Alternative Payment Methods For Behavioral Health Associated With Lower Utilization

Alternative payment methods (APMs) for mental health and addiction disorder treatment are associated 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.

Among the five APM evaluations that assessed clinical outcomes, three reported improvements. Although data on clinical outcomes was scarce in the APM evaluations, pay-for-performance APMs were associated with improved behavioral health outcomes. APMs with shared savings were not.

The 17 APMs spanned three broad types: fee-for-service (FFS) with links to quality and value, APMs built on FFS architecture, and population-based payments. Within each broad type, the implementations could take different approaches and serve different populations. Nine targeted people with addiction disorder, four targeted people with mental health disorders, and the remaining four targeted both mental health and addiction disorder. Eleven of the APM implementations specifically focused on adults, and two specifically targeted children and adolescents.

17 Alternative Payment Methods Focused On Behavioral Health

Implementation Type Population

Outcomes Evaluated

FFS With Link To Quality & Value

Sustaining Healthcare Across Integrated Primary Care Efforts Program Foundational payments for infrastructure and operations Medicare, Medicaid, and individuals with dual eligibility; all ages Mental health and addiction treatment, processes of care and spending
Adolescent Community Reinforcement Approach Pay-for-performance Publicly funded SUD programs; child and adolescent Addiction treatment, processes of care, clinical outcomes, and spending
Spectrum Addiction Services Pay-for-performance Medicaid and uninsured; adult Addiction treatment, processes of care
Outpatient Psychosocial Counseling Treatment Center In Maryland Pay-for-performance Publicly funded addiction treatment programs; adult Addiction treatment, processes of care, clinical outcomes, and adverse selection
Washington State Mental Health Integration Program Pay-for-performance Medicaid; adult Mental health, processes of care, clinical outcomes, and adverse selection
Connecticut’s Behavioral Health Partnership Pay-for-performance Medicaid; child and adolescent Mental health and addiction treatment, process of care

APMs Built On FFS Architecture

Medicare Shared Savings Program Accountable Care Organizations APMs with shared savings Medicare; adult Mental health and addiction treatment; processes of care, clinical outcomes, spending, utilization, and adverse selection
Maine Medicaid Accountable Communities Initiative APMs with shared savings Medicaid; adult Mental health and addiction treatment; processes of care, spending, and utilization
Vermont Medicaid Shared Savings Program APMs with shared savings Medicaid; all ages Mental health and addiction treatment; processes of care, utilization, and adverse selection
Medicare Pioneer Accountable Care Organizations APMs with shared saving and downside risk Medicare; adult Mental health; processes of care, clinical outcomes, spending, utilization, and adverse selection
Minnesota Integrated Health Partnerships Program APMs with shared saving and downside risk Medicaid; all ages Mental health and addiction treatment; processes of care, spending, and utilization

Population-Based Payment

Delaware Division of Substance Abuse and Mental Health–Outpatient Services APM Condition-specific population-based payment Publicly funded addiction treatment programs; adult Addiction treatment; processes of care, utilization, and adverse selection
Delaware Division of Substance Abuse and Mental Health–Detoxification Care Transition APM Condition-specific population-based payment Publicly funded addiction treatment programs; adult Addiction treatment; utilization, and adverse selection
Maine Addiction Treatment System, phase 1 of performance-based contracting Condition-specific population-based payment Publicly funded addiction treatment programs; adult Addiction treatment; clinical outcomes, utilization, and adverse selection
Maine Addiction Treatment System, phase 2 of performance-based contracting Condition-specific population-based payment Publicly funded addiction treatment programs; adult Addiction treatment; process, utilization, and adverse selection
BCBSMA Alternative Quality Contract Comprehensive population-based payment Commercial; adult Mental health; process of care, spending, and utilization
Oregon Coordinated Care Organizations Comprehensive population-based payment Medicaid; adult Addiction treatment; process of care

These findings were reported in “Association of Alternative Payment and Delivery Models With Outcomes for Mental Health and Substance Use Disorders; A Systematic Review” by Andrew D. Carlo, M.D., MPH; Nicole M. Benson, M.D.; Frances Chu, MSN, MLIS; et al. The researchers analyzed 27 articles published from January 1, 1997 to May 17, 2019, on 17 APM implementations in behavioral health care. The goal was to review and summarize the published literature on APMs for people with behavioral health conditions to evaluate the impact of the APM on behavioral health outcomes or changes in service delivery. The articles each assessed at least one mental health or addiction treatment outcome in comparison to a control group. The researchers concluded that their review identified some evidence for APM effectiveness for behavioral health care; however, more research is needed to identify successful program components and associations with clinical outcomes.

The full text of “Association of Alternative Payment and Delivery Models With Outcomes for Mental Health and Substance Use Disorders; A Systematic Review” was published July 23, 2020 by JAMA Network Open. A free copy is available online at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2768565 (accessed August 17, 2020).

For more information, contact: Andrew D. Carlo, M.D., MPH, Assistant Professor, Department of Psychiatry and Behavioral Sciences, University of Washington School of Medicine, 446 East Ontario Street, #7-200, Chicago, Illinois 60611; Email: andrew.carlo@nm.org; Website: https://www.uwmedicine.org/school-of-medicine.

VBR: Are You Walking In Your Customer’s 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).

At the health plan level, most recent was the launch of Blue Cross and Blue Shield of North Carolina’s “Accelerate to Value” program to help primary care practices deal with COVID-19-related financial challenges (see Blue Cross Of North Carolina Launches Program To Pay Primary Care Practices To Switch To Value-Based Model). The program, which requires primary care practices to commit to transitioning to VBC by the end of 2020, provides financial stabilization payments based on the practice’s 2019 revenue.

Over the past few months, we’ve seen similar initiatives emerge from BlueCross BlueShield of Western New York (BCBSWNY) (see BlueCross BlueShield & Value Network Partner To Start Behavioral Health Value-Based Payment In Western New York), the Pennsylvania Clinical Network with Geisinger Health Plan (see PA Clinical Network & Geisinger Health Plan Announce Value-Based Contract Agreement), and Aetna (see Pennsylvania Clinical Network Signs Value-Based Contract With Aetna Medicare Advantage Plan).

What this means for provider organization recovery strategy depends on the organization’s current market positioning. The likely impact of the impending payer budget crunch (both government and employer) is more managed care and more value-based reimbursement arrangements. But that will vary by specialty, by consumer type, and by geography. Many provider organization executive teams are not waiting to see what comes their way. They are using changing reimbursement as a market positioning advantage for their post-recovery strategy.

