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

This presentation was delivered on February 10, 2021 at The 2021 OPEN MINDS Performance Management Institute. In the presentation, the speakers discussed how to confirm the foundational components of infrastructure needed for value-based reimbursement (VBR) are in place; how to move from service value concepts linked to VBR to discussions with payers and implementation of new VBR services; and how to implement approaches to realigning their service model to ensure success in a value-driven market.

The presentation speakers included:

  • Ken Carr, Senior Associate, OPEN MINDS
  • Cathy Gilbert, Senior Associate, OPEN MINDS

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Leading Through Change: An Interview With David Klements, CEO, Qualifacts + Credible Behavioral Health

This presentation was delivered on October 29, 2020 at The 2020 OPEN MINDS Executive Leadership Retreat. In the presentation, the speakers discussed leadership best practices during one of the most complicated business scenarios—mergers and acquisitions.

The presentation speakers included:

  • David Klements, President & Chief Executive Officer, Qualifacts + Credible
  • Monica E. Oss, Chief Executive Officer, OPEN MINDS

Becoming A CCBHC: What I Wish I Had Known From An Executive Perspective

This presentation was delivered on October 29, 2020 at The 2020 OPEN MINDS Executive Leadership Retreat. In the presentation, the speakers discussed the executive’s role in two major strategy elements when moving toward the Certified Community Behavioral Health Clinic (CCBHC) model, including how to support the team through great “change management” as the CCBHC brings with it new services, new programs, new credential types, and new business processes; and how to prepare the team for an environment of Continuous Quality Improvement (CQI).

The presentation speakers included:

  • Sarah Ackerman, MBA, Chief Executive Officer, Western Mental Health Center
  • Mary Givens, Product Manager of Federal Programs, Qualifacts

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The OPEN MINDS Health Plan Partnership Summit: A Guide To Developing & Negotiating Partnership Agreements With Health Plans

This presentation was delivered on October 29, 2020 at The 2020 OPEN MINDS Executive Leadership Retreat. In the presentation, the speakers discussed the development of new partnerships with health plans and new business models for sustainability, including how to understand the needs of payers, reframe the services of typical provider organizations into “solutions” for health plans, negotiate agreements with payers, and build mutually beneficial partnerships with payers in their market.

The presentation speakers included:

  • Paul M. Duck, Senior Associate, OPEN MINDS
  • Robert Bickford, MBA, Deputy Chief Financial Officer, Community Behavioral Health
  • Donald Savoie, President & Chief Executive Officer, Meridian Behavioral Healthcare, Inc.
  • Margaret Mays, Ph.D., National Vice President, Quality Improvement, Magellan Health
  • James R. Currey, MSIS, Sr. Director, Analytics, Magellan Healthcare Division
  • Angela Hagan, Ph.D., MPA, Associate Director, Population Health Insights, Bold Goal, Office of Health Affairs and Advocacy, Humana, Inc.
  • Melissa Larkin-Skinner, MA, MBA, LMHC, Chief Executive Officer, Centerstone Florida

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Getting The Most From Your EHR Selection & Implementation Process—Central Mental Health Center’s Executive Director Kathy Mosher, MS, MBA

This presentation was delivered on October 28, 2020 at The 2020 OPEN MINDS Executive Leadership Retreat. In the presentation, the speakers discussed how Central Mental Health Center approached their selection of an electronic health record (EHR) system to meet their current and future needs.

The presentation speakers included:

  • John F. Talbot, Ph.D., Vice President, Corporate Strategy, Jefferson Center for Mental Health, and Senior Associate, OPEN MINDS
  • Kathy Mosher, MS, MBA, Executive Director, Central Mental Health Center

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.

Medicare ACOs Generated Savings Of 1% To 2%

Medicare accountable care organizations (ACOs) have generated 1% to 2% reductions in Medicare program spending, according to a review of ACO evaluations between 2012 and 2016. The savings estimates were consistent for ACOs participating in the Medicare Shared Savings Program (MSSP) and for those participating in the Next Generation (NextGen) ACO model. The Medicare ACO savings stem from small reductions in hospital inpatient, hospital outpatient, and post-acute care use compared to what would have been spent if the ACO program did not exist.

The Medicare savings estimate is before shared savings payments to those ACOs that earned savings. For NextGen ACOs, after the shared savings payment, the NextGen ACOs generated net savings of 1% in the first year. The second-year evaluation compared the NextGen model against all other FFS Medicare, including other ACOs, but found no net savings.

The review was conducted by the Medicare Payment and Access Commission (MedPAC). MedPAC noted that although ACO savings are relatively small, they are greater than savings generated by most Medicare care coordination models. About 11.2 million Medicare beneficiaries are assigned to one of the 517 ACOs participating in 2020. They represent about 23% of all Medicare fee-for-service (FFS) Part A and Part B beneficiaries. The Centers for Medicare & Medicaid Services assigns FFS beneficiaries to an ACO if the beneficiary has a plurality of visits with clinical professionals who participate in the ACO. The majority of beneficiaries are assigned to an ACO participating in the Medicare Shared Savings Program (MSSP). During 2016, 500,000 beneficiaries were assigned to one of the 18 NextGen ACOs.

