How To Manage The 5% With Multiple Chronic Conditions & Complex Support Needs

By Monica E. Oss
There is a lot of investment money going into the mental health field—in fact, $14.7 billion in the first half of this year (see Why Are Digital First Mental Health Companies So Popular?). Much of that investment is focused on digital behavioral health systems and tools for both professional and self-care.

However, these new platforms and tools are not the perfect fit for every consumer with a mental illness. In fact, 25% of consumers with any mental illness have a serious mental illness (SMI). In all, 13.1 million consumers, or 5% of the total United States population, have an SMI (see Key Substance Use & Mental Health Indicators In The United States: Results From The 2019 National Survey On Drug Use & Health). Of consumers with SMI, 27% have co-occurring substance use disorders. We also know that SMI consumers on average tend to die 10 to 25 years earlier than the general population—and have a mortality rate that is twice as high as that of the general population because of chronic physical medical conditions such as cardiovascular, respiratory, and infectious diseases; diabetes; and hypertension (see Premature Death Among People With Severe Mental Disorders). 20% of the SMI population lives in poverty Approximately 20% of jail inmates and 15% of state prison inmates have an SMI (see Mental Health & Criminal Justice). 33% of the homeless population has an SMI (see 250,000 Mentally Ill Are Homeless. 140,000 Seriously Mentally Ill Are Homeless).

For the approximately 5% of the population—those with multiple chronic conditions and complex support needs—that use a majority of the health care resources, a different approach is needed to assure good consumer outcomes and prevent inappropriate use of resources. That population was the focus of our recent discussion with Carole Matyas, Vice President, Operations at Sunshine Health, and the keynote speaker at the upcoming 2021 OPEN MINDS Executive Leadership Retreat.

On September 22, Ms. Matyas will deliver the keynote address, The Future Of Managing Care For Consumers With An SMI—What Works. The cornerstone of progressive interventions for the high-risk/high-needs population with a serious mental illness is based on a “whole person” treatment strategy that encompasses medical, behavioral, pharmacy, social needs, and caregiver collaboration and coordination. Ms. Matyas will review Sunshine Health programs that are showing promising positive outcomes such as reduced use of acute/crisis care, better engagement with primary care that improves medical health outcomes and addresses high comorbidity issues, stabilized community-based living environment by addressing social needs for the enrolled Medicaid and Medicare members served. She will provide an overview of their Long Acting Injectable (LAI) program with data that demonstrates reductions in emergency department and inpatient services, and increase in community-based and medical services for members.

My takeaway from our pre-Institute discussion with Ms. Matyas? The Sunshine Health approach to optimizing the management of consumers with an SMI has four key components—intensive case management to assure care coordination, leveraging long-acting medications, a focus on primary care, and addressing social support needs.

Intensive case management to assure care coordination. One approach that has improved outcomes for SMI consumers is intensive case management. Sunshine Health took its top 400 high-needs, high-risk consumers (who have 30+ hospital admissions a year, go to the emergency room every other week, and reject any type of community-based treatment) and had its staff provide proactive and intensive case management services in collaboration with a host of community provider organizations and stakeholders. For example, case managers work closely with a telehealth provider organization that Sunshine Health contracts with to ensure that consumers discharged from hospital have their seven-day follow up appointment virtually and then connect them with an outpatient provider organization for ongoing care.

Leveraging long medications. Sunshine Health has been encouraging provider organizations to use long-acting injectables (LAIs) for antipsychotic medication administration. Ms. Matyas shared that SMI consumers receiving monthly LAIs have shown significant stabilization in their mental health and also do better at getting care for their comorbid medical conditions, engage with peers socially, and are even able to have part-time employment. She said, “We are promoting use of LAIs and really going a long way in working with hospital systems, primary care physicians, and mental health providers to make it easy to obtain those medications, administer them, monitor, and do outreach so members continue treatment. While the medications can be expensive, the results definitely show reductions in hospitalizations, readmissions, and emergency room visits as well as better outcomes from community-based treatment.”

Sunshine Health has a number of strategies to increase the use of LAIs. They do not require provider organizations to obtain prior authorizations to administer LAIs. In addition, if clinical professionals start an LAI when a consumer is in the hospital, case managers make sure to follow up with the consumer to make sure they get to the outpatient provider organization for their next dose when it’s due. They also have a “concierge program” within their pharmacy network and customer service representatives call members to schedule an appointment for their next LAI dose. Some pharmacies are also authorized to administer the LAIs. Sunshine’s provider relations team is charged with providing information about LAIs to community mental health and primary care provider organizations.

Ms. Matyas said, “We have a goal of increasing long acting injectables 25% year over year. During the pandemic, we had interruptions with folks getting their long acting injectables, but we are working towards getting back to normal state, which is encouraging.” And now there are two barriers to overcome to extend the use of LAIs, she added. The first is adherence which becomes challenging when consumers are say, cycling in and out of homelessness and are not stable in their environment or engaged in their treatment. The other issue is that there’s a history of long acting injectables not getting authorized by managed care. So provider organizations need to be educated and learn that “they don’t have to jump through a lot of hoops” to be able to prescribe LAIs if appropriate for the consumers.

Focus on primary care. Sunshine Health is encouraging provider organizations to go the integrated care route by participating in health home models and value-based reimbursement (VBR) models. They are also leveraging data to encourage collaborations and equipping primary care provider organizations to better address the needs of SMI consumers. Recently, they launched a behavioral health home program and seven community mental health centers have signed up to date. These centers have co-located primary care and behavioral health services and are delivering whole-person care under value-based contracts.

VBR is the cornerstone for integrated care. Sunshine Health offers incentives for provider organizations to address “gaps in medical and behavioral care.” In the behavioral health homes program, the incentive program is contingent on preventive health screenings being conducted for all consumers and on addressing the comorbidities that SMI consumers have. All provider organizations in Sunshine’s network—whether they are primary care practices or community mental health centers—are expected to address comorbidities and to report on the array of HEDIS measures related to both medical and behavioral care. Ultimately, Ms. Matyas explained, “The goal is to move more to value-based care, where we can impact members by having them in a health care environment so that they don’t have to go eight different places to get the care they need. They should be able to be more easily referred and seen, for whatever service it is they need. Value-based care incentivizes providers to work together without dictating a one-size-fits-all model.”

Sunshine Health embeds behavioral health services in primary care and offers psychiatrists who can consult on prescribing patterns and other issues in the care of SMI consumers. Ms. Matyas explained, “Every member covered by us is assigned a primary care provider regardless of whether they have an SMI diagnosis or not. So every one of the 5% of our 2.6 million members with SMI has a primary care physician. We take the data to our primary care practices and say, ‘Here are the demographics of the population assigned to you and here are the care gaps.’ The primary care practices will tell us whether they can handle the whole-health needs of these SMI members or want us to move them to a different provider. Or the practices may say they are equipped to handle some things but not others. So then we bring in behavioral health quality practice advisors to work with them, or we move the SMI members to a primary care practice that is better suited to work with this population.”

Addressing social support needs. Sunshine Health addresses social determinants of health (SDOH) in a variety of ways. Many of their behavioral health provider organizations have robust case management programs and the case managers connect consumers to social supports as needed. The health plan maintains a database of community resources that these case managers can access on request. They also offer micro grants to small community projects that support social needs. Some of their Medicaid programs, like the SMI specialty plan, have expanded benefits such as housing rental deposit or one month’s advance rent to help consumers get into housing. They’ve distributed cell phones and tablets for consumer use. SMI consumers get $35 a month in over-the-counter benefits from CVS to buy non-prescription items.

The fact that health plans are looking at primary care as the hub for SMI treatment should be a wake-up call for specialty provider organization executives who believe that their niche in serving this population assures a steady stream of business. Assuming responsibility for the whole-person care (medical, behavioral, and social) of the SMI populations served and participating in value-based arrangements are becoming the basics for sustainability planning.

