_768999_v1 Brand: IMBRUVICA® Size: 8.125" x 10.875" Colors: CMYK Description: #1 PRESCRIBED ORAL CLL THERAPY.* Pub: CAPG Health (Spring 2017 Issue)

K P G75 M50 K75 Y50 GN M25 B C75 M75 K25 Y C50 M G25 C Y75 K50 C25 G50 Y25 R B:16.5 in T:8.125 in T:8.125 in S:7.25 in S:7.25 in

2,3

41% of patients crossed over to IMBRUVICA®

K P G75 M50 K75 Y50 GN M25 B C75 M75 K25 Y C50 M G25 C Y75 K50 C25 G50 Y25 R Brief Summary of Prescribing Information for IMBRUVICA® (ibrutinib) IMBRUVICA® (ibrutinib) capsules IMBRUVICA® (ibrutinib) capsules, for oral use See package insert for Full Prescribing Information ADVERSE REACTIONS The following adverse reactions are discussed in more detail in other INDICATIONS AND USAGE sections of the labeling: Mantle Cell Lymphoma: IMBRUVICA is indicated for the treatment of patients with mantle cell lymphoma (MCL) who have received at least one • Hemorrhage [see Warnings and Precautions] prior therapy. • Infections [see Warnings and Precautions] Accelerated approval was granted for this indication based on overall • Cytopenias [see Warnings and Precautions] response rate. Continued approval for this indication may be contingent • Atrial Fibrillation [see Warnings and Precautions] upon verification of clinical benefit in confirmatory trials [see Clinical • Hypertension [see Warnings and Precautions] Studies (14.1) in Full Prescribing Information]. • Second Primary Malignancies [see Warnings and Precautions] Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma: IMBRUVICA • Tumor Lysis Syndrome [see Warnings and Precautions] is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) [see Clinical Studies (14.2) in Full Clinical Trials Experience: Because clinical trials are conducted under Prescribing Information]. widely variable conditions, adverse event rates observed in clinical trials of a Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma with 17p drug cannot be directly compared with rates of clinical trials of another drug deletion: IMBRUVICA is indicated for the treatment of patients with chronic and may not reflect the rates observed in practice. lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) with 17p Mantle Cell Lymphoma: The data described below reflect exposure to deletion [see Clinical Studies (14.2) in Full Prescribing Information]. IMBRUVICA in a clinical trial that included 111 patients with previously Waldenström’s Macroglobulinemia: IMBRUVICA is indicated for the treated MCL treated with 560 mg daily with a median treatment duration of treatment of patients with Waldenström’s macroglobulinemia (WM) [see 8.3 months. Clinical Studies (14.3) in Full Prescribing Information]. The most commonly occurring adverse reactions (≥ 20%) were thrombo- CONTRAINDICATIONS cytopenia, diarrhea, neutropenia, anemia, fatigue, musculoskeletal pain, None peripheral edema, upper respiratory tract infection, nausea, bruising, dyspnea, constipation, rash, abdominal pain, vomiting and decreased WARNINGS AND PRECAUTIONS appetite (see Tables 1 and 2). Hemorrhage: Fatal bleeding events have occurred in patients treated with The most common Grade 3 or 4 non-hematological adverse reactions (≥ 5%) IMBRUVICA. Grade 3 or higher bleeding events (intracranial hemorrhage were pneumonia, abdominal pain, atrial fibrillation, diarrhea, fatigue, and [including subdural hematoma], gastrointestinal bleeding, hematuria, skin infections. and post procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in Fatal and serious cases of renal failure have occurred with IMBRUVICA approximately half of patients treated with IMBRUVICA. therapy. Increases in creatinine 1.5 to 3 times the upper limit of normal The mechanism for the bleeding events is not well understood. occurred in 9% of patients. IMBRUVICA may increase the risk of hemorrhage in patients receiving Adverse reactions from the MCL trial (N=111) using single agent IMBRUVICA antiplatelet or anticoagulant therapies and patients should be monitored for 560 mg daily occurring at a rate of ≥ 10% are presented in Table 1. signs of bleeding. Table 1: Non-Hematologic Adverse Reactions in ≥ 10% of Patients Consider the benefit-risk of withholding IMBRUVICA for at least 3 to 7 days with MCL (N=111) pre and post-surgery depending upon the type of surgery and the risk of bleeding [see Clinical Studies (14) in Full Prescribing Information]. All Grades Grade 3 or 4 Body System Adverse Reaction (%) (%) Infections: Fatal and non-fatal infections have occurred with IMBRUVICA therapy. Grade 3 or greater infections occurred in 14% to 29% of patients Gastrointestinal Diarrhea 51 5 [see Adverse Reactions]. Cases of progressive multifocal leukoencepha- disorders Nausea 31 0 lopathy (PML) have occurred in patients treated with IMBRUVICA. Evaluate Constipation 25 0 patients for fever and infections and treat appropriately. Abdominal pain 24 5 23 0 Cytopenias: Treatment-emergent Grade 3 or 4 cytopenias including Vomiting Stomatitis 17 1 neutropenia (range, 19 to 29%), thrombocytopenia (range, 5 to 17%), and Dyspepsia 11 0 anemia (range, 0 to 9%) based on laboratory measurements occurred in patients treated with single agent IMBRUVICA. Infections and Upper respiratory tract Monitor complete blood counts monthly. infestations infection 34 0 Urinary tract infection 14 3 Atrial Fibrillation: Atrial fibrillation and atrial flutter (range, 6 to 9%) have Pneumonia 14 7 occurred in patients treated with IMBRUVICA, particularly in patients Skin infections 14 5 with cardiac risk factors, hypertension, acute infections, and a previous Sinusitis 13 1 history of atrial fibrillation. Periodically monitor patients clinically for atrial fibrillation. Patients who develop arrhythmic symptoms (e.g., palpitations, General disorders and Fatigue 41 5 lightheadedness) or new onset dyspnea should have an ECG performed. administration site Peripheral edema 35 3 Atrial fibrillation should be managed appropriately, and if it persists, conditions Pyrexia 18 1 consider the risks and benefits of IMBRUVICA treatment and follow Asthenia 14 3 dose modification guidelines [see Dosage and Administration (2.3) in Full Skin and Bruising 30 0 Prescribing Information]. subcutaneous tissue Rash 25 3 Hypertension: Hypertension (range, 6 to 17%) has occurred in patients disorders Petechiae 11 0 treated with IMBRUVICA with a median time to onset of 4.6 months Musculoskeletal and Musculoskeletal pain 37 1 (range, 0.03 to 22 months). Monitor patients for new onset hypertension or connective tissue Muscle spasms 14 0 hypertension that is not adequately controlled after starting IMBRUVICA. disorders Arthralgia 11 0 Adjust existing anti-hypertensive medications and/or initiate anti- Respiratory, thoracic Dyspnea 27 4 hypertensive treatment as appropriate. and mediastinal Cough 19 0 Second Primary Malignancies: Other malignancies (range, 5 to 16%) disorders Epistaxis 11 0 including non-skin carcinomas (range, 1 to 4%) have occurred in patients Metabolism and Decreased appetite 21 2 treated with IMBRUVICA. The most frequent second primary malignancy nutrition disorders Dehydration 12 4 was non-melanoma skin cancer (range, 4 to 13%). Nervous system Dizziness 14 0 Tumor Lysis Syndrome: Tumor lysis syndrome has been infrequently disorders Headache 13 0 reported with IMBRUVICA therapy. Assess the baseline risk (e.g., high tumor burden) and take appropriate precautions. Monitor patients closely Table 2: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or and treat as appropriate. Neutrophils in Patients with MCL (N=111) Embryo-Fetal Toxicity: Based on findings in animals, IMBRUVICA can cause fetal harm when administered to a pregnant woman. Administration Percent of Patients (N=111) of ibrutinib to pregnant rats and rabbits during the period of organogenesis All Grades Grade 3 or 4 caused embryofetal toxicity including malformations at exposures that were (%) (%) 2-20 times higher than those reported in patients with MCL, CLL/SLL or WM. Platelets Decreased 57 17 Advise women to avoid becoming pregnant while taking IMBRUVICA and for Neutrophils Decreased 47 29 1 month after cessation of therapy. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be Hemoglobin Decreased 41 9 apprised of the potential hazard to a fetus [see Use in Specific Populations]. * Based on laboratory measurements and adverse reactions IMBRUVICA® (ibrutinib) capsules IMBRUVICA® (ibrutinib) capsules

