Healthy Contracts Legislation is Essential!
A Healthy Contract Position Paper
This section is titled, “Examples of Problems with Mental Health Services in Oregon, Put Simply”.
Based on case examples, there is evidence that contracts, hidden information, and changing policies are used by Healthplans to control and exploit provider practices. These practices have become arbitrary, unfair, and have no accountable guardrails. One Healthplan refuses to acknowledge a contradictory statement regarding their authority to change reimbursements “at will” without notice. Another Healthplan forced provider practices to sign a new contract, leaving no time to assess the consequences, also declaring their intention to audit providers who see patients more than 26 times in a year. Another Healthplan intends to charge providers for the cost of audits if there is provider fault. These are just a few examples. Put simply, Healthplans are not aligned with each other, and they are not aligned with providers’ values, objectives, strategies and targets. Provider practices are not aligned with Healthplan values, objectives, and the chaotic forms of incentives, and controls used by Healthplans. Healthplan values and objective and controls are hidden. Provider practices receive no feedback that affords continuous improvement which is an essential control for Value-based contracts.
Healthplans contracts for mental and behavioral health services are not healthy!
Healthplans waste provider time and resources declaring there policies, expectations, and requirements have value. Healthplans do not have the same values that are shared among providers, the Oregon Health Authority, and the public. Healthplan policies restrict access, which is contrary to healthcare reform values, guidelines, and objectives. By restricting access to care, this benefits Healthplan profits by reducing expenditures for treatment.
When the Oregon Sustainable Healthcare Program approved a 3.49% annual increase in the cost of care per member per month, one Healthplan reduced reimbursements for mental and behavioral health services by 3.3% annually for at least 3 years. Another Healthplan abruptly instituted a policy to audit provider practices that see patients for more that 26 appointments in a year. They called this a review to improve quality and access, when in fact it is a claw back audit, and it not part of any continuous improvement program that improve quality, access and public health.
When one Healthplan reduces their rates, and another increases their rates, this affects quality and access. Healthplans reduce access, and their response is to focus on over-treatment to create access. Providers are blamed for undertreatment (in other words lack of access). Providers, are expected to accept referrals as if all patients and providers are the same. There are sub-populations with the general population. Treating mental and behavioral health problems require a relationship. Also, that the provider be qualified to work with that population.
Providers who are forced to carry a case load of 60 patients with a high case mix severity, and keep a waiting list, is going to have less favorable health and treatment outcomes. Provider practices who are trained to provider general counseling services cannot manage a practice with a high case-mix severity.
Based on 20 years of training mental health professionals, and on working with Healthplans since 2015, MRI concludes that Healthplan interactions with provider practices are intimidating, alienating, and covertly and overtly deceptive. MRI suggests that Healthplans’ behavioral health managers have little or no authority to intercede against Healthplans’ profit agendas. MRI concludes that Healthplans cannot be trusted to create and offer contracts to provider practices because of the incessant hidden focus on profit and the downstream harm to public
Unacceptable Contract Risk Profile
A thoughtful analysis of Healthplan policy and contracting behavior since 2015 provides supports an argument that Healthplans offer contracts that benefits the Healthplan with no risk to the Healthplan, but place the risks of failure which are the result of their policy requirements and limits on employers, the public, and providers’ practices. Figure 1 illustrates that there is probable to almost certain severe to catastrophic impact on public health and provider practices. The certainty of identified risks impacting generally accepted objectives are visualized by the vertical axis. The impact is further visualized as severe to catastrophic on the horizontal axis. Thus all the objectives are in the yellow, orange and red zones. The inherent risk of “Provider Under Treatment” is in the probable to almost certain zone. Without effectives Controls, the risk cannot be reduced to rare or insignificant. If the “Control” is to do nothing (i.e., there is no control) to prevent Under Treatment, the residual risk of doing nothing remain unacceptable.
When Healthplans do not collaborate with providers to co-create shared values and objectives, Healthplans create the risk of failure. Instead of owning their mistake, Healthplan make providers become the target of audits.
The risk impacting objectives in Figure 1 visualize the risk that this Heathplan created, which providers are expected to overcome. There is no risk to the Healthplan at this point because the contract and policy offered was already more likely than not going fail anyway.