For example, Heal announced the launch of a new “health assurance” offering called “Heal Pass”—a monthly subscription of $49 dollars where enrollees receive eight physician house calls, annual physicals, and next-day shipping on medications prescribed by a Heal clinical professional (see Heal Launches New ‘Health Assurance’ Offering). And, Talkspace has a number of subscription options that consist of unlimited texting, live sessions, or therapy options geared toward specific populations including couples and adolescents—ranging from a rate of $260 per month to $396 per month (see How Much Does Talkspace Cost?).

The question for executive teams is to evaluate whether a proposed non-fee-for-service reimbursement model would be better for market positioning—with more revenue and/or greater profitability. To evaluate that question, executive teams need an external perspective—good customer perspectives on what they need and how they prefer to pay for those services. But equally as important, executive teams need to understand the costs of their services, not only by unit of service but by type of consumer over time.

Ken Carr, Senior Associate, OPEN MINDS

And my colleague and OPEN MINDS Senior Associate Ken Carr believes that our traditional view of VBR—reduced costs, focus on value, and consumer outcomes—needs to take on an additional dimension with the advent of models like Heal and Talkspace. Their approach to value is to identify what is important to the consumer—immediate access, price transparency, and consistent payment, with good service and outcomes implied. For provider organization managers, fee-for-service reimbursement has driven business models—filling the schedules of clinical professionals, ensuring required levels of productivity, and shaping consumer access around available office hours. And consumers have no idea how much the service costs until they receive a statement in the mail a month later. In contrast, as Mr. Carr explained, “The new approach to value must focus on ease of access—house calls, phone calls, and virtual services.” The consumer (or the health plan) doesn’t need to worry about the cost—the subscription can be worked into a monthly spending budget like a gym fee or even a Netflix subscription.

Moving to using VBR as a proactive market strategy requires setting aside past structures, and creating entirely new approaches. But how do provider organization managers begin to deal with the costs of a consumer-driven access model and set prices for these new models? Identifying the unit cost of a service and the related utilization is a starting point. But building a sustainable model will also require data on how consumers access the service, how often they use the service, and the intensity of their needs. “Provider organizations must create a structure to manage a new payment method that will lower their financial risks while better meeting consumer needs. For that, having timely data, and adjusting resource capacity is critical,” said Mr. Carr.

Mr. Carr had some more pointers for provider organizations gearing up for the shift to value in his seminar, Succeeding With Value-Based Reimbursement: An OPEN MINDS Executive Seminar On Organizational Competencies & Management Best Practices For Value-Based Contracting, at The 2020 OPEN MINDS Strategy & Innovation Institute:

At the end of the day, VBR is here to stay. As Mr. Carr explained, “Now is the time to start the transition. VBR isn’t going to be set aside or delayed as a result of the pandemic. If anything, it’s going to be adopted as a strategy to keep costs down during a time where budgets are increasingly strained.”

For more on value-based care, check out these resources in The OPEN MINDS Industry Library:

And for even more, join us at The 2020 OPEN MINDS Management Best Practices Institute for the session, Navigating Health Plans: Keys To Developing Long Term Relationships, with OPEN MINDS Senior Associate Paul Duck and OPEN MINDS Vice President Richard Louis, III.

Making Your Clinical Programs VBR-Ready

The adoption of value-based reimbursement (VBR) has been inconsistent over the past few years (see VBR – Where’s The Beef? And Where Are We On The Road To Value? The 2020 OPEN MINDS Performance Management Survey). But the consensus is that the recession that is upon us and the likely reduced federal/state budgets will drive more VBR and more financial risk transfers from managed care organizations to provider organizations (see Show Me The Value, Show Me The Money).

Dominick DiSalvo, MA, LPC, Corporate Director of Clinical Services, KidsPeace
Dominick DiSalvo, MA, LPC, Corporate Director of Clinical Services, KidsPeace

Our team does a lot of organizational assessments of ‘readiness’ for VBR—and we’ve developed a self-assessment tool to do just that. The tool (see The OPEN MINDS Value-Based Reimbursement Readiness Assessment) has several key domains including provider network management; consumer access and service engagement; financial management; leadership and governance; technology and reporting; and clinical management and performance optimization. But, readiness assessments tend to focus on the organizational management infrastructure. A big question for executive teams is whether clinical programs are ready for VBR. That was the focus of the session Creating & Managing The Clinical Models You Need For Value-Based Reimbursement, led by Dominick DiSalvo, MA, LPC, corporate director of clinical services at KidsPeace at The 2020 OPEN MINDS Strategy & Innovation Institute.

KidsPeace offers a full continuum of behavioral health care services for children and families, from serving youth in the foster care and child welfare system to providing residential treatment, accredited educational services, and a free standing psychiatric hospital. Headquartered in Pennsylvania, its services span 10 states and the District of Columbia. Between 2016 and 2017, the organization followed the state of Pennsylvania in its initial journey to VBR. Since then, KidsPeace has participated in performance-based contracting, including pay-for-performance, with payments linked to a specific set of benchmarked outcomes.

But success with VBR doesn’t come without its challenges—it requires a significant shift in both leadership mindset and organizational infrastructure. As Mr. DiSalvo discussed, “The most difficult task we have is to limit risk by finding the balance between person/family-centered care and structured programs that reduce variability in services and outcomes.” His advice? Focus on trauma-informed care; synthesize evidence-based clinical models; use data to drive clinical decisionmaking; and engage clinical professionals to engage consumers.

Focus on trauma-informed care—KidsPeace began the move to VBR by using the Trauma History Questionnaire (THQ), a 24-item self-report measure that examines an individual’s experience with possible traumatic events including crime, physical or sexual assault, and neglect. Mr. DiSalvo described this as a necessary first step in moving toward a value-based framework for care, because when trauma wasn’t factored in, the desired treatment outcomes were not being achieved. After it started to implement trauma-informed care, KidsPeace found that youth self-reported experiencing an average of 10 traumatic categories before entering the program. The new focus on trauma as an underlying cause required a considerable shift in how clinical professionals were supporting consumers—and how senior leaders were supporting clinical professionals. “This data really convinced our leadership team that we needed to have a complete change in focus—we needed to be family and youth driven, trauma-informed, and have data drive what is going on in our programs,” said Mr. DiSalvo. (For more on becoming trauma-informed, see Making Trauma-Informed Care A Scalable Reality and How ‘Trauma-Informed’ Is Your Organization?).