Ten patients (9%) discontinued treatment due to adverse reactions in the Table 4: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or trial (N=111). The most frequent adverse reaction leading to treatment Neutrophils in Patients with CLL/SLL (N=51) in Study 1 discontinuation was subdural hematoma (1.8%). Adverse reactions leading to dose reduction occurred in 14% of patients. Percent of Patients (N=51) Patients with MCL who develop lymphocytosis greater than 400,000/mcL have All Grades (%) Grade 3 or 4 (%) developed intracranial hemorrhage, lethargy, gait instability, and headache. However, some of these cases were in the setting of disease progression. Platelets Decreased 69 12 Forty percent of patients had elevated uric acid levels on study including Neutrophils Decreased 53 26 13% with values above 10 mg/dL. Adverse reaction of hyperuricemia was Hemoglobin Decreased 43 0 reported for 15% of patients. Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma: The data * Based on laboratory measurements per IWCLL criteria and adverse reactions. described below reflect exposure in one single-arm, open-label clinical Study 2: Adverse reactions and laboratory abnormalities described below in trial and three randomized controlled clinical trials in patients with CLL/ Tables 5 and 6 reflect exposure to IMBRUVICA with a median duration of 8.6 SLL (n=1278 total and n=668 patients exposed to IMBRUVICA). Study 1 months and exposure to ofatumumab with a median of 5.3 months in Study 2 included 51 patients with previously treated CLL/SLL, Study 2 included 391 in patients with previously treated CLL/SLL. randomized patients with previously treated CLL or SLL who received single agent IMBRUVICA or ofatumumab, Study 3 included 269 randomized patients Table 5: Adverse Reactions Reported in ≥ 10% of Patients and at Least 65 years or older with treatment naïve-CLL or SLL who received single 2% Greater in the IMBRUVICA Treated Arm in Patients in Study 2 agent IMBRUVICA or chlorambucil and Study 4 included 578 randomized IMBRUVICA Ofatumumab patients with previously treated CLL or SLL who received IMBRUVICA in (N=195) (N=191) combination with bendamustine and rituximab or placebo in combination Body System All Grades Grade 3 or 4 All Grades Grade 3 or 4 with bendamustine and rituximab. Adverse Reaction (%) (%) (%) (%) The most commonly occurring adverse reactions in Studies 1, 2, 3 and 4 in patients with CLL/SLL receiving IMBRUVICA (≥ 20%) were neutropenia, Gastrointestinal thrombocytopenia, anemia, diarrhea, musculoskeletal pain, nausea, rash, disorders bruising, fatigue, pyrexia and hemorrhage. Four to 10 percent of patients Diarrhea 48 4 18 2 receiving IMBRUVICA in Studies 1, 2, 3 and 4 discontinued treatment due Nausea 26 2 18 0 to adverse reactions. These included pneumonia, hemorrhage, atrial fibrillation, rash and neutropenia (1% each). Adverse reactions leading to Stomatitis* 17 1 6 1 dose reduction occurred in approximately 6% of patients. Constipation 15 0 9 0 Study 1: Adverse reactions and laboratory abnormalities from the CLL/SLL Vomiting 14 0 6 1 trial (N=51) using single agent IMBRUVICA 420 mg daily in patients with previously treated CLL/SLL occurring at a rate of ≥ 10% with a median duration General disorders of treatment of 15.6 months are presented in Tables 3 and 4. and administration site conditions Table 3: Non-Hematologic Adverse Reactions in ≥ 10% of Patients Pyrexia 24 2 15 1 with CLL/SLL (N=51) in Study 1 Infections and All Grades Grade 3 or 4 infestations Body System Adverse Reaction (%) (%) Upper respiratory 16 1 11 2 Gastrointestinal Diarrhea 59 4 tract infection disorders Constipation 22 2 Nausea 20 2 Pneumonia* 15 10 13 9 Stomatitis 20 0 Sinusitis* 11 1 6 0 Vomiting 18 2 Abdominal pain 14 0 Urinary tract 10 4 5 1 Dyspepsia 12 0 infection Infections and Upper respiratory Skin and infestations tract infection 47 2 subcutaneous Sinusitis 22 6 tissue disorders Skin infection 16 6 Rash* 24 3 13 0 Pneumonia 12 10 Urinary tract infection 12 2 Petechiae 14 0 1 0 General disorders and Fatigue 33 6 Bruising* 12 0 1 0 administration site Pyrexia 24 2 Musculoskeletal conditions Peripheral edema 22 0 and connective Asthenia 14 6 tissue disorders Chills 12 0 Musculoskeletal 28 2 18 1 Skin and Bruising 51 2 Pain* subcutaneous tissue Rash 25 0 Arthralgia 17 1 7 0 disorders Petechiae 16 0 Nervous system Respiratory, thoracic Cough 22 0 disorders and mediastinal Oropharyngeal pain 14 0 disorders Dyspnea 12 0 Headache 14 1 6 0 Musculoskeletal and Musculoskeletal pain 25 6 Dizziness 11 0 5 0 connective tissue Arthralgia 24 0 Injury, poisoning disorders Muscle spasms 18 2 and procedural Nervous system Dizziness 20 0 complications disorders Headache 18 2 Contusion 11 0 3 0 Metabolism and Decreased appetite 16 2 Eye disorders nutrition disorders Vision blurred 10 0 3 0 Neoplasms Second 12* 0 benign, malignant, malignancies* Subjects with multiple events for a given ADR term are counted once only unspecified for each ADR term. Vascular disorders Hypertension 16 8 The system organ class and individual ADR terms are sorted in descending frequency order in the IMBRUVICA arm. * One patient death due to histiocytic sarcoma. * Includes multiple ADR terms IMBRUVICA® (ibrutinib) capsules IMBRUVICA® (ibrutinib) capsules

