CAPG Health Spring 2017 by America's Physician Groups

HEALTH Volume 11 • No. 1

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

Spring 2017

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Contact conferences@questdiagnostics.com 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 have about their “at risk” populations—their most complex, medically compromised patients.

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TABLE OF CONTENTS

ON THE COVER

Dr. Kurt Ransohoff

Sansum Clinic: 96 Years of Innovative Healthcare

HEALTH

DEPARTMENTS

FEATURES

Editor-in-Chief

Don Crane

Editorial Advisory Board

From the President

Preparing for MACRA: How to Lead

Publisher

Valerie Okunami

Lura Hawkins, MBA Amy Nguyen Howell, MD, MBA Mary Kay Payne, Arch Health Partners Managing Editor

Names in the News

Daryn Kobata

Editorial Assistant

Nelson Maldonado Contributing Writers

Jim Agronick Bill Barcellona Don Crane Mara McDermott Amy Nguyen Howell, MD, MBA Kurt Ransohoff, MD Stephen L. Rivetti CAPG Health Magazine is published by

Valerie Okunami Media PO Box 674, Sloughhouse, CA 95683 Phone 916.761.1853

capghealth.com Please send press releases and editorial inquiries to capghealth@ capg.org or c/o CAPG Health, 915 Wilshire Blvd., Suite 1620, Los Angeles, CA 90017 For advertising, please send email to vokunami@netscape.com Subscription rates: $32 per year; $58 two years; $3 single copy. Advertising rates on request. Bulk third class mail paid in Jefferson City, MO Every precaution is taken to ensure the accuracy of the articles published in CAPG Health Magazine. Opinions expressed or facts supplied by its authors are not the responsibility of CAPG Health Magazine. © 2017, CAPG Health Magazine. All rights reserved. Reproduction in whole or in part without written permission is strictly prohibited.

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10 Upcoming Events

14 Policy Briefing: How Will “Repeal and Replace” Affect My State?

16 Federal Policy Update: Aftermath of the 2016 Election

18 CAPG Member List

Through Change

30 California Healthcare 2017: Fasten Your Seatbelts and Keep Your Hands Inside the Car!

32 Best Practices: Disability Income Protection for Medical Group Physicians

From the President A M ES S AG E F R O M D O N A L D C R A N E , P R ES I D E N T A N D C EO , C A P G

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

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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 offer TRUE 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

Names in the News WELCOME TO OUR NEWEST MEMBERS CAPG warmly welcomes these members who have recently joined: Organizational Members Advantage Medical Group, LLC, Orlando, FL Canopy Health, Emeryville, CA Central Oregon IPA, Bend, OR Comprehensive Geriatric Care of San Juan, San Juan, PR East Coast Medical Services, Inc., Fajardo, PR Innovare Health Advocates, St. Louis, MO Jefferson Health, Philadelphia, PA Key Medical Group, Inc., Visalia, CA Managed Care Management and Educational, LLC, San German, PR Medicos Selectos del Norte, Inc., Vega Alta, PR Methodist Le Bonheur Healthcare, Nashville, TN Oak Street Health, Chicago, IL Pediatric Associates, Plantation, FL Privia Medical Group, LLC, Arlington, VA Signature Partners Network, Falls Church, VA Corporate Partner Continuum Health Alliance Associate Partners Natera, Inc. Soleo Health, Inc. Affiliate Partners Canvas Medical Financial Recovery Group, Inc. U.S. Advisors, Inc.

FOURTEEN CAPG MEMBERS SELECTED AS 2017 NEXT GEN ACOS The Centers for Medicare & Medicaid Services has confirmed more than 350,000 clinicians will participate in four alternative payment models in 2017: the Medicare Shared Savings Program, Next Generation Accountable Care Organization (ACO), Comprehensive End Stage Renal Disease Care model, and Comprehensive Primary Care Plus model. The Next Gen ACO model participants include 14 CAPG members.

“I’m extremely proud of our member groups selected by CMS as Next Generation participants,” said Donald Crane, CAPG’s CEO. “CAPG stands ready to do all we can to advance accountable care organization models and other innovative payment and delivery approaches in the future.” The CAPG Next Generation participants are: • Allina Integrated Medical Network (Minnesota and Wisconsin) • Arizona Care Network, LLC (Arizona) • DaVita Medical ACO California, LLC (California) • Hill Physicians Medical Group (California) • KentuckyOne Health Partners, LLC (Indiana and Kentucky) • MemorialCare Regional ACO, LLC (California) • Monarch Health Plan (California) • Optum Accountable Care Organization (Arizona) • Physicians of Southwest Washington (Washington) • Prospect ACO CA, LLC (California) • Prospect ACO Northeast, LLC (Connecticut and Rhode Island) • Regal Medical Group dba Heritage California ACO (California) • Sharp HealthCare ACO – II, LLC (California) • Triad Health ACO Inc. (North Carolina)

JENNIFER JACKMAN NAMED CEO OF EDINGER MEDICAL GROUP Edinger Medical Group, an award-winning physician-owned practice serving Orange County, California patients for over 50 years, has appointed Jennifer Jackman as chief executive officer. Jackman, a highly respected healthcare leader and public policy advocate for physician organizations, has over 25 years of experience in the healthcare industry. Previously, she was COO of MemorialCare Medical Foundation, overseeing strategy and operations of the Foundation, MemorialCare Medical Group, Greater Newport Physicians IPA, MemorialCare Regional Accountable Care Organization (ACO), and multiple ambulatory surgery and imaging centers. She also was senior VP of medical group operations for Monarch Healthcare, responsible for the OptumCare Medical Group operations, including the successful Pioneer ACO initiative, and president and CEO of Bright Health Physicians. continued on page 34

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Healthcare Facilities & Services  Who We Are  Leading Independent Advisory Firm

Comprehensive Capabilities

•  Independent financial, valuation, and strategic advisory  •  Significant experience and tenure; partners average over 25  years of experience

CORPORATE DEVELOPMENT

•  Nationwide   presence   with   offices   in   Chicago,   Cleveland,  Irvine, Philadelphia, and San Antonio

Buy‐Side M&A Advisory  Asset and Service Line Divestitures  Affiliations and Joint‐Venture Formations  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  with health systems; especially with respect to transaction  structure formation, incentive alignment, and risk mitigation  •  Broad, national, health system client base  •  Subgroup dedicated to healthcare real estate advisory and  brokerage

Fair Market Value Opinions  Fairness Opinions  Litigation Support and Benchmarking  Regulatory Compliance Advisory  Strategic Options Assessments  General Finance and Strategy Advisory  Healthcare Real Estate Brokerage & Advisory

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

HOSPITAL & HEALTH SYSTEMS

POST‐ACUTE CARE

OUTPATIENT SERVICES

•  For‐Profit & Not‐for‐Profit Health  Systems  •  Academic Medical Centers  •  Specialty Hospitals  •  Rural Health Providers

•  Long‐Term Care Hospitals  •  Physical Therapy &  Rehabilitation Providers  •  Senior Living  •  Home Health & Hospice

•  •  •  •  •  •

Urgent Care Centers  Ambulatory Surgery Centers  Diagnostic Imaging Centers  Laboratory Services  Other Ancillary Service Providers  Primary Care &   Specialty Medical Groups  •  Cancer Treatment Centers

ALTERNATE SITE

HEALTH FACILITIES

Who We Serve

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

E V E N T S

MIDWEST REGIONAL MEETING CAPG ANNUAL CONFERENCE 2017 June 22-24 San Diego, Manchester Grand Hyatt capg.org/conference2017

STATE POLICY COMMITTEE

GENERAL MEMBERSHIP—SOUTHERN CALIFORNIA Wednesday, May 10 CAPG

Thursday, March 16 WebEx

GENERAL MEMBERSHIP—NORTHERN CALIFORNIA

COLORADO REGIONAL MEETING

Thursday, May 11 Oakland, Hilton Oakland Airport

Thursday, March 30 Denver, Marriott Tech Center

HUMAN RESOURCES COMMITTEE Tuesday, April 4 WebEx

INLAND EMPIRE REGIONAL MEETING Tuesday, April 11 Riverside, Mission Inn

U P C O M I N G

Tuesday, May 2 Chicago, Marriott O’Hare

FEDERAL POLICY COMMITTEE Thursday, April 13 WebEx

SOUTHWEST REGIONAL MEETING Tuesday, April 17 Phoenix, Airport Marriott

CONTRACTS COMMITTEE Thursday, April 20 CAPG

SOUTHEAST REGIONAL MEETING Tuesday, April 25 Orlando, JW Marriott Grande Lakes

STATE GOVERNMENT PROGRAMS COMMITTEE Tuesday, April 25 CAPG

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NORTHEAST REGIONAL MEETING Tuesday, May 16 Philadelphia, Courtyard Philadelphia Airport

PHARMACEUTICAL CARE COMMITTEE Thursday, May 18 CAPG

STATE POLICY COMMITTEE Thursday, May 25 WebEx

COMMERCIAL ACO COMMITTEE Wednesday, June 7 CAPG

CLINICAL QUALITY LEADERSHIP COMMITTEE Saturday, June 24 CAPG Annual Conference 2017 Unless otherwise noted, contact CAPG for more information on these events: 213.624.2274.

CAPG Annual Conference 2017 From Volume to Value in the New World Order: What Now? June 22-24, 2017 Manchester Grand Hyatt, San Diego, CA

#CAPGInnovates @CAPGVoice

REGISTER NOW! capg.org/conference2017 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, Heritage Foundation

Amidst the Uncertainty, What Should the Delivery System Do?

New Market-based Policy Changes

Author, Consultant, and Futurist

Panel—Healthcare Post-Election: Whither the Value Movement?