Synthesize evidence-based clinical models—After understanding the “value” of becoming trauma-informed to provide more effective treatment—and ultimately—more meaningful and measurable outcomes, KidsPeace completely restructured their clinical programming by synthesizing a core set of evidence-based practices within each program. The restructure allowed each individualized treatment plan to be guided by both the youth and their family—and driven by objective and relevant data—an essential part in defining “value” for each consumer. The organization adopted four clinical practice models—including trauma focused-cognitive behavioral therapy (with all clinical leadership becoming or in the process of becoming Nationally Certified Trauma Therapists); motivational interviewing (to increase motivation and engagement among youth); community living (to prepare adolescents for young adulthood and community inclusion); and individualized treatment planning. By using these four clinical models, the organization has the flexibility to provide individualized care as well as the consistency and structure to meet the needs of all youth and families that are served. (For more on evidence-based practices, see Care Delivery In A Value-Based Era – Evidence-Based, Practice-Based, Standardized & Measurement-Based and Behavioral Health Evidence-Based Practices As Population Health Management Tools).

Use data to drive clinical decisionmaking—Before they restructured clinical program models to focus on value, Mr. DiSalvo noted that KidsPeace had challenges with using data to drive treatment and decisionmaking processes. “When I had conversations with our foster care program in Indiana versus conversations with our residential program in Georgia, the way they captured data and assessed youth were very different.” To ensure consistency across all programs, no matter the location or service line, the organization moved to a corporate wide electronic health record and adopted the use of a data dashboard to visually track key metrics over time. Those metrics included discharge disposition and post-discharge follow up surveys, high risk behaviors (e.g. suicidal ideation), clinical treatment benchmarks, length of stay, and individualized score cards in graph format. The data is then broken down further by day, time of day, over time, and total score. “We’ve even gotten as granular as examining if there is a particular staff member that youth are struggling more with and if we need to provide more training.” The key quality indicators (in a simple, color-coded format) are reviewed quarterly with the senior leadership team to quickly identify any pain points and make changes to maximize program efficiency. Mr. DiSalvo explained, “Not only can we track youth individually but we are also able to track specific program progress from an aggregate level—and then make changes and help continuously improve that program.” (For more on using data to drive decisionmaking, see Don’t Underestimate The Culture Change In Becoming Data Drive and Proving Your Unique Value To Payers: Data Speaks Louder Than Words).

Engage clinical professionals to engage consumers—To truly drive optimal outcomes in value-based clinical programming, Mr. DiSalvo highlighted a final key component—engaging clinical professionals. “It’s impossible to succeed with risk-based payment models if staff aren’t engaged. If a child feels like a staff member is there simply to get a paycheck, they are not going to respond well.” Rather, a significant shift in mindset was necessary for many professionals to continuously find ways to improve the overall experience for youth, families, and staff. “Once we started to have the data inform practice, our clinicians started seeing clear, quantitative results. Once that happened, it was a ripple effect—our youth found more enjoyment in their experience. Ultimately, it’s the clinicians who then become the champions for change.” (For more on engagement, see Health Plans Invest In Consumer Engagement and Navigating The Performance Loop – Customer Service, Consumer Experience & Consumer Engagement).

Any significant transformation isn’t sustainable without embedding those changes within the organizational culture (see How Culture Makes Organizational Change Less Painful). Mr. DiSalvo discussed the importance of cultivating a cohesive culture to act as the foundation of any clinical program focused on providing value, “Our initiative at KidsPeace is to integrate all of our resources to improve safety, engagement, connection, clinical practice and outcomes for all staff, youth, and families but it doesn’t come naturally. It requires robust training and a strong understanding about what engagement actually looks like. Clinical professionals must move away from the mindset that ‘we are the ones who know best’ and understand that the family and youth are the experts. We are simply here to join them in their journey.”

My takeaway from the session is that it’s not enough to have your administrative and financial infrastructure “ready” for VBR. Making clinical programs VBR-ready is a critical aspect of strategy development for sustainability.

For more on finding and demonstrating your value, check out these resources in the OPEN MINDS Industry Library:

And for even more on best practices in establishing service standards and key performance measures, join us on October 8 at 1:00 pm EDT for the web briefing, Measuring & Improving Consumer Experience, Consumer Engagement & Consumer Performance – A Best Practice Approach, led by OPEN MINDS Executive Vice President Kimberly Bond. The web briefing is offered as part of The OPEN MINDS Executive Blueprint For Crisis Management: Building Organizational Sustainability & Success In A Disrupted Health & Human Service Market, a program designed to help executive teams prepare, respond, and navigate the disruption caused by a market in turbulence.

NCQA Adjusts HEDIS Quality Measures Due To COVID-19 Pandemic-Driven Telehealth Surge

On June 5, 2020, the National Committee for Quality Assurance (NCQA) announced adjustments to 40 Healthcare Effectiveness Data and Information Set (HEDIS) measures to support the use of telehealth during the coronavirus disease 2019 (COVID-19) pandemic and after. NCQA will apply the adjustment for measurement of health care quality starting in 2020. The adjustments align with guidance from the Centers for Medicare & Medicaid Services and other federal and state regulators.

NCQA is updating the measures in “HEDIS Volume 2 Technical Specifications,” which will be published on July 1, 2020. Telehealth revisions will be outlined in each measure specification’s “Summary of Changes” section. The guidance will specify how telehealth visits can be used, what will be included in the measure denominator and numerator, and what will be excluded. It will also specify what type of telehealth (e.g., synchronous telehealth visits, telephone visits or asynchronous e-visits or virtual check-ins) is permitted to meet the measure.

Eight of the adjustments affect behavioral health measures:

  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 remaining measures with new telehealth accommodations concern prevention and screening, respiratory care, cardiovascular care, diabetes care, musculoskeletal conditions, care coordination, access and availability of care, utilization, and risk-adjusted utilization. The accommodations also affect measures reported using electronic clinical data systems. Within these remaining measures, some also affect behavioral health services.