Table 6: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Table 8: Adverse Reactions Reported in at Least 10% of Patients and at Neutrophils in Study 2 Least 2% Greater in the IMBRUVICA Arm in Patients in Study 4 IMBRUVICA Ofatumumab Ibrutinib + BR Placebo + BR (N=195) (N=191) (N=287) (N=287) All Grades Grade 3 or 4 All Grades Grade 3 or 4 Body System All Grades Grade 3 or 4 All Grades Grade 3 or 4 (%) (%) (%) (%) Adverse Reaction (%) (%) (%) (%) Neutrophils Decreased 51 23 57 26 Blood and lymphatic Platelets Decreased 52 5 45 10 system disorders Hemoglobin Decreased 36 0 21 0 Neutropenia* 66 61 60 55 * Based on laboratory measurements per IWCLL criteria. Thrombocytopenia* 34 16 26 16 Study 3: Adverse reactions described below in Table 7 reflect exposure to IMBRUVICA with a median duration of 17.4 months. The median exposure to Skin and chlorambucil was 7.1 months in Study 3. subcutaneous tissue disorders Table 7: Adverse Reactions Reported in ≥ 10% of Patients and at Least Rash* 32 4 25 1 2% Greater in the IMBRUVICA Treated Arm in Patients in Study 3 Bruising* 20 <1 8 <1 IMBRUVICA Chlorambucil (N=135) (N=132) Gastrointestinal Body System All Grades Grade 3 or 4 All Grades Grade 3 or 4 disorders Adverse Reaction (%) (%) (%) (%) Diarrhea 36 2 23 1 Gastrointestinal Abdominal Pain 12 1 8 <1 disorders Diarrhea 42 4 17 0 Musculoskeletal and connective tissue Stomatitis* 14 1 4 1 disorders Musculoskeletal and connective tissue Musculoskeletal 29 2 20 0 disorders pain* Musculoskeletal pain* 36 4 20 0 Muscle spasms 12 <1 5 0 Arthralgia 16 1 7 1 General disorders Muscle spasms 11 0 5 0 and administration Eye Disorders site conditions Dry eye 17 0 5 0 Pyrexia 25 4 22 2 Lacrimation increased 13 0 6 0 Vascular Disorders Vision blurred 13 0 8 0 Hemorrhage* 19 2 9 1 Visual acuity reduced 11 0 2 0 Hypertension* 11 5 5 2 Skin and subcutaneous Infections and tissue disorders infestations Rash* 21 4 12 2 Bronchitis 13 2 10 3 Bruising* 19 0 7 0 Skin infection* 10 3 6 2 Infections and infestations Metabolism and nutrition disorders Skin infection* 15 2 3 1 Pneumonia* 14 8 7 4 Hyperuricemia 10 2 6 0 Urinary tract infections 10 1 8 1 The system organ class and individual ADR terms are sorted in descending Respiratory, thoracic frequency order in the IMBRUVICA arm. and mediastinal * Includes multiple ADR terms disorders <1 used for frequency above 0 and below 0.5% Cough 22 0 15 0 Atrial fibrillation of any grade occurred in 7% of patients treated with General disorders and IMBRUVICA + BR and 2% of patients treated with placebo + BR. The administration site frequency of Grade 3 and 4 atrial fibrillation was 3% in patients treated with conditions IMBRUVICA + BR and 1% in patients treated with placebo + BR. Peripheral edema 19 1 9 0 Waldenström’s Macroglobulinemia: The data described below reflect Pyrexia 17 0 14 2 exposure to IMBRUVICA in an open-label clinical trial that included Vascular Disorders 63 patients with previously treated WM. Hypertension* 14 4 1 0 The most commonly occurring adverse reactions in the WM trial (≥ 20%) Nervous System were neutropenia, thrombocytopenia, diarrhea, rash, nausea, muscle Disorders spasms, and fatigue. Headache 12 1 10 2 Six percent of patients receiving IMBRUVICA in the WM trial discontinued treatment due to adverse events. Adverse events leading to dose reduction Subjects with multiple events for a given ADR term are counted once only occurred in 11% of patients. for each ADR term. Adverse reactions and laboratory abnormalities described below in The system organ class and individual ADR terms are sorted in descending Tables 9 and 10 reflect exposure to IMBRUVICA with a median duration of frequency order in the IMBRUVICA arm. 11.7 months in the WM trial. * Includes multiple ADR terms Study 4: Adverse reactions described below in Table 8 reflect exposure to IMBRUVICA + BR with a median duration of 14.7 months and exposure to placebo + BR with a median of 12.8 months in Study 4 in patients with previously treated CLL/SLL. IMBRUVICA® (ibrutinib) capsules IMBRUVICA® (ibrutinib) capsules

