AHCCCS                Janice K. Brewer, Governor
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September 17, 2014

Mr. Mike Uchrin Health Choice Arizona
410 North 44th Street Suite 900
Phoenix, Arizona 85008

RE: Performance for Acute-Care Clinical Quality Measures

Dear Mr. Uchrin:

The Arizona Health Care Cost Containment System (AHCCCS) has completed the review and evaluation of Contractor results of the contractual Clinical Quality Performance Measures for Contract Year End (CYE) 2012. Performance measure rates were evaluated  in  two  ways: whether they met the Minimum Performance Standard (MPS) outlined in Contract and whether there was a statistically significant decline  in the rate from the previous measurement period. Based upon the results of the review, Contractors are subject to regulatory action including over
$1.4 million in financial sanctions.

AHCCCS places significant emphasis on the selected Performance Measures in contract as it is believed that those measures have the greatest ability to positively impact member health outcomes.  For the CYE 2012 Measurement Period0), a specific subset of Contract Performance
Measures were selected for evaluation and reporting as AHCCCS was beginning the transition process to the new measure vendor and wanted to ensure appropriate allocation of resources to support both efforts. With such in mind, the CYE  2012  measurement period results that are included in Attachment A are only for those measures that AHCCCS officially evaluated. Regulatory action on the KidsCare performance measures is not being taken for the CYE 2012 measurement period; however, data related to KidsCare performance is provided for your review in Appendix B.

In August 2012, AHCCCS notified Contractors of Notices to Cure based on continued non­ compliance with Minimum Performance Standards (MPS) outlined in contract.  Over  $2.75 million in financial sanctions were initially assessed although some were waived so that resources could be redirected  to the measures; additionally, Contractors were required to participate in quarterly technical assistance sessions with AHCCCS staff. While mandated technical assistance is not being required as part of this evaluation, Contractors are encouraged to reach out to AHCCCS staff for assistance if barriers exist that prevent improving and/or sustaining performance  measure rates.

Notice to Cure

AHCCCS has evaluated each  Contractor's  final results  of the  Contract  Performance  Measures for the  CYE 2012 measurement period and compared them with the CYE 2011 measurement period and the Minimum  Performance  Standards in the CYE 2012 Contract.   Measures that are

701 East Jefferson, Phoenix, AZ 85034 • PO Box 25520, Phoenix, AZ 85002 • 602-417-4000 • www.azahcccs.gov

below the MPS have been issued a Notice to Cure. This action will be reflected in subsequent measurement period evaluations as part of the regulatory action consideration process and could lead to additional Contractor reporting requirements if deemed necessary.

Sanctions

Measure rates that do not meet the MPS and measure rates that show a statistically significant decline are subject to sanctions for this measurement period. Each rate that did not meet the MPS was assessed a full sanction. Each rate that showed a statistically significant decline but remained above the MPS was assessed a sanction at 50 percent of the full sanction amount.

AHCCCS is sanctioning the Contractor a total of $250,000 for the following  measures,  as allowed in Contract:

Well-child Visits- First 15 months	$50,000	
Well-child Visits 3-6 years	$50,000	
Adolescent Well Care	$50,000	
EPSDT Participation	$100,000	

This sanction will be withheld from an upcoming capitation payment.

Corrective Action Plans

Per Attachment A, the Contractor will note the measures that should have a Corrective Action Plan (CAP). However, due to the timing of this Notice, the CAPs are being waived. Please note that Contractors should have internal processes in place to ensure ongoing evaluation of measures as well as implementation of effective interventions if measures are at risk of not meeting the MPS or having a statistically significant decline. CAPs will be required for the CYE 2013 Measurement Period, as appropriate.

Future Performance

It is expected that all Performance Measures meet or exceed the Minimum Performance Standards outlined in the Contract. Additionally, it is expected that measures do not show a statistically significant decline from year to year. At least annually, AHCCCS may take additional regulatory action if the Minimum Performance Standards are not met and/or statistically significant improvement is not shown.   Regulatory actions may include continuation of actions listed above, including additional sanctions, as allowed in the Contract.