Just Change the Name to Trumpcare and Let’s Move On

Moderated by Donald H. Crane, President and CEO, CAPG

Ian Morrison

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 of today—the oldest independent multispecialty provider of outpatient healthcare services on the Central Coast, and the last remaining independent medical foundation in California—is the result of the happy and successful marriage of two clinics: the original Sansum Medical Clinic and the Santa Barbara Medical Clinic, both founded in 1921. Recently we worked with the Santa Barbara Historical Museum to document the history of Sansum Clinic. I was amazed by how strong a role our history has played in preparing us to care for patients, despite the ever-evolving changes we face in our industry. Sansum Medical Clinic’s founder, Dr. William David Sansum, was the first doctor in the U.S. to use insulin to treat patients with diabetes. The Clinic’s underlying concept was to examine and treat health problems of patients who did not require hospitalization, using the latest research and medical advances. As the Clinic thrived and expanded, prominent patients traveled from places like Las Vegas and Mexico to receive thorough examinations without the “exorbitant price tag” of a hospital stay, then $10 to $12 a day. The Santa Barbara Medical Clinic was created with an innovative and almost revolutionary approach to healthcare. Doctors Rexwald Brown, Benjamin Bakewell, and Hilmar Koefod formed a group practice to make comprehensive specialty care available to all segments of Santa Barbara at a time when solo practitioners provided most of the care. Dr. Brown in particular believed in the team approach to providing higher quality healthcare more affordably by pooling resources and skills and sharing costs—a novel premise before it became the standard for excellence it is today. He was passionate about the idea that this model could make healthcare more affordable for people of moderate circumstances. This group approach was similar 12 l CAPG HEALTH

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to the multispecialty model of the Mayo Clinic, the first integrated group practice in the nation. Our forward-thinking founders established models of healthcare that have enabled us to weather the 1925 Santa Barbara earthquake, the Great Depression, World War II, the advent of Medicare, the formation of a nonprofit foundation, a merger of the two organizations to form a single outpatient clinic (now called Sansum Clinic) to better serve the community through economies of scale and administrative efficiencies, and the current alphabet soup of modern healthcare: HMOs, PPOs, the ACA, and most recently MACRA. The common themes from the last century closely mirror those we face today—innovation, growing to meet the needs of the community, changes in payment models, and partnering for increased efficiency. Today, Sansum Clinic’s 180 physicians in 30-plus specialties serve more than 129,000 patients, with 800,000 patient visits annually at 22 care facilities. The Clinic is administered by a Board of Trustees for the benefit of the community, and is among the top dozen employers in Santa Barbara County. In 2012, Sansum Clinic adopted a comprehensive electronic health record system from Epic, which allows patients to have online access to their personal health records. That same year, we merged with our local nonprofit Cancer Center of Santa Barbara with a vision for enhancing cancer care on the Central Coast, and today we are building a world-class regional Cancer Center slated to open later this year—thanks to the generosity of grateful patients and other community donors. We have seen some of the key features of the Affordable Care Act (ACA) take effect. Since 2014, we have experienced a notable increase in new patient visits, and we have proudly adapted in an attempt to meet the community’s needs amid this changing environment. In 2014, we built the Foothill Medical & Surgical Center, our first new facility in Santa Barbara in decades, which gave us the opportunity to put specialties with similar needs under one roof, and created much-needed space to expand primary care, urgent care, and same-day appointments. It also afforded the Clinic with four operating rooms, allowing us to transition care that previously could only be provided in

a more costly hospital setting to an outpatient setting. That same year, our new Patient Access Department allowed us to make great strides in streamlining the scheduling and registration processes for primary care services, including internal medicine, family medicine, and pediatrics. The Department’s centralized scheduling process reduces scheduling time and increases the efficiency and accuracy of registration, improving patients’ ability to get the right care at the right time, in the right place. The Clinic has made a dedicated effort in disaster preparedness for our community. As part of the expansion, we are installing emergency power that will enable us to serve the community in the case of natural disaster. Sansum Clinic joined the County of Santa Barbara’s Emergency Preparedness Program and now participates in the Disaster Healthcare Partnership Coalition, which assures collaborative planning and efficient emergency response.

The shift toward value-based payment models also means we are becoming increasingly reliant on data in order to document, measure, and report our quality and cost. We must be able to report on the high-value care we provide while also monitoring it for improvement opportunities. We are making investments in our internal data warehouse and electronic health record to ensure we have the ability to meet these needs now and well into the future. Other current efforts to improve our system include expansion of clinical hours, pharmacy services, the use of mid-level providers (nurse practitioners and physician assistants), and patient health and wellness education, plus addition of important programs like lung cancer screening. We are proud that these efforts have earned us national recognition for medical quality, including 4.5 Medicare Stars and CAPG Standards of Excellence™ Elite status.

In 2015, we strengthened our partnership with CenCal Health to ensure the growing Medi-Cal patient population is served with adequate access to care, health promotion and wellness activities, care coordination and disease management, and health information technology. We continue our decades-long commitment to the health of those who could not otherwise afford medical services by providing more than $250,000 each year in free diagnostic services to patients of the Santa Barbara Neighborhood Clinics.

Sansum Clinic’s vision continues to build upon the founding goals of the two original clinics. As a premier integrated delivery system, we provide high-value healthcare to the communities we serve, managing the population’s care needs while also creating a model of care that will thrive in California’s rapidly changing healthcare arena. It is a pleasure to share how our history has developed to forge what is today an exceptional healthcare provider serving our small but forward-thinking community, and how we are poised to navigate the healthcare landscape of the future.

We are now focused on navigating our way through the next monumental changes in healthcare: Medicare’s shift in payment models to focus on performance-based payment. One value-based model we are pursuing is the patientcentered medical home (PCMH), in which a primary care doctor leads a clinical care team that oversees the care of each patient in a practice. The goal is more coordinated patient care and improved outcomes. With a team-based approach to care, all members of the clinical staff can assist with 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.

Our predecessors practicing at “The Clinic” in the 1920s or during WWII would not recognize the newfangled technologies and interventions utilized every day at the current Sansum Clinic, but in other ways they would very much recognize the same dedication to meeting the community’s needs through a group practice model that started almost 100 years ago. o Dr. Kurt Ransohoff, CEO and Chief Medical Officer of Sansum Clinic, is the new chair of CAPG's Board of Directors for 2017-18.

Spring 2017

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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.

loss of “The Medicaid expansion funding could potentially throw millions of people out of covered ambulatory care and return them to seeking [emergency room treatment].”

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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. Each seeks to cap the federal budget increase in Medicaid spending. Most include the abolishment of subsidies in the individual and small group coverage markets–and most of all, dropping the individual and employer mandates, the essential health benefits standard and certain coverage mandates–like free birth control and access to reproductive services. Most seem to keep the inclusion of coverage for dependents to age 26 and the ban against pre-existing condition underwriting. New mechanisms are included to increase access to coverage– like cross-state insurance sales, high deductible consumer-driven plans, and taxpayer deductions for premium expenditures. Aspirational goals are included, such as incorporating greater state-level flexibility to design coverage systems in the commercial and Medicaid programs. How will these changes impact states? States that took advantage of the Obamacare coverage expansion generally enjoyed improved health status within their population and lower cost trend in healthcare spending. Many of the expansion states are now evaluating the negative hit to their economy resulting from a loss of ACA coverage and reporting local impacts to members 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 funding could potentially throw millions of people out of covered ambulatory care and return them to seeking treatment at the local emergency services department. Hospitals are facing the prospect of increased unpaid debt without a commensurate replacement of their lost Disproportionate Share 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.

The ACA also had an indirect positive impact through creating tens of thousands of healthcare jobs. The loss of those jobs, especially in the middle class, will have a serious impact on voter attitudes going into the 2018 midterm election. Is there a potential upside? The Affordable Care Act was far from perfect and some elements, such as tax reconciliation of subsidies or the longterm sustainability of the risk adjustment program, may have been fatally flawed. States now have the opportunity to honestly evaluate the potential for change and suggest improvements. Allowing state flexibility to design localized Medicaid systems may prove more efficient in the long run. The Ryan proposal to move away from the FMAP formula (federal medical assistance percentage—the federal government’s share of a state’s expenditures) to a per-capita expenditure model has generated fear and uncertainty within the safety net. More analysis, like the one recently issued by Avalere Health, are needed to evaluate potential impacts on state budgets. Assuming that expansion states could keep their expansion funding, perhaps their most important potential gain would be the ability to garner 100 percent of any savings realized through a more efficient Medicaid system. In many states, any shared savings that were negotiated with the federal government were mostly passed back to CMS. Providers did all the hard work to create the savings, but saw none of the benefit. States could maximize the value of such savings by reducing pressure on their own

general funds and reinvesting savings to build better infrastructure for healthcare delivery. The states will need both increased flexibility to administer local versions of Medicaid and federal innovation funding to capitalize new infrastructure for data analytics, cost and quality transparency, and care management. Examining specific Republican proposals for insurance market reform. Republicans propose to replace the current ACA Exchange Marketplace model, which utilizes an individual mandate to purchase coverage with premium and cost share subsidies. The new arrangement would include a combination of tax deductions/credits for premium costs coupled with an individual mandate to maintain continuous coverage to preserve the right of guaranteed issuance. The Republican safety net for those who cannot afford continuous coverage is the reintroduction of high-risk pools as mechanism for coverage of last resort. Risk pools could use some updating. To stay financially viable, states could develop delivery networks for their risk pool populations that are designed to deal with sicker, more complex patients, rather than using leased PPO networks. States must evaluate whether their own tax policies can support a tax deduction/credit model. A recent UCLA study challenged the viability of the tax credit model, since deductions are mostly used by those in upper income strata. If deductions or credits are only useful to those with higher incomes, the mechanism doesn’t replace the use of subsidies, which are more continued on page 34

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Federal Policy Update Aftermath of the 2016 Election: The State of the Value Movement BY M A R A M C D E R M OT T, V I C E P R ES I D E N T O F F E D E R A L A F FA I R S , C A P G

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. Although Republicans control the White House, House, and Senate, they do not have the necessary votes in the Senate to repeal the entire ACA, due to the Senate’s 60-vote filibuster requirement. Republicans may, however, proceed under the budget 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 means that repeal will likely be piecemeal, with some aspects of the law remaining intact. The Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) were created as part of the ACA. However, these provisions seem unlikely 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 changes to the Medicare ACO program—loosening restrictions and bringing about more success in the program than we have seen to date. Alongside possible improvements to the ACO program, we see potential for the development of new alternative payment models. Recall that CAPG worked on a 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 members of Congress on both sides of the aisle and the Administration to further riskbearing delivery models.

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

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remains] “[CAPG optimistic about our ability to continue advancing the value movement, including promoting and expanding capitated, coordinated care.”

measurement in 2017. We expect that MACRA will carry forward as planned in 2017, with a soft launch and relatively low bar for avoiding financial penalties in the lfirst year. However, we see opportunity for additional rule making and regulatory changes in 2018 and beyond. CAPG welcomes the opportunity to work with the new Administration to design MACRA implementation for future years.

CMS INNOVATION CENTER VULNERABLE At the end of 2016, the Centers for Medicare & Medicaid (CMS) Innovation Center, or CMMI, faced intense scrutiny, particularly from Congressional Republicans. With introduction of proposed mandatory models like the joint replacement bundled payment program and a nationwide Part B drug demonstration, CMMI came under fire from the Hill and stakeholders alike. This has led many to wonder if the CMMI will be repealed or otherwise modified in 2017. While the future of CMMI remains cloudy, we think it will continue, but perhaps with some changes and certainly with new types of models being tested. We believe this will bring opportunities for CAPG members to improve upon existing CMMI offerings and potentially test new models.