Addressing Social Determinants As A Path To Revenue Growth

By Monica E. Oss

Over the last 15 years, there have been many pilot projects by payers, health plans, and public and private entities to address social determinants of health (SDOH). In the past couple years, we’ve heard from several health plan executives about their SDOH initiatives (see Mind, Body, Community: Kaiser Permanente’s Unique ApproachInnovation: Tag, You’re It‘Leaning In’ To Medicare: Social Needs OpportunitiesWill Investing In Social Determinants Pay OffHousing = Health: The Five Levers, and Medicaid Wants More Than Health: Be Prepared For Contract Changes). We’ve seen many new SDOH program launches by health plans—UnitedHealthcare’s recent Empowering Health grants, Humana’s Bold Goals program, Horizon Blue Cross Blue Shields of New Jersey’s Neighbors in Health program, and North Carolina Medicaid’s Healthy Opportunities Pilots, to name just a few. And there are the requirements to address SDOH under new Medicaid managed care contracts in a number of states (see Medicaid Authorities & Options To Address Social Determinants Of Health).

For specialty provider organizations, the question is how to address SDOH—and find a funding stream to do just that. Previously, we outlined the two paths to adding social service supports and supports coordination to traditional service lines. One way is to add a social supports coordination element that will get more referrals or improve reimbursement under value-based reimbursement arrangements—and pay for itself as an enhanced service feature with more total revenue for existing services. The other way is to build social supports programs that health plans or government payers will reimburse—and build a new revenue stream. Whatever option an executive team chooses, return-on-investment analysis is key. I wrote recently about our six-step model for assessing the effectiveness (both proactively and in practice) of enhanced social service programming in Building An ROI For Social Service Referrals.

We heard two great case studies of provider organizations that are taking the second path— building service lines for social services with payer/health plan revenue—during the session, Incorporating Social Determinants Of Health Into Your Practice To Improve Patient Outcomes & Increase Reimbursement at last week’s 2021 OPEN MINDS Management Best Practices Institute (session recordings and decks are available at https://openminds.com/live-mbpi/sessions/ until September 27). June Simmons, President and Chief Executive Officer of Partners in Care Foundation and Karin Annerhed-Harris, Vice President, Business Development at Resources for Human Development (RHD), shared how they are working with health plans on unique initiatives to address SDOH for complex consumers.

June Simmons, President & CEO, Partners In Care Foundation

Partners in Care Foundation builds community networks to provide a single point of access for consumers. Partners in Care contracts with health plans—and sometimes with health systems—to provide care management and home and community-based social services. Their goal is to integrate all community health resources and supports into a seamless delivery system for easy access and management. Ms. Simmons said, “If you’re just referring Ms. Smith to go down the street where they provide meals, it’s one thing. But if you’re paying for something, it’s a whole new paradigm. And sometimes you’re going to have to pay for care coordination and concrete services on a targeted basis.”

Partners contracted with Blue Shield of California (BSC) in 2014 to provide SDOH services to BSC consumers through primary care practices. BSC pays Partners for specialized staff—community health advocates (CHAs)—who are trained and supervised by PIC, and embedded in medical practices. To date, Partners has trained and placed 70 CHAs in three years. CHAs assess and analyze consumer needs, work with consumers on care planning, connect them to services, follow up, and track outcomes. The relationship with BSC has grown since over time, with Partners providing a variety of SDOH-related services.

Partners also operates specialized Outreach and Engagement Centers for Anthem in California, Georgia, Colorado, and Virginia. Through these centers, they develop care plans, engage with consumers, and make sure they get the needed social services. “You can take a horse to the water but you can’t make it drink. So engagement is crucial to ensure that consumers actually use the services they are connected to and that’s why the health plans partner with experts like us.”

For health plans, the benefit is in contracting with a single entity that manages the comprehensive network of social care. Access to supports becomes easier for consumers. Data sharing between the health plan and community-based organizations is also streamlined and simplified. Ms. Simmons said, “So if you’re a health plan and want to address a certain population—maybe it’s young moms and kids, maybe it’s frail elders and keeping them out of the nursing home—are you going to go out and identify all the agencies involved, organize them, and contract with them? Or would you like a lead entity that’s going to do that for you—curate the services, qualify the agencies, be the central intake, the oversee the quality, and do the billing?” Working with a trusted local entity is a far more practical and efficient route for health plans in Ms. Simmons’ opinion. She said, “A more mature community entity can bring their neighboring health and human service provider organizations into an organized delivery system, so consumers don’t have to be referred to multiple entities.”

Karin Annerhed-Harris, VP, Business Development, Resources for Human Development

Resources for Human Development addresses food and housing needs. RHD provides outpatient and residential services for consumers with mental illness, substance use disorders, and intellectual and developmental disabilities. RHD partnered with Temple University Hospital and two managed care organizations (MCOs)—Health Partners Plans and Keystone First—to pilot the Housing Smart program. The program was intended to reduce avoidable emergency room utilization and hospital readmissions among homeless individuals through peer outreach, supportive services, and subsidized housing resources.

The MCOs agreed to criteria for eligibility and generated a list of member referrals for RHD. RHD provided the high-users experiencing homelessness with access to housing vouchers that are good for two years. The consumers were housed in apartments across Philadelphia and local food banks provided three meals a day for three months, followed by cooking classes. The pilot resulted in a 74% drop in emergency room use, 48% reduction in hospitalizations, and a 76% increase in outpatient hospital visits. And with stable housing, 12 consumers in the program are actively engaged in behavioral health outpatient services.

At the outset of the program, Temple generated a list of eligible people using target population criteria and shared that with the MCOs. They enrolled 25 high utilizers prioritizing consumers with opioid use disorder, persistent mental illness, and co-occurring physical health conditions. RHD used an MCO-funded team comprising a peer support specialist, care coordinator, and tenant services coordinator to engage consumers in services. While the MCOs reimburse for services, 36% of the program is grant funded and goes toward housing, Ms. Harris said. RHD is exploring expanded health plan funding, now that Pennsylvania allows health systems and MCOs that can save money through a value-based agreement to use the profits to fund housing.

Lessons learned—partnership, evidence-based interventions, data sharing, and more. Ms. Simmons shared the four key elements for successful integration of SDOH—strong partnerships to form a comprehensive community network of care, the capacity to deliver home-based services, the use of good screening tools to assess consumer needs and preferences, and the delivery of evidence-based interventions for SDOH.

At RHD, Ms. Harris attributes the success of their pilot to robust partnerships and collaborations (between provider organizations, a health system, health plans, and other community organizations); cross-sector tools and training; and data sharing to enable a holistic view of consumer needs, goals, and care gaps.

The takeaway for provider organization executives? As my colleague and OPEN MINDS Senior Associate Cathy Gilbert, who moderated the session, said, “Entrepreneurial provider organizations have the opportunity to package many consumer support services that were previously not reimbursable and turn them into new revenue streams in partnership with plans. Providing these services drives better outcomes for consumers and ultimately reduces overall costs.”

WellSpan Health & Gateway Health Launch Value-Based Partnership For Medicaid Members

On July 29, 2021, Gateway Health, a Pennsylvania Medicaid managed care plan, and WellSpan Health a health system in central Pennsylvania launched a value-based partnership focused on connecting Gateway Health members with primary care professionals. Gateway Health and WellSpan are proactively contacting Gateway Health’s Medicaid members who visit the health system through emergency or urgent care visits, but do not have a relationship with a primary care provider organization. WellSpan case managers will work one-on-one with the Gateway members to address barriers, such as transportation and cost, to establishing an appropriate primary care relationship. Financial details about the partnership have not been disclosed. The goal is to reduce the number of potentially preventable emergency department visits among Gateway members.

