© 2008 CareCore National. All rights reserved. 800-918-8924

© 2008 CareCore National. All rights reserved. 800-918-8924 www.carecorenational.com

© 2008 CareCore National. All rights reserved. 800-918-8924 www.carecorenational.com 2

Experience Over 25 million total subscribers

managed Medicaid among fastest growing

class of subscribers Program types

ASO Full Risk

Radiology Benefit Management


Trend, Utilization & Cost

MedicaidUnmanaged

Modality 2004 2005 % Trend 2006 % Trend 2007 % Trend 2008 % TrendCT 44.00 49.28 12.00% 54.70 11.00% 60.17 10.00% 66.19 10.00%MRA 1.50 1.73 15.00% 1.98 15.00% 2.28 15.00% 2.53 11.00%MRI 30.00 34.20 14.00% 37.96 11.00% 41.38 9.00% 45.10 9.00%Nuc Card Prim 8.50 9.78 15.00% 11.24 15.00% 12.59 12.00% 14.10 12.00%Nuc Med 6.00 6.24 4.00% 6.49 4.00% 6.75 4.00% 7.02 4.00%PET 0.75 0.98 30.00% 1.22 25.00% 1.44 18.00% 1.68 17.00%High Tech 90.75 102.20 12.61% 113.60 11.16% 124.61 9.69% 136.63 9.64%

MedicaidManaged

Modality 2004 2005 % Trend 2006 % Trend 2007 % Trend 2008 % TrendCT 39.40 42.16 7.00% 44.69 6.00% 47.82 7.00% 50.69 6.00%MRA 1.19 1.30 9.00% 1.40 8.00% 1.52 8.00% 1.62 7.00%MRI 24.88 26.37 6.00% 27.95 6.00% 29.91 7.00% 32.00 7.00%Nuc Card Prim 6.05 6.77 12.00% 7.45 10.00% 8.04 8.00% 8.69 8.00%Nuc Med 5.20 5.30 2.00% 5.41 2.00% 5.46 1.00% 5.52 1.00%PET 0.59 0.68 15.00% 0.79 15.00% 0.89 13.00% 0.99 11.00%High Tech 77.31 82.59 6.83% 87.69 6.18% 93.64 6.78% 99.50 6.26%

Unmanaged Medicaid vs. Managed Medicaid Trend by Modality


Relationship to Commercial RBM

Strategies used to manage Medicaid outpatient diagnostic imaging benefits are generally the same as those used for commercial and Medicare benefit programs

Key differences: Frequency and site of service Consumer knowledge and engagement Access to care Quality of care

Potential utilization management impact by Medicaid lines of business: FHP – High Impact TANF – Moderate Impact ABAD – High Impact CHP – Low Impact

Medicaid programs must address appropriateness and frequency of imaging with attention to under utilization


Strategies for Effective Radiology Benefits Management

Key Reduction Components Impact

Prior Authorization 12%

Correct Coding 2%& Bundling

Steerage 3%

Profiling/Reporting 1%

Privileging 3%


Nurse reviews history and findings against evidence-based criteria. If request satisfies criteria the exam is approved immediately and an authorization number is issued. If not, the case is transferred to a physician for review.

Physician reviews case and as appropriate will consult with referring physician. Case is approved, non-certified or withdrawn.

Physician seeksprior authorization & selects 1 of 3portal options:

Phone Web Fax

Physician office visit

Licensed Specialist Review

Physician evaluates clinical problem and chooses an imaging study

Prior Authorization Overview

Advanced Imaging Exams

MRI/MRA CT PET Nuclear Cardiology Nuclear Medicine

Physician Review

Criteria for radiology, cardiology and oncology can be found on the CareCore National’s website

Proprietary Clinical Criteria


Assures ongoing performance monitoring. Componentsinclude professional practice/physician assessment, peer review, film review, equipment accreditation, equipment standards, specific performance-based privileging for complex imaging procedures, pay-for-performance, redirection and quality standards.

Quality Assurance

Professional Practice/Provider Assessment Practice and site details Ownership structure Physician information Modalities Equipment specifications Policies and procedures

Film Review Randomized targeted

film review to assess: image quality professional

interpretation Corrective actions

required if deficiencies are noted

Accreditation & Privileging Proper accreditation of

site and equipment Limit the scope of

imaging procedures that a physician, site or specialty will be authorized for payment when “self-referred.”


Network Management

Factors driving cost: 60% of all Medicaid outpatient imaging is provided at

hospital outpatient departments 40% of the balance is self-referred Need adequate access to quality free-standing imaging

centers

MODALITY Office HospitalCT SCAN 242.56$ 375.06$ MRA 301.16$ 563.42$ MRI 327.48$ 725.71$ NUC CARD PRIMARY (BUNDLED) 536.90$ 1,568.90$ NUC MED 119.09$ 447.71$ PET SCAN 1,955.12$ 4,712.71$

