11/24/2014
 David R. Swann, MA, LCAS, CCS, LPC, NCC
 e Council for Behavioral Healthcare

2014

David Swann, MA, LCAS, CCS, LPC, NCC
Senior Healthcare Consultant
MTM Services

Mike Forrester, PhD
Chief Clinical Officer
Partners Behavioral Health Management

Niels Eskelsen, MBA
Chief Business Officer
Partners Behavioral Health Management
2
 Current
Trends in Healthcare Reform
 Maximizing
 Provider
Value for Consumers
Reimbursement Models
3
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11/24/2014
Moving from carve out Medicaid BH funding to Section
1115 Integrated Waivers (Alabama, Arkansas, Kansas,
Illinois, etc.)
 Movement to Care Coordination Entities and Managed
Care Community Networks (Illinois, Oregon)
 14 plus states have applied under Section 2703 of the ACA
to develop Integrated Care Health Homes
 Excellence in Mental Health Act 2014-8 states will be
selected.

4
 Accountable
Care Organizations (ACOs)
o Accountable Care Organizations (ACOs) are being
certified by CMS with over 165 announced
Certifications for both Medicare and now Medicaid
Share Savings Plans
o Groups of providers who assume responsibility for
meeting quality and cost goals for an assigned
patient population
5
 Patient
centered medical homes
o A system that hinges on each patient having close
contact with a primary care clinician for continuing care
o The primary clinician takes the lead when referring a
patient to specialists
o Patient centered medical homes represent a promising
approach to delivering high quality, cost effective care,
especially for people with a chronic health condition
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11/24/2014
 Payer
focus on high-needs complex consumers
with preference for coordinated care across
medical and behavioral
 Moving
from paying for volume of services to
paying for value/quality of services
7

Services provided - Service array, duration and intensity of
services through Level of Care/Benefit Design Criteria and/or EBPs

Cost of services - Provided based on current service delivery
processes by CPT/E&M or other code and staff type

Outcomes achieved - (i.e., how do we demonstrate that people are
getting “better”)

Value is determined - Based on can you achieve the same or
better outcomes with a change of services delivered or change in
service process costs which makes the outcomes under the new
clinical model a better value for the payer
8

Achieving the best outcomes at the lowest cost

Move from a supply-driven health care system
organized around what clinicians do and toward a
consumer-centered system organized around
what consumers need
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11/24/2014
 Requires
transformational change
is misaligned with the interest of
consumers when revenue and profit depends on
increasing the service volume, not delivering
quality outcomes
 Improving outcomes that matter to consumers in a
cost effective way will result in progress
 Revenue
10
 Can
you promise anything that will lead to savings
for the payer?
 Can you promise anything that will lead to
improved outcomes?
 What is the effect of the services that you provide?
 How do you know that you get that effect?
 Can you state your value in a few simple
sentences?
11
Aligning how we pay for services with the outcomes we
are attempting to achieve – better health, better care and
better costs
 Services must be effective in achieving individual
outcomes or system-wide outcomes
 The services are more cost-effective than alternatives
that may have been selected
 The services are “lean”, waste (excess costs) have been
removed through process improvement activities

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With hospitals moving toward a value-based payment system
there is more demand now than ever for strategies that will
help healthcare systems hone in on population health.
The Triple Aim, an initiative set forth by the Institute for
Healthcare Improvement, covers three main checkpoints for all
hospitals as they make this transition
Population Health Focus
Experience of Care
Lower Per Capita Cost
Source: Stiefel M, Nolan K. A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost. IHI
Innovation Series white paper. Cambridge, Massachusetts: Institute for Healthcare Improvement; 2012. (Available on
www.IHI.org)
13
The success of achieving the Triple Aim relies on a few steps:
 Identifying target (or at-risk) populations
 Find out and define what your system’s aims and measures will be
 Develop a project that will show your progress and evidence to
support system-wide change
 Scale up testing for populations – look at the community you serve
first, those are your potential patients: by understanding their
socioeconomic and health state at a population level, you’ll better
predict their needs