Prevention and Screening

  1. Weight Assessment and Counseling for Nutrition and Physical Activity for Children/Adolescents
  2. Breast Cancer Screening
  3. Colorectal Cancer Screening
  4. Care for Older Adults

Respiratory

  1. Use of Spirometry Testing in the Assessment and Diagnosis of COPD
  2. Asthma Medication Ratio

Cardiovascular Conditions

  1. Controlling High Blood Pressure
  2. Persistence of Beta-Blocker Treatment After a Heart Attack
  3. Statin Therapy for Patients with Cardiovascular Disease
  4. Cardiac Rehabilitation

Diabetes

  1. Comprehensive Diabetes Care
  2. Kidney Health Evaluation for Patients with Diabetes
  3. Statin Therapy for Patients with Diabetes

Musculoskeletal Conditions

  1. Disease-Modifying Anti-Rheumatic Drug Therapy for Rheumatoid Arthritis- Scheduled for Retirement
  2. Osteoporosis Management in Women Who Had a Fracture
  3. Osteoporosis Screening in Older Women

Care Coordination

  1. Transitions of Care
  2. Follow-up After Emergency Department Visit for People with Multiple High-Risk Chronic Conditions
  3. Access/Availability of Care

Access/Availability of Care

  1. Prenatal and Postpartum Care
  2. Use of First-Line Psychosocial Care for Children and Adolescents on Antipsychotics

Utilization

  1. Well-Child Visits in the First 30 Months of Life
  2. Child and Adolescent Well Care Visits
  3. Mental Health Utilization

Risk-Adjusted Utilization

  1. Plan All-Cause Readmissions
  2. Hospitalization Following Discharge from a Skilled Nursing Facility
  3. Acute Hospital Utilization
  4. Emergency Department Utilization
  5. Hospitalization for Potentially Preventable Complications

Measures Reported Using Electronic Clinical Data Systems

  1. Utilization of the PHQ-9 to Monitor Depression Symptoms for Adolescents and Adults
  2. Depression Screening and Follow-up for Adolescents and Adults
  3. Postpartum Depression Screening and Follow-up
  4. Prenatal Depression Screening and Follow-up
  5. Breast Cancer Screening
  6. Colorectal Cancer Screening
  7. Follow-up Care for Children Prescribed ADHD Medication

More information about the changes is posted at https://www.ncqa.org/covid/ (accessed June 12, 2020).

For more information, contact:

  • Andy Reynolds, Assistant Vice President, Marketing And Communications, National Committee for Quality Assurance, 1100 13th Street Northwest, 3rd Floor, Washington, District of Columbia 20005; 202-955-3518; Email: reynolds@ncqa.org; Website: https://www.ncqa.org/
  • Matt Brock, Communications Director, National Committee for Quality Assurance, 1100 13th Street Northwest, 3rd Floor, Washington, District of Columbia 20005; 202-955-1739; Fax: 202-955-3599; Email: brock@ncqa.org; Website: https://www.ncqa.org/

Think Like A Health Plan

Among the top 10 takeaways I shared from The 2020 OPEN MINDS Strategy & Innovation Institute last week (see The Recovery Formula: Strategy + Innovation + Preparing For (Some) Failure), a key one was “Provider organizations and payers CAN work together. Payers are looking for creative ways to meet consumer needs in times of crisis and beyond and welcome ideas and negotiation.”

This was reiterated in the Institute’s Open Forum On Health Plan Measures Of Treatment Efficacy, with Andy K. Kelly, director of provider value optimization at Optum Behavioral Health; Brian Smock, vice president of Magellan Health; Sharon Hicks, senior associate at OPEN MINDS and former chief information officer of Community Behavioral Health; and Joseph P. Naughton-Travers, senior associate at OPEN MINDS. The insights shared by the four panelists reveal what payers are looking for and how they are prepared to negotiate in three key areas—whole person care, outcomes data, and program innovation.

Payers Are Looking For Whole Person Care

Mr. Kelly explained that Optum’s models are centered around improving the delivery of person-centered care. Optum is focused on how to treat the whole person and how to engage and support individuals in the community after service delivery. How to accomplish this? The discussion that followed included two types of models. The first model is focused on co-location of services—behavioral health services in primary care organizations or primary care services in behavioral health organizations. Mr. Smock talked about the opportunity to leverage embedding primary care in specialty care for value-based purchasing—provider organizations can make the case by showing shared savings from treating chronic conditions on the behavioral health side. And Mr. Kelly emphasized that health plan managers appreciate the economies of scale, the efficiencies, and the better outcomes that can be achieved when the “primary care professional can walk down the hallway and talk to the psychiatrist.”

The second model of integrated care is through collaboration. Health plans want to see the full array of services covered under one agreement. But provider organizations don’t have to deliver the full array of services as long as they can work with others across the service delivery system to ensure and coordinate access to care for their consumers. This type of collaboration demands a technology infrastructure that allows for centralized care coordination—and interoperability with all collaborating service organizations. Mr. Smock pointed out that Magellan’s desired outcome with high-need, high-utilization consumers is to reduce inpatient readmissions—and if a collaborative model can get them closer to that outcome, it is welcomed. “We are open to negotiation with provider organizations if there is collaboration,” he said.

Evolving Performance Measures For Evolving Payer VBR Arrangements 

The discussion of models for delivering integrated services moved to the discussion of value-based reimbursement (VBR), incentives, and measures. Two emerging issues in VBR performance incentives were raised. The first was how to develop reimbursement arrangements that take into account the period of time required to realize “savings.” The second was the issue of social determinants and how to determine “performance.”

Ms. Hicks pointed out that for the move to managed long-term services and supports programs, for incentivizing consumer quality of life and increases in consumer functional abilities, the measurement period needs to be longer than a year. “You have to be able to look at long-term conditions over a number of years but our rating systems don’t typically allow that. I can find ways to keep a consumer out of the hospital for one year. But that does not mean I am actually addressing their service needs.”

Mr. Kelly admitted that a one-year construct is fairly arbitrary for consumers with chronic conditions. At Optum, he said, “We are assimilating experiences from our state-mandated health homes to build our own measures. We are taking pieces from several state plan amendments—about what worked and what didn’t—to create a 36-month program. Twelve months does not cut it for high-risk populations that need wraparound services. One-year results go away quickly. We are looking for year-to-year progression and attribution—and plan to create pilot programs that cover performance over a three-year period.”

Mr. Smock explained that Magellan is looking at longer-term results in their contracting for Assertive Community Treatment (ACT) teams. “It’s been iterative. Programs are not static. We look at gains and what didn’t pan out. We know consumers can make substantial gains and move to less-intensive services but it takes time. We take a longer-term view and look not only at ACT team costs, but also at costs for other levels of care such as medical and emergency department visits. The longer we go, the more robust the data gets to help us figure out how to modify the models in future.”

