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Mindy Klowden, MNM

Director of Training and Technical Assistance, National Council for Behavioral Health

Value-based Payment is the New Reality for SUD Providers: Are You Ready?

July 17, 2019 | Healthcare trends | Comments
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The health care landscape is shifting from traditional fee-for-service models that incentivize volume of care toward value-based payment (VBP) models. VBP models create incentives for providers to improve health care quality and demonstrate better health outcomes at lower costs. Initially focused on physical health care, VBP models are becoming more prevalent in behavioral health, in part, because of the high costs associated with behavioral health conditions.

Recent research provides greater insight into this complex issue. A Milliman Research report examined the potential economic impact of integrating medical and behavioral health care and the cost of serving people with co-morbid conditions and a U.S. Government Accountability Office report prepared for Congress looked at behavioral health conditions as cost drivers in Medicaid.

But VBP doesn’t just provide financial incentives; the trend presents an opportunity for substance use disorder (SUD) treatment providers to improve overall care and help patients get and stay healthier.

Is your organization ready for value-based payment? What kinds of changes do you need to make and where should you start? You may have already started to make changes, as the funding for many of your programs has likely already shifted from state block grant funding to Medicaid and/or private insurance.

An important starting point may be to look at the data you are currently collecting and how you are using it. Implementing a continuous quality improvement process helps providers utilize the data they are collecting, not only for reporting purposes, but also to inform their clinical processes and program development. In a nutshell, this involves forming a team with both clinical and administrative folk who meet on a regular basis to determine what is working and identify opportunities for improvement. The National Council’s Care Transitions Network created a Quality Improvement Toolkit to help you take the first critical steps.

A common stumbling block is that mental health and SUD treatment outcomes can be difficult to define and measure. Knowledge from the field underscores improved functioning and quality of life as primary goals, but these are often absent in VBP performance measures. With a dearth of standardized tools, how can you demonstrate that your clients are getting and staying healthier over time? It may be worth starting with some nationally recognized process measures, such as those set by the National Committee for Quality Assurance (NCQA).

Another important step starts with understanding your costs of services. This means accurately tracking personnel and staffing costs, as well as administrative costs that include occupancy, technology, infrastructure and hidden costs such as workforce training to accommodate a new payment model. You need to cost out your services before considering if a VBP model offers adequate resources to make the necessary shifts in practice.

Important questions include:

  • Does the contract contain the flexibility you need for patient care?
  • Will the contract cover your actual costs?
  • Are the outcomes you will be required to measure the right ones?
  • Will the outcomes add meaning to your practice?
  • Will they accurately indicate if patients are being supported in their overall health and recovery?

Whether or not your organization is prepared to take on a VBP contract, it is important to be engaged in conversations at the local, state and federal levels about the future of behavioral health payment reform. Our common goal of supporting patients in leading healthier, happier and more productive lives hinges on the ability to help shape these conversations and develop payment models that support a full continuum of care.