Source: A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost
Stiefel M, Nolan K. A Guide to Measuring the Triple Aim: Population Health, Experience of Care, and Per Capita Cost . IHI Innovation Series white
paper. Cambridge, Massachusetts: Institute for Healthcare Improvement; 2012. (Available on www.IHI.org)

14
Payment for specified care coordination services to
specific types of providers
◦ Example: Medical homes - medical home receives a monthly
payment in exchange for the delivery of care coordination
services not otherwise provided
Payment for support services not traditionally covered
under a fee-for-service model, and therefore would not
be provided
 Potential benefits

◦
◦
◦
◦
Enhanced patient physician communication
Enhanced family involvement
Improved flexibility for where care can be provided
Reduction of unnecessary/inefficient care
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 To
align incentives between health care payers
and providers to better coordinate care,
enhance prevention and disease management,
reduce avoidable utilization and total costs, and
improve health outcomes
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 What
are your thoughts on paying for value?
do you define service value?
 What are the characteristics of a provider that
delivers value?
 Has anyone incentivized the delivery of service
value?
 How did you know you were getting what you
wanted to pay for?
 How
17
Mike Forrester, Ph.D.
Chief Clinical Officer
Partners Behavioral Health Management
18
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11/24/2014
The BIG QuestionAccountability In
Healthcare?
19
 MCOs
manage the financial risk
manage the provider network
 MCOs manage clinical care
 MCOs ensure quality measures are achieved
 MCOs can use innovative reimbursement models
to create incentives to strengthen clinical
strategies and improve outcomes
 MCOs
20

Among leading strategies to reform health
care is the development and
implementation of new payment models

The goal of these models is to change the
way physicians, hospitals, and other
providers are paid in order to emphasize
quality care at lower costs
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Level of Financial Risk
Low
Fee for
Service
Moderate
Performance
Based
Contract
Bundled
&
Episodic
Payment
s
Shared
Savings
High
Capita
-tion
Capitation AND
Performance
Based
Contracting
Level of Accountability
Provider less
engaged
Provider
engaged
Provider
actively
engaged
Provider fully
accountable
22

Payment reform is moving from “paying for volume
to paying for value/quality”

VBP requires integration of our clinical, quality and
financial information and the ability to track and analyze
costs by consumer, provider, team, program, and payor
and can operate effectively under fee for service, case
rate, and sub-capitation payment models in order to
succeed under a variety of pay for performance (P4)
bonus arrangements
23
Standard payment Methodologies
 Fee-For-Service
 Pay-For-Performance







Bundled Payments
Case Rates
Shared Savings
Shared Risk
Comprehensive Cost of Care Payment
Traditional Capitation
Global Payments
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11/24/2014
 Fee-For
-Service is the most common way of
paying for healthcare services today
 A predetermined amount is paid for each discrete
service provided
 The provider is at risk for the number and cost of
processes within each service, but there is no limit
on the number of services
 Providers receive payment regardless of
outcomes
25
The Fee-For-Service reimbursement model
makes it very difficult to achieve outcomes such
as:
 Reductions in readmissions
 Inappropriate use of emergency room care
 Reduced hospitalizations
 Reduced residential
 Other high cost services
WHY? – Let’s Discuss
26
Advantages/Incentives
 MCO
o The primary reimbursement methodology preferred by CMS
o Provider claims serve as encounter data
o Claims payment process validates validity of claims by a predefined
adjudication methodology
o Supports accountability for enrollee care
 Provider
o Incentive for provider to provide as much billable service as possible
o Incentive to maintain high productivity rates
o Allows for a wide rate of providers to participate in the system
(Large comprehensive and small specialty providers may provide
services under the plan)
o Allows for more diverse place of service
o Allows for greater geographical coverage (rural vs. urban)
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Disadvantages
 MCO
o Offers little or no incentive to deliver efficient care or prevent unnecessary care
o Must rely on utilization management tools to control service costs
o Most services are based on face to face visits, and may not include carecoordination and management of conditions by other contact methods
o As payments are limited to one provider for one interaction, fee for service does
little to encourage management of care across settings and among multiple
providers
o Limited to the scope of services offered by a particular agency or independent
practitioner
 Provider
o Payment lags service
o Cost of processing claims, including the losses related to denied claims
o Losses of flexibility in providing services do to limitations on multiple services on
the same day
o Pressure to maintain high productivity, may lead to practitioner burn out
28
 Why
should a payer pay me more?
trying to answer this question, stay away from any
answer that pertains to the effort that you put forth
 For example, every provider that provides XYZ services
in one community all reports that they are treating the
most severely ill people…that can’t be true
 Is your healthcare organization built for high volume
and serious illness? If not, What do you do?
 In
29
Provider reimbursement, including financial incentives,
based on achieving defined and measurable goals
related to care processes, and outcomes
 Offers potential to improve quality of care, encourage
collaboration, and enhance efficiency of care
 Limitations include single condition focused measures
that do not reflect the complexity of caring for patients
with complex cases
 May incentivize physicians to avoid high risk patients