A question from one of the executive attendees, Chris Wolf, executive vice president at I Am Boundless, shifted the discussion to social determinants of health (SDOH). He asked how SDOH are being incorporated in VBR reimbursement and in performance measurement systems. Ms. Hicks said some payers are giving bonus payments if provider organizations submit descriptors of SDOH in claim forms—payers are collecting SDOH information as diagnoses. (For more on how this is happening in Medicare Advantage plans, see a recording of the Institute keynote address by Allison Rizer, MHP, MBA, former vice president of strategy and health policy of UnitedHealthcare (Emerging Models & New Benefits For Individuals Dually Eligible For Medicare & Medicaid).

Mr. Kelly admitted that health plans are struggling with how to measure SDOH consistently and what to do with the data. “Value-based purchasing programs are based on what we can pull from claims data but that’s a limited view. We don’t know what better looks like on our own. We need provider organizations to make the case to us for additional reimbursement for SDOH,” he said. On the flip side, he said that health plans need to make the claims data available to provider organizations in a more useful form, “Here’s what we’re seeing with your population, help us out. We have to help providers determine the programs they can offer to address SDOH.”

Payers Will Collaborate For The Right Innovation

Payers are looking for provider organizations to come to them with creative programs ideas, said Mr. Smock and Mr. Kelly. If the potential outcomes align with a health plan’s overall goals for treatment, and if the provider organizations are willing to be flexible, they will find a way to make it work. But what about the financial risk? Mr. Naughton-Travers said to the panel, “A provider organization with an innovative model has fears about the downside risk of a model with substantial financial risk. They may want to know if they can get a year of protection before they move to a significant risk-based model. They want to know if they have time to ramp up to collect more data and establish better outcomes.”

All three of the health plan executives said that, for the right program model and proposed reimbursement, they are willing to work with provider organizations on a graduated financial risk model. “Some of these programs do not yield financial savings on day one and you have to find ways to get there. It’s a transformational process,” said Mr. Smock. He explained how Magellan gave a certified community behavioral health center (CCBHC) in Texas a “foundational payment” to help them develop infrastructure, ramp up, get a new program started, and get some reporting in place. Magellan’s desired outcome in supporting the program—a one-stop shop to help consumers get the full array of Medicaid services under one roof—was to reduce inpatient readmissions. If the CCBHC could follow up with consumers within seven days of discharge from inpatient and reduce readmissions, they could earn a monthly bonus based on percentage of reduction.

The strategic takeaways for executives of provider organizations are simple—think like a health plan and understand their goals for consumer care, develop a solid financial model and expected performance estimates for any proposed program, and be willing to collaborate in getting that program launched. As Mr. Naughton-Travers summarized, “Payers are partnering with providers to come up with solutions for better outcomes, to control costs, and get the data to build the model.”

For more on both integrated care and performance measures, check out these resources in The OPEN MINDS Industry Library:

  1. Reducing The Cost Of Reporting 558 Unique Performance Measures
  2. Proving Your Unique Value To Payers: Data Speaks Louder Than Words
  3. Performance Management Is Never ‘Done’
  4. Are You Ready For Whole-Person Care? Know The Performance Measures That Matter
  5. Does Your Organization Stack Up On Key Performance Measures?
  6. Ten Integration Models Reshaping Specialty Service Delivery
  7. The Path From Behavioral Health Carve-Out To Integration
  8. Developing Strategies To Address Integration—The Key Is Market Math & Innovative Value Propositions
  9. Making The Many Models Of Integration Work
  10. Integration—Strategic Threat (& Opportunity) For Specialists

And for the deeper dive on health plan strategy and new program development, browse the recordings and slides from 35+ sessions at The 2020 OPEN MINDS Strategy & Innovation Institute at https://www.openminds.com/live/sessions/.

Budgeting For Technology To Support Value-Based Care

Technology expenditures for health and human service organizations used to be an afterthought. A few decades ago, the technology required was focused on relatively inexpensive administrative functions, but that has changed.

Technology is now strategic and mandatory – the ability to leverage technology is now essential to competitive advantage and strategic success.

And it’s expensive. Stats on implementing an electronic health record (EHR) range from $15,000 to $70,000 per provider. Budgeting for technology is no longer optional – and shouldn’t be done in isolation by tech staff.

Ray Wolfe, JD, OPEN MINDS senior associate, outlines best practices for budgeting. First, assess what technology functionality is mandatory for current operations and what investments are required for future strategy. “Whether we think we can afford it or not, whether we can manage it—technology, and especially an EHR—is a mandatory purchase. This is something we simply have to do,” he said.

EHRs enhance the clinical experience and improve back-end efficiencies, Mr. Wolfe said. For example, EHR dashboards allow teams to shift from an intuitive, creative approach to medicine “when we thought we knew best and everyone had their own approach,” to capturing relevant and meaningful data at each patient interaction. “We can assess whether what we’re doing is truly helpful and, if not, change it,” said Mr. Wolfe. “That’s impossible to do without a tech tool.”

And what you can’t assess, you can’t be reimbursed for by health plans when negotiating contracts.

Costs fall into two buckets: Upfront (the biggest investment), which includes training, equipment, and implementation; and ongoing costs that include license fees, technical support, hardware, staffing, and application specialists. And you need to show the rationale behind the expenditures –the return-on-investment, which can add 3% to 5% to the bottom line. An EHR is not an expense for its own sake, or for the sake of technology – it’s to help organizations improve both clinical care and financial results.

The key is to remember that with technology purchases, “You don’t get what you pay for; you only have the opportunity to get what you pay for,” which is why a strategic approach matters. It also begs the question, does your organization have the capital required to make this investment? Or, as Mr. Wolfe, asked, can you afford not to?

To answer that question, executives should review assets-to-debt and debt-to-equity ratios to ensure they don’t borrow more than they should to finance technology. Consider debt to equity (well-run organizations have a larger equity-to-debt share with a ratio of 1 or less) and compare assets to debt (you want to see a ratio of 2 to 1 or better).

And ask how effectively the organization covers the costs of liability. “You need a 2-to-1 ratio,” said Mr. Wolfe. If assets are higher than 2 and the assets-to-debt ratio is less than 1, you have assets you can use for an EHR system purchase, the costs of which can be spread out over several years.

When you consider the upfront cost of technology, you must find a way to manage it within these ratios. Most executives underestimate them, warned Mr. Wolfe. But don’t forget cost savings in this equation—from cloud storage to outsourcing tech staff, improved productivity and collecting 95% of what is billed.

Adding up cost savings associated with technology investments reinforces what a growing number of subject matter experts call a mandatory investment in EHRs. This way of thinking will ensure health and human service agencies survive an increasingly competitive market that requires sophisticated data collection and reporting.