OPPORTUNITY FOR MEDICARE ADVANTAGE Since the enactment of the ACA, the Medicare Advantage (MA) program has faced intense regulatory and legislative pressure. The program faced cuts under the ACA and has seen additional downward pressure from policies that include risk adjustment changes, the phase-in of encounter data, and program audits. The new Administration and Congress are expected to take a more favorable approach to MA, creating opportunities for CAPG members. In particular, CAPG has sought out opportunities to incent participation in risk contracts between MA health plans and physician organizations. We look forward to working with the new Administration to achieve the goals of a reformed delivery system in MA that rewards the CAPG member model.

CAPG REMAINS A STRONG VOICE FOR VALUE We see opportunities and challenges in the year to come. CAPG continues to pursue value-based reforms in Washington, DC. We remain optimistic about our ability to continue advancing the value movement, including promoting and expanding capitated, coordinated care. We look forward to working with all of you in this new environment to bring the message of coordinated care to the Administration and the 115th Congress. o

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Choice Medical Group

Hill Physicians Medical Group, Inc.*

Cigna Medical Group

Innovare Health Advocates

Long Beach, California Access Medical Group/Access Senior Health Care • California IPA • Community Care IPA • Future Care IPA • MediChoice IPA • Premier Care IPA • Seoul Medical Group

Citrus Valley Independent Physicians

Iora Health, Inc.

Colorado Permanente Medical Group, P.C.

Jefferson Health

Advantage Medical Group, LLC

Comprehensive Geriatric Care of San Juan San Juan, Puerto Rico

John Muir Physician Network*

Orlando, FL

Adventist Health Physicians Network IPA

Conifer Health Solutions Encino, California

Key Medical Group

Los Angeles, California

Affinity Medical Group

AltaMed Health Services • Exceptional Care Medical Group • Family Choice Medical Group • Family Health Alliance • Mid Cities IPA • OmniCare Medical Group • Premier Care of Northern California • Saint Agnes Medical Group

Lakeside Community Healthcare

Continucare Corporation

Lakewood IPA

ORGANIZATIONAL MEMBERS

Accountable Health Care IPA Long Beach, California

M E M B E R S

Advanced Medical Management, Inc.

Pinole, California

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AllCare IPA

Modesto, California

Allied Physicians of California

Phoenix, AZ

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DaVita HealthCare Partners*

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Boston, Massachusetts Philadelphia, Pennsylvania Walnut Creek, California Visalia, California

Agoura Hills, California

Lakeside Medical Group, Inc. Glendale, California

Lakewood, California Alamitos IPA • St. Mary IPA • Brookshire IPA

Leon Medical Centers, Inc.

Los Angeles, California

Torrance , California ABQ Health Partners, Division of DaVita HealthCare Partners • Colorado Springs Health Partners • HealthCare Partners • HealthCare Partners Nevada • HealthCare Partners South Florida • JSA Medical Group, Division of DaVita HealthCare Partners • The Everett Clinic

Angel Medical Group

Desert Oasis Healthcare

San German, Puerto Rico

AppleCare Medical Group, Inc.*

Dignity Health Foundation

Austin Regional Clinic*

East Coast Medical Services, Inc.

Bakersfield Family Medical Center

Edinger Medical Group

Bayhealth Physician Alliance, LLC

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Alhambra, California

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AltaMed Health Services Corporation*

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Beaver Medical Group*

Equality Health - Q Point

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Brown & Toland Physicians*

The Everett Clinic, P.S.*

Oakland, CA

Everett, Washington

California Pacific Physicians Medical Group, Inc.

Facey Medical Foundation*

Cypress, California

C A P G

Apple Valley, California

Mission Hills, California

Golden Empire Managed Care, Inc.

CareMore Medical Group

Bakersfield, CA

Canopy Health

Good Samaritan Medical Practice Association

Downey, California

Emeryville, California

Long Beach, California

CareMount Medical, P.C.

Greater Newport Physicians Medical Group, Inc.*

Mount Kisco, New York

Catholic Health Initiatives*

Newport Beach, California

Englewood, Colorado Architrave Health • Arkansas Health Network • Colorado Health Neighborhoods • KentuckyOne Health Partners • Mercy Health Network • Mission HealthCare Network PrimeCare Select • St. Luke’s Health Network • TriHealth • UniNet

Group Health Physicians

Cedars-Sinai Medical Group*

Honolulu, Hawaii

Central Ohio Primary Care Physicians, Inc.*

Reseda, California Affiliated Doctors of Orange County • Arizona Priority Care Plus • Bakersfield Family Medical Group • California Coastal Physician Network • California Desert IPA • Coastal Communities Physician Network • Desert Oasis Healthcare • Greater Covina Medical Group • HealthCare Partners, IPA, AZ and NY • Heritage Physician Network • Heritage Victor Valley Medical Group • High Desert Medical Group • Lakeside Community Healthcare • Lakeside Medical Group • Regal Medical Group • Sierra Medical Group

Beverly Hills, California

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Central Oregon IPA Bend, Oregon

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Chinese American IPA New York, New York

Chinese Community Health Care Association San Francisco, California

18 l CAPG HEALTH

Spring 2017

Seattle, Washington

Guthrie Medical Group* Sayre, Pennsylvania

Hawaii Pacific Health Heritage Provider Network*

High Desert Medical Group Lancaster, California

Doral, Florida

Loma Linda University Health Care Loma Linda, California

Managed Care Management and Educational, LLC Maverick Medical Group Glendale, California

Medicos Selectos del Norte, Inc. Vega Alta, Puerto Rico

MedPoint Management

Woodland Hills, California Accountable Health Care IPA • Bella Vista Medical Group IPA • Centinela Valley IPA • El Proyecto Del Barrio, Inc. • Global Care Medical Group IPA • HealthCare LA IPA • Jewish Home for the Aging IPA • Pioneer Provider Network, A Medical Group, Inc. • Premier Physicians Network • Prospect Medical Group, Inc. • Redwood Community Health Network • Watts Healthcare Corporation

MemorialCare Medical Group* Tustin, California

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Methodist Le Bonheur Healthcare Memphis, Tennessee

Mid-Atlantic Permanente Medical Group, PC Rockville, Maryland

Molina Medical Centers* Long Beach, California

Monarch HealthCare* Irvine, California

Monterey Bay IPA Monterey, California

Mount Sinai Health Partners* New York, New York

MSO of Puerto Rico* San Juan, Puerto Rico

Muir Medical Group, IPA Walnut Creek, California

NAMM California*

Ontario, California Coachella Valley Physicians of PrimeCare • Empire Physicians Medical Group • Mercy Physicians Medical Group • Primary Care Associated Medical Group • PrimeCare Medical Group of Chino • PrimeCare Medical Network • PrimeCare of Citrus

Valley • PrimeCare of Corona • PrimeCare of Hemet Valley • PrimeCare of Inland Valley • PrimeCare of Moreno Valley • PrimeCare of Redlands • PrimeCare of Riverside • PrimeCare of San Bernardino • PrimeCare of Sun City • PrimeCare of Temecula • Redlands Family Practice Medical Group

St. Joseph Heritage Healthcare*

New West Physicians, PC*

Cerritos, California

Golden, Colorado

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Northwest Physicians Network of Washington, LLC Tacoma, Washington

Oak Street Health Chicago, Illinois

Omnicare Medical Group Lynnwood, California

One Medical Group

San Francisco, California

Pediatric Associates Plantation, Florida

The Permanente Medical Group, Inc. (North)* Oakland, California

Physicians DataTrust

San Diego, California Greater Tri-Cities IPA • Noble AMA IPA • St. Vincent IPA

Physicians Choice Medical Group of San Luis Obispo San Luis Obispo, California

Fullerton, California Hoag Medical Group • Mission Heritage Medical Group • St. Mary High Desert Medical Group

St. Vincent IPA Medical Corporation San Bernardino Medical Group San Bernardino, California

Sansum Clinic*

Santa Barbara, California

Santa Clara County IPA (SCCIPA) Foster City, California

Santé Health System, Inc. Fresno, California

Scripps Coastal Medical Center Oceanside, California San Diego, California

SeaView IPA

Oxnard, California

Sharp Community Medical Group* San Diego, California

Arch Health Partners • Graybill Medical Group

Sharp Rees-Stealy Medical Group* San Diego, California

Signature Partners Network* Falls Church, Virginia

The Southeast Permanente Medical Group, Inc.

Santa Cruz, California

Atlanta, Georgia

Physicians Choice Medical Group of Santa Maria

Southern California Permanente Medical Group*

Santa Maria, California

Pasadena, California

Physicians of Southwest Washington, LLC

Southwest Medical Associates

Olympia, Washington

Las Vegas, Nevada

PIH Health Physicians

Summit Medical Group, PA*

Whittier, California

Berkeley Heights, New Jersey

Pioneer Medical Group, Inc.*

Sutter Health Foundations & Affiliated Groups*

Preferred IPA of California Glendale, California

Privia Medical Group, LLC Arlington, Virginia

Prospect Medical Group*

Orange, California AMVI/Prospect Medical Group • Genesis Healthcare of Southern California, A Medical Group • Nuestra Familia Medical Group • Pomona Valley Medical Group • Prospect HealthSource Medical Group • Prospect NWOC Medical Group • Prospect Professional Care Medical Group • Prospect Provider Group RI, LLC • Prospect Provider Group CT, LLC • Prospect Provider Group CTW, LLC • Prospect Provider Group NJ, LLC • Prospect Health Services TX • StarCare Medical Group • Upland Medical Group, a Professional Medical Corporation

Providence Health & Services Torrance, California

Providence Medical Management Services Burbank, California Korean American Medical Group • Providence Care Network

Renaissance Physician Organization Clare Hawkins, MD, IPA Board Chair

River City Medical Group, Inc. Sacramento, California

Riverside Medical Clinic Riverside, California

Riverside Physician Network Riverside, California

Torrance, California

Triad HealthCare Network, LLC* Greensboro, North Carolina

UC Irvine Health Irvine, California

UCLA Medical Group* Los Angeles, California

USC Care Medical Group, Inc. Los Angeles, California

Valley Organized Physicians Harlingen, Texas

Verity Medical Foundation San Jose, California

WellMed Medical Group, P.A.* San Antonio, Texas

Scripps Physicians Medical Group

Physicians Medical Group of Santa Cruz*

Cerritos, California

Torrance Hospital IPA

Sacramento, California Central Valley Medical Group • East Bay Physicians Medical Group • Gould Medical Group • Marin Headlands Medical Group • Mills-Peninsula Medical Group • Palo Alto Foundation Medical Group • Palo Alto Medical Foundation • Peninsula Medical Clinic • Physician Foundation Medical Associates • Sutter East Bay Medical Foundation • Sutter Gould Medical Foundation • Sutter Independent Physicians • Sutter Medical Foundation • Sutter Medical Group • Sutter Medical Group of the Redwoods • Sutter North Medical Group • Sutter Pacific Medical Foundation

