We’ve written a lot about the challenge of addressing health plan “pain points”—Pain Points Matter, Health Plan Relationship Building Skills Key To VBR Success, and Solve The Problem, Gain A Partner. Understanding health plan needs and the ability to present them with a “solution” to their problems is key to more revenue if you are a provider organization—by becoming a “partner” rather than just another service provider. But how does that work in practice? How do executive teams translate their market intelligence into actionable steps and sustainable revenue?
Here’s an example. Recently, we covered the new contract awards in New Hampshire. The New Hampshire Department of Health and Human Services (DHHS) announced the award of performance-based health plan contracts for the state’s new integrated Medicaid managed care program. The three health plans (AmeriHealth Caritas, New Hampshire Healthy Families, and Well Sense) will be at-risk for physical, behavioral health, and pharmacy services. The health plan will have a two percent quality withhold from their capitation rate and be eligible for annual performance incentives. They will be assessed in three performance categories—quality improvement, care management, and behavioral health (For our complete story, as well as a detailed look at the measures, check out New Hampshire Medicaid Implements MCO Capitation Rates Linked To Performance). The two behavioral health measures are:
- The percent of community mental health program-eligible health plan members that receive Assertive Community Treatment (ACT) services consistent with a fidelity score of 85 or more
- The percent of health plan members in an emergency department or a hospital setting that are awaiting psychiatric placement for 24 hours or more
So, what does this market intelligence tell you if you’re delivering behavioral health services in New Hampshire? It tells you that these health plans will be looking for partner organizations that can improve their scores in these two areas—the “pain points”.
There are four key steps in taking this from information to potential revenue. First, assess current competition and capacity. Is the market overcrowded or is there room to grow? In this case, is there enough ACT capacity? Are there enough emergency psychiatric programs to prevent long waiting times? Are the existing programs meeting the performance requirements outlined in health plan contracts?
Second, if there is room for a new program in the current system, it is time to focus on your organization’s ability to develop a solution. Do the programs play to your strengths as an organization? Are they part of your strategic vision for the future?
Continuing with our New Hampshire example, if there is a shortage of psychiatric urgent care programming, a provider organization may decide that they have experience with crisis intervention programs and community-based care coordination and are already planning to expand their partnerships in the community to coordinate social support services for the consumers they serve. In that case, then starting a psychiatric urgent care program is in their “wheelhouse” and aligns with their strategy for the future.
Third, if the program aligns with your strategic vision, then it’s time for a high-level feasibility analysis. What does this solution look like? How much will it cost to develop? What is the likely reimbursement rate? How many referrals are needed to breakeven? (For the OPEN MINDS feasibility analysis model, see How To Develop A New Service Line: Building A Diversification Strategy & Conducting A Feasibility Analysis.)
Finally, if the initial feasibility analysis is good, it is time for concept testing with the payer. This is the time to approach the health plan with your organization’s concept—explain how you’ll deliver the program sustainability and how you will address their pain points. For more detail on this process, check out this presentation from my colleague Deb Adler, Senior Associate, OPEN MINDS: The OPEN MINDS Health Plan Partnership Summit: A Guide To Developing & Negotiating Partnership Agreements With Health Plans.
This model of connecting health plan performance measures to a provider organizations’ programming is a “best practice” for organic growth of provider organizations. Taking this best practice from concept to practice, involves some advanced management competencies—analysis market intelligence, feasibility analysis service line design, ability to manage performance-based contracts, and relationships with the health plan managers. But if these skills are not in your management team’s portfolio, they are skills to acquire.
Interested in learning more about the health plan contracting models and performance measures in your state? Check out our State Market Intelligence Suite. OPEN MINDS Circle Elite members can download all 50 states (plus Washington, D.C.) now on the OPEN MINDS website—check out the suite of New Hampshire state profiles below:
- New Hampshire Behavioral Health System State Profile Report
- New Hampshire Health Care System Landscape: An OPEN MINDS State Profile
- New Hampshire Medicaid System: An OPEN MINDS State Profile
- New Hampshire Medicaid/Medicare Dual Eligible System: An OPEN MINDS State Profile
For more preparing your organization, join us June 3 in New Orleans at OPEN MINDS Strategy & Innovation week for the seminar, “Succeeding With Value-Based Reimbursement: An OPEN MINDS Executive Seminar On Organizational Competencies & Management Best Practices For Value-Based Contracting”, featuring Ken Carr, Senior Associate, OPEN MINDS.