MedPAC also considered the findings of evaluations of a commercial ACO, the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC). The ACQ evaluations found material gross savings and modest net savings after accounting for incentive payments. The savings were primarily due to reduced laboratory testing, imaging, and emergency department visits. About 29% of AQC savings in the early years of the model were due to the use of lower cost provider organizations, not lower service volume. MedPAC determined that savings reported by commercial ACOs may be difficult to replicate in the Medicare ACO models in part because Medicare sets prices administratively. Additionally, the larger ACQ gross savings should be expected because the model is housed in a health maintenance organization, which can use prior authorizations to restrict service use and steer members to lower-priced provider organizations.

These findings were included in MedPAC’s “June 2020 Report To The Congress: Medicare & The Health Care Delivery System,” in the second chapter titled “Challenges In Maintaining And Increasing Savings From Accountable Care Organizations.” The Commission evaluated past ACO savings evaluations, examined strategies to increase savings, and recommended a technical change that will reduce the risk that program vulnerabilities might result in unwarranted shared savings payments to ACOs.

The technical change pertains to the risk that an ACO might disproportionately shift high-cost beneficiaries out of the ACO during the performance year, although the high-cost beneficiaries were included in the baseline year. An ACO that engaged in this behavior would show a spending decrease relative to the ACO benchmark. To counter this risk, MedPAC recommended that CMS determine an ACO’s historical baseline spending using the same national provider identifiers (NPIs) that are used to compute the ACO’s performance-year spending.

A link to the full text of “MedPAC June 2020 Report To The Congress: Medicare & The Health Care Delivery System” may be found in the OPEN MINDS Circle Library at The chapter, “Challenges In Maintaining And Increasing Savings From Accountable Care Organizations,” starts on PDF page 31.

OPEN MINDS last reported on this topic in the following articles:

For more information, contact: Press Office, The Medicare Payment Advisory Commission, 425 I Street NW, Suite 701, Washington, District of Columbia 20001; 202-220-3700; Website:

Nevada Cuts Medicaid Fee-For-Service Rate By 6%; Expects Annual Savings Of $53 Million

On August 15, 2020, the Nevada Medicaid program implemented a 6% rate cut to fee-for-service (FFS) rates. The Medicaid rate reduction is expected to save the state about $53 million over the coming fiscal year. The rate cut was directed by Assembly Bill 3 enacted by the Nevada Legislature during a Special Session to address a budget shortfall due to the coronavirus disease 2019 (COVID-19) pandemic and its subsequent economic impact. The state was facing a budget shortfall of nearly $1 billion. Assembly Bill 3 made a total of $130 million in cuts to the Medicaid program.

The state’s Medicaid managed care capitation rates will be amended by Nevada’s Actuary to include the impact of the 6% reduction to the FFS Fee Schedules, with an effective date of August 15, 2020. The total Medicaid caseload as of July 2020 is 716,981. About 27% (196,256 people) of these recipients are served through the fee-for-service program.

The 6% rate reduction affects behavioral health outpatient treatment, special clinic-addiction treatment agency model, psychologist, behavioral health rehabilitative treatment, applied behavior analysis, and inpatient psychiatric/substance abuse treatment services provided by a general acute hospital. However, rates will not be cut for the following behavioral health provider types and services:

  • Freestanding psychiatric hospital
  • Certified community behavioral health center
  • Residential treatment center
  • Federally Qualified Health Center

On August 14, 2020, the Nevada Department of Health and Human Services (DHHS) Division of Health Care Financing and Policy (DHCFP) notified provider organizations that it was also amending the application for the Home- and Community-Based (HCBS) Frail Elderly (FE) and Physical Disability (PD) Waiver to reflect the rate reduction. All FE and PD Waiver services will remain the same. The amendment must be submitted to the Center for Medicare and Medicaid Services (CMS) for approval. Comments will be accepted through September 14, 2020.

A link to the full text of “Nevada Medicaid Draft Home- and Community-Based Frail Elderly Waiver Amendment” may be found in the OPEN MINDS Circle Library at

A link to the full text of “Nevada Medicaid Draft Amendment For Home &Community Based Waiver For Persons With Physical Disabilities” may be found in the OPEN MINDS Circle Library at

A link to the full text of “Nevada Assembly Bill #3: An Act Relating To State  Financial Administration” may be found in the OPEN MINDS Circle Library at

For more information, contact:

  • Division of Health Care Financing and Policy, Nevada Department of Health and Human Services, 1100 East William Street, Suite 101, Carson City, Nevada 89701; 775-684-3676; Fax: 775-687-3893; Email:; Website:
  • Submit comments on the draft waiver amendment to: Nevada Division of Health Care Financing and Policy, ATTN: LTSS – FE/PD Waiver Amendment, 1050 E William Street, Suite 435, Carson City, Nevada 89701; Fax: 775-687-8724; Email:

Strategies For Making The ‘Return On Investment’ Case For Behavioral Health To Managed Care Organizations & Government Agencies

With the pandemic crisis, current provider organization challenges are unlike any in recent history. Strategic positioning is essential for future sustainability. And creating new services that target consumer needs, and demonstrative value to payers is the growth market of the future.

In this webinar presented to the members of the Coalition for Behavioral Health, OPEN MINDS Senior Associate Ken Carr discusses how you can effectively using ROI to make the case for a new behavioral health service. He shares best practices for:

  • Gaining a clear understanding of consumer and payer needs related to quality outcomes and high cost service
  • Identifying effective services to address those needs that can be easily measured by agreed upon outcomes
  • Creating a logical financial model that identifies key assumptions and resource drivers to project anticipated outcomes and costs
  • Presenting the ROI case that demonstrates the qualitative outcomes and quantitative cost savings

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