Through this value-based partnership, Gateway Health and WellSpan aim to deliver an enhanced level of care, improve health outcomes, and lower health care costs for Gateway Health’s Medicaid members receiving care at WellSpan’s 200-plus health care locations. The partnership will utilize data insights and value-based programs to proactively manage the health care needs for more than 24,000 Gateway Health Medicaid members living in South Central Pennsylvania.

This partnership expands on an existing relationship between Gateway Health and WellSpan. For the past 18 months, they have partnered together for better maternal care and coverage through Foundations Pregnancy Support Services, a program offering coordinated, comprehensive care for mothers and their children with opioid use disorder. WellSpan partners with other Medicaid insurers to provide this support. However, WellSpan said that the commitment and innovative partnership with Gateway Health has resulted in more than double the number of members enrolled than with any other insurer.

Gateway Health was founded in 1992 as a Medicaid managed care plan. It currently provides Medicaid and Medicare Advantage plans. It covers health care services for nearly 340,000 members annually.

Non-profit WellSpan Health is an integrated health system that serves the communities of central Pennsylvania and northern Maryland. It has more than 1,600 employed physicians and advance practice professionals; a regional behavioral health organization; a home care organization; eight hospitals, and more than 200 consumer care locations.

For more information, contact:

Four Keys To Success With Value-Based Reimbursement

By Monica M. Oss

The move away from fee-for-service reimbursement—toward value-based arrangements with financial alignment between health plans and provider organizations—continues. A look at some of the reporting over the past quarter illustrates the continuing activity—Humana To Acquire One Homecare Solutions To Accelerate Development Of Value-Based Home Health OfferingGateway Health & Wellspan Health Announce Value-Based PartnershipCaron Treatment Centers & Independence Blue Cross Report Value-Based Contract Linked To Lower 90-Day Readmission Rate, and 60 Provider Organizations Chosen By CMS For The New ‘Value In Opioid Use Disorder Treatment’ Demonstration.

And as revenue slowly moves away from fee-for-service, most provider organization executive teams are going to have to make the decision about whether or not they want and can manage contracts with downside financial risk. Currently, nearly 36% of all health care payments in the United States are value-based (see 2019 HCP-LAN Alternative Payment Model Measurement Effort: Report & Infographic). A recent survey showed that 53% of specialty provider organizations caring for complex consumers are participating in some form of value-based reimbursement. And 12% of specialty provider organizations report 20% or more of their revenue tied to VBR agreements (see The 2021 OPEN MINDS Performance Management Executive Survey: Where Are We On The Road To Value). As these numbers rise, the available market share outside of these arrangements shrinks.

But for the executive teams that are taking their organization in that direction, the strategic question goes beyond getting the contracts. It is also how to manage VBR reimbursement arrangements successfully—for the consumer and for their own bottom line. In the executive roundtable at a recent conference, VBR: Where’s The Beef? Managing Payer Expectations For Value Over Volume, two health plans executives—Cindy Ehlers, MS, LPC, Executive Vice President, Clinical Operations at Trillium Health Resources and Rhett Melton, Chief Executive Officer at Partners Behavioral Health Management—described their expectations from provider organizations. And two provider executives—Corbin Petro, Chief Executive Officer at Eleanor Health and Teri Herrmann, MA, Chief Executive Officer at SPARC Services & Programs—described their approaches for success with value-based models.

Our payer and provider executives highlighted four aspects of a value-based relationship that are essential for success—an aligned partnership model, knowing what to measure and why, managing the cost side of the equation, and building in processes that allow flexibility in care planning and delivery.

Well-aligned partnerships are key. Provider organizations have traditionally had “vendor” relationships with health plans—relationships that have bordered on adversarial. Our panelists pointed out that it’s important for providers and payers to lose the “us versus them” mentality and come to the table together to see how they can best serve consumers. Mr. Melton said, “There are three people at the table. There’s the payer, there’s the provider, and there’s the member. We start with the members themselves. It’s not us at the managed care company that should sit in an office somewhere and decide what’s the right outcome, we should be working with our members to say, ‘What do you want out of care? What do you want success to look like? What do you think is important in the care that you get?’ That is how we can demonstrate the so-what.”

Ms. Herrmann noted that SPARC Services & Programs has multiple value-based contracts with multiple payers (see Value-Based Reimbursement Models Help SPARC Get A Leg Up In Medicaid Managed Care Contracting). The key to success has been coming together with each payer to figure out the pain points for both the health plan and their diverse consumer members.

To build these partnerships, many health plans are willing to do what it takes to help provider organizations prepare for the shift away from fee-for-service. Both Trillium and Partners Behavioral Health provide support for technology infrastructure upgrades and offer training and education for provider organizations. Mr. Melton said, “We invest in improvements because that stabilizes the system. If a short-term financial cost to the managed care organization can improve accessibility and stability for members, it’s important. We’re looking to walk alongside provider organizations and to bring some of that training to help them grow along with us.” Ms. Ehlers added, “We’re trying to meet providers where they are. So for those that need infrastructure, we try to guide them in that direction. Sometimes we invest in infrastructure to help move them forward. Because it matters to the care of the member. We’ll work with them on training. Lots of providers have done really good work in moving forward as soon as they know that is something they need to do. They’re eager to learn and try.”

Measures are important but must be consumer-centric. The very essence of value-based contracts is performance measurement—it is the means to move away from volume as the foundation of reimbursement. There is a wide range of performance measures in VBR—those affecting cost of care and HEDIS measures being the most common (for more, see our OPEN MINDS-recommended performance dashboard in 12 Steps To Creating Your Data-Driven Organization.)

But the focus on performance for consumers needs to be front and center according to our panelists. Mr. Melton explained, “We require reporting on HEDIS measures—timely follow up from hospitalization, keeping the emergency department utilization down, and decreasing the days of inpatient hospitalization. It is all those things, but we always need to come back to what all those things mean for member satisfaction. It’s great for us to say the days dropped by X number per 1000 for inpatient care. And that’s a good indicator and there are certainly cost ramifications. But did the members think that they had good access to care? And are they happy with the care?”

Ms. Petro said that in its value-based contracts, Eleanor Health (see Eleanor Health’s Value-Based Approach To Medical Homes For Consumers With Addictions & Complex Support Needs) reports on HEDIS measures—emergency room diversion, reduction in hospital readmissions, and net promoter score. But she emphasized that each of these measures is tied to goals that they have defined in tandem with payers and that are consumer-focused. These include improving access to care, engaging the 90% of consumers with substance use disorders who currently don’t seek care, and reducing the total cost of care. She said, “An important part of any value-based payment model is orienting around specific outcomes. This has also been where I saw the most opportunity, having come from the physical side of health care. There aren’t a lot of entities that are tracking to specific outcomes. So payers have been really excited about what we’ve been able to show for the populations that we work with. And outcomes are particularly important for stigmatized populations that historically haven’t been treated well by the health care system. So metrics are an important part of our value models.”

Ms. Herrmann discussed their health plan contracts, which have both upside and downside risk. The incentives can include keeping consumers out of the hospital. Penalties may be incurred if consumers enter residential treatment unnecessarily or exceed a certain length of inpatient stays. However, she said, “They’re really all looking at that same piece—are we able to support that person remaining healthy and in their community, and not using the hospital systems when they don’t need to be? But if residential treatment is needed to keep them safe, are we ensuring that they can get that treatment? Are we doing all of the things that we can do clinically, and giving the clinicians the freedom to intervene in unique ways that fee-for-service doesn’t always allow us to do?”

Cost management is as important as revenue management. There are two parts to the simple equation underlying alternative payment models: Value = Performance/Cost. Performance metrics are critical but cost management is essential for sustainability of provider organizations under these arrangements.

