Caron Leverages Value-Based Care to Improve Access, Move Away from Private Pay Model

Caron Treatment Centers has spent much of its 60-plus-year lifespan making a name for itself as a private pay substance use disorder (SUD) treatment provider.

But in recent years, the not-for-profit broke into the insurance market in a big way: These days, about 80% of its patients are covered by commercial payers, according to Caron’s Executive Vice President and Chief Medical Officer Joseph Garbely. 

“We wanted to increase access to what we think is world-class SUD and co-occurring treatment here at Caron,” Garbely told BHB. “The best way to do that, we felt, … [is] value-based contracts with these insurance companies.”


While Caron has been tracking patient outcome data for years, it didn’t jump into the value-based insurance arena until more recently. It all started back in 2017, when the provider entered into a three-year pilot with Independence Blue Cross (IBC).

IBC agreed to pay Caron a single upfront amount to treat its members with SUD. In return, the provider could care for patients however it saw fit. The only catch: If a patient needed to be readmitted within three-months of being discharged, Caron would offer the follow up treatment for free.

“It was a safe bet, if you will, because we’ve been doing legitimate, verifiable outcome measurement on our patients for years and knew that we had something special here,” Garbely said.


The pilot went on to confirm that: In 2019, less than 6% of the 71 IBC beneficiaries treated by Caron under the agreement relapsed within 90 days. Comparatively, readmission rates for other providers in IBC’s network ranged from about 12% to 26%.

The strong results prompted IBC and Caron to continue the relationship post-pilot. Plus, it led to other opportunities, too.

“Now we’re full-on partners,” Garbely said. “And it’s ushered in many other partners, as it turns out.”

Today, Caron also has value-based agreements with Aetna and most of the Blues health plans nationwide, as well as several other smaller, more regional plans.

Generally, the arrangements work like this: Patients receive an independent evaluation to diagnose the level of care they need. If they’re right for Caron’s residential treatment, insurers refer them to the provider under the value-based arrangement.

From there, Caron is given a minimum of 28 days to treat the patient, during which time the insurers pretty much stay out of the way. That means Caron doesn’t have to get individual approval for each service it provides, allowing for a comprehensive approach to care.

“What that allows is our high-level, … experienced experts to evaluate the patient from many different angles,” Garbely said. “It starts to remove the obstacles. … We’re dealing with not just their substance use disorder, but also with their co-occurring disorders.”

That often includes treating other mental and physical health conditions, as well as addressing social issues. Additionally, it allows Caron to help guide care post-discharge, too.

“We have dedicated counselor-level staff that are … helping the patient transition to that next level of care, removing obstacles that might exist … [like] transportation … or if there’s a mixed up with their insurance,” Garbely said. “We act as … recovery support staff to make sure the next part of their journey is realized.”

Why value-based?

In deciding to work with insurers, Caron chose to go the value-based route for a couple of reasons.

In general, margins are much lower for behavioral health providers paid by insurers rather than by private pay clients. But within insurance, value-based reimbursement stands to be a lot more profitable for providers than fee-for-service payments, as long as outcomes are good.

On top of that, Garbely believes value-based care is the future of the behavioral health industry.

“This is a chronic brain disease, and it has to be treated as a chronic disease,” Garbely said. “It can’t be episodic care anymore. We can’t do that.”

He said it’s time for providers — especially SUD providers, whose collective reputation has been tarnished in recent years by bad actors — to take accountability for their outcomes, just like in physical health care.

“If you do knee replacements, and you have a high post-op infection rate, your reimbursement is going down. That’s just the way it is — and as it should,” Garbely said. “It’s high time that we, as an industry, hold ourselves accountable for how well we do through legitimate outcomes.”

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