The need for mental and behavioral health care is extensive in Oregon. Healthplans’ contracting values, objectives and controls are so archaic and ill-defined, that the risk of deleterious impacts on providers and public health requires a legislated intervention program.
Figure 1. Unacceptable Contract Risk Profile.
9 Examples of 43 Problems
Based on having reviewed contracts for more than a decade, engaged in several contract negotiations, and the recent audit of a Healthplan’s contract, Mentor Research Institute (MRI) concludes that Healthplan contracts in Oregon undermine public health needs to the benefit of Healthplans which profit by not providing care.
Some contracts, and one contract in particular, should not be signed, because there is a probable to almost certain moderate to catastrophic impact on provider practices and public health (see Figure 1). Lacking an alternative, and feeling commitment to their patients, unwitting providers have signed those contracts.
Following are 9 key examples of 43 problems which have probable to almost certain moderate to catastrophic impacts on access to care, the values of care, the objectives of care, and key performance indicators. All of these have adverse effects on access, employee productivity, public safety and health outcomes.
Healthplans refuse to have productive conversations with provider practices to create contracts that are fair, made in good faith, and transparent. Their contracts demonstrate a framework of risk management practices that are systematically to their benefit, to the detriment of public mental health and to providers’ practices. It’s about what they can get away with. The framework policy for claw backs is not transparent. Providers are supposed to remain ethical and “hold the line” but they don’t have the resources to adequately examine or challenge contracts.
Healthplans deny mental and behavioral health providers’ practices the use of Common Procedure Terminology (CPT) billing codes that would allow them to better measure services provided and to manage certain populations of patients which require additional resources such as screening, care coordination and advocacy. Instead, Healthplans force providers to use one psychotherapy treatment procedure code when they should be using three. Healthplans’ failure to allow the use of important CPT codes reduces Healthplan costs, but stops providers’ from providing services to children, adolescents, and families, as well as those with serious disorders. Providers’ opportunity cost of seeing those patients is high. The consequence: providers who have education loans, children in college, or are close to retirement chose to work with patients who do not require high levels of evaluation and care, coordination of care, consultation, progress and outcome measurement. Providers with the greatest skill and experience are often unwilling to work with high risk patient populations when the audit risk is high, the patient is in crisis, and reimbursement rates are not proportional to the work, the professional skill required or the liability. Not all patients are the same. Providers are more likely to be audited if the level of care requires more than one 52 minute a week.
Healthplans write contracts which show intent to audit providers’ practices against hidden frameworks and audit criteria. One contract asserts the Healthplan can charge provider practices both recovery of reimbursements (a “clawback”), plus the cost of their audit if they are found at fault. Yet, they do not define their audit “test script” or “fault” in a way that another auditor could conduct an audit and come to the same result. (Two auditors using what is called a “test script” would come to the same result if the contract and framework of expectations were fair.) The cost of defending yourself in such an audit could be as much as $350/hour for an attorney and $450/hour for a certified auditor to audit the Healthplan’s audit of a provider. Some contract asserts that the Healthplan has authority to make the final determination, not an independent auditor. An audited provider’s only alternative is to file a lawsuit and prove the contract is unenforceable and should be voided because it violates a fundamental principle of contract law. And some contracts require the provider to agree that they cannot recover attorney fees if they prevail . Provider practices unwittingly sign contracts that give ultimate power to Healthplans. Unhappy providers leave contracts, and avoid complex cases.
Healthplan reimbursement schedules discriminate against LPCs, LMFTs, LCSWs and psychologists with no evidence that reimbursement differentials are supported by values or objectives that demonstrate improved health outcomes. For example, the value of psychologists’ services is undefined by Healthplans, and shows no value proportional to the reimbursement difference for nearly all common billable services. Psychologists should be paid additionally for services they are uniquely qualified to provide. Discriminatory reimbursements perpetuate an idea of financial value with no correlation to measurable values. One Healthplan representative stated that the reason for the difference was that “patients think psychologists are doctors and the perception has marketing value”. Psychologists may have higher “face value” but lack evidence-based value for the majority of services they provide. If a Healthplan is paying a provider less, then the expectations should be less, and since those providers practices are deemed less competent, they should not be required to treat complex medical, behavior and psychological disorders. Yet Healthplans insist they are capable and can perform the same services as providers who are paid more.
