Transforming Mental Health Services From Fee-for-Service to Value-Based Contracts: A Closer Look
A Discussion Paper
The Shift to Value-Based Payment Models
The mental health services industry is undergoing a significant transformation, moving away from the traditional fee-for-service model towards value-based payment contracts. The fee-for-service approach, which reimburses providers based on the volume of services rendered, often incentivizes quantity over quality. In contrast, value-based contracts prioritize patient outcomes, efficiency, and cost-effectiveness. This transition aims to enhance care quality while reducing overall healthcare costs, while aligning the interests of providers, payers, and patients.
Advantages and Challenges of Value-Based Payment Contracts
Value-based payment contracts offer several advantages. They are intended to encourage providers to deliver high-quality care that improves patient health outcomes. There is no evidence that fee-for-services has any more or less waste that value-based payment. However, by emphasizing preventive care and effective management of chronic conditions, these contracts can significantly reduce unnecessary healthcare expenditures. Fee-for-service providers generally do not work with subpopulations which have serious and persistent social and mental health problems. They require more resources and more frequent appointments which Healthplan do not wish to pay for. Value-based payment promote coordination among healthcare providers, leading to more comprehensive and cohesive patient care. As a result, patients often experience higher satisfaction due to better care and improved health results.
However, there are many challenges associated with value-based payment contracts. Transitioning to these contracts requires significant changes in practice management, IT systems, and care delivery models, making implementation complex. Providers may face financial uncertainty if they fail to meet performance targets, such as coordinating care with physicians, which can have a negative impact of their revenue. Additionally, the increased documentation and reporting requirements can be onerous, diverting resources from direct patient care. Accurate and timely data collection is critical, and any deficiencies in this area can undermine the effectiveness of value-based contracts.
The Crucial Role of Independent Certified Auditors
Independent certified internal auditors (CIA) are essential to ensure the successful implementation and management of value-based payment contracts. They verify that all contractual and regulatory requirements are met, safeguarding against fraud and non-compliance. Auditors assist in designing and implementing robust internal controls to monitor performance and compliance. Regular audits assess the effectiveness of these controls, identify potential risks, and recommend improvements. Reporting directly to a Board of Directors rather than Healthplan management, auditors maintain objectivity and impartiality, ensuring unbiased assessments and recommendations.
The Importance of an Ethics Point Portal
An ethics point portal is a vital tool for maintaining transparency and accountability within healthcare organizations. It provides a confidential platform for reporting unethical behavior, fraud, or non-compliance without fear of retaliation. By promoting a culture of integrity, the portal encourages employees and stakeholders to report issues safely. Early detection of problems helps prevent more significant issues down the line. For the portal to be effective, it must be easily accessible to all employees and stakeholders, guaranteeing anonymity to protect whistleblowers. Additionally, a process for investigating and addressing reported issues promptly is essential.
Clear and Understandable Contracts and Policies
Contracts and policies need to be written in plain language that is easily understandable by all stakeholders. Complex legal jargon can create confusion and lead to misinterpretation, increasing the risk of non-compliance and disputes. Plain language ensures that everyone, from healthcare providers to patients, can clearly understand their roles, responsibilities, and the terms of agreement. This clarity fosters better adherence to policies, enhances communication, and builds trust among all parties involved.
Management’s Role in Responding to Auditor Reports
Management should act on the findings reported by independent certified internal auditors rather than gathering and analyzing information independently. This approach ensures objectivity, as auditors provide an unbiased perspective free from internal pressures or conflicts of interest. It also enhances accountability, as management is held responsible for implementing recommended improvements and corrective actions. Clear separation of duties promotes transparency and trust within the organization.
Information Sharing with Stakeholders
Providing comprehensive information and analysis to health plan management, provider practices, and other stakeholders is crucial. Stakeholders can make better-informed decisions when they have access to accurate and detailed information. This openness encourages collaboration and alignment among all parties involved, fostering a unified approach to achieving contract objectives. Open communication builds trust and confidence in the value-based payment system.
Ensuring Trust, Effective Service Delivery, and Achievement of Goals
The process of involving independent certified auditors and using an ethics point portal ensures that stakeholders trust the system is fair, transparent, and free from conflicts of interest. Continuous monitoring and evaluation guarantee that services are delivered efficiently and meet quality standards. Clear performance metrics and regular audits help track progress toward achieving defined objectives, targets, and goals. By embracing these strategies, health plan management and mental and behavioral health provider practices can navigate the complexities of transitioning to value-based payment models, ultimately improving patient outcomes, reducing costs, and fostering a culture of accountability and excellence.