Swedish Medical Group Seattle, Washington

Synergy HealthCare, LLC Nashville, Tennessee

SynerMed*

Monterey Park, California Adventist Health Plan • Alpha Care Medical Group • Alvarado Hospital Medical Center • Angeles IPA • Coordinated Care Plan of California • Crown City Medical Group • EHS Inland Valleys IPA • EHS Medical Group – Central Valley • EHS Medical Group – Los Angeles • EHS Medical Group – Sacramento • Employee Health Systems • IPA of Georgia • MultiCultural Medical Group • Pacific Alliance Medical Center • Torrance Hospital IPA • XiMed

Tenet Healthcare Dallas, Texas

The Portland Clinic Portland, Oregon

The Vancouver Clinic, Inc., P.S.* Vancouver, Washington

CORPORATE PARTNERS abbvie Anthem Blue Cross of California athenahealth Boehringer Ingelheim Pharmaceuticals, Inc. Continuum Health Alliance Evolent Health Humana, Inc. Merck & Co. Nestle Health Science Novartis Pharmaceuticals Novo Nordisk Patient-Centered Primary Care Collaborative Sanofi, US SCAN Health Plan Shionogi, Inc. ASSOCIATE PARTNERS Arkray Astellas Pharma US, Inc. AstraZeneca Pharmaceuticals Avanir Pharmaceuticals, Inc. Bio-Reference Laboratories, Inc. Bristol-Myers-Squibb Easy Choice Health Plan, Inc. Genentech, Inc. Incyte Corporation Johnson & Johnson Family of Companies Kaufman, Hall & Associates Kindred Healthcare, Inc. Lumara Health Natera, Inc. Pfizer, Inc. Ralphs Grocery Company Soleo Health, Inc. Sunovion Pharmaceuticals Inc. Surgical Care Affiliates, Inc. The Doctors Company AFFILIATE PARTNERS Acurus Solutions, Inc. Alignment Healthcare Altura ASPiRA LABS Axene Health Partners Cal INDEX Canvas Medical Children’s Hospital Los Angeles Medical Group CVHCare Financial Recovery Group, Inc. Mills Peninsula Medical Group Nifty After Fifty Monarch LLC Partners in Care Foundation Pharmacyclics, Inc. Redlands Community Hospital Saint Agnes Medical Group SullivanLuallin Group U.S. Advisors, Inc. Ventegra, LLC * Indicates 2017-18 Board Members

Spring 2017

CAPG HEALTH l 19

#1 PRESCRIBED ORAL CLL THERAPY.* MORE THAN 20,000 PATIENTS TREATED SINCE APPROVAL1†

MAKE IMBRUVICA® YOUR FIRST STEP Approved in frontline CLL with or without 17p deletion2

CLL SLL

IMBRUVICA® is a once-daily oral therapy indicated for: • Chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL)2 • CLL/SLL with 17p deletion2

IMPORTANT SAFETY INFORMATION WARNINGS AND PRECAUTIONS Hemorrhage - Fatal bleeding events have occurred in patients treated with IMBRUVICA®. Grade 3 or higher bleeding events (intracranial hemorrhage [including subdural hematoma], gastrointestinal bleeding, hematuria, and post-procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in approximately half of patients treated with IMBRUVICA®. The mechanism for the bleeding events is not well understood. IMBRUVICA® may increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant therapies and patients should be monitored for signs of bleeding. Consider the benefit-risk of withholding IMBRUVICA® for at least 3 to 7 days pre- and postsurgery depending upon the type of surgery and the risk of bleeding. Infections - Fatal and nonfatal infections have occurred with IMBRUVICA® therapy. Grade 3 or greater infections occurred in 14% to 29% of patients. Cases of progressive multifocal leukoencephalopathy (PML) have occurred in patients treated with IMBRUVICA®. Evaluate patients for fever and infections and treat appropriately. Cytopenias - Treatment-emergent Grade 3 or 4 cytopenias including neutropenia (range, 19% to 29%), thrombocytopenia (range, 5% to 17%), and anemia (range, 0% to 9%) based on laboratory measurements occurred in patients treated with single agent IMBRUVICA®. Monitor complete blood counts monthly. Atrial Fibrillation - Atrial fibrillation and atrial flutter (range, 6% to 9%) have occurred in patients treated with IMBRUVICA®, particularly in patients with

cardiac risk factors, hypertension, acute infections, and a previous history of atrial fibrillation. Periodically monitor patients clinically for atrial fibrillation. Patients who develop arrhythmic symptoms (eg, palpitations, lightheadedness) or new-onset dyspnea should have an ECG performed. Atrial fibrillation should be managed appropriately and if it persists, consider the risks and benefits of IMBRUVICA® treatment and follow dose modification guidelines. Hypertension - Hypertension (range, 6% to 17%) has occurred in patients treated with IMBRUVICA® with a median time to onset of 4.6 months (range, 0.03 to 22 months). Monitor patients for new-onset hypertension or hypertension that is not adequately controlled after starting IMBRUVICA®. Adjust existing antihypertensive medications and/or initiate antihypertensive treatment as appropriate. Second Primary Malignancies - Other malignancies (range, 5% to 16%) including non-skin carcinomas (range, 1% to 4%) have occurred in patients treated with IMBRUVICA®. The most frequent second primary malignancy was non-melanoma skin cancer (range, 4% to 13%). Tumor Lysis Syndrome - Tumor lysis syndrome has been infrequently reported with IMBRUVICA® therapy. Assess the baseline risk (eg, high tumor burden) and take appropriate precautions. Monitor patients closely and treat as appropriate. Embryo-Fetal Toxicity - Based on findings in animals, IMBRUVICA® can cause fetal harm when administered to a pregnant woman. Advise women to avoid becoming pregnant while taking IMBRUVICA® and for 1 month after cessation of therapy. If this

RESONATETM-2 FRONTLINE DATA 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 OVERALL SURVIVAL

PROLONGED PROGRESSION-FREE SURVIVAL

IMBRUVICA® signiﬁcantly extended OS vs chlorambucil2

IMBRUVICA® signiﬁcantly extended PFS vs chlorambucil2,3

Statistically signiﬁcant reduction in risk of death2

2,3

56% HR=0.44 (95% CI: 0.21, 0.92)

41% of patients

2,3

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

SECONDARY ENDPOINT: OS

• Chlorambucil median PFS was 18.9 months (95% CI: 14.1, 22.0)2

• Median follow-up was 28 months2

• PFS was assessed by an IRC per revised IWCLL criteria3

Adverse reactions ≥20% across CLL/SLL registration studies2 • • • •

Neutropenia Thrombocytopenia Anemia Diarrhea

• • • •

Musculoskeletal pain Nausea Rash Bruising

drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be apprised of the potential hazard to a fetus.

ADVERSE REACTIONS The most common adverse reactions (≥20%) in patients with B-cell malignancies (MCL, CLL/SLL, and WM) were neutropenia‡ (64%), thrombocytopenia‡ (63%), diarrhea (43%), anemia‡ (41%), musculoskeletal pain (30%), rash (29%), nausea (29%), bruising (29%), fatigue (27%), hemorrhage (21%), and pyrexia (21%). ‡ Based on adverse reactions and/or laboratory measurements (noted as platelets, neutrophils, or hemoglobin decreased).

The most common Grade 3 or 4 non-hematologic adverse reactions (≥5%) in MCL patients were pneumonia (7%), abdominal pain (5%), atrial ﬁbrillation (5%), diarrhea (5%), fatigue (5%), and skin infections (5%). Approximately 6% (CLL/SLL), 14% (MCL), and 11% (WM) of patients had a dose reduction due to adverse reactions. Approximately 4%-10% (CLL/SLL), 9% (MCL), and 6% (WM) of patients discontinued due to adverse reactions. Most frequent adverse reactions leading to discontinuation were pneumonia, hemorrhage, atrial ﬁbrillation, rash, and neutropenia (1% each) in CLL/SLL patients and subdural hematoma (1.8%) in MCL patients.

To learn more, visit

• Fatigue • Pyrexia • Hemorrhage

DRUG INTERACTIONS

CYP3A Inhibitors - Avoid coadministration with strong and moderate CYP3A inhibitors. If a moderate CYP3A inhibitor must be used, reduce the IMBRUVICA® dose. CYP3A Inducers - Avoid coadministration with strong CYP3A inducers.

SPECIFIC POPULATIONS

Hepatic Impairment - Avoid use in patients with moderate or severe baseline hepatic impairment. In patients with mild impairment, reduce IMBRUVICA® dose. Please see the Brief Summary on the following pages. *Based on market share 2016 July YTD data from IMS. † Based on IMS data February 2014 to date. CI=conﬁdence interval, CLL=chronic lymphocytic leukemia, HR=hazard ratio, IRC=Independent Review Committee, IWCLL=International Workshop on CLL, OS=overall survival, PFS=progression-free survival, SLL=small lymphocytic leukemia. References: 1. Data on ﬁle. Pharmacyclics LLC. 2. IMBRUVICA® (ibrutinib) Prescribing Information. Pharmacyclics LLC 2016. 3. Burger JA, Tedeschi A, Barr PM, et al; for the RESONATE-2 Investigators. Ibrutinib as initial therapy for patients with chronic lymphocytic leukemia. N Engl J Med. 2015;373(25):2425-2437.