Healthplans have clinically useless charting requirements that may require 20 to 40% of clinicians’ time, yet have no value except to defend the level of care to Healthplans. Healthplans, however, cannot demonstrate any value or defensible objective of those charts to patients, physicians or other healthcare providers. Charting requirements have become more complex and important to Healthplans than access, increasing quality or improved health outcomes. A survey of more than100 physicians revealed most physicians want no more than a short paragraph concerning shared patients who need medical attention. All this bother to create useless chart notes is ironic since demand for services is so high providers don’t want or need to see patients longer than necessary. And writing chart notes to fully protect a provider is impossible anyway! The level of detail Healthplans expect violates Federal minimum necessary regulations. That increases therapists’ liability for documenting sensitive, private and personal details which Healthplans don’t need to have.
Healthplans refuse to partner with provider practices that organize to improve quality and health outcomes at an appropriate cost. For example, when figure 1 was presented to the Healthplan, they indicated they did not want to discuss the findings. To reduce risk, and improve quality and outcomes, Healthplans would need to participate in creating shared values, shared objectives, and/or use transparent “controls”, “test scripts” and key performance indicators. That would allow providers to be successful, achieve higher quality and improve health outcomes. OHA defines value as evidence-based, patient-centered, and improved health at an appropriate cost. Healthplans operationalize “value” as reduced cost, contrary to Oregon Health Authority expectations and recommendations.
Healthplans profit by creating contracts and administrative burdens which effectively constrain access even for the most medically necessary care. Why constrain access? We believe Healthplans profit by not providing care, moving profits to other states, paying investors, and/or keeping retained earnings. The Center for Medicare and Medicaid (CMS) current guidance (1/01/2024) has replaced “medical necessity” criteria with “reasonable and necessary” yet Healthplans continue to use lack of progress rather than a reasonable expectation that the patient’s condition will deteriorate.
It is not necessary that a course of therapy have as its goal restoration of the patient to the level of functioning exhibited prior to the onset of the illness, although this may be appropriate for some patients. For many other psychiatric patients, particularly those with long-term, chronic conditions, control of symptoms and maintenance of a functional level to avoid further deterioration or hospitalization is an acceptable expectation of improvement. "Improvement" in this context is measured by comparing the effect of continuing treatment versus discontinuing it. Where there is a reasonable expectation that if treatment services were withdrawn the patient's condition would deteriorate, relapse further, or require hospitalization, this criterion would be met (CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 70.1). For more information see: https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=56937&ver=30&=
Healthplan contracts and interactions with provider practices cause provider defensiveness and distrust. Psychotherapy, counseling and intervention services are mentally, emotionally and physically exhausting, and providers must manage their case mix severity, otherwise they will become depressed, burned-out or develop symptoms of traumatic stress. Providers sign fewer contracts, public access to care diminishes. Patients are deflected from care when providers reduce their case loads to contracts that have only reasonable requirements, or they create long waiting lists, have only inconvenient appointment times for patients, call patients back reluctantly, or may not accept certain patients who are not referred by a physician, etc...
Healthplan contracts and interactions with provider practices are perilously close or cross the line legally. This includes ignoring parity laws, unlawful trade practices, deceptive trade practices, unconscionable tactics, and offering bad faith and unfair contracts of adhesion. Healthplan objectives are to restrict access and duration of care, not improve quality and outcomes at an appropriate cost. Providers lack the resources to confront these practices largely because their associations are not structured or funded to address create and managed contracting issues in Oregon
Petition for Change
This petition is necessary because of Healthplans’ unwillingness to act in good faith with fair dealing. When Healthplans are deliberately vague or withhold important information, and lead providers to underestimate the implications and risks of entering their contracts, the contracts are unconscionable.
Based on legal advice, such contracts are unenforceable, could be voided if there are material consequences, or could be boycotted for public health reasons. (Boycotts focused on money or intended to influence market share are subject to antitrust scrutiny. (Boycotts for the purpose of protecting the public are legitimate.)
Unfortunately, independent and group practice providers do not have the legal, business, or financial resources to evaluate, challenge or negotiate with bullies who have both power and money. Providers need the protections asked for in this petition. Providers, whether practicing as individuals or groups are unwittingly signing contracts they should not.
