Increasingly, community-based behavioral health organizations are participating in alternative payment models, including value-based purchasing (VBP). To prepare to participate in these models, organizations can take steps to assess their readiness in key areas including compliance. This roadmap provides a background on VBP, examples of existing behavioral health VBP models, key readiness domains for VBP adoption and compliance questions organizations should consider to thrive in a VBP environment.

VBP Background

In simple terms, VBP models align financial incentives with value rather than volume. Historically, health care providers were reimbursed mostly fee-for-service (FFS), which incentivizes providing a high volume of services regardless of the outcomes those services produce. A VBP model aligns financial incentives with outcomes to reward effective high quality care. The types of quality indicators used to link payments to performance in VBP models can include: improving health outcomes, utilizing evidence-based practices, managing costs and utilizing care coordination strategies. Value-based purchasing models come in different forms, but they share the common goal of achieving the Triple Aim: better individual health, better population health and lowered costs.

Value-based purchasing models are here to stay. Unlike some health reforms that have been at the forefront of heated political debate, VBP has bipartisan support. In 2015, the U.S. Department of Health and Human Services (HHS) set a goal to have 30 percent of Medicare payments tied to VBP by 2016 and 50 percent by 2018. The Centers for Medicare and Medicaid Services (CMS) announced that it had reached its 30 percent goal in January 2016. States are also setting VBP goals.

Pennsylvania’s Medicaid managed care program, HealthChoices, has set three-year goals for VBP contracting for its physical health managed care organizations. Additionally, Pennsylvania has established a statewide behavioral health pay-for-performance program. While behavioral health providers has been slower to adopt VBP than physical health providers, it is estimated that approximately 15 percent of behavioral health organizations are participating in VBP. This number is expected to continue to grow.

VBP Framework

Value-based purchasing models vary across the country. One framework, the Health Care Payment Learning and Action Network (LAN) alternative payment model, was adopted by the Department of Health and Human Services (HHS) and is used by CMS, states and other payors. This framework categorizes payment models into four groups ranging from a typical FFS model to full-risk population-based payments:

1. FFS payments not linked to quality
2. FFS payments linked to quality and value
3. Alternative payment models based on FFS
   • Shared savings/shared risk
   • Bundled or episode-based payments
4. Population-based payments

1.      FFS payments not linked to quality

The first category of the payment model is considered a typical FFS model with payment based on quantity rather than quality. This model does not include a linkage to outcomes. Services are reimbursed based on the number of units provided regardless of the quality they produce.

2.      FFS payments linked to quality and value

The second category modifies FFS reimbursement by tying it to performance. Providers participating in this model generally report on a set of quality indicators. Payment may be tied to reporting on the indicators (regardless of what the data show) or based on the quality of the services provided (pay-for-performance). Payment arrangements in this model may also include penalties for failing to meet certain performance standards.

3.      Alternative payment models based on FFS

Models in this category are reimbursed through FFS, but must meet quality metrics. Two examples of these models are shared savings/shared risk and bundled or episode-based payment models. In shared savings/shared risk models, providers must meet a total-cost-of-care target for some or all services provided to a defined group of patients. If costs are lower than the target, providers may keep some of the savings; however, if costs are higher than the target, providers could be at risk for the loss. Bundled or episode-based payments give providers a single payment for services to treat a specific condition or to provide a given treatment. An early example of a bundled payment was for coronary artery bypass graft (CABG) surgery. In 1991, CMS introduce a payment model demonstration for a bundled payment for CABG surgery that included all hospital and physician services (including any readmissions for 90 days). The demonstration lasted five years and resulted in savings to Medicare of approximately 10 percent.

4.      Population-based payments

Models in this category deliver coordinated care within a defined budget. Generally, plans or providers bear the financial risk for the treatment. Payments structures can include global or capitated per-member-per-month. Payments can cover a wide range of services and treatments including preventive care, primary care, other medical services and behavioral health.

As the LAN alternative payment model framework demonstrates, there is a continuum of payment models providers could participate in. These models range in flexibility of services covered under a payment, the level of risk assumed by providers and plans, as well as types of quality reporting and their impact on payment. LAN recommends a movement toward category 3 and 4 models for all patient populations.

