Healthy vs Toxic Contracts

Mentor research Institute
November 2023

Conversations and Independent Contract
Audits Can Create Ethical and Effective
Value-Based Payment Contracts

This paper is based on investigation and research regarding requirements for successful implementation of Value Based Reimbursements (VBR) for fee-for-service (FFS), alternative payment methods (APM), and value-based payments (VBP). We are in an era where measurement based care (MBC) and outcome informed care (OIC) are the touchpoints for mental and behavioral healthcare contract design and implementation. This paper also discusses what should not be done with reference to one Healthplan’s proposal. Guidance for this paper has been drawn from provider practices, professional associations, thought leaders, industry consultants, the Oregon Health Authority (OHA), the Department of Health and Human Services Health Payer System Learning Action Network (HPC-LAN), and the Oregon Value-Based Payment Compact (ORCompact). The purpose of this document is to offer readers and decision makers basic understanding of important issues that pertain to FFS, APM and VBP contracting, with a pathway to develop contracts in partnership with Healthplans. Such a pathway will require clear standards for contracting, managed within proposed legislative guidelines which protects the public interest and assures access to mental, behavioral and substance abuse treatment services. This includes commercial contracts Medicare, Medicaid and employer insurance payers in Oregon and in ways that are not subject to Federal restrictions such a the Federal Trade Commission and Antitrust.

Executive Summary

The Oregon Legislature through Senate Bill 889 (2019 Law) and House Bill 2081 (2021 Law) has established the Sustainable Health Care Cost Growth Target Program within the Oregon Health Authority (OHA). The cost of health care in Oregon has grown and is projected to grow faster than both the state economy and Oregonians’ wages. The voluntary allowable increase target is 3.49%.

Healthplan X subsequently proposed a Behavioral Health Incentive Program (BHIP). Healthplan X has taken an approach to increase the quality and effectiveness of mental health services by promoting measurement that offers financial incentives to professionals so that Healthplan X presumably can evaluate providers’ access, efforts to coordinate care, and quality improvement effectiveness. Healthplan X has told providers that quality factors will increase efficiency that in turn will increase the ability of providers to see more patients. There is no evidence that value of outcome measurement will increase access. Instead, MRI believes the mental health workforce needs to be expanded, new providers recruited and offered contracts structured for their participation during their pre-licensure period, and that the services of current mental health professionals should be retained by Healthplans rather than being lost by intimidating and alienating contracts which leads qualified professionals to either “game” contracts” or the choice of working primarily or only “out of pocket.”

The labor force issues are separate from models of care that include measurement and payment models which incorporate alternative-payment models (APM) and value-based payment models (VBP). Healthplan X’s Behavioral Health Incentive Program (BHIP), its purposes and rationale, and will based on an independent audit, has a probable to almost certain risk of failing to improve access to care or improved quality of care and outcomes. This conclusion is attributed Healthplan refusal to have (1) conversations, (2) establish shared definitions of values, (3) share objectives that can achieve those values, (3) allow providers to use appropriate population specific treatment models, (4) Healthplan refusal to create transparent control processes which can provide key performance indicators (KPI).

American Mental Health Alliance Oregon (AMHA-OR) renamed itself in October 2023 as Independent Mental Health Practices Alliance (IMHPA). IMPHA is capable of moving toward and into VBR, MBC, and OIC. IMPHA is group contract capable organization comprised on independent mental, behavioral and substance abuse treatment providers. IMHPA conducted a focus group of members and guests to expand on beliefs important to mental, behavioral and substance use treatment services, recognizing that:

According to the American Psychological Association, categories of quality, for purposes of mental and behavioral health, are defined by (a) infrastructure, (b) practice processes, and (c) outcomes.
The Oregon Health Authority (OHA) has defined values specifically as (a) “evidence-based”, (b) “patient-centered”, and (c) “improved quality and positive health outcomes at an appropriate cost”.
The Oregon Value-Based Payment Compact (OR-Compact) has defined “values” specifically as (a) “evidence-based”, (b) “patient-centered”, and (c) “increased effectiveness at a reduced cost”.

“Increased effectiveness at a reduced cost” and “improved quality and positive health outcomes at an appropriate cost” are not synonymous. This mis-match is just one example of the reasons Healthplans in Oregon struggle with provider practices to create value-based services. Contract are structured to benefit Healthplan true value (e.g., profit and market) which based on audit is consistently to the detriment of providers. These are contracts of adhesion (i.e., take-it-or-leave).

MRI has provided leadership to provider practices in defining best practices that incorporate measurement utilizing a provider and Healthplan friendly technology platform which adheres to the shared values outlined above. Equally important is the importance of a payment methodology that compensates providers for their expertise and their commitment of time and effort to quality improvement and value-based objectives. In January 2022, MRI proposed to Healthplan X a model of appropriate increased rates for each of the relevant CPT codes for mental health and substance use services as well as the need for reimbursement for administering standardized measures using an unlisted CPT Code (90899). At a minimum, FFS, APM and VBP also require use of an interactive complexity code (CPT 90785) and a measurement CPT code (CPT 90899). The proposal reflected cost, and recommended reimbursement rate competative with other payers.

