By Monica E. Oss, Chief Executive Officer
We started the year with the release of new reports on the continued movement away from fee-for-service reimbursement to alternate, value-based reimbursement (VBR) models. Over half of health systems are planning to move to “payvider” market positioning in 2022 (see Nearly 60% Of Health Systems Aim To Become ‘Payviders’ In 2022). These ‘payvider plans’ include many arrangements – provider-sponsored health plans; direct contracting with health plans; joint ventures with health plans; and risk-based contracting. In addition, a new survey found 56% of health plans and pharmacy benefit managers (PBMs) report using outcome-based, non-fee-for-service provider reimbursement. However, when it comes to mental health reimbursement, only 22% reported having outcomes-based contract (OBC) (see 56% Of Payers Had Outcomes-Based Provider Reimbursement In Place As Of September 2021).
This disparity between the use of VBR for reimbursement for behavioral health services and other areas of health care is not new. Our survey, The 2021 OPEN MINDS Performance Management Executive Survey: Where Are We On The Road To Value, reported 53% of specialty provider organizations serving consumers with chronic and complex conditions are participating in VBR, compared to 74% of primary care organizations. And, 12% of specialty provider organizations reported 20% or more of their revenue was tied to VBR, compared to 32% of primary care organizations.
There are several reasons for this disparity. Many specialty provider organization executives report difficulties securing VBR contracts. Health plan executives express concerns about balancing choice and access with value-based contracts for behavioral health. In addition, when it comes to behavioral health reimbursement, health plans have issues with linking behavioral health provider compensation to total cost of care in systems with capitation of primary care services; with data sharing and systems interoperability; and with making necessary system changes.
Executive teams of specialty provider organizations need to get ahead of this curve and develop a strategy to “fit” in established value-based relationships. That will involve understanding the dominant health plans in their market areas – and how they prefer to contract for delivering services to consumers living with behavioral health and cognitive conditions. With that market information, executive teams can decide if new partnerships, a merger, or an investment in a different service delivery and management capacity is the best strategy.
Many executive teams are skeptical of participating in the new alternative payment methodologies because the options are limited. Fee-for-service rates for undifferentiated services have been flat for a number of years (on the decline, on an inflation-adjusted basis). To maintain margins, executive teams need to build a plan for creating “value-added services” that get above-market reimbursement. Or, the other options for margins is VBR.
In 2021, there were some great perspectives on future health plan strategy from our keynote speakers at our institutes and summits. To watch any of those presentations, check out:
- Caroline Carney, M.D., Chief Medical Officer, Magellan: A Time For Transformation: Reimagining The Partnership Approach For Behavioral Health
- Carol Matyas, Vice President Operations, Sunshine Health Plan: Innovative Programs That Demonstrate Positive Outcomes For The SMI Population & Thought Leader Discussion
- Nanette Perrin, Senior Director of Kansas Pathways, RCRS & Social Determinants of Health, Sunflower Health Plan, Stephanie Rasmussen, Vice President of Long Term Supports & Services, Sunflower Health Plan, and Stephanie Perry, Director of Long Term Care & Support Services, Iowa Total Care: Innovative Value-Based Contracting & Alternative Payment Models – The Health Plan Perspective
- Michelle Berthon, Behavioral Health Clinical Operations and Government Sector Product Development, Optum; Kimberly Macakiage, Medicaid Waiver Director, Integral Care; and Neal Tilghman, General Manager, Integrated Care, Netsmart: “P” Is For Payers, Priorities, Partnership … & Platforms
- Erin Boyd, Behavioral Network Strategy Director, Cigna: What Health Plans Want: Making It Easier For Consumers To Get Care
- Amy Kendall, Vice President of Complex Health Solutions at CareSource: What Provider Organizations Should Expect As Managed Care Moves To A Whole Person Focus
- Angela L. Perri, Chief Medicare Officer at UPMC Health Plan: Leading A Technology Transformation—Tech & Analytics To Improve The Consumer & Clinical Professional Experience
- Rafael Gonzalez-Amezcua, M.D., Chief Medical Officer, Aetna Better Health of California: A Payer’s Perspective On Crucial Integrated Health Components In The ‘Next Normal’
- DeAnna Minus-Vincent, Senior Vice President, Chief Social Integration & Health Equity Strategist at RWJBarnabas Health: Making Social Service Supports More Than A Referral
- Joseph Kvedar, M.D., Vice President of Connected Health, Health Partners Massachusetts: The Evolving Digital First Health Care Landscape For The ‘Next Normal’
- Dave Richard, North Carolina Department of Health and Human Services Medicaid Director: From Policy To Action: How One State Is Implementing & Activating Sweeping Medicaid Reform & The Implications For Provider Organizations
- Eric Hunter, President and Chief Executive Officer of CareOregon: CareOregon: A Case Study In Provider Network Stabilization & Patient Experience Improvement
- Victor Armstrong, the North Carolina Division Director of Mental Health, Developmental Disabilities & Substance Abuse Services: The I/DD Landscape: Looking Ahead To The ‘Next Normal’
- Tracy Sanders, M.Ed., Senior Director, Medicaid Complex Population Development, Optum Behavioral Health and Kelly Friedlander, Principal Consultant, Community Bridges Consulting Group: Peer Mentor Training For People With I/DD
For the VBR year in review, check out these 2021 resources in the OPEN MINDS Industry Library:
- Humana Medicare Advantage Members In Value-Based Arrangements Had Reduced Hospitalizations, More Preventive Care In 2020
- Anthem Selects Somatus To Deliver Personalized, Value-Based Kidney Care
- Medicare To Expand Home Health Value-Based Purchasing Model Nationwide In 2022
- CMS Strategy Targets Moving Medicaid & Medicare Consumers To Delivery Models Focused On Performance & Total Cost of Care
- CMS Designates Connecticut Health Plan’s Episodes-Of-Care Payment Model As One Of The First Commercial Plan Other Payer Advanced Alternative Payment Model
- Orange County, California Implementing Value-Based Contracting For Behavioral Health In 2022
- Fresenius & Cigna Expand Value-Based Kidney Care Partnership Through 2023
- CMS Proposes Expansion Of Home Health Value-Based Purchasing Program
- AmeriHealth Caritas & Howard University To Pilot Addiction Medical Home Alternative Payment Model
- 60 Provider Organizations Chosen By CMS For The New ‘Value In Opioid Use Disorder Treatment’ Demonstration
And for even more, join OPEN MINDS on February 10 for The 2022 OPEN MINDS Performance Management Institute, where OPEN MINDS Chief Marketing Officer, Timothy Snyder and OPEN MINDS Senior Associate, Casey Zanetti, will present the executive seminar Maximizing Revenue, Aligning Internal Growth Strategy & Succeeding In Value-Based Care.