30
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11/24/2014
Follow up after an inpatient admission
Seeing referred consumers on the same day they are
referred
 Following certain evidence based practices
 Clinically integrated “treat to target”/episode of care brief
therapy model
 An internal functioning utilization plan to monitor the level of
services being provided in line with the level of care benefit
design and criteria
 Satisfaction surveys from members


31
Single payments for a group of services related to a
treatment or condition that may involve multiple
providers across varied settings
 Potential to improve coordination across multiple
caregivers, provides flexibility in provision of care,
incentivizes effective management of episodes
 Limitations include the difficulty in defining an episode,
potential barriers to choice of provider and lack of
incentive to reduce unnecessary episodes

32
 MCO
pays provider for a variety of related
services that occur during an episode of care
rather than separate payment for each service
type
 This
approach is designed to encourage providers
to provide better coordinated and more efficient
care and to eliminate care that is not truly needed
33
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11/24/2014
 On
the behavioral health side, this could include
paying for facility/hospital not only for the inpatient
care but also post discharge service following the
discharge from the hospital
 Ideally, this could be at a flat fee for every inpatient
stay
34
It might also be a bundled payment for providing 6 months
of community-based recovery-oriented services for an
adult mental health consumer who requires LOCUS Level
3 services
 The provider would need would need to work with this
consumer to develop a recovery oriented professional care
plan, a self-care plan and identify a few clinical and
personal goals for the consumer
 The provider would also need to measure progress using a
validated tool and get high marks on a customer survey

35
 Case
rates provide much greater flexibility to the
provider and the consumer, and it allows them to
be more agile about what is needed at any point in
time
 Case rates assist the provider when compared
with fee for service through the reduction in
administrative costs
 This is especially the case as the provider
continues to hone the service and deliver it at a
lower cost
36
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Shared savings is a payment strategy that works in
combination with other payment strategies:

Offers an incentive for the provider to reduce health
care spending below the negotiated rate, allowing
the provider to share in any of the savings

MCO withholds AT-RISK funding

Provider bears no responsibility for costs that occur
above the rate

A common first step approach toward full-risk
payments

Common 50/50 split
37
Shared Risk is a payment strategy that in combination
with other strategies offers an incentive for the provider
to reduce health care spending below the offered rate
by putting the provider at-risk for some of the loss if
costs exceed the rate:
 Shared risk may allow the MCO to pay providers in
advance for AT-RISK funds
 Provider must repay AT-RISK funds if MCO service
cost exceeds MCO revenues
 Flexible arrangement
 Not as common as shared saving
38

Involves providing a single risk-adjusted payment for the full range
of health care services needed by a specified group of people for a
fixed period of time