Brief Summary of Prescribing Information for IMBRUVICA® (ibrutinib) IMBRUVICA® (ibrutinib) capsules, for oral use See package insert for Full Prescribing Information INDICATIONS AND USAGE Mantle Cell Lymphoma: IMBRUVICA is indicated for the treatment of patients with mantle cell lymphoma (MCL) who have received at least one prior therapy. Accelerated approval was granted for this indication based on overall response rate. Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trials [see Clinical Studies (14.1) in Full Prescribing Information]. Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma: IMBRUVICA is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) [see Clinical Studies (14.2) in Full Prescribing Information]. Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma with 17p deletion: IMBRUVICA is indicated for the treatment of patients with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) with 17p deletion [see Clinical Studies (14.2) in Full Prescribing Information]. Waldenström’s Macroglobulinemia: IMBRUVICA is indicated for the treatment of patients with Waldenström’s macroglobulinemia (WM) [see Clinical Studies (14.3) in Full Prescribing Information]. CONTRAINDICATIONS None WARNINGS AND PRECAUTIONS Hemorrhage: Fatal bleeding events have occurred in patients treated with IMBRUVICA. Grade 3 or higher bleeding events (intracranial hemorrhage [including subdural hematoma], gastrointestinal bleeding, hematuria, and post procedural hemorrhage) have occurred in up to 6% of patients. Bleeding events of any grade, including bruising and petechiae, occurred in approximately half of patients treated with IMBRUVICA. The mechanism for the bleeding events is not well understood. IMBRUVICA may increase the risk of hemorrhage in patients receiving antiplatelet or anticoagulant therapies and patients should be monitored for signs of bleeding. Consider the benefit-risk of withholding IMBRUVICA for at least 3 to 7 days pre and post-surgery depending upon the type of surgery and the risk of bleeding [see Clinical Studies (14) in Full Prescribing Information]. Infections: Fatal and non-fatal infections have occurred with IMBRUVICA therapy. Grade 3 or greater infections occurred in 14% to 29% of patients [see Adverse Reactions]. Cases of progressive multifocal leukoencephalopathy (PML) have occurred in patients treated with IMBRUVICA. Evaluate patients for fever and infections and treat appropriately. Cytopenias: Treatment-emergent Grade 3 or 4 cytopenias including neutropenia (range, 19 to 29%), thrombocytopenia (range, 5 to 17%), and anemia (range, 0 to 9%) based on laboratory measurements occurred in patients treated with single agent IMBRUVICA. Monitor complete blood counts monthly. Atrial Fibrillation: Atrial fibrillation and atrial flutter (range, 6 to 9%) have occurred in patients treated with IMBRUVICA, particularly in patients with cardiac risk factors, hypertension, acute infections, and a previous history of atrial fibrillation. Periodically monitor patients clinically for atrial fibrillation. Patients who develop arrhythmic symptoms (e.g., palpitations, lightheadedness) or new onset dyspnea should have an ECG performed. Atrial fibrillation should be managed appropriately, and if it persists, consider the risks and benefits of IMBRUVICA treatment and follow dose modification guidelines [see Dosage and Administration (2.3) in Full Prescribing Information]. Hypertension: Hypertension (range, 6 to 17%) has occurred in patients treated with IMBRUVICA with a median time to onset of 4.6 months (range, 0.03 to 22 months). Monitor patients for new onset hypertension or hypertension that is not adequately controlled after starting IMBRUVICA. Adjust existing anti-hypertensive medications and/or initiate antihypertensive treatment as appropriate. Second Primary Malignancies: Other malignancies (range, 5 to 16%) including non-skin carcinomas (range, 1 to 4%) have occurred in patients treated with IMBRUVICA. The most frequent second primary malignancy was non-melanoma skin cancer (range, 4 to 13%). Tumor Lysis Syndrome: Tumor lysis syndrome has been infrequently reported with IMBRUVICA therapy. Assess the baseline risk (e.g., high tumor burden) and take appropriate precautions. Monitor patients closely and treat as appropriate. Embryo-Fetal Toxicity: Based on findings in animals, IMBRUVICA can cause fetal harm when administered to a pregnant woman. Administration of ibrutinib to pregnant rats and rabbits during the period of organogenesis caused embryofetal toxicity including malformations at exposures that were 2-20 times higher than those reported in patients with MCL, CLL/SLL or WM. Advise women to avoid becoming pregnant while taking IMBRUVICA and for 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 apprised of the potential hazard to a fetus [see Use in Specific Populations].

IMBRUVICA® (ibrutinib) capsules ADVERSE REACTIONS The following adverse reactions are discussed in more detail in other sections of the labeling: • Hemorrhage [see Warnings and Precautions] • Infections [see Warnings and Precautions] • Cytopenias [see Warnings and Precautions] • Atrial Fibrillation [see Warnings and Precautions] • Hypertension [see Warnings and Precautions] • Second Primary Malignancies [see Warnings and Precautions] • Tumor Lysis Syndrome [see Warnings and Precautions] Clinical Trials Experience: Because clinical trials are conducted under widely variable conditions, adverse event rates observed in clinical trials of a drug cannot be directly compared with rates of clinical trials of another drug and may not reflect the rates observed in practice. Mantle Cell Lymphoma: The data described below reflect exposure to IMBRUVICA in a clinical trial that included 111 patients with previously treated MCL treated with 560 mg daily with a median treatment duration of 8.3 months. The most commonly occurring adverse reactions (≥ 20%) were thrombocytopenia, diarrhea, neutropenia, anemia, fatigue, musculoskeletal pain, peripheral edema, upper respiratory tract infection, nausea, bruising, dyspnea, constipation, rash, abdominal pain, vomiting and decreased appetite (see Tables 1 and 2). The most common Grade 3 or 4 non-hematological adverse reactions (≥ 5%) were pneumonia, abdominal pain, atrial fibrillation, diarrhea, fatigue, and skin infections. Fatal and serious cases of renal failure have occurred with IMBRUVICA therapy. Increases in creatinine 1.5 to 3 times the upper limit of normal occurred in 9% of patients. Adverse reactions from the MCL trial (N=111) using single agent IMBRUVICA 560 mg daily occurring at a rate of ≥ 10% are presented in Table 1. Table 1: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with MCL (N=111) All Grades Grade 3 or 4 Body System Adverse Reaction (%) (%) 5 51 Gastrointestinal Diarrhea 0 31 disorders Nausea 0 25 Constipation 5 24 Abdominal pain 0 23 Vomiting 1 17 Stomatitis 0 11 Dyspepsia Infections and Upper respiratory tract 0 34 infestations infection 3 14 Urinary tract infection 7 14 Pneumonia 5 14 Skin infections 1 13 Sinusitis 5 41 General disorders and Fatigue 3 35 administration site Peripheral edema 1 18 conditions Pyrexia 3 14 Asthenia 0 30 Bruising Skin and 3 25 subcutaneous tissue Rash 0 11 Petechiae disorders Musculoskeletal and Musculoskeletal pain 37 1 connective tissue Muscle spasms 14 0 disorders Arthralgia 11 0 4 27 Respiratory, thoracic Dyspnea 0 19 Cough and mediastinal 0 11 Epistaxis disorders Metabolism and Decreased appetite 21 2 nutrition disorders Dehydration 12 4 Nervous system Dizziness 14 0 disorders Headache 13 0 Table 2: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with MCL (N=111) Percent of Patients (N=111) All Grades Grade 3 or 4 (%) (%) Platelets Decreased 57 17 Neutrophils Decreased 47 29 Hemoglobin Decreased 41 9 * Based on laboratory measurements and adverse reactions

IMBRUVICA® (ibrutinib) capsules

Ten patients (9%) discontinued treatment due to adverse reactions in the trial (N=111). The most frequent adverse reaction leading to treatment discontinuation was subdural hematoma (1.8%). Adverse reactions leading to dose reduction occurred in 14% of patients. Patients with MCL who develop lymphocytosis greater than 400,000/mcL have developed intracranial hemorrhage, lethargy, gait instability, and headache. However, some of these cases were in the setting of disease progression. Forty percent of patients had elevated uric acid levels on study including 13% with values above 10 mg/dL. Adverse reaction of hyperuricemia was reported for 15% of patients. Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma: The data described below reflect exposure in one single-arm, open-label clinical trial and three randomized controlled clinical trials in patients with CLL/ SLL (n=1278 total and n=668 patients exposed to IMBRUVICA). Study 1 included 51 patients with previously treated CLL/SLL, Study 2 included 391 randomized patients with previously treated CLL or SLL who received single agent IMBRUVICA or ofatumumab, Study 3 included 269 randomized patients 65 years or older with treatment naïve-CLL or SLL who received single agent IMBRUVICA or chlorambucil and Study 4 included 578 randomized patients with previously treated CLL or SLL who received IMBRUVICA in combination with bendamustine and rituximab or placebo in combination with bendamustine and rituximab. The most commonly occurring adverse reactions in Studies 1, 2, 3 and 4 in patients with CLL/SLL receiving IMBRUVICA (≥ 20%) were neutropenia, thrombocytopenia, anemia, diarrhea, musculoskeletal pain, nausea, rash, bruising, fatigue, pyrexia and hemorrhage. Four to 10 percent of patients receiving IMBRUVICA in Studies 1, 2, 3 and 4 discontinued treatment due to adverse reactions. These included pneumonia, hemorrhage, atrial fibrillation, rash and neutropenia (1% each). Adverse reactions leading to dose reduction occurred in approximately 6% of patients. Study 1: Adverse reactions and laboratory abnormalities from the CLL/SLL 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 of treatment of 15.6 months are presented in Tables 3 and 4. Table 3: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with CLL/SLL (N=51) in Study 1 Body System Gastrointestinal disorders

Infections and infestations

General disorders and administration site conditions Skin and subcutaneous tissue disorders Respiratory, thoracic and mediastinal disorders Musculoskeletal and connective tissue disorders Nervous system disorders Metabolism and nutrition disorders Neoplasms benign, malignant, unspecified Vascular disorders

Adverse Reaction Diarrhea Constipation Nausea Stomatitis Vomiting Abdominal pain Dyspepsia Upper respiratory tract infection Sinusitis Skin infection Pneumonia Urinary tract infection Fatigue Pyrexia Peripheral edema Asthenia Chills Bruising Rash Petechiae Cough Oropharyngeal pain Dyspnea Musculoskeletal pain Arthralgia Muscle spasms Dizziness Headache Decreased appetite

All Grades Grade 3 or 4 (%) (%) 59 4 22 2 20 2 20 0 18 2 14 0 12 0 47 22 16 12 12 33 24 22 14 12 51 25 16 22 14 12 25 24 18 20 18 16

2 6 6 10 2 6 2 0 6 0 2 0 0 0 0 0 6 0 2 0 2 2

Second malignancies*

12*

Hypertension

* One patient death due to histiocytic sarcoma.