Based on an independent audit of Healthplan X’s contract proposal it has become clear that APM and VBP contracts require auditing before they are signed. Contract auditing involves independent, objective assurance and consulting activity required of both payers and providers, a process designed to define and add value, to meet shared objectives, improve contracted operations, effectively manage contract cycles, and protect ethical provider practices. The purposes of contract auditing is to support partnership by supporting transparency, data informed decisions that are evidence-based, care that is patient-centered, which supports measurable improvements in quality and health improvement at appropriate cost.

Contracting Summary

Requirements for pay-for-performance (P4P) and measurement-based care (MBC) for mental and behavioral health practices:

Collaboration drives innovation in practice and financial models.
A Healthplan must challenge itself to clearly define what is considered “value” in its mental and behavioral health contracts.
Models of practice and workflows are provider centric.
Measurement is provider and patient-centric.
Collaboration (i.e., conversation) between payers, providers, and patients is important to achieve equity and quality targets.
Reimbursement rates need to be competitive.
Patient access is a function of supply, demand, and opportunity cost.
Measurement-based care (MBC) does not address access and is only one aspect of quality-value.
Existing payment methodologies reflect fee-for-service, case rates, episodes of care rates, per member per month, and added incentive payments structured to support MBC, alternative payment methods (APM) and value-based payment (VBP).
Health Plan payment methodologies need to be clearly defined, transparent and auditable.
Contracting for the lowest price is based on payer and provider willingness to agree to those price terms.
MRI and IMPHA recommend that quality services be provided at a rate which reflects the expertise, investment of resources, and competence of providers, building a baseline that can be used to set benchmarks as a basis for quality improvement.
Healthy contracting requires “good faith” and “fair dealing.” Toxic contracting the result of “bad faith” and “unfair risk”. Toxic contracts create toxic outcomes which are unreliable, not accountable, and reduce access to medically necessary care which Healthplans are responsible for creating and providers protests are ignored.
Effective contracting for FFS, APM and VBP must include a reliable, valid, and useful estimate of risks impacting objectives and key performance measures so that neither Healthplans or provider are unknowingly set up to fail. Healthplan’s performance can be measured in lawful ways that create pubic confidence with legislative regulation.
When providers are devoted to providing care for patients, believe a contract is rigged to fail, and they are unable to renegotiate based on data, the contract is defined as unfair and created in bad faith. Such contracts are ineffective, unenforceable, can be voided, and are vulnerable to “gaming”, and class action lawsuits.
Healthplans which do not share values, objectives, and transparent “controls” (management methods), “scripts”, and allow for necessary difference in “practice framework” threaten public health, waste taxpayer and employer dollars, limit access to care, and undermine improvements by mental and behavioral health practices.

Legislative Recommendations

Mental and behavioral health providers’ practices do not have the legal and financial resources to hold Healthplans and other payers accountable for contracts and policies that threaten individual and public health. Mental and behavioral health professionals are first to identify Healthplan waste, policies and actions that undermine best practices and the services necessary to create positive outcomes. Provider practices are the front line of care and the first line of defense for vulnerable mental and behavioral health clients.

MRI recommends that providers seek legislative requirements for Healthplans to pay the cost of a consulting Certified Internal Auditor (CIA) or equivalent to serve as an independent contract auditor. The Audit Officer (AO) should report to a Mental and Behavioral Health Practices Contract Audit Committee (CAC), not to Healthplans, and especially not to Healthplans’ legal departments. The composition of the CAC should include independent practice providers, group practice providers, clinician representatives of mental health services employers, and 2 representatives of Healthplans.

Mental and behavioral professionals who are candidates for the Contract Audit Committee should be selected based on (1) their type of practice, (2) knowledge of P4P, MBC, APM and VBP contracting, (3) recommendations of peers, (4) knowledge of behavioral health research and design, and (5) experience working on committees or boards.

A Contract Audit Committee (CAC) consisting of 8 professionals licensed in Oregon as mental health professionals should be empaneled. The committee would include 6 independent and employed mental and behavioral health professionals. The CAC would also include 2 mental health professionals acting as representatives of Healthplans.

The CAC working with an Audit Officer (AO) will be responsible for establishing the scope of audits, setting audit priorities, approving audits, reviewing, and authorizing publication of Auditor Reports to Healthplans, providers, and the public. The CAC will be responsible for developing and setting the annual audit action plan. Annual budgets for electronic publications and reporting to the OHA will be established and funded by the OHA.

Healthplans should be prohibited from implementing new contracts, or making changes to contracts, until providers have 60 days to review and comment. Contract provisions that do support OHA values and objectives and/or have no value or may harm public health will not be implemented. The information gathered should be reported to the CAC and be maintained with anonymity to ensure that auditor’s recommendations are reliable, valid, and useful. CAC decisions can be appealed to the CAC based on a second opinion provided by an external qualified Certified Internal Auditor (CIA). Final appeal would be the using a State sponsored arbitration process.

