E-mail: [e-mail]

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E-mail healthcaregroup_at_earthlink.net
Keeping the Promise

HEALTHY AMERICAN HEALTH
CARE GROUP, INC. One
Commerce Ctr-1201 Orange Street
Wilmington,
Delaware 19899
Telephone Number 877-256-4166

Fax Number 888-244-0544

• Clinton Mayes, MBA
• Report to APHCA Meeting
• September 27, 2012

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Overview of Affordable Care Acts CO-OP Program

• THE CONSUMER OPERATED AND ORIENTED PLAN (CO-OP)
• http//cciio.cms.gov
• The ACA (Section 1322) created the Consumer
  Operated and Oriented Plan (CO-OP) program to
  foster the creation of new consumer-governed
  nonprofit health plans.
• To encourage the establishment of a CO-OP in each
  State, the program has a 3.4 billion
  appropriation to subsidize loans for eligible
  prospective CO-OPs.
• The CO-OP program will provide Start-up Loans
  and Solvency Loans to eligible nonprofit
  organizations.

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Overview

• January 2011--30-35 people at first CO-OP meeting
  in DC
• Plus OMB HHS CCIIO
• Section 1322http//aahm.net
• 501(c) (29)?
• Loans-Start up-repayment in 5 yrs
• Loans Solvency repayment in 15 years.

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Currently Funded CO-OPs20 States awarded
1,560,856,720

Minutemen Health, Inc.Service Area
MassachusettsAward Amount 88,498,080Award
Date August 31, 2012 Minuteman Health, Inc.
(MHI) is sponsored by Tufts Medical Center and
Vanguard Health Systems, two hospital systems
that intend to participate in the MHI network.
MHIs mission is to deliver efficient, quality
healthcare financing to their future membership.
They propose to initially provide regional
coverage in eastern and central Massachusetts and
expand to offer statewide coverage by July
2014. Community Health Alliance Mutual Insurance
CompanyService Area TennesseeAward Amount
73,306,700Award Date August 31, 2012 Community
Health Alliance Mutual Insurance Company (CHA) is
sponsored by Healthcare 21 Business Coalition
(HC21), a member of the National Business
Coalition on Health, and LBMC Employment Partners
(LBMS), a professional services organization
providing financial, accounting services, and
Professional Employer Organization (PEO) services
to small employers in Tennessee. CHAs mission is
to create new health insurance options expected
to meet the medical, wellness, and financial
needs of insurance consumers in Tennessee. CHA is
planning on offering its insurance plans
state-wide. Additionally, Midwest Members Health
(MMH) has changed its name to CoOportunity Health
and will continue to provide insurance coverage
to individuals in Iowa and Nebraska under the
terms of its original loan agreement. In addition
to this new award, the following applicants were
awarded CO-OP loans in previous rounds Compass
Cooperative Health NetworkService Area
ArizonaAward Amount 93,313,233Award Date
June 8, 2012 Compass Cooperative Health Network
(CCHN) is sponsored by prominent local experts in
insurance, chronic disease coordination, use of
health information technology to better
coordinate care, and business startup.  Compass
Cooperative Health Network (CCHN) plans to offer
health insurance coverage statewide over time in
Arizona. Colorado Health Insurance Cooperative,
Inc. (CHI)Service Area ColoradoAward Amount
69,396,000Award Date July 27, 2012 The
Colorado Health Insurance Cooperative, Inc. (CHI)
is sponsored by the Rocky Mountain Farmers Union
Educational and Charitable Foundation, Inc. (RMFU
Foundation), which houses educational and
outreach programs, and a regional cooperative
development center. A significant component of
CHIs plan is to create chapters in communities
throughout the state in an effort to fully engage
members in the business of the CO-OP. CHI intends
to offer benefit plans designed for individuals
and employers inside and outside the Colorado
Health Benefit Exchange. The CO-OP is committed
to offering a qualified health plan at the Silver
and Gold benefit levels in both the individual
and Small Business Health Options Program (SHOP)
Exchange markets. CHI also plans to offer at
least one Value Based Plan (VBP) in the small
group market. CHI is planning on marketing its
insurance programs on a state-wide basis.
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HealthyCTService Area ConnecticutAward Amount
75,801,000Award Date June 8, 2012 HealthyCT is
sponsored by the Connecticut State Medical
Society (CSMS) and the CSMS-IPA (a statewide
Independent Practice Association), and plans to
offer high-quality, coordinated medical care with
strong physician-patient relationships at its
foundation.  HealthyCT will encourage the use of
patient-centered medical homes in providing
health insurance coverage statewide. CoOportunity
Health (formerly Midwest Members Health)Service
Area Iowa and NebraskaAward Amount 
112,612,100Award Date February 21,
2012 CoOportunity Health is sponsored by the Iowa
Institute, a community organization. They plan to
provide health insurance coverage throughout Iowa
and Nebraska.  Kentucky Health Care
CooperativeService Area KentuckyAward Amount
58,831,500Award Date June 22, 2012 Kentucky
Health Care Cooperative is sponsored by a
coalition of business leaders, providers and
community organizations who plan to improve
health outcomes throughout the Commonwealth of
Kentucky by providing better access to high
quality care at an affordable cost. The
Cooperative will participate in Kentuckys Health
Insurance Exchange, as well as in the individual
and small group marketplace. Maine Community
Health Options (MCHO)Service Area MaineAward
Amount 62,100,000Award Date March 23,
2012 Maine Community Health Options is sponsored
by Maine Primary Care Association, which is a
membership organization comprised of Maines
community, tribal, migrant, and homeless health
centers.
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I. Concept and Feasibility