MEDICAID Avg Paid Amount


Quality & Privileging

Quality considerations: Medicaid recipients are entitled access

to quality services Equipment and performance standards

are essential Balance quality and cost

Privileging considerations Focus on limiting self-referred imaging Impose universal equipment and

performance standards Monitor utilization profiles


Experience Over 5.5 million subscribers under

management Program types

ASO Full Risk

Diagnostic imaging & implantable devices

Cardiology Benefit Management


Cardiology Facts

10%

20%

30%

40%

50%

60%

0%

Pacemakers ICD

$11.8 Billion Implantable Device Cost

10%

20%

30%

40%

50%

60%

0%0%

Pacemakers ICDICD


10%

20%

30%

40%

50%

60%

0%

Pacemakers ICD


10%

20%

30%

40%

50%

60%

0%0%

Pacemakers ICDICD

$11.8 Billion Implantable Device Cost$25 Billion Imaging Costs

2%

28%

34%

8%

3%

26%

Cardiac PET/MRI EchocardiographyNuclear Stress Test Coronary CT AngiographyEcho Stress Test Left Heart Catheterization

Modality Trend (yearly) Volume (2006) Cost

Nuclear stress 13% 19 million $600-$1200

Echo stress 10% 3 million $300

Echocardiography 8.5% 26 million $350

2006 Cardiology Spending

Nuclear Medicine


Diagnostic Studies Nuclear stress test Echo stress test Echocardiography Cardiac PET Cardiac MRI Coronary CT angiography (CCTA) Diagnostic left heart catheterization

Implantable Devices Pacemakers Implantable cardioverter defibrillator

(ICD) Biventricular pacemakers

A Comprehensive Approach

Cardiology Program Components

Cardiology Program Impact

MODALITY Approvals /1000

Non Certs /1000

% Approved

% Non-Cert

% Withdrawn

Cardiac Catheterization 2.92 0.36 79.7% 9.77% 10.53%

Cardiac CT/CCTA 0.06 0.18 20.0% 65.0% 15.0%Cardiac MRI 0.23 0.03 53.33% 6.67% 40.0%Echo Stress 1.86 1.75 46.08% 43.34% 10.58%Echocardiography 32.32 0.52 94.99% 1.54% 3.48%Nuclear Stress 18.60 4.48 75.83% 18.28% 5.89%

MEDICAID 2007


Oncology Benefit Management

Experience Over 24 million lives under

management ASO Program


MedPORTAL™

A highly customizable, web-based medical and medication management tool, designed to meet the demands of managing injectable and specialty drug programs across all platforms

Features Drug coverage mapping Medical pharmacy guidelines Online Prior Authorization Therapeutic reimbursement

management Clinical protocol mapping Provider education Dose calculator Patient drug education leaflets

Optional Online drug and administration

claims adjudication Online medication ordering with

contracted pharmacies

MedPORTALTM


Clinical & Utilization Overview of the BioMANAGE™ ESA Program


FMVTM: Therapeutic Class Reimbursement

Reimburse “lower cost alternative” at a “higher profit margin” then costlier drugs

Name Indications Dosage Physician’s Physician’s Cost toCost Profit Insurer

Zometa Hypercalcemia of malignancy 4 mg q 3-4 weeks $840.00 $84.00 $924.00

Aredia Hypercalcemia of malignancy 90 mg q 3-4 weeks $118.00 $11.80 $129.80

Appropriate utilization management: A prior authorization is required on Zometa

Proposed Physician Margin

Zometa $80.00 (9.5%) $920.00Aredia $80.00 (68%) $198.00

Savings to Insurer $722.00Per Treatment

Lower-cost Drugs Higher-cost Drugs

Paid Drug Claim Prior Authorization Approved or Denied


RadCareTM

As an essential component of oncology treatment, radiation oncology is bringing new technology and more treatment options to members with cancer than ever before.

Recent enhancements since 2001 have represented triple digit growth in IMRT.

Future advances such as proton therapy will contribute even more to this rising cost trend.1

CareCore Oncology, under the guidance ofnationally recognized medical experts in radiationoncology have developed a series of radiationoncology pathways focusing on appropriatemanagement and billing of radiation oncologyservices.1NY Times article, “Hospitals Look to Nuclear Tool to Fight Cancer,” Dec. 26, 2007


Cyber Knife

$55,000 to$70,000 per Treatment

The Rising Cost of Prostate Cancer Treatment


RadCARETM Pathways Pathways developed by nationally recognized radiation oncologists RadCARE™ Pathways developed for:

Low denial rate, bundling of appropriate radiotherapy CPT codes Reimbursement and preparation of radiopharmaceuticals Anticipated savings between 12% to 15%

RadCARETM Pathways


LabMANAGE™

With the movement towards individualized medicine in its infancy, the current and forthcoming lab studies in:

Genetics Genomics Cytopathology Cytogentics Pharmacogenomics Chemogenomics

necessitates the appropriate identification andmanagement of these costly tests

In conjunction with the University of Washington, Dept. of Laboratory Medicine, CareCore National has produced:1. Evidenced-based lab study review criteria 2. Diagnosis appropriate lab study guidelines 3. Treatment-specific lab management tools

This process identifies appropriate studies resulting in improved treatment outcomes while reducing the cost associated to unnecessary and/or inappropriate lab studies.

Documents

© 2008 CareCore National. All rights reserved. 800-918-8924