Table 9: Non-Hematologic Adverse Reactions in ≥ 10% of Patients dose AUC values of 1445 ± 869 ng • hr/mL which is approximately 50% greater with Waldenström’s Macroglobulinemia (N=63) than steady state exposures seen at the highest indicated dose (560 mg). All Grades Grade 3 or 4 Avoid concomitant administration of IMBRUVICA with strong or moderate Body System Adverse Reaction (%) (%) inhibitors of CYP3A. For strong CYP3A inhibitors used short-term Gastrointestinal disorders Diarrhea 37 0 (e.g., antifungals and antibiotics for 7 days or less, e.g., ketoconazole, Nausea 21 0 itraconazole, voriconazole, posaconazole, clarithromycin, telithromycin) Stomatitis* 16 0 consider interrupting IMBRUVICA therapy during the duration of inhibitor Gastroesophageal 13 0 use. Avoid strong CYP3A inhibitors that are needed chronically. If a reflux disease moderate CYP3A inhibitor must be used, reduce the IMBRUVICA dose. Skin and subcutaneous Rash* 22 0 Patients taking concomitant strong or moderate CYP3A4 inhibitors should tissue disorders Bruising* 16 0 be monitored more closely for signs of IMBRUVICA toxicity [see Dosage and Pruritus 11 0 Administration (2.4) in Full Prescribing Information]. General disorders and Fatigue 21 0 Avoid grapefruit and Seville oranges during IMBRUVICA treatment, as these administrative site contain moderate inhibitors of CYP3A [see Dosage and Administration (2.4), conditions and Clinical Pharmacology (12.3) in Full Prescribing Information]. Musculoskeletal and Muscle spasms 21 0 CYP3A Inducers: Administration of IMBRUVICA with rifampin, a strong connective tissue Arthropathy 13 0 CYP3A inducer, decreased ibrutinib Cmax and AUC by approximately 13- and disorders 10-fold, respectively. Infections and infestations Upper respiratory Avoid concomitant use of strong CYP3A inducers (e.g., carbamazepine, rifampin, tract infection 19 0 phenytoin, and St. John’s Wort). Consider alternative agents with less CYP3A Sinusitis 19 0 induction [see Clinical Pharmacology (12.3) in Full Prescribing Information]. Pneumonia* 14 6 USE IN SPECIFIC POPULATIONS Skin infection* 14 2 Pregnancy: Risk Summary: IMBRUVICA, a kinase inhibitor, can cause Respiratory, thoracic and Epistaxis 19 0 fetal harm based on findings from animal studies. In animal reproduction mediastinal disorders Cough 13 0 studies, administration of ibrutinib to pregnant rats and rabbits during the Nervous system disorders Dizziness 14 0 period of organogenesis at exposures up to 2-20 times the clinical doses Headache 13 0 of 420-560 mg daily produced embryofetal toxicity including malformations Neoplasms benign, Skin cancer* 11 0 [see Data]. If IMBRUVICA is used during pregnancy or if the patient becomes malignant, and pregnant while taking IMBRUVICA, the patient should be apprised of the unspecified (including potential hazard to the fetus. cysts and polyps) The estimated background risk of major birth defects and miscarriage The system organ class and individual ADR preferred terms are sorted in for the indicated population is unknown. In the U.S. general population, descending frequency order. the estimated background risk of major birth defects and miscarriage in * Includes multiple ADR terms. clinically recognized pregnancies is 2-4% and 15-20%, respectively. Table 10: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Animal Data: Ibrutinib was administered orally to pregnant rats during the Neutrophils in Patients with WM (N=63) period of organogenesis at doses of 10, 40 and 80 mg/kg/day. Ibrutinib at a dose of 80 mg/kg/day was associated with visceral malformations (heart and major Percent of Patients (N=63) vessels) and increased resorptions and post-implantation loss. The dose of All Grades (%) Grade 3 or 4 (%) 80 mg/kg/day in rats is approximately 14 times the exposure (AUC) in patients with Platelets Decreased 43 13 MCL and 20 times the exposure in patients with CLL/SLL or WM administered Neutrophils Decreased 44 19 the dose of 560 mg daily and 420 mg daily, respectively. Ibrutinib at doses of Hemoglobin Decreased 13 8 40 mg/kg/day or greater was associated with decreased fetal weights. The dose of 40 mg/kg/day in rats is approximately 6 times the exposure (AUC) in patients * Based on laboratory measurements. with MCL administered the dose of 560 mg daily. Additional Important Adverse Reactions: Diarrhea: Diarrhea of any grade Ibrutinib was also administered orally to pregnant rabbits during the period occurred at a rate of 43% (range, 36% to 63%) of patients treated with of organogenesis at doses of 5, 15, and 45 mg/kg/day. Ibrutinib at a dose of IMBRUVICA. Grade 2 diarrhea occurred in 9% (range, 3% to 15%) and 15 mg/kg/day or greater was associated with skeletal variations (fused Grade 3 in 3% (range, 0 to 5%) of patients treated with IMBRUVICA. The sternebrae) and ibrutinib at a dose of 45 mg/kg/day was associated with median time to first onset of any grade diarrhea was 12 days (range, 0 to 627), increased resorptions and post-implantation loss. The dose of 15 mg/kg/day of Grade 2 was 37 days (range, 1 to 667) and of Grade 3 was 71 days (range, 3 in rabbits is approximately 2.0 times the exposure (AUC) in patients with MCL to 627). Of the patients who reported diarrhea, 83% had complete resolution, and 2.8 times the exposure in patients with CLL/SLL or WM administered the 1% had partial improvement and 16% had no reported improvement at time dose of 560 and 420 mg daily, respectively. of analysis. The median time from onset to resolution or improvement of any Lactation: Risk Summary: There is no information regarding the presence of grade diarrhea was 5 days (range, 1 to 418), and was similar for Grades 2 ibrutinib or its metabolites in human milk, the effects on the breastfed infant, and 3. Less than 1% of patients discontinued IMBRUVICA due to diarrhea. or the effects on milk production. Visual Disturbance: Blurred vision and decreased visual acuity of any grade The development and health benefits of breastfeeding should be considered occurred in 10% of patients treated with IMBRUVICA (9% Grade 1, 2% along with the mother’s clinical need for IMBRUVICA and any potential Grade 2). The median time to first onset was 88 days (range, 1 to 414 days). adverse effects on the breastfed child from IMBRUVICA or from the Of the patients with visual disturbance, 64% had complete resolution and 36% had no reported improvement at time of analysis. The median time from underlying maternal condition. onset to resolution or improvement was 29 days (range, 1 to 281 days). Females and Males of Reproductive Potential: Pregnancy Testing: Verify Postmarketing Experience: The following adverse reactions have been the pregnancy status of females of reproductive potential prior to initiating identified during post-approval use of IMBRUVICA. Because these IMBRUVICA therapy. reactions are reported voluntarily from a population of uncertain size, it is Contraception: not always possible to reliably estimate their frequency or establish a causal Females: Advise females of reproductive potential to avoid pregnancy while relationship to drug exposure. taking IMBRUVICA and for up to 1 month after ending treatment. If this drug Hepatobiliary disorders: hepatic failure (includes multiple terms) is used during pregnancy or if the patient becomes pregnant while taking Respiratory disorders: interstitial lung disease (includes multiple terms) this drug, the patient should be informed of the potential hazard to a fetus. Metabolic and nutrition disorders: tumor lysis syndrome [see Warnings Males: Advise men to avoid fathering a child while receiving IMBRUVICA, & Precautions] and for 1 month following the last dose of IMBRUVICA. Skin and subcutaneous tissue disorders: anaphylactic shock, angioedema, Pediatric Use: The safety and effectiveness of IMBRUVICA in pediatric urticaria patients has not been established. DRUG INTERACTIONS Geriatric Use: Of the 839 patients in clinical studies of IMBRUVICA, 62% CYP3A Inhibitors: Ibrutinib is primarily metabolized by cytochrome P450 were ≥ 65 years of age, while 21% were ≥75 years of age. No overall enzyme 3A (CYP3A). In healthy volunteers, co-administration of ketoconazole, differences in effectiveness were observed between younger and older a strong CYP3A inhibitor, increased Cmax and AUC of ibrutinib by 29- and patients. Grade 3 or higher pneumonia occurred more frequently among 24-fold, respectively. The highest ibrutinib dose evaluated in clinical trials older patients treated with IMBRUVICA [see Clinical Studies (14.2) in Full was 12.5 mg/kg (actual doses of 840 – 1400 mg) given for 28 days with single Prescribing Information]. IMBRUVICA® (ibrutinib) capsules