Similar to capitation, however there are additional risk adjustment
methodologies utilized, limits on risk exposure, and incorporation of
quality measures
Benefits include flexibility for providers in terms of care delivery,
incentive for efficient care, and improved emphasis on maximizing
health
Limitations include decrease in patient choice of provider, at risk
structure for involved entities, and geographic challenges for the
provision of care
◦ Example: Per Member Per Month


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11/24/2014
Capitation models are designed to control the number of
episodes, as well as the cost of individual episodes
 Provider receives a single payment to cover all services
needed by a patient during a set period of time
regardless of the number of episodes
 Payment amount is the same no matter how sick or
healthy
 Incentivizes providers to avoid those with chronic or
costly conditions

40
Under this method, medical homes work with
payers to complete a zero-based budgeting process
that answers the following questions

Based on the complexity and severity of my patient
population, how may clinicians of what disciplines are
needed to support a team-based care model, where the
clinic becomes a health and wellness center for those
without complex medical conditions, an emergency room
and hospital prevention organization for my patients with
complex and multiple comorbid conditions?
41
 What
infrastructure is needed (technology,
facilities, support staff, etc.) to support these high
performing teams?
 What is the price tag for creating this clinic and
how does it translate into a per-patient per-month
(PPPM) rate?
 What is a standardized PPPM rate for all clinics
that can then be risk adjusted for the severity and
complexity of the patients within a given medical
home?
42
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11/24/2014
 What
are the key performance indicators that will
support identification that the services being
delivered are “lean”?
 What are the performance metrics that need to be
in place to measure whether the clinic is meeting
the stated aims and is providing lean services?
Note: This budgeting exercise is for medical home costs
only. Risk for inpatient and specialty care may or may not
be built into the formula
43
Based on the budgeting process
 Global
payment is a monthly payment to each
clinic based on the number of patients enrolled
times the PPPM rate
 Global payments may include a shared savings
layer that provides a bonus to the clinics if total
healthcare expenditures are reduced more than
extra money paid to the medical home (reduction
of inpatient, ED and specialty care)
44
Niels Eskelsen, CPA, MBA
Chief Business Officer
Partners Behavioral Health Management
45
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11/24/2014
 What
would a provider need to do to be able to
participate one of these types of reimbursement
plans?
 How
do you see yourself moving forward with
these payment options on the horizon?
46
 CMS
requirements
intelligence or data requirements
 Need for annual evaluation
 Case or bundled rate discussion
 Wrap up
 Business
47
The reimbursement plan must be consistent with the
Social Security Act and other federal statutes and
regulations
The MCO must assure that payments are consistent
with:
o Efficiency
o Economy
o Quality of Care
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11/24/2014
The MCO must assure that payments are consistent with:
o Efficiency
• The change in method must promote the efficient use of funding in
providing service delivery or administrative support
o Economy
• Budget Neutrality
 An alternative payment methodology cannot cost more in the
aggregate than using a Fee-for-Service Model
 In order to validate budget neutrality, the MCO must provide
equivalent encounter data, such as shadow claims
o Quality of Care
• There is no reduction in the Quality of Care are evidenced by meeting
predetermined quality measures.
• Quality measures should be both process and outcomes based, with
a preference for the latter
49

Any alternative reimbursement methodology
cannot be a basis for denying or delaying medical
necessary services to Medicaid enrollees or alter the
clinical coverage policy of state plan services
The amount must be sufficient to enlist enough
providers so that care and services are available under
the state Medicaid plan at least to the extent that such
care and services are available to the general
population in the geographic area
See 42CFR430 and 42 CFR 447
50



Do you know the costs of the services
provided?
Do you know the time needed to
move someone from first call to initial
treatment?
Do you produce outcomes that you
can show in data for the following:
o Engagement in treatment
o Readmission rates
o Hospitalization rates
o Symptom reduction through
objective tool measurement
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11/24/2014

What is the purpose of developing an alternative
payment method.
o
o
o
o

What values are we trying to achieve?
What outcomes are we trying to achieve?
What service gaps are we trying to fill?
How will we know if this strategy works or not?
Which method are we considering using?
o Why do we think that changing the payment method will achieve
the desired results?