Potential Opposition from Health Plan Management
Health plan management might not support this approach for several reasons. The involvement of independent auditors and the use of ethics point portals can be seen as an additional layer of oversight that could challenge existing management practices and expose inefficiencies. There might be concerns about increased transparency leading to accountability pressures and potential reputational risks. Furthermore, the costs associated with implementing these oversight mechanisms might be perceived as an unnecessary financial burden, detracting from other strategic investments.
Support from Provider Practices
On the other hand, provider practices are likely to support this approach. Independent audits and transparent reporting can help ensure fair evaluation of their performance and appropriate reimbursement for the quality of care they provide. Providers benefit from clear, understandable contracts and policies that facilitate compliance and reduce the risk of disputes. Additionally, the focus on ethical practices and accountability aligns with the professional values of many healthcare providers, who are committed to delivering high-quality patient care.
Positive Benefits of This Approach
Adopting this approach offers numerous positive benefits. It enhances trust among all stakeholders, including patients, by demonstrating a commitment to transparency and ethical behavior. Effective oversight ensures that healthcare services are delivered efficiently and in accordance with the highest standards, leading to better patient outcomes and higher satisfaction. Clear performance metrics and regular audits help track progress towards achieving contractual goals, fostering continuous improvement and innovation in care delivery.
Negative Impact of Not Implementing This Approach
Failing to implement this approach can have several negative consequences. Lack of transparency and accountability can erode trust among stakeholders, including patients and providers. Without robust oversight, there is a higher risk of fraud, non-compliance, and inefficiencies, which can lead to financial losses and legal issues. Unclear contracts and policies can result in misinterpretation and disputes, disrupting the smooth functioning of healthcare services. Ultimately, the absence of these mechanisms can compromise the quality of care, negatively impacting patient outcomes and satisfaction.
Signs of Bad Faith and Unfair Dealing in Value-Based Payment Contracts
Certain signs can indicate bad faith and unfair dealing in the negotiation and implementation of value-based payment contracts. These signs include:
Setting Benchmarks Without Baselines: Establishing performance benchmarks before adequate baseline data is available is a clear sign of unfair dealing. It places providers at a disadvantage by setting unrealistic expectations.
Lack of Transparency: Opaque contract terms, hidden clauses, or undisclosed metrics that favor one party over the other indicate bad faith. Transparency is crucial for fair dealings.
One-Sided Terms: Contracts that heavily favor the health plan, with little to no consideration for the provider's needs and challenges, reflect an imbalance of power and unfairness.
Ambiguous Language: Using complex, vague, or misleading language in contracts can lead to misinterpretation and disputes, indicating a lack of good faith in negotiations.
Inadequate Risk Adjustment: Refusing or failing to provide adequate risk adjustment mechanisms increases the provider's financial risk, demonstrating unfair practices.
Unreasonable Administrative Burdens: Imposing excessive documentation and reporting requirements without providing necessary support suggests an intent to overburden and disadvantage providers.
Non-Collaborative Approach: A take-it-or-leave-it stance in contract negotiations, without engaging in meaningful dialogue or addressing provider concerns, shows bad faith.
Hidden Financial Incentives: Concealing potential financial benefits that favor the health plan at the expense of providers and patients undermines trust and fairness.
Retaliatory Measures: Implementing punitive measures against providers who voice concerns or attempt to renegotiate terms is a clear indicator of bad faith.
Ignoring Provider Feedback: Failing to incorporate or address feedback from providers during contract development and implementation shows a lack of genuine partnership and fair dealing.
Uncompensated Data Collection: Asking providers to gather data using questionnaires or other methods in a manner that benefits the health plan, without agreeing to future compensation for gathering, aggregating, and transmitting the data, is unfair. This requires providers to have faith that any future offer will be fair, which is not guaranteed.
Ambiguity Over Data Ownership: Contract language that creates ambiguity over data ownership can lead to unfair demands later. Health plans should not assert that providers must provide data because the health plan believes the data is necessary for their healthcare operational responsibilities. Aggregated data has value, and the purposes of how that data is used must be agreed upon by all providers.
Unwillingness to Discuss, Define, and Codify Transparent Shared Values, Measurable Objectives, Effective Controls, Test Scripts, Tests of Design and Effectiveness, and Key Indicators of Success: A health plan's reluctance to engage in detailed discussions and formalize these crucial elements in the contract is a strong indicator of bad faith and unfair dealing.
By recognizing these signs and addressing them proactively, health plan management and provider practices can foster a more equitable and collaborative environment, ensuring the success and sustainability of value-based payment contracts.