Behavioral Health and VBP

State Medicaid systems are increasingly adopting VBP models that include behavioral health. These include incorporating integrated care and quality improvement projects into state Medicaid managed care arrangements, as well as implementing provider-based delivery system reforms. Examples include the use of Health Homes, Accountable Care Organizations (ACO) and Certified Community Behavioral Health Centers (CCBHC). All three aim to improve individual and population health outcomes by providing a range of comprehensive services and care coordination to patients. Fourteen states and the District of Columbia have implemented Health Home models specifically for individuals with serious mental illness. ACOs often utilize shared risk and shared savings mechanisms. Behavioral health participation in ACOs varies across states; however, several states require ACOs to provide behavioral health services and report on behavioral health quality outcomes. Recently, the Protecting Access to Medicare Act established the CCBHC demonstration. Eight states will pilot a payment and delivery system that provides comprehensive behavioral health services to individuals. CCBHCs will be financed through a prospective-payment system and states will have the option of including quality payments and payments linked to outcomes.

Compliance Issues within VBP

Organizations preparing to participate in VBP must ensure that they have the necessary policies, training, systems and processes in place to comply with state and federal regulations to reduce risk. A VBP environment requires providers to have capable information technology systems in place, communicate data in real time, effectively manage accounting and billing systems utilizing alternative payment models, effectively provide a range of services and manage care for patients, and provide care coordination and linkages to care and other services in an effective manner. In each of these areas there are compliance concerns.

Some key issues include:

• Complying with state and federal privacy and confidentiality regulation such as HIPAA and 42 Code of Federal Regulations (CFR) Part 2 in integrated settings where data is shared
• Establishing an interdisciplinary care team that is appropriately credentialed, licensed and operates within state scope of practice laws
• Complying with state and federal billing regulations, among many others

Within the five organizational readiness elements described below, key compliance questions are presented. These lists are non-exhaustive and should be a foundation for organizations to begin to address their organizational readiness and compliance needs within a VBP model.

Organizational Readiness for VBP

There are several steps organizations can take to begin preparing for VBP. In 2014, the National Council for Behavioral Health released guidance to community-based behavioral health organizations on becoming a Center of Excellence by focusing on five main elements or domains:

1. Easy access
2. World class customer service built on a culture of engagement and wellness
3. Comprehensive care
4. Excellent outcomes
5. Excellent value

These elements provide organizations a strong foundation to begin participating in VBP contracting.

1. Easy access

Organizations that are embarking on integrated care models and VBP must ensure patients have easy access to a range of services. To improve access to care, organizations should focus on improving policies, processes and structures to create efficient workflows. Organizations should strive to establish ways to improve same-day access to care as well as manage no-shows effectively. Organizations should also utilize tools and resources to eliminate redundancies in the collection of information from patients.

Some VBP models are specifically designed for individuals with certain diagnoses, for example, Medicaid Health Home models for individuals with serious mental illness. It is important that organizations have a patient population that is large enough for financially viability under a VBP model. Attending to specific challenges among populations to increase access is critical. This includes addressing barriers to access such as transportation, limited hours of operation, geographic location and language access challenges, among others.

Key compliance questions:

• Are outreach materials in multiple languages and accessible by diverse populations?
• Does the organization have a translation service that is compliant with confidentiality and privacy laws?
• Are formal referral agreements in place to receive and give referrals to partner organizations?
• Are patient materials written to be understood by individuals with low literacy rates?
• Are policies on co-payments, deductibles and waivers of co-payments in place?
• Are the organization’s operating hours compliant with VBP contractual agreements (i.e., offering 24/7 care per CCBHC guidance)?
• Does the organization have adequate staff to meet the needs of the patient population?

2. World class customer service built on a culture of engagement

In addition to removing barriers to accessing services, organizations should strive to create environments in which patients have established trust with their care teams and feel safe and welcomed. Improving the culture of an organization can lead to better retention in services and engagement in care. Investing in staff is critical to improving the organizational culture. Staff should fully understand the organization’s values and provide care and services in a manner in keeping with those values.

Key compliance questions:

• Have staff received all appropriate training regarding patient privacy and confidentiality?
• Are staff trainings documented?
• Do staff have access to employee information including the code of conduct?
• Do staff have easy access to the organization’s policies and procedures?
• Are there mechanisms in place to assure staff have appropriate licensure, credentialing and continuing education credits and opportunities?
• Is there a process in place to receive and remediate grievances from clients and staff?
• Are policies on standards and accountability (for example, incentives and disciplinary actions) in place?
• Are the organization’s physical properties compliant with the Americans with Disabilities Act (ADA) and other state and federal regulations?
• Are the organization’s physical properties designed in a way that is de-stigmatizing and welcoming to a diverse patient population?

