Coronavirus Could Speed Shift to Value-Based Behavioral Reimbursement

Study after study has shown that behavioral health treatment leads to better overall health outcomes and lower total care costs. But typical fee-for-service reimbursement models don’t account for services’ long-term impact. 

As such, most behavioral health providers grapple with meager reimbursement rates and slim margins. But the coronavirus could finally change that, mainstreaming value-based care once and for all.

“The march towards value-based purchasing has been predicated on this idea that fee-for-service reimbursement doesn’t work,” said Chuck Ingoglia, president and CEO of the National Council for Behavioral Health. “And if ever we had a situation that proved that, it was this last year.”

Ingoglia made those comments during a recent webinar hosted by the talent solutions company Relias, which provides online analytics, assessments and learning for about 10,000 health care providers nationwide.

During the virtual event, Ingoglia identified the weakness of fee-for-service reimbursement as one of the most important lessons learned amid the pandemic. In 2020, providers of all shapes and sizes were forced to cut back their census to prevent the spread of COVID-19, putting even more financial strain on already overburdened behavioral health providers. 

Ingoglia said he’s hopeful for a more “rational reimbursement approach” in the future, and he’s not the only one.

In fact, Scott Palmer — executive director of strategic initiatives at Hazelden Betty Ford Foundation — predicts the behavioral health care industry will see an uptick in value-based reimbursement models in the year ahead.

“The pursuit of better outcomes at less cost is driving much of these trends, along with the expectations of the modern, info-rich patient/consumer, who wants choices, price transparency, up-front pricing, quality assurances, on-demand services and omni-channel support,” Palmer recently told Behavioral Health Business.

The concept of value-based care isn’t new: The idea is to create more value for patients, rather than to incentivise lucrative processes and procedures.

Health care has been moving toward value-based reimbursement for years, but the paradigm shift has been slow. One reason for that is the risk associated with switching to value-based care.

Essentially, providers have to walk away from guaranteed payments and put their faith in their ability to generate long-term outcomes instead, which can be scary, according to Kevin Holst, Chief Commercial Officer at Groups Recover Together. 

“It’s a really difficult transition if your business is built around fee-for-service partnerships with payers,” Holst told BHB. “How do you stop doing the lucrative, definitive testing and … shift to a value-based model?” 

Groups Recover Together has been all in on value-based care since the company’s founding back in 2014. Based in Burlington, Massachusetts, the organization provides group-based medication-assisted treatment (MAT) for opioid use disorder (OUD). 

The MAT provider has more than 70 value-based contracts nationwide with individual health plans in the commercial, Medicaid and Medicare spaces. Additionally, it has more than 70 locations across over 10 states; however, currently, it’s providing all care virtually due to the coronavirus. 

Holst said Groups Recover Together went the value-based care route because it’s the only way that the company could afford to provide all the services shown to improve patient outcomes and lead to long-term recovery. 

“Medicaid fee schedules pay more for a 30-second laboratory test for toxicology than they do for a 60-minute session with a counselor or a 30-minute session with a doctor,” he said. “The unit economics are backwards.”

Instead of toxicology, Groups Recover Together focuses on providing a bundle of wraparound services in addition to MAT, which is delivered in group settings.

Patients meet with a counselor and their group once a week. Plus, they get care navigation and peer recovery services, which aren’t always economical for fee-for-service providers.

“We’re taking risks on our performance. We’re held accountable to the bundled rate that we’re paid in driving key metrics with our members,” Holst said. “It’s the only way to deploy and be able to invest in the things that we’ve proven to drive outcomes.”

While Holst declined to share the company’s financials, he did point to a number of outcome metrics to highlight the company’s success.

For example, 65% to 75% of Groups Recover Together members are still in treatment at month six, he said, versus 25% to 30% in traditional MAT models. Additionally, Holst said the company gets abstinence rates as high as 90% across its patient population, verses about 20% in traditional MAT. 

“We’re convinced, based on the data, that if you invest in solving for some of these significant barriers to long-term recovery, you’re going to make out from a financial perspective in your risk-based contracts,” he said. 

Holst said the coronavirus seems to have quickened health care’s shift toward value-based care, calling it “a silver lining” of the pandemic. But still, it’ll be a while before value-based care becomes the norm. 

“There is a ton of work that needs to be done in terms of the payer infrastructure to be able to support these — and the data” Holst said.