A Beginners Guide To Value Based Reimbursement: Five Things You Should Know

  1. Behavioral Health Is In Transition From Volume Based Care To Value Based Care

Healthcare reimbursement models have shifted away from volume-based care, sometimes called fee-for-service, where a provider is paid a fee for each service rendered. The current trend is toward value-based care, defined as reimbursement that is directly linked to performance on cost, quality, and the patient’s experience of care.

This transition is already well established in physical health where, for instance Medicare has shifted almost 90% of payments for hospital visits into value-based models. While the numbers are not as robust in behavioral health, the percentage of value-based reimbursed care does continue to grow. Despite this growth, there are still many within the behavioral healthcare continuum that have not fully embraced the model. However, the transition is inevitable and one way to prepare is to understand the basic language and models of value- based care. Let’s start with terminology.

 

    1. Know Your VBR Payment Model Terminology

Know your reimbursement structures and the associated level of risk assumed by the provider organization, listed below in ascending order from low risk to high risk:

  • Performance-based Contracting-Contracts in which payment is linked to provider performance and require providers to undertake specific activities or meet certain benchmarks for services. These contracts may include incentives and penalties, caseloads and Pay for Performance.
  • Bundled & Episodic Rates-A single bulk payment for all services rendered to treat an individual for an identified condition during a specific time period. These payments also include case rates.
  • Shared Savings-Supplemental payments to providers if they successfully reduce health care spending for a defined patient population relative to a benchmark. The payment is a percentage of the net savings generated by the provider.
  • Shared Risk-An arrangement of shared financial responsibility between payer and provider that allows for cost control, efficiency of service use and quality. In this arrangement, both financial savings and losses are shared.
  • Capitation– A payment arrangement for health care service providers that pays a set amount for each enrolled person assigned to them, per time period, regardless of whether the person receives services during the period covered by the payment.
  • Capitation + Performance-based Contracting-This payment arrangement adds performance-based contracting as a supplemental incentive to a capitation contract.

 

  1. Develop an Incremental Plan For Risk With Payers

As noted above, the type of payment arrangement you choose will assume a certain level of financial risk for the provider. That level of assumed risk can be small, medium, or high as illustrated below. The upside of assuming risk is a higher payout for the provider. Of course, the downside is the potential to lose money.

  1. Assess Your Organization Readiness

Carefully assess your organization and determine the gaps in value-based care. OPEN MINDS has developed an online readiness assessment tool, sponsored by Carelogic. This tool offers you recommendations in your planning process in the following domains:

  • Provider Network Management – Strategies to enhance provider networks
  • Clinical Management & Clinical Performance Optimization – Data analyzed to drive clinical decision making
  • Consumer Access, Service Engagement – Processes to empower consumers and create engagement
  • Financial Management – Revenue cycle management and accounting procedures to support contracts
  • Technology & Reporting Infrastructure – Data leveraged to gain insight
  • Leadership & Governance – Alignment of strategy with infrastructure and resources

By Joining the Value Based Care for Behavioral Health online community, you have free access to the VBR Readiness Assessment. The assessment is available now at https://vbcforbh.com/vbr-assessment/

  1. Prepare for Challenges During Your Transition
  • Create a transition plan for your clinical and financial operations to support value-based care. Plan capital expenditures over time.
  • Identify patient experience and clinical outcome indicators that align with the expectations of your payers.
  • Establish evidence-based care, aligned with workflows, data entry and outcome reporting.
  • Adopt interoperable electronic health record systems and effective data analytics tools.
  • Eliminate waste, streamline workflows, rightsize staff, and align supplier contracts to reduce costs.

Even if Value Based Reimbursement (VBR) is not immediately imminent in your region, it is on the horizon. Prepare now by measuring and improving patient experience and patient outcomes. Begin to demonstrate improvement in the quality and efficiency of care that your organization provides. Your pathway to value-based care will improve the health and satisfaction of your consumers and the financial effectiveness to your organization.

The Evolution of Financial Management to Support Value Based Care, an Interview with George Braunstein, FACHE

George Braunstein, FACHE has 40 years of experience in the health and human service industry, leading both private and public organizations – in institutional and ambulatory settings. He has worked as Executive Director of the Fairfax-Falls Church Community Services Board (CSB) in Fairfax, Virginia and also was the Executive Director of the Chesterfield County Community Services Board. Mr. Braunstein also served as the Executive Director of Behavioral Health for Aurora Health Care in Milwaukee – the largest integrated health care system in Wisconsin with 13 hospitals, 20,000 employees and $1.5 billion in annual revenues.

Ahead of His Time

Starting with in the early 1990s, before NCQA and EHRs were well developed to support Value Based Reimbursement (VBR), George Braunstein was directing an HMO in Milwaukee overseeing behavioral health care. As was the trend at that time for HMOs, cost savings were based on limiting all services across the board. Said Braunstein, “We were struggling with a policy which was a denial of care to attempt to make the bottom line look better.” Despite the reduced services, overall costs were not necessarily declining. When Mr. Braunstein looked at this trend, he had a different idea. Using only simple algorithms and rudimentary financial data, Mr. Braunstein and a nationally based work group quickly realized that there was a “missing piece”, which he described as “how do we create value out of behavioral health”.

The solution was to set up a “single integrated model’ where behavioral health providers were embedded in the primary healthcare system. And instead of strict limits on services, George and his team looked for the most cost-effective ways to reach desired results. One relatively simple strategy was to not limit outpatient behavioral health therapy which had the direct effect of reducing expensive inpatient readmission rates. Mr. Braunstein and his team closely monitored both costs and outcomes and developed a 10 percent withhold reimbursement to incentivize the staff to achieve desired clinical outcomes. As noted by Braunstein, he saw “the need for some kind of continuous quality improvement tool.” The program succeeded. In its first year, Mr. Braunstein noted a two percent pay out and seven percent payout in the second year.

Lessons Learned

This early success laid the groundwork for more sophisticated VBR processes that Mr. Braunstein would later develop in his career. For instance, the implementation of higher financial risk accountable care organizations and the implementation of case rates and bundled rates, to name a few. While these VBR models became more sophisticated, the underlying principles that needed to be in place for VBR to work remain the same. Some of the lessons learned include:

  • Understand your baseline data, both clinical and financial, and make that data available at the “point of impact.” The front-line providers need to be in the loop.
  • Stay on top of the data. Organizations can have a great deal of data but without built-in processes for sharing and accountability, VBR will fail.
  • Be patient. Most behavioral healthcare providers are “mission driven” and may not see the ‘value’ in VBR. Mr. Braunstein noted that although changing organizational culture can take years, continuously providing clinical and financial updates on improvement to providers will help them develop a more “entrepreneurial approach” to their practices too.