The Audit Officer (AO) function is to oversee, prioritize, and mitigate the clinical, ethical, legal, compliance, regulatory, financial, and other risks to Healthplan Operations and Provider Practices. The AO works with the CAC to implement policies and practices that prevent risks from becoming manifest. In addition, the AO provides advice, counsel, and support to the CAC on legal, audit, compliance, and risk matters created by Healthplans and/or Provider Practices. The AO also works to develop and model a culture that supports and encourages adherence with applicable laws and regulatory codes of conduct and ethical principles with transparency in assigned personal and business dealings and demonstration of integrity and respect in all interactions.

The AO will make recommendations for controls (i.e., contract management and monitoring scripts) based on an analysis of an existing or proposed contract, changes in contracts as they affect shared values, objectives and controls. The AO also will have the ability to identify values and objectives, and recommend “controls” that (1) value diversity, (2) audit issues for a range of sub-populations, (3) make recommendations that recognize the dynamics of difference, (4) acquire and incorporate cultural knowledge and human differences, and (5) adapt to diversity and the cultural contexts of provider practices who work with populations who are marginalized or otherwise underserved.

Discussion of One Healthplan’s Contract Proposal

In November 2022, Healthplan X offered and implemented a new contract for groups in their provider network. The framework of that contract implements some elements of the Centers for Medicare and Medicaid that trend toward rate reductions annually but left out the regional Geographic Practice Cost Index. The CMS rates are arguably low and not competitive. The rate was initially less than CMS for counselors, LMFTs and Licensed clinical social workers. (Lower than what they would be paid contracting with Medicare.) Healthplan X also offered providers their Behavioral Health Incentive Plan (BHIP).

The contract offered was in effect, take-it-or-leave-it. Problem surfaced. For example, in a quality improvement initiative, providers, as well as providers and Healthplans, must be allowed to communicate and work together to establish common values, objectives, goals, measures, strategies, technology, information, public health concerns, and special population needs. Healthplan X would not reveal the identify of provider groups sharing risk.

OHA, HPC-LAN and OR-Compact lead providers to define value as (1) evidence-based, (2) patient-centered, and focused on (3) improved quality and positive health outcomes at appropriate cost. Rather than creating contracts by “making it up as we go” as Healthplan X has advised they are doing, there must be an explicit processes to monitor, manage and control risk, and to adjust the risk, so that neither Healthplans nor Providers fail because they were otherwise acting in good faith relying on framework that was undefined or ill-defined.

Objectives such as profit, reducing costs, and administrative burdens can impact other objectives such as patient access, coordination of care, measurement, provider satisfaction with the contact, etc. Low trust of Healthplans, is the result of bad faith contracts, unfair practices, and provider dissatisfaction. This leads to contract “gaming”, by minimizing providers’ case-mix severity, or to dropping out of contracts. If providers and Healthplans are not able to align on shared values and objectives, Healthplans and providers cannot effectively manage the risks that impact them both.

In the case where Healthplans focus on “waste” as an objective, providers may conclude the Healthplan’s objectives and controls are unfair; especially if the effect of a contract generates profits by not providing care, and increases provider practices’ risk. The framework of VBP contracts must have “controls” which can be used to manage upside risk and/or downside risks in ways that are fair and are created in good faith.

Contracting Framework for Ethical and Effective Contracting with Mental & Behavioral Health Practices

Oregon has long been a national leader in health system transformation, focused on creating systems for delivering affordable, high value coordinated quality care. In 2019, the legislature created the Sustainable Health Care Cost Growth Target implementation Committee and charged it with identifying mechanisms to lower the growth of healthcare spending to a financially sustainable rate. In October 2020, the Implementation Committee for the Oregon Value-Based Payment Compact created a set of principles to increase the spread of value-based payment (VBP) models across the state as a strategy to improve quality and lower costs, and recommended that payers, providers, and other stakeholders across the state make a voluntary commitment to participate in and spread VBPs.

The cost of health care in Oregon has grown and is projected to grow faster than both the state economy and Oregonians’ wages. The health care cost growth target is a target for the annual per capita rate of growth of total health care spending in the state. Cost increases of health insurance companies and health care provider organizations will be compared to the growth target each year. The program will also evaluate and annually report on cost increases and drivers of health care costs. The voluntary allowable increase target is 3.49%.

For 2023, HealthplanX converted their individual mental health providers’ contracts to Medicare reimbursements rates, Healthplan X’s conversion had the impact of reducing provider rates within 2 months of many providers having signed that new contract. An outpouring of anger, resulted in Healthplan X increasing their rate calculation formula in a manner that discriminated against licensed professional counselors and social workers. Health plan X told a provider group representative that “they didn’t know” (in November 2022) that the rate would drop for 2023. Healthplan X negotiated and made assurances to one contracted group that its rates would not drop in 2024, and rescinded that assurance months later without telling the contract negotiator. Healthplan X subsequently stated they were assessing whether or not they will allow an automatic rate reduction to go into effect in 2024. Providers are left to see whether or not rates will drop in 2024. Signed contracts for Healthplan X require provider practices to continue to see patients for 120 days before they can drop their contracts. These are a few examples of many that demonstrate bad faith and unfair dealing in contracts that are toxic to providers’ willingness to contract and undermine public trust.