• CO-OP---Non-profit no ownership rights!!
• By-Laws should define members, consumers, and
  patients
• No marketing rule
• Quickly need membership of 25,000
• Goal is 5 market share
• Rent infrastructure-IT, claims, network, etc.
• Federal loans for Capital requirement , accepted
  by State DOI Growth Capital
• Premium rates (Individuals and Small Groups) must
  be adequate to generate NET Income.

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II. The Role of the Consumer in Consumer
Operated and Oriented Plans (CO-OPs)

• Majority consumer Board
• Open meetings - annual
• No conflicts of interest
• Mission drivennon-profit
• --To foster the creation of new,
  consumer-governed nonprofit health plans that
  will
• Operate with a strong consumer focus and
  greater plan accountability and Provide high
  quality, low cost, coordinated care.
• --CO-OPs will enhance competition in the
  Exchanges and provide additional plan choices for
  consumers and small businesses.
• See FQHCs for 51 Board model.

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Operational Board Composition

• A majority of the voting directors on the
  operational board must be CO-OP members.
• How many director positions (less than half), if
  any, should be open to or reserved for persons
  who are not CO-OP members?
• Directors may not be representatives of any
  federal, state or local government, or of any
  pre-existing insurer.
• Citations 45 CFR 156.515(b)(1)(vi) and (v)

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Operational Board Reserved Positions

• Less than half the director positions may be
  reserved for persons with specialized expertise,
  experience, or affiliation (for example,
  providers, employers, and unions).
• Should any director positions be so reserved, or
  should such directors simply be recruited as
  necessary?
•  Nonvoting directors are allowed on the
  operational board.
• How many directors, if any, should be nonvoting?
• Should all or any of the nonvoting director
  positions be reserved for persons with
  specialized expertise, experience, or
  affiliation?
• Citations 45 CFR 156.515(b)(2)(ii) to (iv)

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Operational Board Standards

• Board must be subject to ethics, conflict of
  interest, and disclosure standards that
• Protect against insurance industry involvement
  and interference.
• Ensure each director acts in the sole interest of
  the COOP, its members, and its local geographic
  community as appropriate
• Ensure each director avoids self dealing, and
  acts prudently and consistently with the terms of
  the COOPs governance documents and applicable
  law.
• There should be a provision deeming a director
  to have resigned for lack of participation (e.g.,
  failure to attend half the meetings in a calendar
  year)?
• Citations 45 CFR 156.515(b)(3)

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Officers of HAHCG

• Officers
• Cynthia Newhall, Chairman , Mississippi
• Lucius Black, Vice Chairman, Illinois
• Carolyn Mayes, Secretary, DC area
• Milton Patton, Treasurer, Georgia