Hepatic Impairment: Ibrutinib is metabolized in the liver. In a hepatic impairment study, data showed an increase in ibrutinib exposure. Following single dose administration, the AUC of ibrutinib increased 2.7-, 8.2- and 9.8-fold in subjects with mild (Child-Pugh class A), moderate (Child-Pugh class B), and severe (Child-Pugh class C) hepatic impairment compared to subjects with normal liver function. The safety of IMBRUVICA has not been evaluated in cancer patients with mild to severe hepatic impairment by Child-Pugh criteria. Monitor patients for signs of IMBRUVICA toxicity and follow dose modification guidance as needed. It is not recommended to administer IMBRUVICA to patients with moderate or severe hepatic impairment (Child- Pugh class B and C) [see Dosage and Administration (2.5) and Clinical Pharmacology (12.3) in Full Prescribing Information]. Plasmapheresis: Management of hyperviscosity in WM patients may include plasmapheresis before and during treatment with IMBRUVICA. Modifications to IMBRUVICA dosing are not required. PATIENT COUNSELING INFORMATION Advise the patient to read the FDA-approved patient labeling (Patient Information). • Hemorrhage: Inform patients of the possibility of bleeding, and to report any signs or symptoms (severe headache, blood in stools or urine, prolonged or uncontrolled bleeding). Inform the patient that IMBRUVICA may need to be interrupted for medical or dental procedures [see Warnings and Precautions]. • Infections: Inform patients of the possibility of serious infection, and to report any signs or symptoms (fever, chills, weakness, confusion) suggestive of infection [see Warnings and Precautions]. • Atrial fibrillation: Counsel patients to report any signs of palpitations, lightheadedness, dizziness, fainting, shortness of breath, and chest discomfort [see Warnings and Precautions]. • Hypertension: Inform patients that high blood pressure has occurred in patients taking IMBRUVICA, which may require treatment with antihypertensive therapy [see Warnings and Precautions]. • Second primary malignancies: Inform patients that other malignancies have occurred in patients who have been treated with IMBRUVICA, including skin cancers and other carcinomas [see Warnings and Precautions]. • Tumor lysis syndrome: Inform patients of the potential risk of tumor lysis syndrome and report any signs and symptoms associated with this event to their healthcare provider for evaluation [see Warnings and RESERVE YOUR SPACE Precautions]. • Embryo-fetal toxicity: Advise women of the potential hazard to a fetus and IN THE CONFERENCE to avoid becoming pregnant during treatment and for 1 month after the last dose of IMBRUVICA [see Warnings and Precautions]. • Inform patients to take IMBRUVICA orally once daily according to their EDITION 2017 physician’s instructions and that the capsules should be swallowed whole with a glass of water without being opened, broken, or chewed at approximately the same time each day [see Dosage and Administration (2.1) in Full Prescribing Information]. Summer 2017 / Annual • Advise patients that in the event of a missed daily dose of IMBRUVICA, Conference Issue it should be taken as soon as possible on the same day with a return to the normal schedule the following day. Patients should not take extra Topic: Organizational Quality capsules to make up the missed dose [see Dosage and Administration Editorial and Advertising Due Friday, April 28, 2017 (2.6) in Full Prescribing Information]. • Advise patients of the common side effects associated with IMBRUVICA [see Adverse Reactions]. Direct the patient to a complete list of adverse drug reactions in PATIENT INFORMATION. Discounts for annual contracts • Advise patients to inform their health care providers of all concomitant and special discounts for CAPG medications, including prescription medicines, over-the-counter drugs, vitamins, and herbal products [see Drug Interactions]. Members • Advise patients that they may experience loose stools or diarrhea, and should contact their doctor if their diarrhea persists. Advise patients to maintain adequate hydration. For editorial guidelines contact Daryn Kobata Active ingredient made in China. at [email protected] Distributed and Marketed by: Pharmacyclics LLC Sunnyvale, CA USA 94085 and Editorial Departments: Marketed by: Upcoming Events | Names in the News | Member Janssen Biotech, Inc. Horsham, PA USA 19044 Spotlight Patent http://www.imbruvica.com IMBRUVICA® is a registered trademark owned by Pharmacyclics LLC For Advertising Information contact © Pharmacyclics LLC 2016 [email protected] or call Valerie © Janssen Biotech, Inc. 2016 PRC-02066 Okunami, Publisher t 916-761-1853

26 l capg health Spring 2017 Preparing for MACRA: How to Lead Through Change

By Amy Nguyen Howell, MD, MBA, Chief Medical Officer, CAPG

Now that the Medicare Access and CHIP Reauthorization Act (MACRA) has replaced the sustainable growth rate formula for determining physician pay, physicians are feeling the pressure to move from volume to value.

The law is poised to fundamentally change how Medicare pays providers, and many are grappling with the choice between reimbursement paths that it presents. One thing is clear: Physicians should actively engage their colleagues throughout the healthcare system if they want to thrive under these new models.

This requires change, and if I know anything about doctors…they DON’T LIKE CHANGE. If you’re going to impose a change within your physician organization and you haven’t completely planned it out yet, that might be a bad idea.

Of course, you probably already know this. “Paying close So the question is: How do you lead physicians through change to best prepare them for MACRA? Here are three factors to consider. attention to

First, you need situational awareness—the ability to track and comprehend the situational critical elements that shape the overall success of your physician organization. Second, you need to identify organizational attributes—the values and beliefs held awareness, by your physicians. The third essential is a supportive team structure. organizational

Situational Awareness attributes, and a Alternate payment models (APMs) mandate that siloed participants in the supportive team healthcare system collaborate in providing exceptional patient care at a reduced cost. Some view this as a tremendous challenge. Others view MACRA as a great structure will unknown and struggle to get their arms around what it means for them. allow physicians What is the difference between MACRA’s Merit-based Incentive Payment System (MIPS) and APMs options? MIPS is a modified fee-for service system in which to succeed and physicians are paid for each service they provide for patients and financially prosper under the incentivized to report quality measures.

APMs are an entirely new approach. Under a bundled payment APM, a practitioner MACRA law.” or medical group contracts with a payer to receive one bundled payment for services provided for a patient or group of patients based on specific clinical episodes or conditions. This payment is then divided among the care providers involved. Under an accountable care organization (ACO) or shared-savings APM, participating providers who demonstrate improved quality and reduce costs share in these savings.