Per the terms of your contract, sanctions are not AHCCCS' exclusive remedy. In particular and without limiting possible future actions, if any legal action is brought against AHCCCS as the result of Contractor non-compliance with the Contract, AHCCCS will seek compensation from the  Contractor  for  any  damages  arising  from  such legal  action,  including  but  not  limited  to

AHCCCS' cost of representation, as well as the cost of any attorney's fees and costs payable to the party bringing the action.

If you disagree with this sanction, you may file a dispute with AHCCCS using the process outlined in A.A.C. R9-34-401, et seq. The dispute must be filed in writing and must be received by AHCCCS no later than 60 days from the date of this letter. The dispute shall specify the legal and factual bases for the dispute, as well as the relief requested.  Dispute letters should be sent to:

AHCCCS
Office of Administrative Legal Services 701 E. Jefferson
Phoenix, AZ  85034

If you have any questions regarding this letter, please contact Kim Elliott at 602-417-4782 or Kim.Elliott@azahcccs.gov.

Michael Veit,
Contracts and Purchasing Administrator

cc:       Nicole Larson, Contract Compliance Officer, Health Choice Arizona
Kim Elliott, PhD, CPHQ, Clinical Quality Administrator, DHCM, AHCCCS Kari Price, Assistant Director, DHCM, AHCCCS
Shelli Silver, Assistant Director, DHCM, AHCCCS

Attachment A:  Health Choice Performance Measure Review
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Regulatory Act

CYE 2011	CVE 2012

Significance

Minimum	Current

Notice to

Performance Measure

1 Performanc    Performance	Relative	Performanc

Statewide

Sanction

e {10/01/10-	{10/01/11-

Percent Change	Level
(p value)

e Standard
·- ---·

Cure
{Y/N)

-

Average	{Y/N)

97.0%	I	N	I	N

87.7%	I	N	I	N

89.9%	I	N	I	N

87.7%	I	N	I	N

67.8%	I	y	I	y

59.1%	
60.9%	
3.0%	
<0.001	
66%	
66.8%	
I	
y	
I	
y	
	
30.3%	
32.3%	
6.3%	
<0.001	
42%	
38.0%	
I	
y	
I	
y	

Annual Dental Visits	
64.2%	
65.3%	
1.7%	
<0.001	
57%	
61.8%	
I	
N	
I	
N	

EPSDT Participation	
59.8%	
58.2%	
-2.7%	
<0.001	
68%	
65.7%	
I	
y	
I	
y	

-
EPSDT Dental

I	45.9%	I	46.8%	I	2.0%	I	<0.001	I	46%	I	44.1%	I	N	I	N

  Particioation 	

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Attachment B: Health Choice Performance Measure Review

CVE 2011	CVE 2012
IPerformanc	Performance e {10/01/10-		(10/01/11-
09/30/12)	
Minimum	Current Relative	Significance	Performanc
Level	Statewide
Percent Change	e Standard
Ia a--·
(p value)	Average	

100.0%	
I	-		
n/a	
n/a	
93%	
100.0%	

93.1%	
I	
93.7%		
0.6%	
0.789	
83%	
93.9%	

91.8%		
95.6%		
4.2%	
0.011	
83%	
95.9%	

91.5%		
93.5%		
2.2%	
0.121	
81%	
94.0%	
		
0.0%		
n/a	
n/a	
65%	
0.0%	

68.9%		
72.0%		
4.5%	
0.457	
66%	
76.6%	
49.4%		54.0%		8.6%	0.049	42%	55.1%	

78.3%		
81.6%		
4.0%	
0.016	
57%	
77.8%	

Performance Measure

years ot ageJ Adolescent Well Care Visits

Annual Dental Visits