In Oregon, there are a many significant challenges in the delivery of mental and behavioral health and substance use treatment services related to supply and demand factors. Specifically, demand is greater than the supply of qualified professionals to meet the demand, which has led the State of Oregon’s legislators to pass legislation to address the importance of assuring mental health parity. Healthplans have not be responsive to Senate Bill 860 and there are questions whether the parity objective of access to care is being supported by Healthplans. Some Healthplans have responded by increasing amounts paid for various mental health services while other Healthplans have sought to established “narrow networks with incentives” to attend to the mental health needs of plan members. Other Healthplans have taken a “wait and see” approach, watching where the industry goes and whether programs such as integrated care models increase access through primary care settings.

The OHA Healthcare Sustainable Growth Target Program has recently focused on “What is happening with behavioral health spending?” Despite two decades of research and guidance from provider associations, research institutions, industry thought leaders and consultants, Oregon Healthplans have not implemented quality improvement programs for mental and behavioral health services using Fee-For-Service (FFS), Alternative Payment Methods (APM) or Value-Based Payments (VBP). At best, they have implemented utilization limitations and controls (e.g., audits that are not material to values and objectives) referring to those strategies as elements in their quality improvement programs.

In a quality improvement initiative, providers, as well as providers and payers, must be allowed to communicate and work together to establish common values, objectives, goals, measures, strategies, technology, information, public health concerns, and special population needs. This cannot be presumed and dictated as shared values unless Healthplans and providers work as partners. Partnering requires open and transparent conversations.

To partner responsibly in a value-based payment contract, providers and Healthplans must define and develop shared values, shared objectives, transparent controls and key performance indicatord the criteria for their achievement. Ideally, these definitions should be shared across all provider groups, independent providers, and Healthplans. Providers and Healthplans need to define the values and objectives which ethically and clinically require what are necessary or expected as deliverable services. Controls must protect the ethical requirements incumbent on mental and behavioral health professionals.

Review of OHA, HPC-LAN and OR-Compact documents lead to definitions of value as (1) evidence based, (2) patient-centered, and focused on (3) improved quality and health at appropriate cost. Those values are not deliverables. Actions including screening, symptom, progress and outcome measures, and coordinating care are examples of deliverables. Deliverables can be measured. Deliverables require baselines and benchmarking, infrastructure, processes, and outcome objectives. Deliverables cannot be dictated by payers’ requirement that providers invest time and money to create processes that are not defined, measurable or achievable.

Value-based payments are not designed, negotiated, or evaluated in the same way as fee-for-service contracts because P4P, APM and VBP contracts involve risk and risk sharing among providers and often Healthplans. VBP contracts and APMs are developed and adjusted over time because there must be risk-adjustments for technology, analytics, sub-populations and changes in the defined values and objectives. Managing changes requires the use of agreed upon “controls.” Controls are important factors. Nationally providers and Healthplans struggle to implement controls in a transparent manner. Historically, Healthplans maintain control using contracts of adhesion (i.e., take it or leave it), and processes known only to the Healthplan (that may be viewed by providers as arbitrary and capricious).

If a Healthplan’s model for VBP contracting is to “make it up as we go”, this will bring in a high degree of risks that will impact objectives, if not immediately, almost certainly over a 3-year period. Rather than “make it up as we go”, there must be processes to monitor, manage and control risk, and to adjust the risk, so that neither Healthplans nor Providers fail when they act in good faith using an untested contract. A poorly designed contract of adhesion can be unmanageable, inequitable, and cannot be changed or re-negotiated when problems are revealed.

Based on surveys as far back as 2015, mental health providers opine that their contracts are designed by Healthplans to benefit Healthplans, to the detriment of providers’ practices, and to patients’ health. This happens when Healthplans do not define and share all their objectives, and instead assume that providers’ objectives are aligned with Healthplan’s, and subsequently audit providers’ compliance based on the Healthplan’s objectives.

The cultures of Healthplans and providers have similar and different priorities. Healthplans prioritize employer marketing, employer satisfaction, employee health, etc. Providers prioritize appropriate referral channels, support services, billing technology, patient care, ethical practice, a balance in patient case mix severity, liability, patient risk and health.

It is important to analyze how Healthplan objectives and provider objectives impact each other. For example, objectives such as profit, reducing costs, and administrative burden can impact other objectives such as patient access, coordination of care, provider satisfaction with the contact, etc.. Low provider satisfaction can lead to providers gaming or dropping contracts. In the case where Healthplans focus on “waste” as an objective, providers conclude the Healthplan’s objectives and controls are unfair; especially if the effect of a contract generates profits by not providing care. If providers and Healthplans are not able to align on common objectives, then Healthplans and providers cannot effectively manage the risks that impact them both. The framework of VBP contracts must have controls to manage upside risk and/or downside risks in ways that are fair and created in good faith.

