A Game Plan for Building a Sustainable Certified Community Behavioral Health Clinic (CCBHC)

The goal of the Certified Community Behavioral Health Clinics (CCBHC) is to improve patient care across the healthcare spectrum, serving highly complex patients while avoiding the use of high-cost, low-return care models though community-based alternatives that improve care management. Based on the success of the first wave of CCHBC’s, Congress has acted five times to extend the demonstration project and has allocated $450 million (to date) for CCBHC expansion grants. The number of CCBHC’s have expanded from 66 in 2015, to 166 in 2020.  The Substance Abuse and Mental Health Services Administration (SAMHSA) has embraced the CCBHC concept of integrated care and behavioral health providers, who have long supported integrated care, are now looking to the CCBHC model as an economically viable way to support this model of care.

Indeed, CCBHC’s have an excellent opportunity to be leaders in the new integrated healthcare system if they can display the following specific values:

  1. Accessibility: All needed services – mental health, substance abuse treatment, and physical health care – are provided in-house or quickly, in proximity, within the community.
  2. Efficiency: Multiple services can be provided daily, with one patient visit instead of multiple visits.
  3. Connection: Electronic Health Records (EHR) are used across service lines to produce and track clinical and quality metrics.
  4. Accountability: A commitment to producing the array of quality metrics required for quarterly reporting, in nearly real time.
  5. Adaptability: A commitment to using bundled payment arrangements that help clinics adopt and utilize alternative payment models instead of fee-for-service.

To meet these core values, provider organizations, in many cases, have had to update their organization’s service lines, hire new staff, and implement or update Electronic Health Record systems (EHRs). These changes represent substantial economic and human resource expenses. While enhanced reimbursement and up-front grant dollars have helped to offset the expense, it still begs the question: “How does an organization sustain the model beyond the grant period?” (https://vbcforbh.com/are-you-really-ready-for-value-based-payment/)

Thinking Beyond Grant Funding

The recipients of the 2020 CCBHC Expansion Grant the funding stream are only guaranteed funding for two years. A few considerations are important. The first is that funding may not be renewed. Considering potential fiscal deficits expected from the COVID epidemic, there is a distinct possibility that additional funding will not be there. A second possibility is that state funding may supplant federal funding. As states grapple with the aftermath of a pandemic, fewer state dollars will be available.  Already, Nevada has made a 6% cut to Medicaid dollars (https://vbcforbh.com/nevada-moves-forward-with-6-medicaid-fee-for-service-rate-cut/).

SAMSHA was abundantly clear that grant participants should not expect more federal support. The newest round of grantees were given the task to: “Develop and implement plans for sustainability to ensure delivery of services once federal funding ends. Recipients should not anticipate the continued renewal of federal funding to support this effort. Federal funding is subject to funding availability and is also subject to a competitive grant award process. Recipients must develop and implement sustainability plans to ensure continued service once the grant ends. Recipients will be asked to report on sustainability plans” (https://www.samhsa.gov/sites/default/files/grants/pdf/fy-2020-ccbhc-foa.pdf).

The long-term sustainability of CCBHC programming requires a strategic response.

Community Behavioral Health Clinic (CCBHC) Sustainability and Value-Based Reimbursement

The CCBHC’s with an eye toward a future will be looking for alternative revenue streams immediately. The good news is that the CCBHC infrastructure of data driven health care focused on improved outcomes and diminished costs is an ideal match for payers who are looking for lower cost interventions and improved population health, and are using Value Based Reimbursement (VBR) to meet these goals.

The organizational readiness for CCBHC implementation has laid the groundwork for Value Based Programming.  The development of Evidenced Based Practices, addition of service lines, hiring new staff, affiliations with emergency care, adoption enhanced payment processes, and implementing and updating you Electronic Health Records (EHR) to capture clinical and quality data has positioned CCBHC to think about working with both private and public payers.

A Growing Value Based Culture

The OPEN MINDS 2019 State-By-State Update found that 28 of the 40 states with Medicaid managed care require health plans to implement alternative payment arrangements (APMs) with provider organizations. This is up from 22 states out of 39 states in 2017. And Value-Based processes are at the center of the trend. Organizational readiness for VBR follows a defined path:

(See OPEN MINDS Are You Really Ready for Value-Based Payment?)

The CCBHC is already this path, developing a VBR infrastructure. The next step is to define the unique value proposition of the CCBHC.