Healthplan contracts for mental and behavioral health services have inadequate guardrails and controls that would protect public health and provider practices. Healthplan policies and practices have the effect of restricting access to services and underming outcomes.
Mentor Research Institute is speaking with the Oregon House Interim Committee on Behavioral Health and Health and the House Judiciary Committee. Legislation to stop Healthplan bullies and toxic contracts has been drafted for a “Healthy Contracts Bill”.
This petition proposes a comprehensive solution to many widely reported complaints affecting access to care, public health and provider practices.
Please READ & SIGN the Healthy Contracts Petition
Share this link with colleagues, change requires action:
The petition relates to legal and ethical relationships between mental and behavioral health provider practices and Healthplans. The opinions and concerns expressed above do not represent nor should they be taken as legal advice.
Summary of a Deep Dive Investigation into One Healthplan’s Contract!
An audit process, routinely used in Healthcare to guide leadership and joint ventures intending mutual success, was used to evaluate one Healthplan’s recent contract proposal. The process incorporated the following framework to assess the feasibility of the Healthplans contract proposal:
definition of values,
statement of objectives,
risk-impacting objectives,
risk control matrix,
controls,
test-scripts,
test of design,
test of effectiveness, and
key leading indicators.
The Healthplan’s representative and behavioral health manager were interviewed, and the contract’s master service agreement and sub-agreement were examined. The provider association’s attorney initiated a contract negotiation. Several meetings were held. What was learned was compared to standard business practices in Healthcare operation, including frameworks and models recommended by the HHS Health Payer Center Learning Action Network (LAN), the Oregon Health Authority (OHA), healthcare industry experts, and other published resources…
During contract negotiations Mentor Research Institute (MRI) presented the results of their investigation and analysis to four representatives of the Healthplan. This included concerns based on the 9 concepts described above. In summary, there was a probable to almost certain moderate to catastrophic impact on public health if the contact is not changed. The Healthplan disinterest if considering these factors for success was unyielding, i.e., “take it or leave it”. The Healthplan subsequently recommended that further conversation was not necessary because the Healthplan and provider group were not aligned. The challenge facing providers was not a matter of alignment. The problem was simple. The contract was deceptive, faulty, and lacked important information. Most importantly, the Healthplan did not negotiate the contract in good faith because they withheld important information. Why? The information withheld could otherwise cause a greater number of providers to challenge or possibly reject or void their contract.
The risk that provider will fail to meet contract expectations because the contract is not transparent, not negotiable, or agreed upon. MRI continues to talk to the Healthplan, hoping to get answers to their questions. One should not sign a master service agreement if the signer believe the attached sub agreement option is deceptive, faulty and unfair. We believe their is probable to almost certain risk that the Healthplan we investigated is pushing the line close to defrauding employers and the public who purchase their plans.
Based on 20 years of training mental health professionals and working with Healthplans since 2015, MRI concludes that Healthplan interactions with provider practices are intimidating, alienating, and covertly and overtly deceptive.
Some providers respond by limiting the patient they will agree to treat based on risk of audit, their case mix severity, authorized CPT codes, availability of consultation, physician support, social detriments of health, family dysfunction, patient age, culture, and health status.
Value-based contracting will not successful until Healthplans and provider practices co-create shared value, objectives, controls, test scripts, and agree of leading indicators of success. In order for contract to be feasible there must be a test of design and test of effectiveness.
MRI suggests that Healthplans’ behavioral health managers have little or no authority to co-create values and objectives that might go again against Healthplan profit agendas. As a result, Healthplans cannot be trusted to create and offer contacts to provider practices. The misalignment between Healthplans and provider practices will result in a gradual erosion of quality and will harm public health.
The larger paper linked below requires study and is not written for people seeking a quick read to gain expert awareness. There are many purposes of the paper, the most important of which is to encourage practice providers to ask questions and learn more about fee-for-services (FFS), alternative payment methods (APM), and value-based payment (VBP) contracts where pay-for-performance (P4P), measurement-based care (MBC), and outcome informed care (OIC) are the necessary foundations for mental and behavioral healthcare contract design and implementation.
The larger paper:
https://www.mentorresearch.org/healthy-toxic-contracts-conversations-and-audits
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