Figure 1. Healthplan X Top Risk Review Heatmap

Figure 1 is a visual analytic of risks and consequences. The bubbles are inherent and explicit risk-impacting-objectives. This heatmap displays visually the inherent risks of a contract if nothing is changed. The bubbles can be used to facilitate a discussion of the interacting effects of values, objectives, and controls.

MRI and IMHPA’s interpretation of Figure 1 is that the Healthplan X Master Agreement and the BHIP should be re-designed. The distribution of the bubbles illustrates that the inherent risks benefit Healthplan X with a strong upside risk over a significant downside risk over time for participating providers. Impacts on providers will surface immediately and within year 1 and the remaining impacts within 3 years. There are probable to almost certain moderate to catastrophic consequences to participating provider and public health objectives. Left unchanged, the framework of this contract has significant risk or no value to providers, patients and public health. The redline change required is to implement controls such that the risk does not map from yellow to red. Value-based contracting is feasible if the risks impacting objectives are in the green, which would be a healthy contract, one that will benefit providers, the Healthplan, and public health.

The question facing providers is whether a contract is fair, made in good faith, and is manageable. Using the presented Top Risk Review Heatmap allows providers and Healthplans to ascertain risks, the value and the requirements of a contract moving forward before the contract is offered or signed. Figure 1 demonstrates visually that Healthplan X and providers are not aligned. In this case, this misalignment is to benefit of Healthplan X and systematically to the detriment to all providers and public health.

In practice, risk is assumed by a Healthplan, among providers, or shared between providers and the Healthplan. Absence of dedicated effort to partner suggests that a Healthplan does not want to share risk with providers. Healthplan X’s current contracting method requires providers to assume an unfair level of risk and benefit immediately or over time. This risk relationship is illustrated in Figure 1.

For example, absent assurance, a Healthplan may subsequently conduct an audit for compliance, instead of an audit that supports quality improvement of services that will achieve targets. Providers are not willing to assume any additional risk especially when Healthplans create “controls” that are not transparent and not negotiable. By not partnering, FFS, APM and VBP contracts for mental and behavioral health services can lead to gaming.

Figure 2. Asymmetric Risk-Benefit

Figure 2 illustrates the risk and benefit dynamic of Heathplan X’s effort to attract provider practices to sign a seemingly innocuous contract that offers a “false profit leader” an incentive that has no explicit risk and no expectation to deliver anything and you get paid more (i.e., “Just measure anything”). A false profit leader is the opposite of a “loss leader.” Loss leaders are widely considered predatory, drawing customers in for a low cost only to upsell another product that costs more because the original product is no longer available. A false profit leader draws provider practices in to sign agreements for a profit. The profit may not be proportional to changing requirements. But signing the contract has value to a Healthplan attempting to implement a value-based payment program. Signing the contract endorses Healthplan X, improves their brand recognition in the market, and allows them to meet ORCompact requirements.

Healthplan X’s “false profit leader” for their contract seemingly has profit, but it has no measurable value. The systematic benefit to Healthplans which is to the detriment of providers and the public is “rigged” to gather support for the contract (i.e., face value) rather than support for a contract based on shared values that have actual measurable value (i.e., shared value). From that point forward, the Healthplan controls providers’ practices. Provider practices do have the choice to leave the contract, with the experience of having sacrificed their own opportunity cost while altering their practice to adjust to the Healthplan’s requirements and policies. Policies that should have been transparent to begin with.

Providers entering such a contract are vulnerable, they are given no assurance otherwise, and can expect with near certainty that Healthplan X will switch requirements to achieve new targets. Healthplan X’s underlying framework will almost certainly benefit the Healthplans (i.e., low risk, high benefit) to the detriment of providers (i.e., high risk, low benefit).

National Committee for Quality Assurance (NCQA) standards are a roadmap for improvement—Healthplans use these roadmaps to perform a gap analysis and align improvement activities with areas that are most important to State governments and employers, such as network adequacy and consumer protection. NCQA Standards evaluate plans on:

Quality Management and Improvement.
Population Health Management.
Network Management.
Utilization Management.
Credentialing and Recredentialing.
Members’ Rights and Responsibilities.
Member Connections.
Medicaid Benefits and Services.

According to NCQA, the use of Healthcare Effectiveness Data and Information Set (HEDIS) data allows the Health Plan Accreditation process to effectively measure care and service performance. This focuses attention on activities that keep members healthy.

NCQA does not provide useful guidance for value-based payment contracting for psychiatric, psychotherapeutic or counseling services. Guidance for contracting is provided by provider organizations, thought leaders, industry expert consultants, professional associations, the Department of Health and Human Services, and the Oregon Health Authority.

Objectives for VBP contracts have been widely published. Mentor Research Institute (MRI) selected 18 objectives that should be inherent in the proposed Healthplan X Healthplan contract. After reviewing contracts of other Healthplans, MRI identified 3 more objectives. Contracting groups need to know Healthplan X’s values and objectives and to have those stated in ways that can be defined, shared, measured, and used to set baselines and benchmarks for which quality improvement targets can be defined. Independent practice providers and group practice providers need to know as well. For example, is it the objective of Healthplan X to support independent practice or to fold independent practice into employer owned groups? That declaration, one way or another, is an objective that interacts with other objectives.

