Fee-for-service reimbursement models incentivize behavioral health providers to deliver more services – in some instances, even when medically unnecessary, some would point out.
Value-based care – paying for quality and outcomes instead of volume – has been heralded as the behavioral health industry’s path away from fee-for-service models.
Challenges, including tension between health plans and providers, have kept value-based care from becoming standard practice within the behavioral health industry. Shared-savings models could be the industry’s realistic first step away from fee-for-service arrangements.
“Even if providers and payers want to use the fee-for-service model as a foundation, there is an opportunity for providers and payers to partner, and look to shared savings as a potential [way] to begin to evolve and invest in the data systems and technology infrastructure that they’re going to need for more sophisticated models of payment,” Jennifer Riha, chief strategy officer of nonprofit behavioral health provider I Am Boundless, told Behavioral Health Business.
Riha mentioned per member per month arrangements and other capitation-based models as examples.
Worthington, Ohio-based Boundless offers whole-person health care to children, adults and families with autism spectrum disorder (ASD), and intellectual and developmental disabilities (IDD). Services include psychiatry, speech and occupational therapy, dentistry, applied behavior analysis (ABA), and primary care services.
Shared savings is a trailing payment model that requires a primary payment model to reimburse providers for services up front, Riha said. It is based on a patient’s total cost of care, not just costs associated with behavioral health.
After a period of time, providers can receive a share of the cost savings associated with long-term health outcomes.
Providers and payers can couple shared savings models with fee-for-service models, or with capitation payment models.
Implementing shared-savings models alongside fee-for-service models may not yield the same benefits as implementing them in addition to models like per member per month systems.
“Opportunities for more creativity and flexibility [regarding types of care and care delivery] are [how] we’re going to see shared savings be more impactful,” Riha said.
Shared-savings models are already in use among certain behavioral health specialties, including mental health and substance use disorder (SUD) treatment. ASD and IDD providers have yet to establish any major shared-savings models, Riha said, but Boundless was actively exploring a shared-savings model with a payer specifically for IDD and ASD individuals as of the time of publication.
The U.S. Centers for Medicare & Medicaid Services (CMS) is among the organizations already implementing shared-savings models in health care. CMS operates a voluntary shared-savings program that allows health care providers to join together and be held accountable for the quality, cost and experience of care of a specific Medicare fee-for-service beneficiary population.
“The Shared Savings Program is an important innovation for moving the [CMS] payment system away from volume and toward value and outcomes,” a CMS webpage about the program reads.
CMS claims that the model promotes accountability for a patient population and encourages investment in high-quality and efficient services, among other benefits.
Benefits
Shared-savings arrangements’ key benefit may be that they are easier to implement than full value-based care arrangements.
Value-based arrangements can incentivize efficient and effective care while increasing provider payments, Dr. Steven Pratt, senior medical director for the employer segment within Magellan Healthcare, told BHB.
The fragmented U.S. health care system presents significant challenges to implementing these models, however, as providers and payers must coordinate for value-based care to be effective.
Frisco, Texas-based Magellan Healthcare is a subsidiary of Magellan Health, a provider of behavioral health and other services.
Some behavioral health operators have already made the leap to value-based care arrangements. Almost 90% of opioid use disorder (OUD) treatment provider Groups Recovery Together’s new payer contracts include a value-based element, for example.
Providers that historically operated on fee-for-service arrangements are likely to struggle more when forging value-based arrangements with payers, according to Cooper Zelnick, Groups’ chief revenue officer.
“We’re lucky that we were born and grew up value-based,” Zelnick previously told BHB. “We never had perverse incentives to deliver services that don’t drive value. For providers who have been forced to exist off the fee schedule, I think that transitioning to value is tricky for many reasons.”
Less comprehensive risk-sharing models are easier to implement than full value-based care models, according to Pratt. These models could be a first step for providers that currently operate on fee-for-service models.
“Early in the process, it is possible to miscalculate and end up causing financial pain to either a payer or provider,” Pratt told BHB in an email. “Less comprehensive risk-sharing models minimize this risk while providing both payers and providers to gain experience with risk sharing. This experience will also allow payers and providers to assess the impact on patient care in order to maximize the benefits to patients.”
Risk-sharing models help payers achieve efficacy, quality and cost goals, Pratt said, and help providers increase reimbursement rates and offer incentives to improve quality.
Implementation and hazards
When entering into any kind of outcomes-based payment model, providers must take certain steps, Riha said.
The first of these steps is to establish baseline parameters, including specifying the target population and the current total cost of care. Then, providers and payers must agree on how to measure reductions in the total cost of care and improvements in outcomes and quality of life.
Payers must be able to monitor and review if providers are achieving the agreed-upon outcomes, Riha said, but providers also need to ensure they can continuously monitor their own progress.
“The worst thing a provider can do is to enter into a value-based, shared-savings or outcomes-based payment model, not know how they are doing in real-time and just essentially wait for the payer to tell them, ‘You achieved it,’ or, ‘You did not,”’ Riha said. “There’s no room to improve at that point.”
Real-time data collection requires an initial investment but allows providers to determine areas for improvement and differences between programs and locations before payers send their reports.
If outcomes do not improve as expected, providers and payers may both face certain risks, Riha said.
In some shared-savings models that operate along with an existing fee-for-service model, providers may have little at risk.
In more inventive models that require providers to design a new intervention or design a different method of evaluating care delivery, risk exists in that initial investments may be wasted if outcomes do not improve.
“There certainly are risks on both sides, but ultimately as we look to the workforce, we simply are not going to have the available individuals to do the one-to-one caregiving models that we’ve had for the past 40 years,” Riha said. “That really is what the fee-for-service models are built on. Investing in alternative models that reduce cost of care and improve or maintain quality of life and outcomes goals, it’s really not an if. It’s a must.”
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