The first step is the understanding how much services costs. There are unit of service costs. But that is only the first step. Cost of care across the continuum and over time are critical measures. Ms. Ehlers  said, “Providers don’t know how much services cost, because they have a whole lot of stuff rolled up into their administrative overhead. And so when it comes down to a discrete service, a lot of times they’re unable to tell us what it actually costs them. That’s one of the things that slows us way down.” (For more on this, see our OPEN MINDS Value-Based Contracting Risk Assessment Checklist.)

And there is another cost issue. Delivering services with downside financial risk often requires additional infrastructure with additional costs. This includes capacity to collect data, capacity to analyze data for population health management, ability to run service utilization prediction models, ability to exchange healthcare information, care management functionality, and consumer portal functionality—see  The OPEN MINDS Value-Based Reimbursement Readiness Assessment Checklist). Ms. Petro said, “I would argue that the greater piece of information that we can show is the impact that we’re having on the quality and the costs for the that individual we are serving, as opposed to the cost of intervention. We need to know the impact of delivering care that often isn’t supported in a fee-for-service environment—the community health worker and peer support services that break down those non clinical barriers to care. Or are the costs keeping people healthy, keeping people out of the hospital, and really having that total impact?” Her advice is to “move from a billable service metric to a caseload or a risk-adjusted caseload metric” and look at how the needs of a population or set of members is being met. She said, “You really have to look at what do these patients cost? Why do they cost this much? Where are the opportunities for savings? Are they all in the right levels of care and do they have access to care?”

Value fosters flexibility—with a caveat. Provider organization clinical managers have often expressed frustration with the restrictions imposed by “billable services.” The general consensus is that fee-for-service reimbursement hinders a whole-person approach and doing what is best for the consumer. But value-based models bring newfound flexibility, our panelists agreed. At SPARC, value-based models have given clinical professionals a lot of freedom and flexibility to adjust levels and intensity of care based on where consumers are. For example, they have 6-month authorizations so there’s no need to go back to the payer for more units. The administrative burden is significantly reduced.

But there is a caveat. While there are not rules on the volume of care—or necessarily the type of care—clinical professionals are held accountable for outcomes. Ms. Herrmann said that they discuss their commitment to value-based models while hiring clinical professionals. They stress that the clinical team will have flexibility in how they deliver care but also have “skin in the game” for delivering good performance. She said, “We talk about the fact that we have opportunities for incentive payments as an agency if we’re able to keep the children and families we’re working with out of higher levels of care, and if the things that we do stick and work. Then we translate those into incentives for the clinicians.”

This is not about giving carte blanche to clinical professionals to use whatever treatment models they choose. It is providing a framework for consumer-centric, structured flexibility through ongoing assessments and clinical support tools.

These four keys to success may seem like a stretch for many provider organization executive teams. But, as Mr. Melton said, they should be “comfortable being uncomfortable.” The investment required—new best practices in partnerships models and management, in data-driven decisionmaking, in cost management and use of decision support tools—is one part of the equation. Building the management team that can use those tools is the other.

Don’t Leave Money On The Table: How The Right Technology Can Improve Your VBR Success

Originally presented on May 26th, 2021

Value-based care is here! If you haven’t started thinking about what it is you need to compete in a value-based environment, now is the time to start. With the rise in value-based care contracts and utilization of alternative payment models, provider organizations are challenged with doing the research and homework to get prepared for these new ways of managing care.

Hear an update on where we are with value-based care from OPEN MINDS Senior Associate, Ken Carr, as well as a firsthand case study from Capital Area Human Services (CAHS) on their journey to value-based care. CAHS Director of Business Development, Karla Lee Muzik, and Program Manager, John Nosacka, will showcase how their organization discovered they had been losing money by not having the right technology and how they began to remedy the problem.

During this session, attendees will:

  • Understand the current state of value-based care
  • Discover how to tell if they too are losing money with the wrong tools and technology
  • Hear a real-life case study from one provider organization who was losing money by not having the right tools to succeed with value-based contracting

Download Presentation (PDF)

Caron Treatment Centers & Independence Blue Cross Report Value-Based Contract Linked To Lower 90-Day Readmission Rate

Independence Blue Cross (IBC) reported that its value-based arrangement with addiction treatment provider Caron Treatment Centers resulted in a 5.6% 90-day readmission rate during a 2019 pilot. Under the arrangement, IBC paid Caron one single upfront fee for IBC members receiving treatment for addiction disorder, and Caron was at risk for any readmissions that occurred within the first 90 days after discharge.

IBC and Caron reported the pilot outcomes in a presentation at the 2021 Rx Drug Abuse & Heroin Summit. In the presentation, IBC reported that the readmission rates for six other addiction treatment providers in its network ranged from 11.6% to 25.7%. In total, 645 IBC members were treated for addiction during 2019; 71 received treatment at Caron.

Caron entered the value-based arrangement with IBC in 2017. The fee IBC pays Caron was not disclosed. In the presentation, Richard Snyder, M.D., IBC’s chief medical officer said the single payment is more than the rate IBC paid to the other addiction treatment provider organizations. However, he said the total cost of treatment has been about the same because Caron’s readmission rate was lower and IBC was not at-risk for the readmission cost.

Caron Treatment Centers is an internationally recognized non-profit organization that provides addiction and behavioral health care treatment, research, prevention, and addiction medicine education. The organization provides a continuum of care for teens, young adults, women, men, and older adults. Caron’s signature programming provides concierge treatment for executives, health care professionals, older adults and first responders. Caron’s program includes multidisciplinary treatment protocols with a median inpatient stay of 25 days, combined with a long-term disease management plan. Pennsylvania-based Caron provides services in Palm Beach County, Florida; Philadelphia; Washington, D.C.; Atlanta; and New York City. The organization is in-network with Capital BlueCross, Aetna, Highmark, and the Blue Card program, Independence Blue Cross, AmeriHealth Administrators, Independence Administrators, UPMC, Blue Cross Blue Shield, Employer Groups of Penn Medicine, and Tower Health.

IBC is a subsidiary of Independence Health Group, Inc. — independent licensees of the Blue Cross and Blue Shield Association, serving the health insurance needs of Philadelphia and southeastern Pennsylvania. Independence ended 2020 serving 8.1 million members nationwide.

IBC and Caron reported the outcomes at the Rx Drug Abuse & Heroin Summit on April 7, 2021.

Contact information: Karen Pasternack, Senior Director of Media Relations, Caron Treatment Centers, 243 N. Galen Hall Road, P.O. Box 150, Wernersville, Pennsylvania 19565; 610-413-6938; Email: kpasternack@caron.org; Website: https://www.caron.org/

Contact Information: Diana Quattrone, Corporate Communications Manager, Independence Blue Cross, 1901 Market Street, Philadelphia, PA 19103; 215-241-3113; Email: diana.quattrone@ibx.com; Website: www.ibx.com

Value-Based Reimbursement Models Help SPARC Get A Leg Up In Medicaid Managed Care Contracting

By Meena Dayak

SPARC Services & Programs (SPARC) is a behavioral health provider organization in North Carolina that has been providing home and community-based services since 2015. They serve 425 consumers monthly and employ 70 full-time staff. They focus on complex consumers—children and adults with severe and persistent mental illnesses (SPMI) who have not been successful with residential and other traditional treatment services—and work to keep them out of institutional care. Currently, most of their consumers are covered by Medicaid, although they have just started to expand into the commercial insurance space. SPARC’s service array includes outpatient services, home and community-based therapy services, rehabilitation services to help consumers transition from residential treatment to community living, support for daily living activities to help consumers live independently in the community, case management, and enhanced crisis response.