Quality care has been categorized by the American Psychological Association (APA) as infrastructure, processes, and/or outcomes. Improvements in quality must be measured, correlated with shared values and objectives, and be reimbursed at an appropriate rate. Healthplan X has not identified any objectives we are aware of that align with APA, OHA, the ORCompact discussions, or with providers’ core values and established standards for delivery of ethical clinical services.

Measurement-Based Care and (MBC) and pay-for-performance (P4P) are necessary steps before alternative payment methods (APM) and VBPs are instituted. Risk-sharing cannot take place in the absence of the ability to establish baselines and recognition of the necessity of investment in needed infrastructure, processes (standards of practice), and outcomes incentives.

Value-based payments are not designed, negotiated, or evaluated the same way as fee-for-service contracts because P4P, APM and VBP contracts involve risk and risk sharing among providers but not Healthplans. VBP contracts and APMs and complicated as time passes because there must be risk-adjustments for technology, analytics, sub-populations and changes in prior definitions of values and objectives. Managing changes requires management using agreed upon controls. Controls are important factors which providers and Healthplans struggle nationally to implement in a transparent manner. Historically, Healthplans maintain control using contracts of adhesion (i.e., take it or leave it), and processes that can be arbitrary and capricious.

It is important to analyze how Healthplan objectives and provider objectives will have impact on each other. If Provides and Healthplans are not able to align on common objectives, then payers and providers cannot effectively manage the risks that impact them both. The framework of VBP contracts must have controls to manage upside risk and/or downside risks in ways that are fair and are created in good faith.

Because there are no shared objectives, the risk and benefit in the Healthplan X master agreement and BHIP framework benefit Healthplan X with a high upside risk. The downside risk has moderate to almost certain consequence to providers’ ability to achieve shared objectives now or in the future. Providers must be allowed to examine and comment on the controls, test scripts, and updated scripts that will be used to evaluate the contract. For example, providers should seek a contact assurance that the contract audit involves a transparent test of design (TOD), test of effectiveness (TOE), and a heatmap.

The shared Purposes and Rationale (Figure 1) suggested by Healthplan X cannot be used to measure value and achievement of objectives in a reliable, valid and useful manner. Unless providers and Healthplans can construct a contract, which group and individual practices can understand and know is fair, and made in good faith, MRI is certain that providers will find evidence to reach harsh conclusions. Conclusions, which MRI is already hearing from informal conversation, will be difficult to control and undo in the era of social media. MRI wants Healthplan X and provider practices to succeed.

Healthplan X’s BHIP is vulnerable to misunderstanding because of its need for greater specify, and its errors of omission and commission. For example, the purpose and rationale Healthplan X has provided is a combination of goals, requirements, and methods (Figure 3). While there are indeed shared beliefs, these are not values, nor are they objectives that can be measured as such. Healthplan X uses the word incentive which providers will consider synonymous with value-based payment. Healthplan X’s use of the word “options” is synonymous with sub agreements within a base contract (i.e., the master service agreement).

Figure 3. (Quoted from the Healthplan X contract)

1. Purpose and rationale

The Healthplan X Behavioral Health Incentive Program (BHIP) is an opt-in program designed to support providers’ delivery of quality of care. It is a combination pay-for-participation and pay-for-performance model, meaning that all behavioral health organizations who opt in and participate in the elements of the model will receive an incentive. Additionally, if Healthplan X’s overall performance target is achieved then an additional bonus will be added. The program is based on the following shared beliefs:

1.1 Member health and welfare is at the center of our work and our outlook in securing effective care.

1.2 Our providers are our primary means of delivering quality of care and building on that relationship will directly enhance all involved.

1.3 Coordinated and collaborative care enhances our members’ ability to access care readily, timely, and easily.

1.4 The adoption of evidence-based practices can improve outcomes. Extensive research supports the effectiveness of treatment which attends to the member’s voice by systematically inviting member feedback on the process of care and member-reported outcomes (Feedback Informed Care [FICare] or Feedback Informed Treatment [FIT], also variously known as Patient-Reported Outcome Measures [PROMs], Outcome Informed Care [OIC], Measurement Based Care [MBC], etc.)

1.5 Such data collection is pan-theoretical and can readily be incorporated into a wide variety of provider practices, treatment modalities and clinical paradigms.

There little to no evidence that “1.3 Coordinated and collaborative care enhances our members’ ability to access care readily, timely, and easily.”

Providers are highly concerned about the variety and impact of differing payer requirements and audit procedures that have no discernible value, no shared objectives, are not fair nor negotiated in good faith. These differing requirements make it difficult to manage practices across multiple-payer contracts. These are risks that will impact crucial objectives such as patient access. There must be controls to manage payers’ contract changes and their cumulative impact across multiple payers (i.e., many contracts will add and change requirements over time, and so will the risks.)