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Planning Committee
Mayes Carolyn Student  University of Maryline
Brown Billy Department for Defense Communications Officer
Chavis Stan Board Member, Alabama CHC Mobile State Farm Agent
Fairman John Delta Health Center  President and CEO
Farmer, MD Curtis C. Farmer and Associates, Internal Medicine Owner/Physician
Mayes Clinton Family Health Care Clinic, Inc. Vice President and COO
Patton Milton Sales IBM
Gray Margaret A. Family Health Care Clinic, Inc. President and CEO
Quartey Andi American Health Care Group, Inc. Interim President and CEO
Bullett Irvin Retired IBM, Volunteer Obama Campaign Sales
Byrd, Atty Isaac K. Byrd and Associates Attorney at Law
Whitley Clifton Missisippi Action for Community Education, Inc. President and CEO
Newhall Cynthia Myra Film Director
Black Lucius Reslink Grantwriter, Consultants, and Educator
Bradley, Sr. Wayne W. Detroit Community Health Connection, Inc. President and CEO
Price Mia A. Milwaukee Health Services, Inc. COO
Galon E. Scott ST. Helena Parish Polish Jury Building Inspector
Scarborough James W. CHC Board Member Experience Twin valley Council Chairman
Brown, PhD, FACHE Richard L. Charles Drew Health Center Chief Executive Officer
Naylor Walley Department of Human Service, Child Services Executive Director
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III. Starting-up New Nonprofit Health Plans

• Sources of risk capital Preferred Stock
  Debentures subordinate LOC Foundations and Gov
  Grants/Loans.
• Infrastructure/IT Policies and Procedures
• Market affinityCHCs invested with membership
  --Consumer Advocacy Marketing Plan Patient
  centered medical home(NCQA)
• Two Major problems Capital and Network!!!

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CO-OP Profit Standards
Surplus revenue must be used to Lower
premiums Improve benefits Improve the
quality of health care delivered to
its members Repay loans awarded by the CO-OP
program and/or Accumulate reasonable and
sufficient reserves to provide for enrollment
growth, financial stability, and stable coverage
for its members.
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CO-OP Standardsfor Health Plan Issuance
Market of Operation A CO-OP must issue 2/3 of
contracts in the individual or small group
markets. A CO-OP must offer at least one
qualified health plan in the individual Exchange
at each of the silver and gold benefit levels
within 36 months of receiving a Start-up Loan or
1 year of receiving a Solvency Loan. If a CO-OP
offers small group coverage, it must offer at
least one qualified health plan at each of the
silver and gold benefit levels in the SHOP
Exchange. CO-OPs cannot offer health coverage
in a State until the State has in effect (or the
Secretary has implemented for the State) the
market reforms required by part A of title XXVII
of the Public Health Service Act.
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Loan Overview
Start-Up Loan Solvency Loan
Purpose Seed capital for start-up and development. Core capital for state risk based capital requirement.
Repayment Term 5 years from each draw. CO-OP application and loan documents will define custom repayment schedule. 15 years from each draw. CO-OP application and loan documents will define custom repayment schedule.
Interest Rate Fixed. 1 point below the Benchmark 5-year treasury rate at time of award. Fixed. 2 point below the Benchmark Treasury rate at the date of award. (Average of 10 and 20-year treasuries)
Disbursement Schedule Based on business plan in loan application and final loan documents. Disbursements subject to achieving milestones. Based on core capital needed to meet each years risk based capital requirements. Disbursements subject to achieving enrollment milestones.
Loan Structure Structured to ensure that these loans are recognized by each States insurance regulators as contributing to State reserve requirements and other solvency requirements.