Since its inception, SPARC has operated predominantly through value-based reimbursement (VBR) arrangements with managed care organizations. SPARC’s Co-Founder and Chief Executive Officer, Teri Herrmann, MA, talked to OPEN MINDS about their VBR models and how they have helped to advance the mission of SPARC.

Reimbursement Models

SPARC currently has two VBR contracts with two managed care organizations (MCOs), Cardinal Innovations and Partners Behavioral Health Management. 26% of their consumers receive services under these VBR models, which constitute nearly 48% of SPARC’s total revenue.

Both of SPARC’s VBR contracts are based on per member per month (PMPM) case rates. When a consumer is referred to them, they do an assessment and seek initial authorization for treatment from the health plan. Typically they get a 6-month authorization and bill one unit per month. The case rates range from $2,800 to $3,000 per month.

SPARC’s very first health plan contract with Cardinal Innovations in 2015—for children’s services—was a value-based contract with downside risk. If a child receiving Family Centered Treatment® (FCT) services from SPARC entered into residential care either during the course of treatment or up to a year post-treatment, then SPARC had to give money back to the payer. “It was pretty unheard of in that landscape,” said Ms. Herrmann. After a year, SPARC re-evaluated the contract with the payer and decided that the goal was “too aggressive.” They re-negotiated the contract to make payback contingent on no readmissions within six months of treatment. The health plan was flexible with value-based contracting as it was new territory for them, too, said Ms. Herrmann. So now, if during treatment, or up to six months post-treatment, the consumer enters into residential care or stays in an inpatient setting longer than 10 days, then SPARC is charged back up to 30% of the amount that they have billed. Ms. Herrmann noted that they’ve had to pay monies back to their health plan, especially because the consumers they serve are so complex but SPARC remains committed to value-based contracting because of the longer term potential for revenue growth and the flexibility offered by the model to improve the quality of care.

In a second value-based contract with Partners Behavioral Health, SPARC has an incentive-based payment with upside risk only for children in FCT. If the children—who receive home and community based services from SPARC—are able to remain at home three months and six months after discharge from a residential facility, then SPARC receives incentives.

For one year, SPARC also had a value-based contract with Cardinal Innovations (operating under a North Carolina Department of Justice mandate) to help adults with SPMI—who had been “inappropriately placed” in adult care homes—transition to independent living in the community. This was a value-based contract with upside risk only, where SPARC was rewarded if they could help consumers transition successfully from the adult care homes and keep them in community housing through continuous interventions.

Success Factors For Value-Based Reimbursement

Ms. Herrmann attributes the success of value-based reimbursement to four factors—a strong referral network, the use of evidence-based practices in treatment, robust data integration and reporting capabilities, and a mindset of innovation and risk tolerance.

Value-based reimbursement—and the “willingness to take on consumers that no one else wants”—has strengthened SPARC’s status as a “preferred provider” with health plans and other state entities. They receive referrals from their MCOs, local hospital systems, state social services and juvenile justice departments, residential treatment facilities, and community-based provider organizations. Ms. Herrmann said, “We’ve got a pretty sophisticated referral process that tracks all our referral sources, and then aligns them with the payers. We can see what’s working and see where the holes are so we can put a referral marketing plan in place to address the gaps.” In addition, 85% of referral sources reported that SPARC kept them informed of the status of their referral. This “closed loop” referral approach strengthens SPARC’s appeal in helping to maintain continuity of care.

SPARC was built on the foundation of the family-centered treatment (FCT) model, an evidence-based practice (EBP) with a trauma treatment model of home-based family therapy that Ms. Hermann was involved in developing in the early 2000s. She underscored that using FCT helped to achieve the improved outcomes that value-based models demand. The use of EBPs is accompanied by relevant training and certification for staff using the model, which replaces some of the prior mandated state training that was not always relevant to the services staff delivered.

Ms. Herrmann describes herself as a “data nerd” focused on assimilating and continuously monitoring outcomes data to examine the potential to improve services. She said, “We don’t just want to measure if the person showed up. We want to objectively look at each person and if they are getting better.” They have built their electronic health record system to produce the key data and desired reports and are continuously working with their developers to manipulate and learn from the data. SPARC applies this data-informed approach across their value-based as well as fee-for-service programs so they can improve performance all around. Ms. Herrmann noted that the health plans are primarily looking for data on avoidance of emergency department utilization and avoidance of inpatient services or residential care for the consumers that SPARC serves. She said, “We’ve had a pretty long placement culture here in North Carolina that we’re slowly changing the tide on. If someone really needs those more acute levels of care, there is a place in the continuum for them. But we don’t want those services to be overutilized for the wrong reasons. And so that’s where we’re really focused for outcomes measurement right now.”

SPARC was proactive from the outset and proposed value-based contracting to their health plans. Ms. Herrmann elaborated, “As we were brainstorming and envisioning the concept for this company, we wanted to serve those niche individuals whose needs weren’t being met. And we were hearing from stakeholders and payers that they were really struggling to figure out what services to get to them. So we saw that we had to be innovative. We knew that starting a company and immediately jumping into value-based contracts was a little risky. But we also knew it would say a lot about us. As a new provider organization, we said to the health plans, ‘Let’s take this walk in value-based work together and learn.’ And this pitch for risk-based contracting opened doors that may not otherwise have been opened.”

Services & Outcomes

For 2019, SPARC reported the following outcomes from its range of services covered by value-based contracts (see SPARC Services & Programs: 2019 NC Outcome Data).

Family-Centered Treatment: Family-centered treatment (FCT) is an evidence-based practice with four phases of treatment—joining and assessment, restructuring, valuing changes, and generalization. FCT is targeted toward consumers at risk for higher levels of residential service—those with extensive histories of using acute services without successful outcomes; those who’ve been hospitalized with little prior treatment and are being recommended for residential services; and those currently in residential treatment where discharge is delayed because of lack of family systems.

Services are intensive with a minimum of 10 hours per month provided to the family. FCT incorporates trauma treatment and coordination with other systems, such as the school, justice, primary care, and social service systems as well as 24/7/365 crisis intervention services. FCT seeks to confirm and capitalize on internal changes within the family so that the family is not dependent on the therapist once services terminate. Families also have the opportunity to give back to their communities and share what they have learned with other families.

While starting FCT at SPARC, 57% of referrals were in some form of an out-of-home placement and 43% were at home with their family. After treatment, 81% of consumers receiving FCT were able to remain with or be reunified in the community with their family or another caregiver. 100% of families were engaged in treatment, participating in five or more sessions in 30 days. And 96% of families reported that treatment improved their family life.

In-Home Therapy Services: In-home therapy services (IHTS) is a combination of motivational interviewing and care coordination provided in the home and community to children and their families where there are complex clinical needs that traditional outpatient therapy cannot adequately address. IHTS is a time limited service, approximately 6 months, in which a therapist and the case manager work with the child and their family to meet the therapeutic needs as well as provide linkage to professional and natural supports. The case manager works with the various systems involved with the child and family, such as the school, primary care, social services, and justice systems. Upon discharge from IHTS, children and their families can continue to receive outpatient therapy to ensure continuity of care.

85% of families successfully completed treatment and 97% of consumers were either at home with family, or in other family placements, at the time of discharge from treatment.

Transition management services: Transition management services (TMS) is a rehabilitative service intended to increase and restore a consumer’s ability to live successfully in the community by maintaining tenancy in community housing. TMS increases the consumer’s ability to live as independently as possible, managing their illness, and reestablishing their community roles related to emotional, social safety, housing, medical and health, educational, vocational, and legal services. TMS provides structured rehabilitative interventions and works in partnership with the individual’s behavioral health service provider.

90% of members participating in services were able to both obtain and maintain their housing in 2019. Only 5% were discharged from the program because they needed a higher level of care. And the program is working with 98% of consumers are on four or more social determinants of health in addition to their housing needs.