What service or services are included in the new rate?
52
 Implementation
Strategies
o What strategy are you going to use to implement a new
payment method?
o How will a new method affect providers?
• Reporting issues
o How will a new method affect consumers and access to
care?
o How will a new payment methodology be explained to
stakeholders?
• What are the upside and downside considerations?
• How are you going to manage downside risk to all
stakeholders?
53
What is the population that is going to covered?
o What is the population demographic?
•
•
•
•
Age
Medicaid Category of Aid
Diagnosis
Geographic configuration
o What are the historical services by the provider network
• What are the types of services provided?
• How many units of services were delivered?
o What is the amount of service historically received,
looking at individuals?
• How much service was provided to each enrollee?
• What are the service utilization trends?
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11/24/2014
Alternative reimbursement methods usually do not mean
reduced administrative cost
Case, bundled, or episodic population-based rates
require providers to have the capacity to provide all
covered services
If a case rate is stratified, it does not limit the amount of
medically necessary services of a covered consumer
Providers must be able to manage their cost in the
aggregate
Do providers have the vision and leadership and will to
change how they provide services that is consistent with
the new reimbursement methodology?
Predetermined monitoring tools must be implemented






55
 Key
o
Questions
Do you have enough encounter data to determine if the
alternative methodology is budget neutral?
What is the summary of service utilization and cost?
How has the new method impacted the identification
and delivery of clinical care?
Anecdotal information will not support continued
capitation funding and will probably affect your rate
What revisions should be made in the coming review
period?
o
o
o
o
56

How would we set an Alternative Reimbursement
for ACTT?
o
What are we trying to achieve?
•
•
o
o
o
o
How are we reimbursing providers now?
Why do we want to change the reimbursement method?
What data would we need?
What will we require the provider to do?
How will we implement the change?
How will we monitor?
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11/24/2014
How would we develop a case rate for all
community based services?

o
What are we trying to achieve?
•
•
How are we reimbursing providers now?
Why do we want to change the reimbursement method?
o
o
o
o
What data would we need?
What will we require the provider to do?
How will we implement the change?
How will we monitor?
58
MST Utilization -Medicaid
80
70
68
70
60
55
47
50
41
40
30
20
35
26
25
26
24
24
24
25
24
22
19
17
15
11
10
7
21
19
12
8
10
6
0
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
2014
2014
2014
Unique consumers Medicaid
New auths - Medicaid
Linear (New auths - Medicaid)
59
H2033 - MULTI- Distinct
SYSTEMIC
Client
THERAPY (MST) Count
Grand Total
136
Amount
Expensed
$1,349,400.93
Average Cost per
Units per Unique
Client Client
271
$ 9,922.07
Units
Expensed
PMPM
36,904 $ 826.84
1. Is MST a candidate for a case rate?
2. How would you determine what the rate should be?
Alternative Payment Methods
60
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11/24/2014
Psychiatric
Inpatient
Distinct
Client
Count
Amount
Expensed
1,467
$4,635,029
Average
Units Cost per
per Unique
Client Client
6.4
$ 3,159.53
Units
Expensed
9,389
PMPM
$263.29
1. What if we offered a case rate based on 5 days per episode, what do you
think would happen?
2. What do you think would happen to Admissions?
3. What do you think would be the initial savings?
Alternative Payment Methods
61
 Alternative
Reimbursement Methodologies are just
one tool for managing risk
 The risks of adopting an alternative
reimbursement methodology must be understood
by the MCO and the Provider
 Monitoring tools must be predetermined and part
of the implementation process
 A formal evaluation process is an important
element of the plan
62

Last chance to ask that embarrassing question!
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11/24/2014
Good Luck!
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