3. Comprehensive care

Many VBP models provide incentives for or mandate the inclusion of a range of services. For example, CCBHCs must provide the following services directly to patients: crisis mental health services including 24-hour mobile crisis teams, emergency crisis intervention and crisis stabilization; screening assessment and diagnosis including risk management; patient-centered treatment planning; and outpatient mental health and substance use services. Furthermore, CCBHCs must provide the following services either directly or through a designated collaborating organization: primary care screening and monitoring; targeted case-management; psychiatric rehabilitation services; peer support, counseling services and family support services; services for veterans and members of the armed services; and connections with other providers and systems.

In addition to offering a range of services, organizations moving toward VBP should be equipped to offer effective care management. Care management staff work with each member of an interdisciplinary team as well as payors and community resources to ensure that an individual’s care plan is supported.

Key compliance questions:

• Does the care team comply with VBP contractual agreements or other guidance?
• Do staff have the appropriate licensure and credentialing to be compliant with state scope of practice laws?
• Is the organization’s conflict of interest policy up-to-date?
• Are policies and procedures related to Anti-Kickback and Stark laws up-to-date?
• Are staff authorized to bill Medicare or Medicaid for services (if applicable)?
• What mechanisms are in place to assure patient confidentiality and privacy within a care team model?
• Do client-informed consent agreements and other forms comply with state and federal regulations?
• Are the appropriate business associate agreements in place with external referring organizations to be compliant with HIPAA and other state and federal regulations?
• Are formal referral agreements established between the organization and community services?
• Is the organization aware of and compliant with billing restrictions such as prohibitions on same-day billing?

4. Excellent outcomes

Organizations participating in VBP must be able to demonstrate quality and improved outcomes. Organizations need to be equipped to report regularly on process and outcome measures. Measures should be selected by the organization that track quality across multiple domains. These can include prevention, access, assessment, treatment, continuity, coordination and safety. Organizations that participate in VBP generally choose performance measures in collaboration with the payor or performance measures might be prescribed by the payer. Organizations should implement systems to track real-time data for reporting purposes and for continuous quality improvement. To collect and report outcomes, organizations must ensure that they have the necessary information technology systems. Systems should be interoperable to communicate across networks.

Key compliance questions:

• Does the agency utilize electronic health records (EHR) that are compliant with state and federal regulations in place?
• Are systems in place that will ensure that charting, collecting and reporting on quality and clinical data are accurate and sufficient to justify payment?
• Is there a system in place to identify improper claims or data reporting?
• Does the agency have the appropriate business agreements in place to assure HIPAA compliance when sharing quality outcomes data?
• Does the organization have appropriate consents from patients (if needed) for sharing information?
• What mechanisms does the organization have in place to protect from cyberattacks or inadvertent disclosures of information?

5. Excellent value

The ability to demonstrate value is essential to an organization’s success in VBP. High-value services have three characteristics:

1. The services are effective in achieving individual outcomes or system-wide outcomes.
2. The services are more cost-effective than alternatives that may have been selected.
3. The services are “lean,” meaning waste (i.e., excess costs) has been removed through the process improvement activities.

To show value, providers need a firm understanding of their performance as well as their costs. This means providers must invest in the necessary information technology systems and billing systems to accurately track processes and measures and perform accounting functions in real-time. The Behavioral Health Centers of Excellence framework of performance measurement include the following actions and components:

• Identify eligible providers
• Select measures to report
• Determine the reporting vehicle
• Develop an internal reporting system
• Identify a standing group to analyze data
• Design and implement rapid cycle improvements

Key compliance questions:

• Does the organization have billing procedures that comply with state and federal regulations?
• What mechanisms are in place to monitor real-time financial data (net assets, days of cash on hand, etc.)?
• What mechanisms are in place to monitor allocation of organization’s financial assets (e.g., administrative costs or spending on administration)?

The transition to VBP financing models can be challenging for providers and organizations; however, there are many steps organizations can take to begin preparing for this transition long before formal VBP agreements are in place. Organizations should strive to adopt the five elements of the Center for Excellence to improve the care of its patients, enhance efficiencies in the delivery of care and lower organizational costs. Organizations and providers should also take steps to be fully informed on compliance issues and take steps to reduce risks. Behavioral Health Advisor will continue to provide organizations helpful information on regulations and laws that impact organizations.