For More Information See:
A Case For Value and Importance of Independent Internal Auditors.
https://www.mentorresearch.org/value-and-importance-of-independent-internal-auditorsBehavioral Health Quality Framework: A Roadmap For Using Measurement to Promote Joint Accountability and Whole-Person Care https://www.ncqa.org/wp-content/uploads/2021/07/20210701Behavioral_Health_Quality_Framework_NCQA_White_Paper.pdf
Contract “Gaming”: Reasons Why Value-Based Contracts Will Fail.
https://www.mentorresearch.org/contract-gaming-reasons-why-value-based-contracts-will-failControls, Tests of Design (TOD) and Tests of Effectiveness (TOE) in Measurement and Value-Based Contracting For Mental and Behavioral Health Services.
https://www.mentorresearch.org/tests-of-design-and-tests-of-effectivenessDefinitions for Healthy Contracts.
https://www.mentorresearch.org/healthy-contracts-bill-definitionsDescription Of Healthcare Fraud By Using Provider Practices As A Proxy.
https://www.mentorresearch.org/healthcare-fraud-in-measurement-and-value-based-contractingGood Faith and Fair Dealings in Healthcare Contracting
https://www.mentorresearch.org/good-faith-and-fair-dealingHealthplan and Medicare Advantage Risk Scores and “Clawbacks”
https://www.mentorresearch.org/medicare-advantage-risk-adjustments-and-clawbacksHealthplan Contracts and Psychotherapy: Beware Shell Games.
https://www.imhpa.org/valuebased-contracting-for-psychotherapy-healthplan-gamesHigh Case-Mix Severity Must be Considered in Value-Based Contracting.
https://www.mentorresearch.org/high-case-mix-severity-must-be-considered-in-valuebased-contractingHow and Why Should the Independence of Certified Internal Auditors be Ensured?
https://www.mentorresearch.org/maintaining-independence-of-internal-auditorsImpact of Behavioral Health Treatment on Total Cost of Care Study.
https://www.evernorth.com/behavioral-health-studyImportance Of Shared Values, Objectives, Controls, and Test Of Design And Effectiveness.
https://www.mentorresearch.org/importance-of-shared-values-objectives-indicators-of-successImportance Of Clear And Accountable Contract Requirements For Value-Based Payment Contracts.
https://www.mentorresearch.org/importance-of-clearly-written-and-accountable-contractsInformed Consent Motivates Patients to “Game” Outcome Measures.
https://www.mentorresearch.org/informed-consent-motivates-gaming-outcome-measuresMental Health America.(Oregon Mental Health Services Rating).
https://www.mhanational.org/issues/2023/ranking-statesHealthplan Fraud Perpetrated on Mental Health Providers: What is It and How to Prevent it.
https://www.mentorresearch.org/preventing-healthplan-fraudIndependent Certified Internal Auditor – Example Job Description
https://www.mentorresearch.org/independent-certified-internal-auditorIndependent Certified Internal Auditor: The Bridge Between Stakeholder and the Healthplan https://www.mentorresearch.org/auditor-shall-be-a-point-of-contact-for-stakeholders
Preventing Problems Created By “Take it or leave it” Contracts in Mental and Behavioral Health Services.
https://www.mentorresearch.org/preventing-contract-of-adhesion-that-harm-public-healthReasonable Fears Providers Have About Entering into Measurement and Value-Based Contracts
https://www.mentorresearch.org/logical-fears-providers-about-value-based-contractsValue-Based Payment Fraud: When Heathplan Misrepresentation Turns into Conspiracy.
https://www.mentorresearch.org/preventing-healthplan-fraudWhat Problems Are Created When Healthplans Offer Providers “Take it or Leave it” Contracts (contracts of adhesion)?
https://www.mentorresearch.org/take-or-leave-contract-in-healthcareWhat Can Happens if Unfair, Bad Faith, Ambiguous, Ill-Defined, Unethical, or Voidable Provisions In Fee-For-Service and Value-Based Contracts Go Unchallenged?
https://www.mentorresearch.org/contracts-with-voidable-provisionsWhy Do Providers Avoid Conflicts With Healthplans.
https://www.mentorresearch.org/why-do-provider-avoid-conflicts-with-healthplansWhy is Hiring an Independent Certified Internal Auditor a Good Idea?
https://www.mentorresearch.org/why-hiring-an-independent-certified-internal-auditor-is-a-good-idea
DISCLAIMER and PURPOSE: This discussion document is intended for training, educational, and or research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.