Re: Non-participation in the new Horizon Medicare Blue Patient-Centered w/rx (HMO) product

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Three Penn Plaza East Newark, NJ 07105-2200 HorizonBlue.com October 2014 <Group Name> <Address> <City, State Zip> Re: Non-participation in the new Horizon Medicare Blue Patient-Centered w/rx (HMO) product Dear [insert group name]: Horizon Blue Cross Blue Shield of New Jersey is committed to improving the quality of care and patient satisfaction for our members while reducing cost. This open enrollment, we will offer a new product, Horizon Medicare Blue Patient-Centered w/rx (HMO), to our Medicare-eligible members with effective dates beginning January 1, 2015. Horizon Medicare Blue Patient-Centered w/rx (HMO) will use a subset of our Horizon Managed Care Network and promote the use of our patient-centered programs, including Patient-Centered Medical Homes (PCMHs) and Accountable Care Organizations (ACOs). Data has shown that providers in patient-centered programs play an important role in improving care and accelerating better health outcomes for our members through personalized and comprehensive health care. Our Physician Agreements allow Horizon BCBSNJ to establish networks without requiring the inclusion of all existing participating physicians. Horizon Medicare Blue Patient-Centered w/rx (HMO) will be a product with limited access to physicians than is currently available. Horizon Medicare Blue Patient-Centered w/rx (HMO) will require members to use those health care professionals participating in the Horizon Managed Care Network who have been identified as participating in this product. As a result of our evaluation based on the criteria noted below your practice, <Practice Name> <(TIN #)>, has not been selected to participate in Horizon Medicare Blue Patient-Centered w/rx (HMO). Based on geographic access and coverage standards, your practice did not meet the criteria for efficiency using Episode Treatment Group (ETG) data. To make it easier for our members, participation in Horizon Medicare Blue Patient-Centered w/rx (HMO) will be at the group level, with all physicians and other health care professionals who practice within the group included or excluded. All physicians and other health care professionals who are affiliated with and practice under or on behalf of the above-noted TIN, are excluded from participating with Horizon Medicare Blue Patient-Centered w/rx (HMO). (Over, please) CMC0006648A (0914) An Independent Licensee of the Blue Cross and Blue Shield Association

You can view a listing of providers associated with your group or update practice demographic information online by accessing our Provider Data Maintenance tool. Registered NaviNet users may log in to NaviNet.net and: Select Horizon BCBSNJ Plan Central. Select Provider Data Maintenance and then Group Maintenance. From the options listed, select Remove a practitioner from a practice location. We are directing you to this page to view the listing of providers associated with your group. You do not need to take any action unless there are inaccuracies with this information. If you need to change your practice demographics or add or remove a practitioner, you may update the information directly within the Group Maintenance section. Exclusion from participation in Horizon Medicare Blue Patient-Centered w/rx (HMO) will not impact your participation in Horizon BCBSNJ s PPO and managed care networks. However, if your practice submits a claim for a Horizon Medicare Blue Patient-Centered w/rx (HMO) member, no reimbursement will be provided. Please read the enclosed Frequently Asked Questions for information about Horizon Medicare Blue Patient-Centered w/rx (HMO). If you have questions or would like to request a listing of physician(s) affiliated with your practice, please call Physician Services at 1-800-624-1110. If your questions are related to your participation status, please select the prompt for More Options and then Network Relations. Thank you for your participation in Horizon BCBSNJ s networks and for the quality care you provide your patients, our members. Sincerely, James Dell Arena Director Network Services and Strategy Enclosures: Frequently Asked Questions

Three Penn Plaza East Newark, NJ 07105-2200 HorizonBlue.com General Horizon Blue Cross Blue Shield of New Jersey Horizon Medicare Blue Patient-Centered w/rx (HMO) Physician or Other Health Care Professionals Frequently Asked Questions Q1. When will Horizon Medicare Blue Patient-Centered w/rx (HMO) take effect? A1. Horizon Medicare Blue Patient-Centered w/rx (HMO) coverage will be offered to Medicare-eligible consumers during open enrollment starting October 15, 2014 and will be effective January 1, 2015. Q2. Which network is used for the new product? A2. Members have access to a subset of the physicians and other health care professionals that participate in the Horizon Managed Care Network, as well as all participating hospitals and ancillary providers. Within this subset of providers, the Primary Care Physician (PCP) network has been separated into tiers. Members maximize their benefits by utilizing a PCP affiliated with one of our patient-centered programs. This means members have lower out-of-pocket costs when they preselect and use a participating patient-centered PCP. Members will still have access to the other participating PCPs that are not affiliated with the patient-centered program, but at a greater cost to the member. Q3. What does patient-centered care mean? A3. Patient-centered care refers to an innovative approach that provides incentives to doctors based upon the quality of patient care, rather than the quantity of care under the traditional approach. Patient-centered programs better coordinate patients health care needs and help to ensure that members receive quality care, at the right place and at the right time. The patient-centered approach also provides a personalized and comprehensive health care program, which enables patients to become actively engaged in their health care. Q4. What are some of the details about Horizon Medicare Blue Patient-Centered w/rx (HMO)? A4. Horizon Medicare Blue Patient-Centered w/rx (HMO): Requires members to select a Primary Care Physician (PCP). When a member uses a participating patient-centered PCP for non-preventive care, a $10 or $15 copayment applies. When a member uses a participating PCP who is not affiliated with one of our patient-centered programs, a $35 copayment applies. There is a $50 copayment when a member visits a participating specialist. Covers preventive care at 100 percent with no out-of-pocket cost. Requires referrals. An Independent Licensee of the Blue Cross and Blue Shield Association CMC0006648C (0914)