Defining the Unique Value Proposition to New Payors

A successful sustainability plan keeps the following goals in mind:

  • Have the Data: Understand internal unit costs and key performance indicators (KPI). Fortunately, the data needed to do this can be found in your CCBHC data. Use this to data to develop a picture of what the CCBHC does well, and where there are opportunities for improvement. Knowing strengths and possible risks will be important guides in rate negotiations.
  • Know the Customer: Research the payers in the market. For the health plans and accountable care organizations, know their structure and customers, their current service delivery network, executive teams, and their enrollment in your service areas. A CCBHC plan has flexibility to meet the changing needs of the marketplace. Alignment with those needs will make a CCBHC more attractive to payers that need services.  (See What Are Health Plans Actually Doing? and Trends in Behavioral Health: A Population Health Manager’s Reference Guide on the U.S. Behavioral Health Financing and Delivery System).
  • Prepare for the End-Game. Think about future meetings with health plan executives to discuss current contracts and proposed services as the CCBHC plan is developed. Be prepared with a proposal and assess readiness for newer payment models (Use the Value-Based Reimbursement Readiness Assessment).

Build Relationships Now

Avoid scrambling at the last moment for new funding streams. Remember, payers know that mental health and substance use disorders are the leading causes of disease burden in America.  This is further exacerbated by co-morbidities faced by people with mental health and substance use disorders who also suffer from cardiovascular disease, and diabetes, and other chronic diseases. The CCBHC is addressing this issue head on and that needs to be highlighted. To do this you can start by doing the following:

  • Build relationships with payers immediately: Reach as high into the payer organization as possible to develop those relationships. Then attempt to establish formal touchpoints. A scorecard with quarterly data will provide updates on key points that may be of value to the health plan. These interactions need to be succinct and to the point.
  • Develop a Pitch Deck: Prepare a brief (one or two slide) value story that describes how the CCBHC’s programs are differentiated in terms of quality and costs, and how they contribute to health care cost savings for the payer.
  • Leverage Informal Meetings: Attend conferences and industry meetings with target payers. These less formal venues allow for additional touchpoints to reiterate the value the CCBHC brings to the table, and the differentiating strengths.

Finally, connecting with health plans comes down to persistence.  Provider organizations need to find the right contact in network management, or whoever is leading their local plan and continue to reach out. In the end, relationship-building is still based on quality communication. The CCBHC model is the perfect framework to build relationships with payer organizations.

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

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

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

Shift to Telehealth

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

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

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

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

New NCQA HEDIS Telehealth Rules

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

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

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

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

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

Systemic Impact of COVID-19

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

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

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

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

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

A Final Thought on Integrations

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

 

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

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

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.

Technology Planning For Integrated Care & Value-Based Reimbursement

OPEN MINDS Senior Associate Ray Wolfe, J.D. and Chief Executive Officer Monica E. Oss delivered this executive web briefing on April 2nd, 2020.  In this session, we explored building a plan that helps executives make choices with confidence, manage them financially, and overcome VBR’s most challenging task: the development of an EHR system that can optimize results.

Download Presentation (PDF)

2020 OPEN MINDS Performance Management Executive Survey: Where Are We On The Road To Value

The results are in! Download the 2020 OPEN MINDS Performance Management Executive Survey eBook: Where Are We On The Road To Value.

The survey was presented at The 2020 OPEN MINDS Performance Management Institute by OPEN MINDS Chief Executive Officer, Monica E. Oss.

In its fourth year, the survey tracks adoption of value-based reimbursement by specialty provider organizations, including the dominant models and performance measures used. The survey will provide direction on how to make sure your organization keeps pace with the rest of the field.

Download Resource

Technology Planning For Integrated Care & Value-Based Reimbursement

Knowledge Partner Session at The 2020 OPEN MINDS Performance Management Institute

Providers are becoming more aware of and involved in the changing reimbursement landscape. While many can build the internal talent and resources needed to win in the VBR world, technology often seems a barrier that can’t be hurdled. The executives, who often have no technical background, are faced with expensive choices that will require focus and effort to implement. In this session we will explore questions that providers have about their technology decisions:
• How can they determine if they can afford these options?
• What are alternative options if they can’t afford technology at this time?
• Which options will bring the best return?
• Are there some that can be delayed?
• How can they allocate internal resources to tech projects without overwhelming their staff?

In this session we will explore building a plan that helps executives make choices with confidence, manage them financially, and overcoming VBR’s most challenging task, the development of an EHR systems that can optimize results.

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.

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.