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Loan Overview
Key elements include Well-organized and capable
leadership and staff Integrity of member
governance Understanding of the target
market Robust and credible business plan with
measurable milestones for durability in the
market Adequate provider network Ability to
begin start-up activities promptly and Ability
to repay loans within the required timeframes.
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Benefits of Participating in theCO-OP Program
CO-OP plans may be deemed certified to
participate in the Exchanges for 2 years and
recertified every 2 years for up to 10 years
after their loans have been repaid A CO-OP may
apply for a tax exemption under section
501(c)(29) of the Internal Revenue Code, although
it is not required to do so.
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IV. Elements of Success Perspectives of
Member-Run Nonprofit Health Plans

• Present Group Health Co-op Wisconsin85k
  members
• Health Partners Minneapolis-1.3M members
• Group Health Washington State-450k members.
• Mission, Passion, Integrity and community
  focused
• Goal 5-10 market share
• Strong By-Laws
• Be competitivemember experience PCMH
  cost-containment.
• Flexibility in product design-allow innovation.
• Market where you have a strong Provider Network

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V. New Nonprofit Health Insurers Perspectives
from State Regulators

• Same licensure and solvency as other health
  plans
• Will be looking for strong consumer protections
• Time (2014)is wasting6-12 mos for licensure plus
  non-profit status
• Challenges Network rates Professional
  management Adverse selection Push back from
  other health plans.

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Questions and comments from the audience

• Fed and States should work in tandum, ie-one
  process
• Fast Track for CO-OPs
• State should require networks to offer their best
  rates to CO-OPs
• Fed should provide Planning grant NOW!

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Recommendations

• Time is of the essence We need to complete all
  task and stay on track per Business Plan
• Seek out Technical Assistance from legacy CO-OPs
  (Group Health, etc.) and Vendors for ASO(claims,
  IT, etc.) and advisory board
• Identify Investors and community stakeholders
• Start to identify Board (Community based) and
  staff
• Start to identify Provider NetworkACO, FQHC,
  others.

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Techniques for Success

• Here are some of the techniques that our CO-OP
  health care system will encourage our providers
  to adopt
• Assigning small teams consisting of a doctor,
  a nurse, and various medical, behavioral and
• administrative assistants to be responsible for
  groups of 1,400 or so patients. The team members
  sit in
• the same small work area and communicate easily.
  When a patient calls, the nurse decides whether a
  faceto-
• face visit with a doctor or other health care
  provider is required or whether counseling by
  phone is
• sufficient. The doctors are left free to deal
  with only the most complicated cases. They have
  no private
• offices and the nurses have no nursing stations
  to which they can retreat.
• Integrating a wide range of data to measure
  medical and financial performance. Southcentrals
  data mall
• coughs up easily understood graphics showing how
  well doctors and the teams they lead are doing to
• improve health outcomes and cut costs compared
  with their colleagues, their past performance and
  national
• benchmarks, and it provides them with action
  lists of what they can do to improve and mentors
  to guide
• them. That almost always spurs the laggards. One
  doctor whose team ranked well behind 10 others in
• scheduling annual eye exams for diabetics jumped
  to first place within two months once she became
  aware
• of how poorly her team was performing.
• Focusing on the needs and convenience of the
  patients rather than of the institution or the
  providers. The
• facilities feature rooms where providers and
  families can chat as equals on comfortable
  chairs, in sharp
• contrast to examination rooms where a doctor
  looms over a patient. Every patient visit is
  carefully planned
• so the patient can get in and out quickly without
  being delayed because, say, a needed lab test
  result is not
• available.

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CMS Recommendations

• The Advisory Board focused on four major
  priorities in the award of loans
• (1)Consumer operation, control, and focus must be
  the salient feature of the CO-OP and must be
  sustained over time
• (2)Solvency and financial stability of coverage
  must be maintained and promoted
• (3)To the extent feasible in local provider and
  plan markets, COOPs should encourage greater care
  integration and promote payment incentives to
  improve efficiency and quality
• (4)Loans should be distributed by the end of
  2011/early 2012 to maximize CO-OPs opportunity
  for competitive success and ability to repay
  loans.

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Questions???Percent of adults who went to
ER in past two years for condition that could
have been treated by regular doctor if available
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Clinton Mayes, MBAVice President and COOFamily
Health Care Clinic, Inc.Phone [phone] 
Fax [phone]Email cmayes_at_familyhealthcare
clinic.com   Healthy American Health Care
Group, Inc. E-mail healthcaregroup_at_earthlink.net