The shift from fee-for-service (FFS) reimbursement to value-based contracting is certainly a work in progress. Some markets, some payers, and some services are more in progress than others. But one place where the shift has gone from concept to reality is Arizona – in the Maricopa County, Arizona system. Arizona’s Regional Behavioral Health Authority (RBHA), Arizona (GSA 6), is managed by Mercy Maricopa, which is sponsored by Mercy Care Plan and Maricopa Integrated Health System (MIHS). Mercy Care Plan is an Arizona Medicaid Plan sponsored by Dignity Health and Carondelet Health Network, and managed by Aetna. In 2014, RBHA moved ahead with a master plan that reshapes how providers are reimbursed for services.
We got an up-close look at this plan at The 2016 OPEN MINDS Performance Management Institute, where Don Fowls, M.D., President of Don Fowls & Associates discussed the framework for contracting in Maricopa County and the challenges of value-based purchasing when developing integrated models of care, in his session, Moving To Value-Based Purchasing In An Era Of Integration – A Guide For Managing High Cost Members. For its delivery system model, Mercy Maricopa Integrated Care (MMIC) is launching several integrated behavioral health and primary care options for consumers, and is pushing for having 50% or more of their total spend in value-based arrangement by 2017-2018 (for a breakdown of this system and a look at the integrated care options, check out Maricopa County’s Emerging Integrated Care Management Model).
Their model to move to value-based arrangements is taking place in three-phases – with a “possible” fourth phase:
- Phase 1: Value-based contracts for permanent supportive housing and ACT and scheduled implementation for person-centered health care homes (integrated health homes)
- Phase 2: Clinically integrated organizations (CIOs) and accountable care organizations (ACOs)
- Phase 3: Bundled payments/episodes of care (aggregate the total costs for providing care into one bundle that reimburses all providers for all services during a period of time or care cycle)
- “Possible” Phase 4: Capitation (A set amount of money paid per member per month (PMPM) for each member assigned; Provides all reimbursement for services, administration and margin from the PMPM. The provider is at risk if costs exceed revenue and can gain if revenue exceeds cost.)
The results from their initial implementation of value-based contracting has been positive. In 2014 and 2015, Mercy Maricopa implemented their initial value-based contracts with five provider organizations for assertive community treatment (ACT) services. Under these initial arrangements, a portion of potential payment is tied to performance on defined measures centering on access, quality, satisfaction, and utilization/cost. This creates a system where bonuses may be paid for meeting performance goals – what Dr. Fowls termed using “the carrot, not the stick.” These provider organizations were given the following performance metrics:
- 10% reduction in inappropriate emergency room use for assigned members
- 10% reduction in readmission rates
- 10% increase in employment
- 10% increase in housing rates
- 10% increase in primary care practice (PCP) visits
Mercy Maricopa is now moving ahead and contracting with additional providers, including community-based behavioral health providers and primary care and specialty medical providers. Performance measures are tied to specific, mutually agreed upon goals. Initially they include process measures but the trend is to move more to measures focused on member outcomes, including those that impact psychosocial determinants. The big challenge according to Dr. Fowls? “It is the culture shift of moving from a traditional block payment to value-based payment. You get used to getting paid a set amount at the beginning at each month, and it really takes a shift in mindset and perspective about the way to do things.”
The successes – and challenges – of these early pay-for-value models is going to do much to inform executives of payers, health plans, and provider organizations about the most successful models and the appropriate rates. For more on Maricopa County, check out Mercy Maricopa Integrated Care Launches Arizona Regional Behavioral Health Authority Contract and Mercy Maricopa Offers Medicaid Beneficiaries With SMI Four Integrated Care Options. And, to learn more about Arizona’s changing Medicaid system of care, the OPEN MINDS Arizona Behavioral Health System State Profile Report is now available for purchase in the OPEN MINDS e-store.