Table 4: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with CLL/SLL (N=51) in Study 1 Percent of Patients (N=51) All Grades (%) Grade 3 or 4 (%) 69 12 53 26 43 0

Platelets Decreased Neutrophils Decreased Hemoglobin Decreased

* Based on laboratory measurements per IWCLL criteria and adverse reactions. Study 2: Adverse reactions and laboratory abnormalities described below in Tables 5 and 6 reflect exposure to IMBRUVICA with a median duration of 8.6 months and exposure to ofatumumab with a median of 5.3 months in Study 2 in patients with previously treated CLL/SLL. Table 5: Adverse Reactions Reported in ≥ 10% of Patients and at Least 2% Greater in the IMBRUVICA Treated Arm in Patients in Study 2

Body System Adverse Reaction Gastrointestinal disorders Diarrhea Nausea Stomatitis* Constipation Vomiting General disorders and administration site conditions Pyrexia Infections and infestations Upper respiratory tract infection Pneumonia* Sinusitis* Urinary tract infection Skin and subcutaneous tissue disorders Rash* Petechiae Bruising* Musculoskeletal and connective tissue disorders Musculoskeletal Pain* Arthralgia Nervous system disorders Headache Dizziness Injury, poisoning and procedural complications Contusion Eye disorders Vision blurred

IMBRUVICA Ofatumumab (N=195) (N=191) All Grades Grade 3 or 4 All Grades Grade 3 or 4 (%) (%) (%) (%)

48 26 17 15 14

4 2 1 0 0

18 18 6 9 6

2 0 1 0 1

15 11 10

10 1 4

13 6 5

9 0 1

24 14 12

3 0 0

13 1 1

0 0 0

14 11

1 0

6 5

0 0

Subjects with multiple events for a given ADR term are counted once only for each ADR term. The system organ class and individual ADR terms are sorted in descending frequency order in the IMBRUVICA arm. * Includes multiple ADR terms

IMBRUVICA® (ibrutinib) capsules Table 6: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Study 2 IMBRUVICA Ofatumumab (N=195) (N=191) All Grades Grade 3 or 4 All Grades Grade 3 or 4 (%) (%) (%) (%) Neutrophils Decreased 51 23 57 26 Platelets Decreased 52 5 45 10 Hemoglobin Decreased 36 0 21 0 * Based on laboratory measurements per IWCLL criteria. 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 chlorambucil was 7.1 months in Study 3. Table 7: Adverse Reactions Reported in ≥ 10% of Patients and at Least 2% Greater in the IMBRUVICA Treated Arm in Patients in Study 3 IMBRUVICA Chlorambucil (N=135) (N=132) All Grades Grade 3 or 4 All Grades Grade 3 or 4 Body System (%) (%) (%) (%) Adverse Reaction Gastrointestinal disorders Diarrhea 42 4 17 0 Stomatitis* 14 1 4 1 Musculoskeletal and connective tissue disorders Musculoskeletal pain* 36 4 20 0 Arthralgia 16 1 7 1 Muscle spasms 11 0 5 0 Eye Disorders Dry eye 17 0 5 0 Lacrimation increased 13 0 6 0 Vision blurred 13 0 8 0 Visual acuity reduced 11 0 2 0 Skin and subcutaneous tissue disorders Rash* 21 4 12 2 Bruising* 19 0 7 0 Infections and infestations Skin infection* 15 2 3 1 Pneumonia* 14 8 7 4 Urinary tract infections 10 1 8 1 Respiratory, thoracic and mediastinal disorders Cough 22 0 15 0 General disorders and administration site conditions Peripheral edema 19 1 9 0 Pyrexia 17 0 14 2 Vascular Disorders Hypertension* 14 4 1 0 Nervous System Disorders Headache 12 1 10 2 Subjects with multiple events for a given ADR term are counted once only for each ADR term. The system organ class and individual ADR terms are sorted in descending frequency order in the IMBRUVICA arm. * 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 Table 8: Adverse Reactions Reported in at Least 10% of Patients and at Least 2% Greater in the IMBRUVICA Arm in Patients in Study 4

Body System Adverse Reaction Blood and lymphatic system disorders Neutropenia* Thrombocytopenia* Skin and subcutaneous tissue disorders Rash* Bruising* Gastrointestinal disorders Diarrhea Abdominal Pain Musculoskeletal and connective tissue disorders Musculoskeletal pain* Muscle spasms General disorders and administration site conditions Pyrexia Vascular Disorders Hemorrhage* Hypertension* Infections and infestations Bronchitis Skin infection* Metabolism and nutrition disorders Hyperuricemia

Ibrutinib + BR Placebo + BR (N=287) (N=287) All Grades Grade 3 or 4 All Grades Grade 3 or 4 (%) (%) (%) (%)

66 34

61 16

60 26

55 16

32 20

4 <1

25 8

1 <1

36 12

2 1

23 8

1 <1

19 11

2 5

9 5

1 2

13 10

2 3

10 6

3 2

The system organ class and individual ADR terms are sorted in descending frequency order in the IMBRUVICA arm. * Includes multiple ADR terms <1 used for frequency above 0 and below 0.5% Atrial fibrillation of any grade occurred in 7% of patients treated with IMBRUVICA + BR and 2% of patients treated with placebo + BR. The frequency of Grade 3 and 4 atrial fibrillation was 3% in patients treated with IMBRUVICA + BR and 1% in patients treated with placebo + BR. Waldenström’s Macroglobulinemia: The data described below reflect exposure to IMBRUVICA in an open-label clinical trial that included 63 patients with previously treated WM. The most commonly occurring adverse reactions in the WM trial (≥ 20%) were neutropenia, thrombocytopenia, diarrhea, rash, nausea, muscle spasms, and fatigue. Six percent of patients receiving IMBRUVICA in the WM trial discontinued treatment due to adverse events. Adverse events leading to dose reduction occurred in 11% of patients. Adverse reactions and laboratory abnormalities described below in Tables 9 and 10 reflect exposure to IMBRUVICA with a median duration of 11.7 months in the WM trial.

IMBRUVICA® (ibrutinib) capsules

Table 9: Non-Hematologic Adverse Reactions in ≥ 10% of Patients with Waldenström’s Macroglobulinemia (N=63) All Grades Grade 3 or 4 Body System Adverse Reaction (%) (%) Gastrointestinal disorders Diarrhea 37 0 Nausea 21 0 Stomatitis* 16 0 Gastroesophageal 13 0 reflux disease Skin and subcutaneous Rash* 22 0 tissue disorders Bruising* 16 0 Pruritus 11 0 General disorders and Fatigue 21 0 administrative site conditions Musculoskeletal and Muscle spasms 21 0 connective tissue Arthropathy 13 0 disorders Infections and infestations Upper respiratory tract infection 19 0 Sinusitis 19 0 Pneumonia* 14 6 Skin infection* 14 2 Respiratory, thoracic and Epistaxis 19 0 mediastinal disorders Cough 13 0 Nervous system disorders Dizziness 14 0 Headache 13 0 Neoplasms benign, Skin cancer* 11 0 malignant, and unspecified (including cysts and polyps) The system organ class and individual ADR preferred terms are sorted in descending frequency order. * Includes multiple ADR terms.

dose AUC values of 1445 ± 869 ng • hr/mL which is approximately 50% greater than steady state exposures seen at the highest indicated dose (560 mg). Avoid concomitant administration of IMBRUVICA with strong or moderate inhibitors of CYP3A. For strong CYP3A inhibitors used short-term (e.g., antifungals and antibiotics for 7 days or less, e.g., ketoconazole, itraconazole, voriconazole, posaconazole, clarithromycin, telithromycin) consider interrupting IMBRUVICA therapy during the duration of inhibitor use. Avoid strong CYP3A inhibitors that are needed chronically. If a moderate CYP3A inhibitor must be used, reduce the IMBRUVICA dose. Patients taking concomitant strong or moderate CYP3A4 inhibitors should be monitored more closely for signs of IMBRUVICA toxicity [see Dosage and Administration (2.4) in Full Prescribing Information]. Avoid grapefruit and Seville oranges during IMBRUVICA treatment, as these contain moderate inhibitors of CYP3A [see Dosage and Administration (2.4), and Clinical Pharmacology (12.3) in Full Prescribing Information]. CYP3A Inducers: Administration of IMBRUVICA with rifampin, a strong CYP3A inducer, decreased ibrutinib Cmax and AUC by approximately 13- and 10-fold, respectively. Avoid concomitant use of strong CYP3A inducers (e.g., carbamazepine, rifampin, phenytoin, and St. John’s Wort). Consider alternative agents with less CYP3A induction [see Clinical Pharmacology (12.3) in Full Prescribing Information]. USE IN SPECIFIC POPULATIONS Pregnancy: Risk Summary: IMBRUVICA, a kinase inhibitor, can cause fetal harm based on findings from animal studies. In animal reproduction studies, administration of ibrutinib to pregnant rats and rabbits during the period of organogenesis at exposures up to 2-20 times the clinical doses of 420-560 mg daily produced embryofetal toxicity including malformations [see Data]. If IMBRUVICA is used during pregnancy or if the patient becomes pregnant while taking IMBRUVICA, the patient should be apprised of the potential hazard to the fetus. The estimated background risk of major birth defects and miscarriage for the indicated population is unknown. In the U.S. general population, the estimated background risk of major birth defects and miscarriage in clinically recognized pregnancies is 2-4% and 15-20%, respectively. Animal Data: Ibrutinib was administered orally to pregnant rats during the 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 vessels) and increased resorptions and post-implantation loss. The dose of 80 mg/kg/day in rats is approximately 14 times the exposure (AUC) in patients with MCL and 20 times the exposure in patients with CLL/SLL or WM administered the dose of 560 mg daily and 420 mg daily, respectively. Ibrutinib at doses of 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 with MCL administered the dose of 560 mg daily. Ibrutinib was also administered orally to pregnant rabbits during the period of organogenesis at doses of 5, 15, and 45 mg/kg/day. Ibrutinib at a dose of 15 mg/kg/day or greater was associated with skeletal variations (fused sternebrae) and ibrutinib at a dose of 45 mg/kg/day was associated with increased resorptions and post-implantation loss. The dose of 15 mg/kg/day in rabbits is approximately 2.0 times the exposure (AUC) in patients with MCL and 2.8 times the exposure in patients with CLL/SLL or WM administered the dose of 560 and 420 mg daily, respectively. Lactation: Risk Summary: There is no information regarding the presence of ibrutinib or its metabolites in human milk, the effects on the breastfed infant, or the effects on milk production. The development and health benefits of breastfeeding should be considered along with the mother’s clinical need for IMBRUVICA and any potential adverse effects on the breastfed child from IMBRUVICA or from the underlying maternal condition. Females and Males of Reproductive Potential: Pregnancy Testing: Verify the pregnancy status of females of reproductive potential prior to initiating IMBRUVICA therapy. Contraception: Females: Advise females of reproductive potential to avoid pregnancy while taking IMBRUVICA and for up to 1 month after ending treatment. If this drug is used during pregnancy or if the patient becomes pregnant while taking this drug, the patient should be informed of the potential hazard to a fetus. Males: Advise men to avoid fathering a child while receiving IMBRUVICA, and for 1 month following the last dose of IMBRUVICA. Pediatric Use: The safety and effectiveness of IMBRUVICA in pediatric patients has not been established. Geriatric Use: Of the 839 patients in clinical studies of IMBRUVICA, 62% were ≥ 65 years of age, while 21% were ≥75 years of age. No overall differences in effectiveness were observed between younger and older patients. Grade 3 or higher pneumonia occurred more frequently among older patients treated with IMBRUVICA [see Clinical Studies (14.2) in Full Prescribing Information].