When asked what he considered to be the largest barrier to creating a Value Based culture, Mr. Braunstein noted that an overly controlling corporate environment is often hard to overcome. As noted, the transition to VBR seldom occurs overnight and there can be failures. He recommends that you carefully work with your board to ensure that they are both mission-driven and entrepreneurial in their outlook. Finally, some bandwidth for program development and, occasionally, a failure is a necessity for overall success.

Technology and VBR

One of the biggest changes Mr. Braunstein has seen since the early days of Value Based Reimbursement is the development of Electronic Health Records. He noted, “the data can be organized, both performance and financial, to adapt and improve”, more efficiently and allow you “to act more proactively”. Importantly, these systems allow for timely analysis of revenue cycles. As noted by Mr. Braunstein, with ever shrinking budgets in behavioral healthcare, the ability to identify and contain costs is the best way to maximize revenue.

Ten Steps to Align Your Financial Management Systems with VBR

Value-Based Reimbursement (VBR) is an opportunity for payers and providers to establish and build new relationships based on shared goals, outcomes and incentives. Ultimately, patient mental and physical health outcomes are improved. Financial leaders must reevaluate their strategies and system. They must consider the investment in the patient experience, as well as clinical outcomes. Both will likely be measured. Key steps to position the financial systems of the organization to support VBR are outlined.

Step 1. Discern the Goals of the New Paradigm and Investment Needs

A first step is to understand the investment of new service lines, support systems and their staffing implications, technologies and other expectations by payers to successfully meet value-based care expectations in your region. This may include chronic care management, improved care coordination, and integration of physical health. Accreditation could also be required, which is a significant expense for a smaller organization. The clinical and operations teams will specify the resources needed and the finance team will help develop pro-forma to accomplish clinical and operations objectives.

Step 2. Bridge the Gaps Between Finance, Operations and Clinical Leadership

Examine your leadership culture, skill sets and silos. Many behavioral health provider organizations are mission-driven and may be ‘allergic’ to a ‘bottom line’ business model. However, VBR is a more complex reimbursement process that marries quality outcomes with cost effectiveness and ultimately defines reimbursements.

Finance leaders need to understand the clinical outcome and patient experience requirements and how to resource staffing and technology to support them. They must be properly funded. Operations and Clinician Leaders need to learn to formulate and present the ROI on additional resource needs and clearly articulate those in financial terms.

The finance department will need the new skill of correlating service data to VBR contract terms and projecting short and long-term cash needs. Keep in mind the financial analysis is only as good as the encounter data feeding the system. In turn, quality improvement can only be realized when the feedback loops are accurate. The lack of good data will diminish outcomes and over time, drive down cash flow. The finance department can often identify red flags in billing practices. In many organizations this may be a new role for the finance department and necessitates a closer working relationship between finance and operational departments.

Step 3. Evaluate Baseline Costs to Deliver Services

In order to evaluate cost effectiveness, you need a baseline of current costs. The average cost per visit is a good start, and this can also be broken down by service line. Engage with your finance department and ensure you are accurately tracking direct costs like staffing costs, and administrative costs that include occupancy, technology, and infrastructure.

 

Step 4. Determine the Investments Required

Consider the goals and investment needs discerned from Step 1. The development of VBR processes can be expensive. For instance, implementing a new evidenced-based practice can include ongoing trainings, certifications, and continuing education expenses. More to the point, can you afford the VBR plan you are planning? Remember you may have many options such as incentive-based ‘withholds’ that lower your financial risk. Having a sound understanding of your financial bandwidth allows you to effectively negotiate with payers and set up programs that will meet the need of the individuals you serve. Also, carefully assess hidden costs such as workforce training to accommodate a new payment model.

Step 5. Consider Your Cost Strategy

A more in-depth breakdown of costs will help increase that value for the consumer and the organization alike. Key tools are cost-driver analysis, activity analysis, and performance analysis. By understanding these crucial concepts, the move to operational implementation, changes and improved outcomes become viable. A few concepts to consider:

  • Activity-based costing—Identify the key activities of a service. Key activities need to be broken down into definable tasks. Then we can identify the resources needed to complete the task. In turn, changes in productivity can be monitored and addressed on a systemic basis.
  • Target costing—With our initial analysis we can identify the cost of a service to hit a specific target market rate to realize the required profit margin. While this type of analysis is derived from manufacturing processes it can be thoughtfully implemented in the behavioral health setting where profit margins are often slim at best. In the end Target costing balances three areas – price (what the consumers will pay), quality (the acceptable level of quality expected), and functionality (the service components expected).
  • Value engineering—Define the functional outcome and identify ways to improve the process of reaching your goals. For instance, a new technology may be added to a service activity that reduces time spent traveling and associated costs like mileage and insurance. The role of the finance team in identifying cost drivers will be a key step in seeking cross-functional input from service line, IT and quality teams and transforming this information into a holistic view that incorporates the different perspectives on the path to better productivity.

Step 6. Take A Systematic Approach to Payer Contracting

It is a critical step to develop, hire or outsource the talent to negotiate payer contracts effectively. Practices should take small steps when entering into VBR. Gain experience with a few select outcome performance areas before entering into a full risk agreement. As you get experience with payer expectations and they with your practice’s cabilities, you can then broaden the contract risk. Identify the diagnoses or procedures you can most easily impact. Consider what matters to your payer by finding two to three diagnoses that comprise the most potential spend for them. It is ill advised to blindly enter into the contracting process without understanding your costs, reporting capabilities and current performance. As provider organization must objectively demonstrate both the improved results and ‘cost effectiveness’ of their approach, it will make it possible to negotiate to thrive, not survive. Also prepare the payer contracting function with national and regional benchmark data. Closely examine the underpinnings of benchmarks such as HEDIS measures. It will come in handy to level-set realistic expectations.

Step 7. Refine Your Revenue Cycle Management

A clear understanding of the hard and soft costs will help to determine the transaction price; an organization’s ability to identify the payment terms for the services provided. While the transaction price was is relatively clear in the fee for service system, the uncertainty of VBR needs heightened attention. Remember, many VBR reimbursements are not determined until the results are obtained. While an agile Electronic Health Record (EHR) can shorten this turn around, there can still be a lag in reimbursement timing. Having the economic stability to deal with these fluctuations is key to the organization.