Q5. What is the reimbursement for this product? A5. Reimbursement is at the managed care fee schedule. PCPs will be reimbursed based on their current (FFS or Capitation) payment methodology. Capitated health care professionals will be reimbursed at existing negotiated rates. There are no out-of-network benefits, except in the event of an emergency. Horizon Medicare Blue Patient-Centered w/rx (HMO) does not offer access to the BlueCard network, except in the event of an emergency while traveling outside of New Jersey. Q6. How will physicians identify enrolled members? A6. Members should present their Horizon BCBSNJ identification (ID) cards, which will include the product prefix, YKO. As always, your office has convenient access to all the important Horizon BCBSNJ information (eligibility, benefits, claims status, etc.) after logging in to NaviNet.net. Q7. Where can I find additional information regarding Horizon Medicare Blue Patient-Centered w/rx (HMO)? A7. Our administrative policy, Physician and Health Care Professional Participation Status in Products that utilize a subset of an existing Horizon Network, is accessible through NaviNet.net under Provider Reference Materials. Q8. Where can I find a listing of participating network physicians and other health care professionals? A8. During open enrollment in October 2014, our online Provider Directory will reflect the in-network participation status of all affiliated physicians and other health care professionals for the Horizon Medicare Blue Patient-Centered w/rx (HMO) product. Q9. Which hospitals are included in Horizon Medicare Blue Patient-Centered w/rx (HMO)? A9. All hospitals in our current Horizon Hospital Network participate in Horizon Medicare Blue Patient-Centered w/rx (HMO). Participation and evaluation Q10. How were physicians and other health care professional practices selected for inclusion in Horizon Medicare Blue Patient-Centered w/rx (HMO)? A10. Group practices from our existing Horizon Managed Care Network were selected for inclusion in Horizon Medicare Blue Patient-Centered w/rx (HMO) based on one or more of the following criteria: Risk-adjusted cost efficiency at the group practice level using Episode Treatment Group (ETG) data. To qualify for the ETG analysis, providers were required to have a minimum of 50 episodes of care from June 2012 through July 2013. Geographic access and coverage standards. 2

Q11. Is participation in Horizon Medicare Blue Patient-Centered w/rx (HMO) at the group level or the practitioner level? A11. To help minimize member confusion, participation in Horizon Medicare Blue Patient-Centered w/rx (HMO) will be at the group level such that all physicians and other health care professionals practicing within the group practice are included or excluded. All physicians or health care professionals affiliated with a participating Tax Identification Number (TIN) will be considered in network when practicing with/on behalf of that participating group practice as it pertains to services rendered to Horizon Medicare Blue Patient-Centered w/rx (HMO). If a physician or other health care professional also happens to be affiliated with a group practice that is not participating in this product, that physician will be considered out of network for this product when practicing with/on behalf of that nonparticipating group practice as it pertains to services rendered to Horizon Medicare Blue Patient-Centered w/rx (HMO) members. Q12. Which specialties were evaluated for efficiency? A12. The following specialties were evaluated for efficiency: Allergy & Immunology Cardiology Cardiovascular Surgery Cardiothoracic Surgery Chiropractic Medicine Dermatology Endocrinology Gastroenterology Neurology Ophthalmology Orthopedic Surgery Otolaryngology Podiatry Pulmonology Rheumatology Urology All other specialties that were not evaluated for efficiency will be considered included as participating with the Horizon Medicare Blue Patient-Centered w/rx (HMO) product. Some exceptions may apply for multi-specialty groups where one of the specialists was evaluated and excluded from participation. Q13. Why am I not included in Horizon Medicare Blue Patient-Centered w/rx (HMO) if my specialty was not evaluated for efficiency? A13. Although your practice is in a specialty that was not evaluated for efficiency, your TIN includes affiliated specialties that were evaluated for efficiency. The efficiency evaluation indicated that the affiliated specialties with your TIN are not the most efficient in the county. As a result, the decision was made to exclude your TIN from Horizon Medicare Blue Patient-Centered w/rx (HMO). For example, a group of Primary Care Physicians (PCPs) will automatically be included in Horizon Medicare Blue Patient-Centered w/rx (HMO), but a practice consisting of a PCP and cardiologists will be evaluated based on the criteria noted above. If the result of the evaluation does not meet one or more of the above criteria, both the PCP and cardiologist in that practice will be excluded from Horizon Medicare Blue Patient-Centered w/rx (HMO). 3

Q14. Why is my practice participating in Horizon Advance EPO but not in Horizon Medicare Blue Patient-Centered w/rx (HMO)? A14. Evaluation for the Horizon Advance EPO product was based on a different set of criteria, specifically admitting and referral patterns to Tier 1 hospitals. Horizon Medicare Blue Patient-Centered w/rx (HMO) focuses on efficiency analysis based on geographic access and coverage standards. Q15. Can other group practices apply for participation in Horizon Medicare Blue Patient-Centered w/rx (HMO)? A15. We will evaluate participation in the Horizon Medicare Blue Patient-Centered w/rx (HMO) product annually and will make periodic changes to include or exclude existing and new providers based upon changes within the above criteria. 4