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.
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.
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:
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.
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.
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.
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.
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.
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:
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.
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:
These elements provide organizations a strong foundation to begin participating in VBP contracting.
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:
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:
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:
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:
The ability to demonstrate value is essential to an organization’s success in VBP. High-value services have three characteristics:
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:
Key compliance questions:
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.