Enhanced crisis response: The enhanced crisis response (ECR) service is intended to put supports in place as quickly as possible for youth with behavioral health needs that are at risk for abandonment, crisis episodes, or being placed in restrictive levels of care. With timely assessments and supports, ECR is intended to keep youth in their environment—such as non-therapeutic foster homes, kinship placements—or minimize needs for long stays in residential treatment. Services last 60 to 90 days on average. SPARC staff work with consumers and families to diffuse the imminent crisis and get the family linked to appropriate community-based services that allow the consumer to thrive and meet their goals.

71% of youth who were discharged from the program in 2019 were able to be discharged into the community with community-based services.

Overall, SPARC’s services received an average customer satisfaction rating of 4.6 stars on a 5-point scale. The net promoter score (based on consumers and families sharing the likelihood that they would refer others to SPARC services) was 4.3 stars.

Benefits Of Value-Based Reimbursement

Ms. Hermann explained that value-based treatment has incentivized service quality and built more staff buy-in for outcomes-driven treatment, afforded flexibility, and proved to be good for business development. She said, “We knew that the landscape of health care is shifting to value-based care, we want to jump in with both feet and have skin in the game. It forced us to say doing ‘A-level’ work isn’t good enough, we need to do ‘A-plus’ work. We committed to a pretty aggressive value-based contract because without that, we knew this would not be a sustainable model.”

The value-based model drives performance-based compensation incentives for staff, which increases their buy-in for achieving better outcomes. Ms. Hermann elaborated, “If a client is in crisis, the therapist response at eight o’clock at night is not just ‘Well go to the emergency room.’ Sometimes that’s a needed intervention but often it’s not. They know that once somebody goes to the emergency room, the whole treatment plan can get derailed. And so our clinicians want to go the extra mile, not only because it’s the right thing to do but also because we have some skin in the game. It creates just a little shift for them at the frontline level, so that they’re committed to providing unique services and really engage in creative problem solving.”

The services SPARC delivers under value-based contracts are labeled “in lieu of services” and have been designated by MCOs to meet an unmet need in their communities. Therefore service definitions afford more freedom and flexibility and avoid the need to fit the treatment model into a state plan amendment service definition which sometimes can be like “fitting a square peg in a round hole.” The VBR model is also designed to reduce administrative burden on provider organizations and payers. For example, given that FCT as an EBP is known to typically discharge families with successful outcomes after six months of treatment, six months of services are authorized at the outset. So instead of wrangling submissions for authorization, clinical professionals can focus on delivering needed services. And the intensity of treatment can be increased or decreased depending on current needs. “If a crisis happens and we need to increase the intensity and frequency of services, we don’t have to go back to that payer and request more time and risk potential denial. That is a huge difference between some of our fee-for-service vs. value based contracts,” said Ms. Herrmann.

Value-based contracting has created opportunity for SPARC to expand its mission to keep consumers out of institutional care. And it has allowed stakeholders to see their innovation and that creativity and to come to them when there are new needs. “It has allowed us to have opportunities that I’m not sure we would’ve had if we’d come in as a provider saying we want to do regular fee-for-service contracting,” Ms. Hermann said.

What’s next? As SPARC moves into providing more services for mild and moderate mental illnesses and pursues contracts with commercial insurance, value-based contracting will continue to define their business development efforts. They plan to work with their MCOs to move from an individual consumer focus to applying a population health lens in their VBR models. They are also looking to focus more on whole-person value-based care and to and certify and train staff to become a “care management agency” as part of North Carolina’s Medicaid transformation (see North Carolina Extends Deadline For Tailored Plan Care Management Applications To June 1, 2021). In addition to Cardinal Innovations Healthcare and Partners Behavioral Health Management, SPARC has entered into contracts with five more managed care organizations appointed by North Carolina Medicaid—WellCare of NC, AmeriHealth Caritas of NC, Blue Cross and Blue Shield of NC, United Healthcare of NC, and Carolina Complete Health, Inc. As these new MCOs get ready for value-based care—once they understand their new consumers and the needs—SPARC is well-poised to leverage their experience and hit the ground running. “We’re really committed to continuing to learn more and doing more in the value based space,” summarized Ms. Herrmann.

COVID-19 and Value-Based Reimbursement: What Do We Know? Where Will it Go?

The impacts of COVID-19 on health care continue to unfold, and one area of uncertainty is the impact COVID will have on Value Based Reimbursements (VBR). Regardless of this uncertainty it appears that VBR is still trending upwards in behavioral health care.  Surveys conducted by OPEN MINDS demonstrate more use of episodic payments, case rates, and bundled rates. In one health plan survey, the number of health plans using bundled payments or case rates rose from 39% to 59% from 2017 to 2019 (see Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing and Delivery System and What Are The Health Plans Doing About VBR?). And, a more recent survey of specialty provider organizations found that 24% of those organizations have some bundled rate contracts (see 2020 OPEN MINDS Performance Management Executive Survey: Where Are We On The Road To Value). A similar trend is noted in the public payer market, where a recent state-by-state analysis found that 28 of the 40 states with Medicaid managed care require health plans to implement alternative payment arrangements (APMs) with provider organizations. This is up from 22 states out of 39 states in 2017

With the continued growth of VBR, many questions about how the pandemic will change VBR processes remain. Some current trends shed light on this question. These trends also give providers clues about areas of focus moving forward in this ‘next normal’.

Shift to Telehealth

One of the astonishing developments of the pandemic is the phenomenal growth of telehealth utilization in behavioral health care. Telehealth has become ubiquitous during the pandemic. Some interesting results of a recent survey by Qualifacts and the National Council for Behavioral Health include:

  • Pre-pandemic, telehealth utilization in behavioral health care was relatively low, only 2% of organizations were providing 80% or more of their care virtually
  • Policy changes during the COVID-19 pandemic have reduced barriers to telehealth. Now, 60% of behavioral health organizations are providing 80% or more virtual care.
  • Behavioral health care executives expect the higher utilization of virtual services to continue, with a majority believing 40 % to 60% of their overall services will be provide in virtual platforms.

In the public sector, there have been sweeping changes in regulation and reimbursement for telehealth services. While the permanence of the changes in the public payer space has not been determined, it’s evident a system-wide reevaluation is occurring.  Some states have enacted new legislation already. For instance, On July 6, 2020, the Colorado legislature passed Senate Bill 212 to expand access to Medicaid telehealth services. The bill expands Medicaid coverage for telehealth services to include reimbursement at parity with in-person services at rural health clinics, federally qualified health centers (FQHC’s), and the Indian Health Service facilities.