Table 10: Treatment-Emergent* Decrease of Hemoglobin, Platelets, or Neutrophils in Patients with WM (N=63) Percent of Patients (N=63) All Grades (%) Grade 3 or 4 (%) Platelets Decreased 43 13 Neutrophils Decreased 44 19 Hemoglobin Decreased 13 8 * Based on laboratory measurements. Additional Important Adverse Reactions: Diarrhea: Diarrhea of any grade occurred at a rate of 43% (range, 36% to 63%) of patients treated with IMBRUVICA. Grade 2 diarrhea occurred in 9% (range, 3% to 15%) and Grade 3 in 3% (range, 0 to 5%) of patients treated with IMBRUVICA. The median time to first onset of any grade diarrhea was 12 days (range, 0 to 627), of Grade 2 was 37 days (range, 1 to 667) and of Grade 3 was 71 days (range, 3 to 627). Of the patients who reported diarrhea, 83% had complete resolution, 1% had partial improvement and 16% had no reported improvement at time of analysis. The median time from onset to resolution or improvement of any grade diarrhea was 5 days (range, 1 to 418), and was similar for Grades 2 and 3. Less than 1% of patients discontinued IMBRUVICA due to diarrhea. Visual Disturbance: Blurred vision and decreased visual acuity of any grade occurred in 10% of patients treated with IMBRUVICA (9% Grade 1, 2% Grade 2). The median time to first onset was 88 days (range, 1 to 414 days). Of the patients with visual disturbance, 64% had complete resolution and 36% had no reported improvement at time of analysis. The median time from onset to resolution or improvement was 29 days (range, 1 to 281 days). Postmarketing Experience: The following adverse reactions have been identified during post-approval use of IMBRUVICA. Because these reactions are reported voluntarily from a population of uncertain size, it is not always possible to reliably estimate their frequency or establish a causal relationship to drug exposure. Hepatobiliary disorders: hepatic failure (includes multiple terms) Respiratory disorders: interstitial lung disease (includes multiple terms) Metabolic and nutrition disorders: tumor lysis syndrome [see Warnings & Precautions] Skin and subcutaneous tissue disorders: anaphylactic shock, angioedema, urticaria DRUG INTERACTIONS CYP3A Inhibitors: Ibrutinib is primarily metabolized by cytochrome P450 enzyme 3A (CYP3A). In healthy volunteers, co-administration of ketoconazole, a strong CYP3A inhibitor, increased Cmax and AUC of ibrutinib by 29- and 24-fold, respectively. The highest ibrutinib dose evaluated in clinical trials was 12.5 mg/kg (actual doses of 840 – 1400 mg) given for 28 days with single

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 (ChildPugh 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 Precautions]. • Embryo-fetal toxicity: Advise women of the potential hazard to a fetus and 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 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]. • Advise patients that in the event of a missed daily dose of IMBRUVICA, 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 capsules to make up the missed dose [see Dosage and Administration (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. • Advise patients to inform their health care providers of all concomitant medications, including prescription medicines, over-the-counter drugs, vitamins, and herbal products [see Drug Interactions]. • 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. Active ingredient made in China. Distributed and Marketed by: Pharmacyclics LLC Sunnyvale, CA USA 94085 and Marketed by: Janssen Biotech, Inc. Horsham, PA USA 19044 Patent http://www.imbruvica.com IMBRUVICA® is a registered trademark owned by Pharmacyclics LLC © Pharmacyclics LLC 2016 © Janssen Biotech, Inc. 2016 PRC-02066

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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. So the question is: How do you lead physicians through change to best prepare them for MACRA? Here are three factors to consider. First, you need situational awareness—the ability to track and comprehend the critical elements that shape the overall success of your physician organization. Second, you need to identify organizational attributes—the values and beliefs held by your physicians. The third essential is a supportive team structure.

SITUATIONAL AWARENESS Alternate payment models (APMs) mandate that siloed participants in the 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 unknown and struggle to get their arms around what it means for them. 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 physicians are paid for each service they provide for patients and financially incentivized to report quality measures. APMs are an entirely new approach. Under a bundled payment APM, a practitioner 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.

“Paying close

attention to situational awareness, organizational attributes, and a supportive team structure will allow physicians to succeed and prosper under the MACRA law.”

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

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continued from page 27

Under MIPS, physicians get a percentage adjustment to Medicare Part B payment based on a four-part score designed to measure quality, cost, and value of care. For 2017, the Quality category counts for 60 percent of the total, the Advancing Care Information (formerly Meaningful Use) category counts for 25 percent, the Clinical Practice Improvement Activities category accounts for 15 percent, and the Resource Use category counts for 0 percent. For 2018 and beyond, Resource Use will be weighted. In this year of transition, CMS lowered the Cost Performance category to 0 percent and gave providers four reporting options to help “pick their pace.” Simply, if a physician reports at least some data in 2017, he or she will not receive a payment reduction. If physicians or groups choose not to participate, they are risking significant financial resources—and will be guaranteed a financial loss with a negative penalty payment. The transition to MIPS may be fairly straightforward for groups that are already pursuing value-based payment methods and have reporting mechanisms in place. Further, the transition to APMs may be natural for physician groups who are already taking on substantial risk.

ORGANIZATIONAL ATTRIBUTES Does your physician organization have the care 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 riskbased incentivization? If your organization has been participating in risk-based models like the Medicare

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Shared Savings Program (MSSP) or bundled payments, then you might choose Advanced APMs. Assess your company’s core qualities and individual physicians’ characteristics to see if they align with APMs as you select your MACRA path. CAPG’s Guide to Alternative Payment Models offers case studies that highlight our members’ experiences with a range of APMs, from bundled payments to capitated, coordinated care. Further, CAPG’s Risk Readiness Tool—with five essential checklists to assess your readiness for Advanced APMs—will help you prepare for MACRA’s requirements, wherever you are on the journey from volume to value. This year, under MACRA’s quality payment program, physicians may earn a 5 percent incentive payment through sufficient participation in certain Advanced APMs. These CMS lists will continue to change and grow as more models are proposed and developed in partnership with the clinician community and the Physician-Focused Payment Model Technical Advisory Committee (PTAC). To qualify as a participant, a clinician must either 1) receive at least 25 percent of payments for Medicare Part B covered professional services through an Advanced APM or 2) see at least 20 percent of Medicare patients through an Advanced APM.

The MACRA final rule exempts small practices from reporting requirements in 2017 due to low-volume threshold, which has been set at less than or equal to $30,000 in Medicare Part B–allowed charges or fewer than 100 Medicare patients.

on current performance. To meet MIPS reporting and performance thresholds, medical groups must create a supportive team structure that will expedite efforts to build and refine their quality reporting and performance management infrastructure.

A few large groups are planning to accept payment adjustments based on their performance under existing APMs. They will receive a lump sum incentive payment and higher annual provider payment as benefits, and will be exempt from MIPS reporting measures.

Both the APM and MIPS tracks require strong, consistent performance on quality and efficiency measures. Those working across mixed medical staffs must carefully consider which models will meet performance objectives. No matter what path you choose, primary care physicians and specialists— whether part of a hospital system or independent—face some weighty decisions. However, this must be done as a team because MACRA is not an individual sport.

Any physician who fails to engage in MIPS or APMs risks losing money in the Medicare program and generating a reputation of not being a team player among clinically integrated networks (CINs) in APMs. It’s highly recommended that practices that aren’t ready for APMs should nevertheless prepare for them in the future by participating in MIPS now. Know your organizational attributes and assess whether they align more with MIPS or APMs for this year, then plan for next year and beyond.

SUPPORTIVE TEAM STRUCTURE Organize your clinical care teams and explain to physicians the urgency surrounding MACRA. Once they can join forces around a mission to improve the quality of care for patients, they will perform better with a united front. Educate the entire care team about the importance of reporting performance data and measuring metrics related to patient outcomes so they can help support physicians through this important transition and process.

In years ahead, CMS is likely to require all physicians to join APMs. As physicians become more involved in these payment systems, organizational leaders must make sure they can lead physicians through change effectively. Paying close attention to situational awareness, organizational attributes, and a supportive team structure will allow physicians to succeed and prosper under MACRA. In doing so, physicians will undoubtedly understand the value MACRA brings to patient care. Additionally, you will learn that by building relationships throughout your CINs, patient-centered medical homes (PCMHs), and medical neighborhoods, you will thrive in today’s complex healthcare environment. Regardless of the payment structure changes and challenges that lie ahead in healthcare reform, remember that the key measurement of overall success are the healthy outcomes of your patients. o Resources

According to the Congressional Budget Office’s most recent long-term projections, which include the estimated effects of MACRA, net Medicare spending will grow from 3 percent of gross domestic product (GDP) in 2015 to 4.2 percent of GDP in 2030, 5.1 percent in 2040, and 5.9 percent in 2050. With slower growth in Medicare spending in recent years, the solvency of the hospital trust fund has been extended. Medicare trustees, however, have projected that the Part A trust fund will be depleted in 2030. To offset this, either taxes must increase substantially or hospital spending decrease significantly.

1. Jenny Jones, “Catch Your Wave.,” ACR Bulletin, accessed November 3, 2016, https://acrbulletin.org/acr-bulletin-july2016/542-mips-apm-changes.

Despite mounting pressure as deadlines approach, several medical group leaders cite a lack of basic infrastructure to assess performance on reported measures or determine measures to report based

5. Rivka Friedman, “With MACRA, 2017 will be ‘year of reckoning’ for physician payment,” Advisory Board, published May 2, 2016, accessed November 1, 2016, https://www.advisory.com/research/ medical-group-strategy-council/practice-notes/2016/05/macraproposed-rule.

2. Shannon Muchmore, “Few docs ready for risk under MACRA,” Modern Healthcare, published August 13, 2016, accessed November 1, 2016, http://www.modernhealthcare.com/article/20160813/ MAGAZINE/308139982. 3. “MIPS and APM Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models,” Centers for Medicare & Medicaid Services, Quality Payment Program, Medicare Program, October 14, 2016, https://qpp.cms.gov/docs/QPP_ Executive_Summary_of_Final_Rule.pdf. 4. “The facts on Medicare spending and financing,” Kaiser Family Foundation, published July 24, 2015, accessed November 1, 2016, http://kff.org/medicare/factsheet/medicare-spending-andfinancing-fact-sheet/.

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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.

question, “Without the continued consolidation in our industry at every level (especially health plan, hospital, and physician group consolidation) is driving much of this change.”