Another key area of input by the finance department is timing of payment. If an outcome goal is reached over two fiscal financial periods, what is the contract language on how that incentive should be paid out. Again, the generally tight profit margins in behavioral health require a clear understanding of the financial terms of the VBR contract, including payment cycles.

Step 8. Evaluate Supplier Contracts

Consider your vendors and suppliers to be your partners in the delivery of value-based care. Under HIPAA rules, you are required to have business associate agreements with vendors who handle your organization’s Protected Health Information (PHI), which protects your organizational risk. Likewise, build in shared accountability into vendor agreements, whenever possible, to ensure timely metrics, adherence to system uptime slas, and data availability to obtain target reimbursements in providing cost-effective care. Perhaps you outsource your chronic care management program. You should have clear performance expectations in your contract to mirror payer performance. Insist upon performance guarantees and financial penalties if the vendor doesn’t perform to established expectations. Routine rebid of vendor relationships help organizations contain costs and maximize their quality.

Step 9. Bring Your Board “On Board”  

A financially savvy provider organization executive team understands the need to align strategies for organizational performance with their ability to manage financial risk. The board has a fiduciary duty to oversee the financial investment and return on value-based care. An important element of this process involves effective education of the board or bringing the ‘board on board’. This topic is often neglected in literature, yet some resources exist (see Get the Board of Directors on Board for ChangeGetting A Board On Board, and A Chaotic Environment Demands Fluid Strategic Planning).

Step 10. Leverage Technology for Efficient Cost Reporting

Many organizations are drawn to the belief that the VBR processes will be managed with EHR software. The good news is that EHRs have become increasingly more agile in the ability to output quality and financial data. The bad news is that there are pitfalls with over reliance on software. George Braunstein has been Executive Director of numerous behavioral health care provider organizations and has seen the evolution of ever more sophisticated software. He notes, “EHR software should be seen as support for VBR” and not a substitute for substantial planning and process implementation. George also noted that without consistent feedback and ongoing education at all organizational levels, there will be little functional change within your organization. (see the Financial Thought Leader article for the complete interview with Mr. Braunstein).

Final Thoughts: You’re Not Alone

Fluency in the language of finance is uncommon in the world of behavioral healthcare. Even seasoned administrators may struggle with the intricacies of alternative payment arrangements and shared risk. The evolution of VBR has made it a need to become familiar with financial processes, however, it does not mean you need to be an expert. Identifying and utilizing your available staff subject matter experts is always a good starting point. Once you have a sense of your organizational financial capabilities you can then move to process planning. Again, finding good resources is critical. For instance, an organizational preparation guide (see https://vbcforbh.com/does-your-strategy-prepare-you-for-success-in-a-value-based-market/) can demystify and give direction to successful VBR implementation. Finally, the use of an agile EHR can give you the systemic support throughout the VBR process.

Success With VBR: What Provider Organization Execs Should Consider

Making the new gainsharing, value-based partnerships between health plans and provider organizations work requires changes from both parties, and a clear understanding of what success requires. Yesterday, I touched on some suggestions for health plan executives to make that equation work (see Making VBR A Success: What Health Plans Can Do). This discussion, which echoes my presentation during the 2019 OPEN MINDS Executive Leadership Retreat (see The Complexity Challenge: How To Position Your Organization For Success In A New Era), was prompted by a new report from Harvard and UnitedHealthcare with a three-dimension framework for building these new payer/provider partnership relationships (see A 3D Model For Value-Based Care: The Next Frontier In Financial incentives And Relationship Support).

The framework is built on performance incentives for cost reduction, performance incentives for consumer outcomes improvement, and the provider infrastructure needed to make value-based reimbursement (VBR) work. For provider organization executives to succeed in these new relationships, that ‘provider infrastructure’ brings a few key requirements – shared data, increased care management capacity, collaborative and innovative program design, and organizational evolution and leadership.

In yesterday’s article, shared data was front and center along with providing care coordination tools for provider organization partners. But having the data and tools isn’t enough for success. Provider organizations need to develop care management skills to ensure access, improve consumer outcomes, and develop a value equation (the balance between performance improvement and cost reduction). While there is ongoing contention about the responsibility for care coordination, the more provider organizations are at financial risk, the more robust provider-led care coordination is essential.

Another issue is innovation. Most executives of provider organizations that have active risk-based (particularly case rates and sub-capitated arrangements) reimbursement arrangements cite the ability to do something new and creative to improve consumer outcomes as the greatest benefit of VBR. These new provider-payer organization relationships can facilitate innovative program development by providing financial upside through aligned goals (see How To Build Value-Based Payer Partnerships).

Finally, there is the issue of organizational change and the leadership required to implement it. Delivering on VBR requires an entirely different type of organization. Every detail of the day-to-day running of provider operations needs to be reconfigured to succeed with VBR, which is why a leadership commitment is so essential. My colleague, Richard Louis III, OPEN MINDS vice president, noted in a recent session that many health and human service organizations will need to add new team members – both clinical professionals and administrative staff. And, many times, new approaches to care are required along with an enhanced tech infrastructure to ensure that data can be tracked and used in actionable ways (see Using Data To Follow The Money & Stay True To The Mission). He advises executive teams to assess their capacity for success early on and ask about a range of organizational competencies – including intake and eligibility determination systems, care managers who can conduct concurrent reviews, and the ability to collect deductibles and copayments (see The OPEN MINDS Value-Based Reimbursement Readiness Assessment).

The move to value-based care is changing the relationship between health plans and provider organizations. Ultimately, the relationships that are most successful will have leaders (on both sides of the equation) who understand that the commodity-oriented network model of the past is (slowly) being replaced by mutually-dependent partnerships. To learn more about preparing for VBR, check out the following resources in the OPEN MINDS Circle Library:

  1. Making VBR A Success: What Health Plans Can Do
  2. 4 Lessons From ACOs For Managing Downside Financial RiskVBR @ Scale—Changes Required
  3. Preparing For The Very Glacial VBR Rollout In Some Markets
  4. Proving Your Unique Value To Payers: Data Speaks Louder Than Words
  5. VBR @ Scale—Changes Required
  6. The New Directions VBR Model
  7. CFOs On The VBR Path
  8. Crawl, Walk, Run To VBR
  9. The Pace Of VBR Is Picking Up
  10. What Are Health Plans Doing About VBR?

And join us February 12 for the session “How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans” during the 2020 OPEN MINDS Performance Management Institute.