While both the MIPS and APM pathways are available to physicians, the Centers for Medicare & Medicaid Services (CMS) is directing providers toward APMs by offering a simpler reporting system and a higher annual incentive than MIPS. continued on next page

Spring 2017 capg health l 27 continued from page 27 Shared Savings Program (MSSP) or bundled payments, then you might choose Advanced APMs. Assess your Under MIPS, physicians get a percentage adjustment company’s core qualities and individual physicians’ to Medicare Part B payment based on a four-part score characteristics to see if they align with APMs as you designed to measure quality, cost, and value of care. select your MACRA path. For 2017, the Quality category counts for 60 percent of the total, the Advancing Care Information (formerly CAPG’s Guide to Alternative Payment Models offers Meaningful Use) category counts for 25 percent, the case studies that highlight our members’ experiences Clinical Practice Improvement Activities category with a range of APMs, from bundled payments to accounts for 15 percent, and the Resource Use category capitated, coordinated care. Further, CAPG’s Risk counts for 0 percent. For 2018 and beyond, Resource Readiness Tool—with five essential checklists to assess Use will be weighted. your readiness for Advanced APMs—will help you prepare for MACRA’s requirements, wherever you are on In this year of transition, CMS lowered the Cost the journey from volume to value. Performance category to 0 percent and gave providers four reporting options to help “pick their pace.” Simply, This year, under MACRA’s quality payment program, if a physician reports at least some data in 2017, he or physicians may earn a 5 percent incentive payment she will not receive a payment reduction. If physicians through sufficient participation in certain Advanced or groups choose not to participate, they are risking APMs. These CMS lists will continue to change and significant financial resources—and will be guaranteed a grow as more models are proposed and developed financial loss with a negative penalty payment. in partnership with the clinician community and the Physician-Focused Payment Model Technical Advisory The transition to MIPS may be fairly straightforward for Committee (PTAC). groups that are already pursuing value-based payment methods and have reporting mechanisms in place. Further, To qualify as a participant, a clinician must either 1) the transition to APMs may be natural for physician groups receive at least 25 percent of payments for Medicare who are already taking on substantial risk. Part B covered professional services through an Advanced APM or 2) see at least 20 percent of Organizational Attributes Medicare patients through an Does your physician organization have the care Advanced APM. coordination attributes needed to participate in an Advanced APM? Do your physicians believe in improving patient outcomes, quality of care, and total cost of care, as well as value population health management and risk- based incentivization?

If your organization has been participating in risk-based models like the Medicare

28 l capg health Spring 2017 The MACRA final rule exempts small practices from on current performance. To meet MIPS reporting and reporting requirements in 2017 due to low-volume performance thresholds, medical groups must create a threshold, which has been set at less than or equal supportive team structure that will expedite efforts to to $30,000 in Medicare Part B–allowed charges or build and refine their quality reporting and performance fewer than 100 Medicare patients. management infrastructure.

A few large groups are planning to accept payment Both the APM and MIPS tracks require strong, adjustments based on their performance under consistent performance on quality and efficiency existing APMs. They will receive a lump sum incentive measures. Those working across mixed medical payment and higher annual provider payment as staffs must carefully consider which models will meet benefits, and will be exempt from MIPS reporting performance objectives. No matter what path you measures. choose, primary care physicians and specialists— whether part of a hospital system or independent—face Any physician who fails to engage in MIPS or APMs some weighty decisions. However, this must be done as risks losing money in the Medicare program and a team because MACRA is not an individual sport. generating a reputation of not being a team player among clinically integrated networks (CINs) in APMs. In years ahead, CMS is likely to require all physicians to join APMs. As physicians become more involved in It’s highly recommended that practices that aren’t these payment systems, organizational leaders must ready for APMs should nevertheless prepare for them make sure they can lead physicians through change in the future by participating in MIPS now. Know your effectively. Paying close attention to situational organizational attributes and assess whether they awareness, organizational attributes, and a supportive align more with MIPS or APMs for this year, then plan team structure will allow physicians to succeed and for next year and beyond. prosper under MACRA.

SUPPORTIVE TEAM STRUCTURE In doing so, physicians will undoubtedly understand the value MACRA brings to patient care. Additionally, Organize your clinical care teams and explain to you will learn that by building relationships throughout physicians the urgency surrounding MACRA. Once your CINs, patient-centered medical homes (PCMHs), they can join forces around a mission to improve the and medical neighborhoods, you will thrive in today’s quality of care for patients, they will perform better complex healthcare environment. Regardless of the with a united front. Educate the entire care team about payment structure changes and challenges that lie the importance of reporting performance data and ahead in healthcare reform, remember that the key measuring metrics related to patient outcomes so they measurement of overall success are the healthy can help support physicians through this important outcomes of your patients. o transition and process. Resources According to the Congressional Budget Office’s 1. Jenny Jones, “Catch Your Wave.,” ACR Bulletin, accessed most recent long-term projections, which include the November 3, 2016, https://acrbulletin.org/acr-bulletin-july- 2016/542-mips-apm-changes. estimated effects of MACRA, net Medicare spending 2. Shannon Muchmore, “Few docs ready for risk under MACRA,” will grow from 3 percent of gross domestic product Modern Healthcare, published August 13, 2016, accessed November (GDP) in 2015 to 4.2 percent of GDP in 2030, 5.1 1, 2016, http://www.modernhealthcare.com/article/20160813/ percent in 2040, and 5.9 percent in 2050. With MAGAZINE/308139982. slower growth in Medicare spending in recent years, 3. “MIPS and APM Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models,” Centers for the solvency of the hospital trust fund has been Medicare & Medicaid Services, Quality Payment Program, Medicare extended. Medicare trustees, however, have projected Program, October 14, 2016, https://qpp.cms.gov/docs/QPP_ Executive_Summary_of_Final_Rule.pdf. that the Part A trust fund will be depleted in 2030. To 4. “The facts on Medicare spending and financing,” Kaiser Family offset this, either taxes must increase substantially or Foundation, published July 24, 2015, accessed November 1, 2016, hospital spending decrease significantly. http://kff.org/medicare/factsheet/medicare-spending-and- financing-fact-sheet/. Despite mounting pressure as deadlines approach, 5. Rivka Friedman, “With MACRA, 2017 will be ‘year of reckoning’ several medical group leaders cite a lack of basic for physician payment,” Advisory Board, published May 2, 2016, accessed November 1, 2016, https://www.advisory.com/research/ infrastructure to assess performance on reported medical-group-strategy-council/practice-notes/2016/05/macra- measures or determine measures to report based proposed-rule.

Spring 2017 capg health l 29 California Healthcare 2017: Fasten Your Seatbelts and Keep Your Hands Inside the Car!

By Jim Agronick, Regional Vice President, Adventist Health Physicians Network

For any of us who have worked in the California healthcare industry for some time (defined as more than two decades) and for a number of different organizations, it is clear that the work environment has changed dramatically over the past five years.

These changes include less clarity in organizational direction and priorities, more politics and infighting between different groups/offices within an organization, and increased turnover in senior management and management ranks. More and more, it seems that management is in self-preservation mode, which means less focus on organizational priorities and patient care and more focus on personal maneuvering and survival. We are all riding a rollercoaster, with all these changes working counter to each organization’s success.

So what are the factors behind this upheaval and what can organizations, as well as individuals, do to manage in the face of chaos? Without question, “ Without question, the continued consolidation in our industry at every level (especially the continued health plan, hospital, and physician group consolidation) is driving much of this change. As organizations acquire other organizations, management positions are eliminated, consolidation increasing the competition for fewer senior level positions. In in our industry addition, there may be downsizing across the board in an effort at every level to reduce overhead and other expenses, along with reporting (especially health relationships that change overnight. If your organization plan, hospital, and is being acquired, there is often a substantial change in culture. physician group Many individuals, even in senior consolidation) is management ranks, are not prepared for these changes all driving much of at once. this change.” A second factor is the continued influx of publicly traded companies into the healthcare space, where previously the landscape was dominated by nonprofit and privately held organizations. The public “Wall Street” firms make no bones about their singular focus (quarterly earnings per share) and their sole customer (the

30 l capg health Spring 2017 shareholder). For anyone new to this sector, it is difficult and failures so the rest of the organization comes to to transition from the patient to the shareholder as your understand what these look like and how to minimize customer. failure while pursuing success.