A “false profit leader” is the opposite of a “loss leader.” (Loss leaders are widely disapproved as predatory, drawing customers in for a low cost only to upsell another product that costs more because the original product is no longer available.) Attracting provider practices to sign a seemingly innocuous contract offering an incentive that has no risk, and then switching requirements to achieve incentives that have a risk framework to benefits a Healthplan to the detriment of providers is a false-profit tactic. A false profit offer draws provider practices to sign agreements for profits that are “rigged” to gather agreement (i.e., face value) and are likely to be changed in ways that further benefit the Healthplan.

Healthplans should not want their contracts to be viewed as a “bait and switch.” Bait and switch in this context means that there are missing agreements, assurances of requirements in the contract a Healthplan intends to add during the contract cycle management. This a problem if one wants to protect public health because a “bait and switch” precedent used in one Healthplan contract may be expected in another Healthplan’s contract with the declaration that “other Healthplans do this as standard practice”. The problem for providers is that Healthplans can implement requirements which have differing administrative demands, measurements, values, objectives, required technology, and costs. This is happening across several Healthplans with cumulative impacts on providers. Providers will become overwhelmed with contracts that are not unified, strategic and differ in their requirements.

The Healthplan X contract is based on ‘asymmetric information” that benefits Healthplan X and makes providers unable to ascertain the current purpose or future value of contracting with Healthplan X. The framework is not defined. The contract does not have necessary language that could support APM and VBP. It sets up provider practices, not the Healthplan, to fail.

The Healthplan X contract is a contract of adhesion (i.e., take-it-or-leave-it).
The Healthplan contract has a “false profit” that entices provider practices to sign a contract that has a moderate to almost certain risk of harm and failure.
The Healthplan X contract leverages all risk and benefit to Healthplan X to the detriment of contracted providers.
The Healthplan X contract is almost certainly a waste of taxpayer and employer money.
The Healthplan X contract has no defined shared values.
The Healthplan X contract has no defined shared objectives.
The Healthplan X contract has no defined target related to incentive reimbursements.
The Healthplan X contract has no clear or shared purposes.
The Healthplan X contract has no shared strategies.
The Healthplan X contract has no targets providers have an ability to achieve.
The Healthplan X contract has no provider shared risks with Healthplan X.
The Healthplan X contract has no risk adjustment process.
The Healthplan X contract was almost certainly created in bad faith using unfair dealing.
The Healthplan X contract is almost certainly a waste of provider resources given the opportunity cost.
The Healthplan X contract has no contract cycle management.
The inherent risk in the Healthplan X contract is the probable to almost certain risk of Moderate to catastrophic impact on Provider practices and the credibility of value-based contracting for mental health services.
Providers are unable to manage multiple VBP contracts each with unique quality improvement programs.
The Healthplan X contract is almost certainly so flawed that the entire contract is unenforceable.

Historically, and unfortunately, the relationship between payers and providers has been challenging, sometimes adversarial. To partner, there must be an independent source of information to help providers and payers govern contracts. MRI has identified a solution that will be fair, accountable, patient centered, that will support and develop quality improvements at appropriate cost. This solution is a standard in organizations such as a hospital-physician-and allied health systems of care that employ internal auditors: Independent audit of contracts before providers or provider groups sign them.

Healthplans and providers need resources that offer qualified, objective, impartial information that can be used to determine if there are reliable and valid contract requirements and reimbursements for their practice. The challenges facing VBP contracts between Healthplans and providers can be resolved if Healthplans, who create changes in contract or new contracts, have their contracts audited by an independent contract auditor before and during the implementation of new contracts or changes in contracts. This is a standard process for hospital physician networks that contract to protect the public. Payer contract audits must be public and consider public input.

“Contract auditing” means an independent, objective assurance and consulting activity is required of both payers and providers, a process designed to add value, create and meet shared objectives, improve contracted operations and effectively manage contract cycles. The purpose is to ensure transparency and data informed decisions that are evidence-based, patient centered, and that support improvements in quality at an appropriate cost.

The auditor will help providers and payers identify shared values and to accomplish their shared objectives by bringing a systematic, disciplined approach to evaluate, and improve the contract effectiveness of risk management, controls, and their respective governance processes.

Independent contract auditing will achieve this goal by gathering, aggregating, and analyzing data providing information, insight and recommendations based on analyses and assessments of data and contracted business processes.

Excerpts from Measurement-Based Care (MBC) Proposals from AMHA-OR (now IMHPA) to Healthplan X