Furthermore, the shift to telehealth is also be reinforced by the recent recognition by the National Committee for Quality Assurance (NCQA) revision of HEDIS Quality Measures associated with Telehealth utilization during the pandemic. https://bhmpc.com/2016/10/hedis-success-value-based-care/

New NCQA HEDIS Telehealth Rules

NCQA  adjusted 40 Healthcare Effectiveness Data and Information Set (HEDIS) measures—in response to the surge in telehealth during the pandemic (see NCQA HEDIS Quality Measures Adjusted For Increased Telehealth Use In Pandemic Crisis). The adjustments, published July 1, will go into effect in 2020 and include eight measures related to behavioral health—medication adherence, follow-up care after hospitalization or emergency department visits, and monitoring of co-occurring medical conditions in consumers with serious mental illness. For each measure, the updated guidance specifies how telehealth visits can be used and what will be included and excluded in the measure’s denominator and numerator. Most importantly, NCQA removed restrictions on video visits and now recognizes a video visit as the same as an in-person visit. Eight of the adjustments affect behavioral health measures (NCQA.org/COVID):

  1. Antidepressant Medication Management
  2. Follow-up Care for Children Prescribed ADHD Medication
  3. Follow-up After Hospitalization for Mental Illness
  4. Follow-up After Emergency Department Visit for Mental Illness
  5. Diabetes Screening for People with Schizophrenia or Bipolar Disorder Who Are Using Antipsychotic Medication
  6. Cardiovascular Monitoring for People with Cardiovascular Disease and Schizophrenia
  7. Diabetes Monitoring for People with Diabetes and Schizophrenia
  8. Adherence to Antipsychotic Medications for Individuals with Schizophrenia

The implication of the of the updated HEDIS measures is that telehealth coverage will carry forward to the post-crisis future. As noted by the NCQA, they cannot drive quality improvement “if their measures don’t take into account what has quickly become the fastest-growing modality for providing health care services.” For behavioral health providers who see telehealth as significant portion of outpatient services this is good news. It will also allow for more flexibility in designing programming to address VBR processes, especially when access to in person care is a major obstacle. https://www.ncqa.org/covid/

Payers are aware of the increase in utilization of telehealth and will build VBR programs around the assumption that provider are utilizing telehealth as part of their service array. Providers with fully integrated telehealth programming will be at a distinct advantage when it comes to VBR readiness in the post crisis era.

The use of telehealth is just one tool in a provider’s service array. Some COVID-19 other trends provide insight into post pandemic behavioral health utilization needs and potential cost drivers that may stimulate VBR development.

Systemic Impact of COVID-19

One interesting trend is the current underutilization of behavioral health services.  Many behavioral health providers have experienced significant decreases in utilization and revenue streams due to COVID-19, in large part due to increased unemployment from COVID-19 and the transition time of shifting benefits from private to public payer sources.

Juxtaposed against underutilization is the increase level of mental health conditions associated with the pandemic. It is expected that there will increase in levels of trauma, depression, and anxiety occurring as a result of the pandemic. The April 2020 Johns Hopkins COVID-19 Civic Life and Public Health Survey Wave 1 demonstrated a 10% increase in adults reporting serious psychological distress over 2019 reports. These results showed an exacerbation for adults with household income of less than $35,000 per year, 19% of whom reported serious psychological distress. There is also expected to be an increase in suicide rates. Unemployment is highly correlated with deaths by suicide, which has led experts to speculate that suicides will increase in 2020/2021. One model, based upon previous suicide and unemployment data, projects 3,235 to 8,164 additional deaths by suicide in the United States in 2020/20212

For payers and providers these trends will, at some point, create an increased demand for behavioral health services. Behavioral health providers with services that align to these needs, like expertise in areas of trauma informed care and crisis intervention programming, will be positioned to better serve these population health needs and meet the needs of payers who are looking for better outcomes for their consumers.

A second area of concern for all providers is the increase in opioid utilization. Due to increased opioid usage during COVID, mortality rates are expected to climb due opioid-related deaths. The American Medical Association (AMA) recently released a statement of concern about reports of increased levels of addiction and opioid-related mortality.

Value-based programs around addiction treatment have been on the rise since before COVID, both Cigna and Anthem have developed VBR programs that look at claims data in their private and public plan, tied that data consumer satisfaction surveys and outcomes. (See OPEN MINDS Addiction by the Numbers.) With the rise in opioid utilization it is reasonable to expect continued development of this treatment programming.

A Final Thought on Integrations

What is also interesting about VBR moving forward is the focus on screening, prevention, and integration of physical health care and behavioral health. Many states and national measures have incentivized screening for depression or substance abuse in primary care settings. And many plans are incentivizing referrals to co-located services and warm hand-offs where co-located services are not available. For forward-thinking behavioral health providers, the need for strong relationships with physical health care providers will present another opportunity for expanding their footprint and enhancing their revenue cycle through VBR arrangements. (See How VBR Prioritizes Primary Care as the Center of Integration.)

 

Learn more about Value Based Reimbursement with these resources from the VBCforBH.com Library.

  1. There Is No “Plan B” Alternative to Value Creating A Value-Focused Competitive Strategy in A Changing Market
  2. How to Develop Alternative Payment Models: A Guide to Building Effective Bundled Payment Models
  3. Care Delivery in A Value-Based Era – Evidence-Based, Practice-Based, Standardized & Measurement-Based
  4. Developing Case Rates? Better Find Your ‘Single Source of Truth’
  5. Adjust Your Strategic Sails!
  6. When the Competition Succeeds at Pay-For-Performance, What Will You Do?
  7. Options for Alternative Payment Models for Behavioral Health
  8. Using Your Performance Metrics to Build A Value Proposition for Health Plans

CMS Value-Based Care Opportunities In Medicaid

On September 15, 2020, the Centers for Medicare and Medicaid Services issued guidance to support state Medicaid Directors in moving towards value-based arrangements and alternative payment models. The guidance outlines lessons learned from early state and federal experiences in implementing value-based care reforms, and includes a number of examples of innovative payment models to help states achieve value-based payment.

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From Fee-For-Service To Episode-Based Payments: The Shift Continues

As the prolonged pandemic continues, every executive in every industry is asking the question, “what’s next?” The health care sector has been completely upended by the pandemic crisis. From our analysis, it appears that the “next normal” holds more focus on “whole person” health management models, “hybrid” service programs with a mix of telehealth and face-to-face services, more leverage of technology, and more focus on value (see my recent presentation, Navigating From Challenge To Opportunity: The Best Of The 2020 OPEN MINDS Management Best Practices Institute).

That last piece—the focus on value—will be a move away from fee-for-service (FFS) reimbursement to some type of non-FFS alternative payment methodology (APM): bundled rates, case rates, episodic payments, and capitation reimbursement. I’m not certain what exactly that will look like and there will likely be significant variance by payer, consumer typology, and service models. Skeptics will say that we’ve been inching toward widespread acceptance of value-based reimbursement (VBR) for a decade or more with limited adoption. In 2018, 39% of payments were FFS, and another 25% were FFS with some link to quality and/or value, such as pay-for-reporting and pay-for-performance (see Entering The Next Phase Of Value-Based Payment Reform).

But that was before the pandemic. Moving to non-FFS APMs addresses multiple issues for payers and health plans. APMs support integrated care models. They allow health plans to address the growing prevalence of behavioral health conditions. They provide steady income for provider organizations. They address the likely budget compression that lies ahead by getting more alignment with provider organizations by increasing their downside financial risk—and shifting some administrative costs to them as well.

Immediately prior to the pandemic, the Centers for Medicare and Medicaid Services (CMS) implemented Patient Driven Groupings Model (PDGM) for home health agencies (HHAs) on January 1, 2020. PDGM was the most significant change to HHA reimbursement in 20 years, tying payment to an individual’s overall health condition rather than to therapy visits. Prior to implementation, there was widespread “the sky is falling” fear of the financial impact. The sky didn’t fall. There was the expected interruption in cash flow, but overall documentation, coding accuracy, and timeliness of claims submission have all improved, and reimbursement rates are better than projected. In some ways, PDGM helped HHAs prepare for the very sudden drop in utilization with the onset of COVID-19. That too, is turning around. Skilled nursing facilities (SNFs) had similar experiences with its new payment model, the Patient Driven Payment Model (PDPM). SNF utilization is declining, as expected, as the industry shifts to right person, right treatment, right setting with home being the preferred care delivery location.

And in anticipation of the “next normal,” on Tuesday, September 15, 2020, CMS released new guidance to help state Medicaid plans continue their shift towards VBR (see Value-Based Care State Medicaid Directors Letter). And, the CMS’ innovation center is about to roll out new risk-based model for those dually eligible for Medicare and Medicaid (see CMS Innovation Agency To Launch Risk-Based Model For Dual Eligibles). The model will allow Medicaid health plans to take on financial risk for a consumer’s FFS Medicare services.