Increased competition and complexity also spark The C suite can set a tone for how individuals, areas, changes as organizations attempt to cover the entire and offices will and will not interact with each other. continuum of care and replicate what Kaiser Permanente Infighting, whether between two departments or two can offer under its comprehensive organizational individuals, should never be tolerated, and senior umbrella. As each health system becomes larger, they leadership needs to model a collaborative approach in all look to extend their reach into new geography and interactions until it becomes part of the culture. inevitably begin to bump into each other. Complexity comes from within—the drive to offer new products and Lastly, as each organization asks its employees to do business lines—and from the external environment, such more with less, leadership can help everyone recognize as new state and federal legislation and regulations that the top priorities (the most important 20 percent), as force shifts in our basic business models. well as ways to operate more efficiently and effectively. In particular, attention to the time spent in meetings Another factor in the current upheaval is increased and traveling to and from them, along with the value of financial challenges from more competition, a decline in specific meetings, will help leadership begin to identify commercial HMO insurance, and mounting pressure to major wasted time. Also important: careful scrutiny of reduce costs while increasing quality and improving the efforts directed toward projects that don’t relate directly patient experience. to the top 20 percent priorities.

Finally, we are beginning to see some of the most senior At the individual level, it is extremely important to leaders in our industry retire after successful careers recognize that the work environment and the rules spanning more than 40 years. While this retirement have changed. It is equally important to remain flexible, is part of the normal life cycle in any industry, it raises understand that change (and some chaos) will be a many questions about where the next generation of constant, “roll with the punches,” and not take things leaders will come from and whether they are adequately personally. Part of this new paradigm is learning to say prepared to take the reins. Along with this changing of “Yes,” even if you want to say “No,” as you will ultimately the guard comes some perceived loss in the structure, be judged on the degree to which you support the order, and values within the industry. current direction. Build bridges wherever possible and make every effort not to get stuck between two Together, all of these factors create a perfect storm for warring factions (whether corporate versus local or one anyone trying to steer their organizations, divisions, or department versus another), which can often be a quick departments. However, you don’t need to abandon ship, one-way ticket out the door. Look to add value wherever as there are some tools—most of which are common possible by offering to help others or other departments, sense—that can help each of us survive and thrive. and by volunteering for new assignments.

Individuals at the very top of each organization (the Many of us recognize we now spend much of our work “C suite”) need to provide as much stability and life riding a rollercoaster—a continuous reminder of how predictability as possible because this equates to significantly our work environment has changed over success, especially when much of the competition the past five years.T his recognition is the first step to operates in chaos. Senior leaders are in an excellent ultimately slowing the rollercoaster and creating more position to guide their organization through turbulence organizational and individual stability and predictability. by establishing a clear vision and direction, creating Those organizations who are successful in this endeavor metrics that allow everyone to see how the organization have a clear advantage over their competition. Fasten is performing, and communicating all of the above to the your seatbelts! o rest of the staff on a continuous basis. Jim Agronick is a seasoned healthcare executive. He Most organizations go through the exercise of developing was Chief Executive Officer of Harriman Jones Medical a vision and direction, but then it goes in a drawer Group in Long Beach, CA, as well as Chief Operating and never sees the light of day until year end, if ever. Officer of Nautilus Healthcare Management Group Frequent communication also falls by the wayside as the in Newport Beach, CA, and Molina Healthcare of pace quickens and there just doesn’t seem to be enough California, Long Beach, before joining Adventist Health time. Leaders need to communicate both successes Physician Network in 2014.

Spring 2017 capg health l 31 Best Practices: Disability Income Protection for Medical Group Physicians

by Stephen L. Rivetti, President, Rivetti Financial

The last several years have brought unparalleled changes to the way medical groups hire and retain their physicians. For example, teaching hospitals are employing faculty physicians, foundations are engaging physicians, and medical groups are modifying their employment structures.

A medical group’s human resources department typically aims to design its benefits program to attract and retain outstanding physicians. However, medical groups and their physicians often overlook one of the most significant benefits—disability income. Because physicians constantly witness the financial and emotional impact disabilities have on their patients and families, they understand the value of a comprehensive disability income program.

When is the last time you reviewed the disability insurance benefits you offer your physicians? Do you fully understand those benefits? Disability insurance often is the forgotten benefit that lies dormant until someone becomes disabled. Only then do people scramble to ensure they have adequate protection, which can, in some cases, be “Carefully too late. You can have an enormous impact on your physicians’ lives (and your own) by simply reviewing these benefits now. review your LTD

Here is a brief, six-point guide for reviewing your long-term disability (LTD) insurance: contracts now, 1. Definition of Disability – The definition of disability should be “Own Occupation,” before one of your which means that you are considered disabled if you cannot perform the substantial and material duties of your usual occupation. Preferably, the LTD contract should medical group also contain “specialty-specific” language, which transforms the coverage to make a physician’s usual occupation specific to their medical specialty. Simply put, if physicians has a physician cannot perform his or her medical specialty, he or she is considered disabled even if he or she is capable of performing other occupations (or even other to file a disability medical specialties). claim. A detailed 2. Maximum Benefit Cap/Percentage – In many instances, the monthly benefit amounts of LTD contracts are subpar. If a physician is earning $30,000 per month, but his review now or her LTD only pays $15,000 per month, the physician may have to make dramatic lifestyle changes. Additionally, if that $15,000 per month benefit is fully taxable, the can eliminate disability coverage will only replace a small fraction of the physician’s actual income. See chart below. disappointment and unfortunate Pre-Disability Sample Maximum Covered By Replacement % of Salary Group LTD Pre-Disability Income surprises.” $300,000 $15,000 60% $400,000 $15,000 45% $500,000 $15,000 36% $600,000 $15,000 30%

3. Taxable vs. Tax-Free Benefits – Everyone should be given the opportunity to receive their disability benefits tax free. Whether benefits are taxable or tax free will