Making VBR A Success: What Health Plans Can Do

Adoption of value-based reimbursement (VBR) models is glacial—slow to occur but changing the delivery system in its wake. It’s an issue we’ve written about before—4 Lessons From ACOs For Managing Downside Financial Risk, VBR @ Scale—Changes Required, and Preparing For The Very Glacial VBR Rollout In Some Markets and will continue to help health and human service organizations find their footing. In the field, what I find interesting is that two different conversations are happening: Health plan executives talk about the lack of readiness of provider organizations while managers of provider organizations talk about the difficulty in moving VBR proposals forward with health plan customers. How do we make these partnerships evolve more smoothly? I think observations and advice from Alyna T. Chien, M.D., MS, Harvard Medical School, and Professor Meredith B. Rosenthal, Harvard T.H. Chan School of Public Health in the report, A 3D Model For Value-Based Care: The Next Frontier In Financial incentives And Relationship Support) provide a great foundation for that discussion.

The authors present a three-part framework for considering the health plan shift to VBR – financial incentives for reduced spending, financial incentives for improving quality, and infrastructure support for their partner provider organizations. Their infrastructure support includes performance management information (both access to raw data and analyzed data), limitations on financial exposure from risk contracts, care coordination tools, technical assistance, and infrastructure payments.

What is interesting is that these were the very issues brought up by provider organization executives during my session at our 2019 OPEN MINDS Executive Leadership Retreat. Access to data and limitation on financial downside were high on the list.

To make this three-dimensional model for VBR a reality, there are some specific actions that managers in health plans, accountable care organizations, and state and county government can take. Two key issues stood out for me as potentially having the greatest impact: Increasing the amount of revenue tied to VBR and aligning performance measures across payer contracts.

One of the common concerns I hear from provider organization executives is that the upside in the value-based contracts is not enough to justify infrastructure expenses. This is a fiscal reality at two levels in any individual payer contract. Is the incremental increased revenue of quality-based performance bonuses or shared financial savings enough to justify new operating infrastructure? Second is the volume of consumers served great enough to warrant dedicated service capacity (it’s addressing that ‘one foot in two canoes’ issue that provider organization managers face).

In our recent survey of specialty provider organizations, we found that 16% had 20% or more of their revenue coming from VBR contracts (see Where Are We On The Road To Value?: The 2019 OPEN MINDS Performance Management Executive Survey). While these numbers represent growth, they still illustrate the challenge of scale.

OPEN MINDS Senior Associate Drew Digiovanni urges industry members to walk before they run with VBR contracts that include financial risk:

Establish a pathway for providers who are entering into VBR agreements for the first time. Assess their abilities and offer limited performance measures in the first year to help them ramp up for success, before entering into more robust risk contracts.

The other issue is one that comes up every year during the OPEN MINDS Performance Management Institute – can’t health plans get together and agree on the same performance measures? From the provider organization perspective, almost every VBR-based contract is a ‘one off’ with different measures that have different definitions.

Admittedly, the adoption of NCQA HEDIS and CMS STARS are starting to create some “standardization” of measures, but provider organization managers need very flexible (and very expensive to maintain) performance reporting tools that can be customized for each contract. Almost any initiative to standardize measures would be welcome on the service delivery side of this equation.

Moving forward, how do health plan executives make their provider partnerships a success, sooner rather than later? OPEN MINDS Senior Associate Paul M. Duck suggests that transparency and investments in technology need to be front and center in VBR discussions:

Provider and payer organizations benefit from technology implementation. If a tool like a telepsychiatry platform is implemented, the payer benefits by increasing access to care, which lowers costs and prevents emergency room admissions. Provider organizations benefit by delivering a new service, which opens the door for additional revenue. It expands access for a larger population and delivers services in places where a group might not have a physical presence, such as rural communities. In other words, it’s a win-win.

Tomorrow, we’ll look more specifically at the provider organization side of the VBR equation. But for now, for more on the path to VBR, check out:

  1. The OPEN MINDS Value-Based Reimbursement Readiness Assessment
  2. How To Build Value-Based Payer Partnerships
  3. Implementing Value-Based Care Through The Certified Community Behavioral Health Model
  4. Does Your Strategy Prepare You For Success In A Value-Based Market?
  5. Current Insights Into Population Health Management Value-Based Models In Managing High-Risk, High-Cost Patients
  6. Using Data To Follow The Money & Stay True To The Mission
  7. Structuring (& Budgeting For) Analytics
  8. Technology & Reporting Requirements For Population Health Management: Preparing For Value-Based Reimbursement
  9. Planning & Budgeting For Technology: How Much Is Enough?
  10. From Pain Point To Revenue

And for a deep dive, join us February 12 for the “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.