AMHA-OR is an incorporated member-owned group practice whereby psychotherapists may opt in or out of contracts.
Members of AMHA-OR are trained to use the LightQ EHR and measurement platform and they present their practice information in the therapist locator at OregonTherapyOptions.com.
Providers will be asked to obtain mutually agreed on screening, progress, and satisfaction measures as they provide services.
Providers will document that people seeking care were offered an appointment in a timely manner.
Psychotherapist members of AMHA-OR should be reimbursed a fixed amount per screening for their time and technology use. Using uniquely identifiable CPT codes (e.g., 90899, 90785) will (a) avoid unnecessary provider costs, (b) reinforce appropriate administration, (c) reduce error in subsequent analysis, (d) reduce expense to the contracting organization (i.e., Healthplan), (e) eliminate the appearance of fraud, and (f) allow providers to conduct relative value analyses. The 90785 CPT code will allow providers to set baselines and to calculate adjustments in reimbursement for patients when there is need to work with parents, family members and/or to coordinate care with physicians and assisted care providers.
MRI recommends Healthplan X collaborate with AMHA-OR to include Associate Licensed Counselors, who have AMHA-OR member supervisors (certified by the State of Oregon) in the Healthplan X contract. This will increase the number of available appointments to Healthplan X members seeking services by an estimated 93% (+/- 37%) in the first year. A Healthplan X access initiative is permissible in the State of Oregon with licensed professional and AMHA-OR oversight. The AMHA-OR Board will assume administrative responsibility for the program, ensure there is qualified clinical supervision, and enforce program policies; supervising supervisors, and auditing Associate Licensed Counselor members of AMHA to ensure medical necessity of care, that standards for documentation are followed, and that treatment is empirically supported.
If Healthplan X agrees to the essentials for ethical practice, business operations and MBC, psychotherapist members of AMHA will opt-in depending on the reimbursement rate. AMHA-OR member dues are being used to create and administer contracts. Psychotherapy services will be reimbursed at a rate calculated by using a Healthplan X multiplier for which the product of the CMS rate is no less than the Oregon Health Plan (OHP) rate for CPT® 90834 code: Psychotherapy, 45 Minutes. MRI estimates this to be a minimum competitive rate for private practice adoption of MBC. The 90834 is the most frequently used CPT code and that rate, more than other codes, determines the willingness of a provider to see complex and urgent cases.
Healthplan X Health will fix the reimbursement rate set by CMS and apply the annual allowable increase set forth by the OHA and OC.
The decision to shift priorities and workflow between appointments from a focus on charting and treatment to measurement technology requires (a) work and (b) practice efficiency/expense, and (c) must be rewarding. The reward must be timely and paired closely to a new task (i.e., target behavior). A financial incentive for deliberate practice and the anticipation of gaining information that is useful is rewarding. It is also respectful of psychotherapists’ time, memorable, ethical and a buffer against the distressing experiences and chronic conditions that psychotherapists encounter in their work. A fixed ratio reinforcement schedule of 1 is the most effective way to change choice behavior; and overcome providers’ resistance to MBC, OIC and FIT.

Issues and Requirements for Successful Fee-For-Service, Pay for Performance, Measurement-Based Care, Alternative Payment Methods and Value-Based Payment Contracting

In January 2022, MRI responded to a Healthplan X Health’s request for proposals (RFP). MRI offered a program that incorporated relevant implementation science research. The program addressed:

A provider and patient centric approach.
Measurement/instrument agnostic (patient and provider centric).
Quality improvement at appropriate provider compensation.
A technology platform that offers ease of use.
Training and support which must be ongoing.

In October 2022, Healthplan X offered and implemented a new contract for their provider network. The framework of that contract implements some elements of the Centers for Medicare and Medicaid that trend toward rate reductions annually but left out the regional Geographic Practice Cost Index. The CMS rates are arguably low and not competitive. The rate was initially less than CMS for counselors, LMFTs and Licensed clinical social workers. (Lower than what they would be paid if they accepted Medicare.) Healthplan X also offered providers their Behavioral Health Incentive Plan (BHIP).

In a quality improvement initiative, providers, as well as providers and Healthplans, must be allowed to communicate and work together to establish common values, objectives, goals, measures, strategies, technology, information, public health concerns, and special population needs. OHA, HPC-LAN and OR-Compact lead providers to define value as (1) evidence-based, (2) patient-centered, and focused on (3) improved quality and positive health outcomes at appropriate cost. Rather than creating contracts by “making it up as we go”, there must be a explicit processes to monitor, manage and control risk, and to adjust the risk, so that neither Healthplans nor Providers fail when they act in good faith relying on an untested contract.

In the case where Healthplans focus on “waste” as an objective, providers may conclude the Healthplan’s objectives and controls are unfair; especially if the effect of a contract generates profits by not providing care, and increases provider practices risk. The framework of VBP contracts must have “controls” which can be used to manage upside risk and/or downside risks in ways that are fair and are created in good faith.

Practice Structures for Fee-For-Service , Alternative-Payment-Methods and Value-Based Payments

Independent mental and behavioral health provider practices take 3 forms:

A licensed clinician working solo (incorporated or not).
A group of licensed clinicians sharing the expenses of space, staff, billing services etc. with informal agreements.
An incorporated practice group where the expenses of practice are shared on a formal basis, and malpractice and general liability insurance involve shared coverage.

Independent practices can incorporate to contract together as Independent Practice Associations (IPAs) that are member owned.

Mental and behavioral health practice that is not “independent” also takes 3 forms and is growing rapidly:

Professionals employed in medical facilities or health agencies.
Professionals employed in groups with salary and benefits.
Professionals employed in groups on a 1099 contract basis.

Contracts structured for Value Based Payments for mental and behavioral health services must align with the values and purposes common to the professionals working in each of these structures.

References

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Mentor Research Institute