32 l capg health Spring 2017 depend on how the premium is paid. If the premium is “GSI”)—a huge benefit because medical underwriting 100 percent employer-paid, the employer will take a is typically very strict. Significant discounts also may be tax deduction, and any disability benefits paid to the available for medical groups of certain sizes. physician will be taxed. However, insurance companies allow employers to “gross up” a physician’s salary to A majority of physicians will obtain personal disability allow the physician to obtain tax-free benefits. In a insurance during their career. Medical groups can “gross-up” structure, the employer pays the premium, (and should) do their physicians a tremendous favor but the premium cost is added to the physician’s W-2. by offering them the same coverage, but without a The physician pays only the taxes owed on the total medical evaluation and with better rates. Many well- premium amount. The “gross-up” structure provides known medical groups are offering a GSI program to for tax-free benefits, which can make a significant supplement their group LTD coverage. GSI offerings difference to a disabled physician. must be negotiated by a broker with experience in this area. Although only a few insurance carriers offer this 4. Pension Contribution Rider – When a physician product, all carriers and options should be reviewed to becomes disabled and no longer receives his or her determine the best plan. income, his or her retirement contributions will cease and the physician can no longer save for retirement. According to a recent Medical Group Management Some insurance companies, however, will allow you Association report, medical groups spend 17 percent to add a pension contribution rider to the disability of their operating budgets on insurance. Despite that, contract. This ensures that a disabled physician selecting an insurance advisor is often a haphazard receives not only his or her monthly disability benefit, process. The right advisor is critical to helping your but also a separate benefit that goes towards his or her medical group thrive. retirement. Carefully review your LTD contracts now, before 5. Claims Management – Ask the insurance company one of your medical group physicians has to file a about the experience and history of the people who disability claim. A detailed review now can eliminate staff its claims unit. That staff will be interacting with disappointment and unfortunate surprises that could your physicians and determining claims. Also ask if arise during the claims process. Medical groups also its claims unit has experience working with medical should consider a supplemental, voluntary GSI program groups. Some insurance companies have claims units for their physicians to enhance benefits at no cost to the dedicated to working with physicians. medical groups, while, at the same time, providing a layer of coverage that will make a significant difference in the 6. Benefits Determination: Partial Disability– Some LTD lives of any disabled physicians and their families. o policies use a 50 percent offset formula for partial disability. This formula favors rank-and-file employees, For over 40 years, Rivetti Financial has helped physicians but penalizes highly paid claimants. The result: highly and medical groups of all sizes, including many CAPG paid physicians who become partially disabled may members, protect their income in the event of a disability. receive only a minimum benefit (e.g., $100 a month). To learn more, visit www.rivettifinancial.com or email [email protected].

Beyond LTD: Enhanced Coverage Sometimes, LTD benefits just don’t cut it.A s a result, medical groups are beginning to offer supplemental coverage options that extend beyond the group’s LTD plan. These plans can be at no cost to the employer/ medical group and, instead, offered to employees/physicians at their own expense. Such programs allow physicians to obtain additional coverage without any medical evaluation (known as “guarantee standard issue” or

Spring 2017 capg health l 33 Names in the News...continued from page 8 New York-Presbyterian Hospital, and was an editor of Health Care: The Journal of Delivery Science and Vivek Garg, MD, Named CMO, Innovation. He received his medical degree and MBA New Markets at CareMore from Harvard University. CareMore Health System, a care delivery system and health plan founded and led by physicians, has Orange Coast Memorial Medical appointed Vivek Garg, MD, as chief medical officer Center Named a Top Workplace of new markets and business development. In this for Sixth Consecutive Year new role, Dr. Garg will oversee clinical operations in the organization’s new business markets, including Orange Coast Memorial Medical Center, a nonprofit Iowa and Tennessee, and will work closely with hospital in the MemorialCare Health System, was the executive team to develop high-impact clinical selected for the sixth consecutive year as a Top business models for these areas. Prior to CareMore, Workplace by the Orange County Register. The he was director of medical operations for Oscar Top Workplaces are determined based solely Insurance and medical director of One Medical on employee feedback. The employee survey is Group. Previously, Dr. Garg was a clinical assistant conducted by WorkplaceDynamics, LLP, a leading professor of medicine at Weill Cornell Medicine, New research firm on organizational health and employee York, acted as an assistant attending physician at engagement. o

Policy Briefing...continued from page 15 networks in any state where they do business. The cost of a local network is far more determinative effective with lower-income earners. High-risk of the premium price than the regulatory structure pools are costly and hard to implement in smaller within each state. Furthermore, this proposal states. Even the federally run Pre-existing Condition tramples on the right of each state to regulate the Insurance Plan (PCIP) pool under the ACA business of insurance. Didn’t the Republicans sue exhausted its funding six months prior to its planned to ban the ACA provision requiring each state to termination date. Congress had to unilaterally cut expand its Medicaid program as a violation of state’s provider rates to continue the program to the end of rights? 2013. Observations. In the midst of all this uncertainty, Republicans also propose provider liability tort one thing is certain—change is coming. This will be reform as a mechanism to alleviate the costly a “mandatory opportunity” to evaluate how to best practice of defensive medicine and prohibitive preserve what is good and useful in Obamacare and provider malpractice insurance rates. Several studies to devise improvements to maximize the value of have shown that the impact of current provider future federal payments. States must focus on three tort liability translates to about one percent of key elements: how to provide the most coverage to the premium dollar, which is far less than the 20 the most people, how to continuously improve the percent cut in premium cost recently promised by quality of care delivered, and how to best control President Trump. Moreover, states like California cost increases. In other words, it’s all still about the already impose the same rules proposed under the Triple Aim. States should benchmark their current Republican tort reform plan and so would not benefit status in terms of lives covered under the ACA, any further from this change. quality of care outcomes, and cost trend.

Cross-state insurance sales also feature prominently With these data in hand, we can all evaluate the in most Republican replacement plans. Lawmakers changes coming under Republican repeal-and- believe that allowing insurers to sell across state replace plans and when the next general election lines will increase competition and result in lower arises, ask then–presidential candidate Ronald premium rates. The insurance industry disfavors Reagan’s famous question: “Are you better off than this approach. Carriers still have to create provider you were four years ago?” o

34 l capg health Spring 2017 Looking to avoid risk? WE CAN SHOW YOU THE WAY.

We’re taking the mal out of malpractice insurance. Thanks to our national scope, regional experts, and data-driven insights, we’re uniquely positioned to spot trends early. We shine a light on risks that others can’t see, letting you focus on caring for patients instead of defending your practice. It’s a stronger vision that creates malpractice insurance without the mal. Join us at thedoctors.com

6071_CA_CAPG_Health_ORM_Spring2017_f.indd 1 12/8/16 2:26 PM Formula for Success in New Payment Models

The new Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which moves the physician payment model away from fee-for-service to value-based patient care, has some healthcare professionals understandably concerned about adding another twist to healthcare reimbursements. At Brown & Toland Physicians, providing value-based care to patients is a familiar practice. Many of our physicians are already meeting MACRA requirements through the use of e-tools, improved quality clinical practices and effective management of costs.

With Brown & Toland’s experience across numerous value-based accountable care projects for HMO and PPO patients, we have fine-tuned the formula for delivering high-quality, cost-effective care while succeeding in risk-adjustment payments models. One such example includes our participation in the CMS Pioneer Accountable Care program, which generated more than $15 million in savings for the care of 17,000 patients.

It is accountable care experiences like this that will help physician-led groups and their partners find the winning formulas for success in the new payment models to come.

To learn more about Brown & Toland Physicians and how we have achieved success through value-based payment models, please visit our website at brownandtoland.com.

Keeping the San Francisco Bay Area healthy for more than 20 years

brownandtoland.com