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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, the continued consolidation in our industry at every level (especially health plan, hospital, and physician group consolidation) is driving much of this change. As organizations acquire other organizations, management positions are eliminated, increasing the competition for fewer senior level positions. In addition, there may be downsizing across the board in an effort to reduce overhead and other expenses, along with reporting relationships that change overnight. If your organization is being acquired, there is often a substantial change in culture. Many individuals, even in senior management ranks, are not prepared for these changes all at once. 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

shareholder). For anyone new to this sector, it is difficult to transition from the patient to the shareholder as your customer.

and failures so the rest of the organization comes to understand what these look like and how to minimize failure while pursuing success.

Increased competition and complexity also spark changes as organizations attempt to cover the entire continuum of care and replicate what Kaiser Permanente can offer under its comprehensive organizational umbrella. As each health system becomes larger, they look to extend their reach into new geography and inevitably begin to bump into each other. Complexity comes from within—the drive to offer new products and business lines—and from the external environment, such as new state and federal legislation and regulations that force shifts in our basic business models.

The C suite can set a tone for how individuals, areas, and offices will and will not interact with each other. Infighting, whether between two departments or two individuals, should never be tolerated, and senior leadership needs to model a collaborative approach in all interactions until it becomes part of the culture.

Another factor in the current upheaval is increased financial challenges from more competition, a decline in commercial HMO insurance, and mounting pressure to reduce costs while increasing quality and improving the patient experience. Finally, we are beginning to see some of the most senior leaders in our industry retire after successful careers spanning more than 40 years. While this retirement is part of the normal life cycle in any industry, it raises many questions about where the next generation of leaders will come from and whether they are adequately prepared to take the reins. Along with this changing of the guard comes some perceived loss in the structure, order, and values within the industry. Together, all of these factors create a perfect storm for anyone trying to steer their organizations, divisions, or departments. However, you don’t need to abandon ship, as there are some tools—most of which are common sense—that can help each of us survive and thrive.

Lastly, as each organization asks its employees to do more with less, leadership can help everyone recognize the top priorities (the most important 20 percent), as well as ways to operate more efficiently and effectively. In particular, attention to the time spent in meetings and traveling to and from them, along with the value of specific meetings, will help leadership begin to identify major wasted time. Also important: careful scrutiny of efforts directed toward projects that don’t relate directly to the top 20 percent priorities. At the individual level, it is extremely important to recognize that the work environment and the rules have changed. It is equally important to remain flexible, understand that change (and some chaos) will be a constant, “roll with the punches,” and not take things personally. Part of this new paradigm is learning to say “Yes,” even if you want to say “No,” as you will ultimately be judged on the degree to which you support the current direction. Build bridges wherever possible and make every effort not to get stuck between two warring factions (whether corporate versus local or one department versus another), which can often be a quick one-way ticket out the door. Look to add value wherever possible by offering to help others or other departments, and by volunteering for new assignments.

Individuals at the very top of each organization (the “C suite”) need to provide as much stability and predictability as possible because this equates to success, especially when much of the competition operates in chaos. Senior leaders are in an excellent position to guide their organization through turbulence by establishing a clear vision and direction, creating metrics that allow everyone to see how the organization is performing, and communicating all of the above to the rest of the staff on a continuous basis.

Many of us recognize we now spend much of our work life riding a rollercoaster—a continuous reminder of how significantly our work environment has changed over the past five years. This recognition is the first step to ultimately slowing the rollercoaster and creating more organizational and individual stability and predictability. Those organizations who are successful in this endeavor have a clear advantage over their competition. Fasten your seatbelts! o

Most organizations go through the exercise of developing a vision and direction, but then it goes in a drawer and never sees the light of day until year end, if ever. Frequent communication also falls by the wayside as the pace quickens and there just doesn’t seem to be enough time. Leaders need to communicate both successes

Jim Agronick is a seasoned healthcare executive. He was Chief Executive Officer of Harriman Jones Medical Group in Long Beach, CA, as well as Chief Operating Officer of Nautilus Healthcare Management Group in Newport Beach, CA, and Molina Healthcare of California, Long Beach, before joining Adventist Health Physician Network in 2014. Spring 2017

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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 too late. You can have an enormous impact on your physicians’ lives (and your own) by simply reviewing these benefits now. Here is a brief, six-point guide for reviewing your long-term disability (LTD) insurance:

1. Definition of Disability – The definition of disability should be “Own Occupation,” 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 also contain “specialty-specific” language, which transforms the coverage to make a physician’s usual occupation specific to their medical specialty. Simply put, if 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 medical specialties). 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 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 disability coverage will only replace a small fraction of the physician’s actual income. See chart below. Pre-Disability Sample Salary

Maximum Covered By Group LTD

Replacement % of Pre-Disability Income

$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

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“Carefully review your LTD contracts now, before one of your medical group physicians has to file a disability claim. A detailed review now can eliminate disappointment and unfortunate surprises.”

depend on how the premium is paid. If the premium is 100 percent employer-paid, the employer will take a tax deduction, and any disability benefits paid to the physician will be taxed. However, insurance companies allow employers to “gross up” a physician’s salary to allow the physician to obtain tax-free benefits. In a “gross-up” structure, the employer pays the premium, but the premium cost is added to the physician’s W-2. The physician pays only the taxes owed on the total premium amount. The “gross-up” structure provides for tax-free benefits, which can make a significant difference to a disabled physician.

4. Pension Contribution Rider – When a physician becomes disabled and no longer receives his or her income, his or her retirement contributions will cease and the physician can no longer save for retirement. Some insurance companies, however, will allow you to add a pension contribution rider to the disability contract. This ensures that a disabled physician receives not only his or her monthly disability benefit, but also a separate benefit that goes towards his or her retirement. 5. Claims Management – Ask the insurance company about the experience and history of the people who staff its claims unit. That staff will be interacting with your physicians and determining claims. Also ask if its claims unit has experience working with medical groups. Some insurance companies have claims units dedicated to working with physicians. 6. Benefits Determination: Partial Disability – Some LTD policies use a 50 percent offset formula for partial disability. This formula favors rank-and-file employees, but penalizes highly paid claimants. The result: highly paid physicians who become partially disabled may receive only a minimum benefit (e.g., $100 a month).

“GSI”)—a huge benefit because medical underwriting is typically very strict. Significant discounts also may be available for medical groups of certain sizes. A majority of physicians will obtain personal disability insurance during their career. Medical groups can (and should) do their physicians a tremendous favor by offering them the same coverage, but without a medical evaluation and with better rates. Many wellknown medical groups are offering a GSI program to supplement their group LTD coverage. GSI offerings must be negotiated by a broker with experience in this area. Although only a few insurance carriers offer this product, all carriers and options should be reviewed to determine the best plan. According to a recent Medical Group Management Association report, medical groups spend 17 percent of their operating budgets on insurance. Despite that, selecting an insurance advisor is often a haphazard process. The right advisor is critical to helping your medical group thrive. Carefully review your LTD contracts now, before one of your medical group physicians has to file a disability claim. A detailed review now can eliminate disappointment and unfortunate surprises that could arise during the claims process. Medical groups also should consider a supplemental, voluntary GSI program for their physicians to enhance benefits at no cost to the medical groups, while, at the same time, providing a layer of coverage that will make a significant difference in the lives of any disabled physicians and their families. o For over 40 years, Rivetti Financial has helped physicians and medical groups of all sizes, including many CAPG members, protect their income in the event of a disability. To learn more, visit www.rivettifinancial.com or email steve@rivettifinancial.com.

BEYOND LTD: ENHANCED COVERAGE Sometimes, LTD benefits just don’t cut it. As 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

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Names in the News...continued from page 8

VIVEK GARG, MD, NAMED CMO, NEW MARKETS AT CAREMORE CareMore Health System, a care delivery system and health plan founded and led by physicians, has appointed Vivek Garg, MD, as chief medical officer of new markets and business development. In this new role, Dr. Garg will oversee clinical operations in the organization’s new business markets, including Iowa and Tennessee, and will work closely with the executive team to develop high-impact clinical business models for these areas. Prior to CareMore, he was director of medical operations for Oscar Insurance and medical director of One Medical Group. Previously, Dr. Garg was a clinical assistant professor of medicine at Weill Cornell Medicine, New York, acted as an assistant attending physician at

Policy Briefing...continued from page 15

effective with lower-income earners. High-risk pools are costly and hard to implement in smaller states. Even the federally run Pre-existing Condition Insurance Plan (PCIP) pool under the ACA exhausted its funding six months prior to its planned termination date. Congress had to unilaterally cut provider rates to continue the program to the end of 2013.

New York-Presbyterian Hospital, and was an editor of Health Care: The Journal of Delivery Science and Innovation. He received his medical degree and MBA from Harvard University.

ORANGE COAST MEMORIAL MEDICAL CENTER NAMED A TOP WORKPLACE FOR SIXTH CONSECUTIVE YEAR Orange Coast Memorial Medical Center, a nonprofit hospital in the MemorialCare Health System, was selected for the sixth consecutive year as a Top Workplace by the Orange County Register. The Top Workplaces are determined based solely on employee feedback. The employee survey is conducted by WorkplaceDynamics, LLP, a leading research firm on organizational health and employee engagement. o

networks in any state where they do business. The cost of a local network is far more determinative of the premium price than the regulatory structure within each state. Furthermore, this proposal tramples on the right of each state to regulate the business of insurance. Didn’t the Republicans sue to ban the ACA provision requiring each state to expand its Medicaid program as a violation of state’s rights?

Republicans also propose provider liability tort reform as a mechanism to alleviate the costly practice of defensive medicine and prohibitive provider malpractice insurance rates. Several studies have shown that the impact of current provider tort liability translates to about one percent of the premium dollar, which is far less than the 20 percent cut in premium cost recently promised by President Trump. Moreover, states like California already impose the same rules proposed under the Republican tort reform plan and so would not benefit any further from this change.

Observations. In the midst of all this uncertainty, one thing is certain—change is coming. This will be a “mandatory opportunity” to evaluate how to best preserve what is good and useful in Obamacare and to devise improvements to maximize the value of future federal payments. States must focus on three key elements: how to provide the most coverage to the most people, how to continuously improve the quality of care delivered, and how to best control cost increases. In other words, it’s all still about the Triple Aim. States should benchmark their current status in terms of lives covered under the ACA, quality of care outcomes, and cost trend.

Cross-state insurance sales also feature prominently in most Republican replacement plans. Lawmakers believe that allowing insurers to sell across state lines will increase competition and result in lower premium rates. The insurance industry disfavors this approach. Carriers still have to create provider

With these data in hand, we can all evaluate the changes coming under Republican repeal-andreplace plans and when the next general election arises, ask then–presidential candidate Ronald Reagan’s famous question: “Are you better off than you were four years ago?” o

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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 & Tolandâ&#x20AC;&#x2122;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.

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