In addition to CMS, health plans are also increasing their use of APMs. On September 14, 2020, Humana announced it was adding two more episode-based payment models—the Coronary Artery Bypass Grafting (CABG) model and the Total Shoulder Specialist Reward Program. These two episode-based models are in addition to Humana’s Maternity Episode-Based Model and Oncology Model of Care. Humana now offers a total of six specialty care payment models, with more than 2.6 million individual Medicare Advantage (MA) and commercial members receiving care through 1,000 value-based relationships across 43 states and Puerto Rico (see Humana Launches Two More Value-Based Programs for Specialty Care).

The implications are clear. More health and human service reimbursement is moving to non-fee-for-service payment models. And the provider organizations that are best prepared to accept value-based contracts with managed care plans are the organizations with a competitive edge. To get your team up to speed, these are some of the best OPEN MINDS resources on VBR models.

Assessments & Educational Programs

Managed Care Competencies Assessment

OPEN MINDS has developed a Managed Care Competencies Assessment, focused on the organizational and technical competencies needed to make the transition successful. This online self-assessment helps to evaluate and identify improvements in 12 domains.

Value-Based Readiness Assessment

To help provider organizations navigate the management challenges of transition to VBR, OPEN MINDS has developed a web-based readiness self-assessment for value-based reimbursement readiness, focused on scoring organizational and technical competencies needed for the transition. This tool was designed to evaluate and identify improvements in six domains.

Succeeding With Value-Based Reimbursement: An OPEN MINDS Executive Seminar On Organizational Competencies & Management Best Practices For Value-Based Contracting

The evolution of health and human services away from a focus on cost-based/volume-based reimbursement—and the growing expectations of consumers, caregivers, and health plans—are changing both the successful business model and the market role of many service provider organizations. This evolution is one that will (like in retail, banking, and publishing) create new winners.

How To Build Value-Based Payer Partnerships: Best Practices Marketing, Negotiating & Contracting With Health Plans

In this presentation at the 2020 OPEN MINDS Management Best Practices Institute, OPEN MINDS Senior Associate Paul Duck discussed how to develop relationships with the payers in your market, initiate strategic conversations, demonstrate value, and secure and optimize service agreements. He also discussed how to help payers meet their performance requirements, align programs and services with their goals, and provide data to show that how service lines can deliver quality outcomes with lower costs.

Strategic Implications Of VBR

VBR: Are You Walking In Your Customers Shoes?

Despite the significant upset to the health and human service system caused by the pandemic crisis, the move to value-based reimbursement (VBR) seems to be moving along. On June 3, The Centers for Medicare and Medicaid Services (CMS) announced adjustments to 16 value-based care (VBC) models, with goals of accounting for COVID-19-related changes in health care delivery (and the uptick in costs), as well as allowing more time for participating provider organizations to transition to VBC (see CMS Makes COVID-19-Related Changes To Value-Based Care Models). And, on June 19, CMS issued a proposed rule to grant state Medicaid programs and other payers flexibility to enter value-based payment (VBP) arrangements with drug manufacturers (see CMS Proposes Regulatory Changes To Promote Medicaid Value-Based Drug Purchasing).

Why Value-Based Purchasing For Medications Matters

On June 17, CMS issued a proposed rule to grant state Medicaid programs and other payers flexibility to enter value-based payment (VBP) arrangements with drug manufacturers. The rule’s definition of VBP is an arrangement intended to align payments to therapeutic or clinical value in a population, such as evidence-based measures. The cost should be linked to existing evidence of the effectiveness and/or outcomes-based measures. Or payment should be linked to the drug’s actual performance in a consumer or a population—such as reduction in medical expenses.

Collect The Data, Connect The Dots Value

One key tool for executive teams planning for recovery after this crisis period is having the metrics to make the right decisions. I tend to think of this data in three domains. There is financial data for short-term cash management strategy. There is strategic market information for planning long-term post-recovery strategy (this includes both external and internal data). And there is service performance data to optimize value.

Show Me The Value, Show Me The Money

This year, what has been top of mind for many executives attending the Institute is how to adapt your strategy in the current crisis—and how to use innovation to succeed in an altered health and human service landscape. But one question keeps coming up—where do “value” and “value-based” reimbursement fit in all of this?

The Blues Move To Value—Will Others Follow?

In the past two weeks, we’ve covered two initiatives sponsored by Blues plans to move behavioral health to some value-based arrangement. Blue Cross and Blue Shield of North Carolina launched a new value-based purchasing model, Blue Premier Behavioral Health, which allows behavioral health professionals who either meet or exceed quality benchmarks to earn higher reimbursement rates. In New York, BlueCross BlueShield of Western New York announced that it entered into a value-based reimbursement arrangement with Value Network.

Bundled Rates – Opioid Treatment & More

We’re seeing more use of episodic payments, case rates, and bundled rates. Our recent health plan survey found the number of health plans using bundled payments or case rates rose from 39% to 59% from 2017 to 2019 (see Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing and Delivery System and What Are The Health Plans Doing About VBR?). And, our recent survey of specialty provider organizations found that 24% of those organizations have some bundled rate contracts (see 2020 OPEN MINDS Performance Management Executive Survey: Where Are We On The Road To Value).

VBR – Where’s The Beef?

Greetings from Florida and the opening day of The 2020 OPEN MINDS Performance Management Institute. It’s a power-packed agenda full of sessions focused on optimizing performance and sustainability in the complex consumer market. I opened the institute with results from our 4th annual survey on the state of value-based reimbursement (VBR) in the market (see Where Are We On The Road To Value? The 2020 OPEN MINDS Performance Management Survey). The findings reminded me of the 1980s advertisement for Wendy’s with the woman, the insistent Clara Peller, asking, “Where’s The Beef?” (see Where’s The Beef) – and saying “I don’t think there is anybody back there…”

Access Matters: Payer Provider Partnerships & Shared Vision

This presentation was delivered on August 26, 2020 at The 2020 OPEN MINDS Management Best Practices Institute. Speakers discuss how the problem of access in behavioral health requires new partnerships, integrated care, collaboration, and a shared vision between payers and provider organizations; and how each payer is working to solve the access problem.

Getting Paid More For What You Do – Tactics To Increase Fees & Rates From Payers & Moving To New Reimbursement Models

OPEN MINDS hosted an executive web forum for executives of health and human service organizations. Led by OPEN MINDS Senior Associate Paul M. Duck, the forum took a deeper dive into different tactics and strategies provider organizations can leverage with payers to negotiate optimal fees and reimbursement rates.

VBR Updates

Alternative Payment Methods For Behavioral Health Associated With Lower Utilization & Spending

Alternative payment methods (APMs) for mental health and addiction disorder treatment are associated with lower behavioral health service utilization and lower spending, as well as improvements in process of care outcomes, according to a review of evaluations of 17 APM implementations. Of the 17 APM implementation evaluations, 11 assessed utilization changes and five found lower utilization. Eight evaluations assessed spending, and half found an association with lower spending. Fifteen evaluations assessed process of care, and 12 reported statistically significant improvements due to the APM.

CMS Unveils APM Strategy For Rural Health Care

On August 11, 2020, the Centers for Medicare & Medicaid Services (CMS) announced an alternative payment methodology (APM) for rural health care services. The APM is called the Community Health Access and Rural Transformation (CHART) Model. CHART has two value-based payment models: the Community Transformation model and the Accountable Care Organization (ACO) Transformation model.

Blue Cross Blue Shield of Massachusetts Launches New Value-Based Payment Model For Small Practices

On July 15, 2020, Blue Cross Blue Shield of Massachusetts (BCBSMA) announced plans to pilot a new value-based payment model for small practices that provides financial support through a global payment, upside risk incentives, and an immediate support payment.