If you’re confused about the terminology in the world of value-based payment, you’re not alone. Somewhere between fee-for-service and capitation is a range of reimbursement models that are fondly referred to as “other weird arrangements.” There are many terms – case rates, bundled payments, gain sharing, episodic payments, and even capitation payment models for a specific populations that are the financial equivalents of case rates.
We’ve reported on all of the above. The use of case rates – see Four Keys To Success With MCO Contracting and The Keys To Negotiating Risk-Based Contracts: Advice From Centerstone’s Debbie Cagle. Capitation arrangements for medical homes and health homes – see The Morphing Of ‘Case Management’ and How Does Case Management Fit Into The New Model Of ‘Whole Person’ Health?. We’ve also looked at bundled payments- Are Bundled Payments Working? An Evaluation Of The Medicare Bundled Payments For Care Improvement (BPCI) Initiative and The Latest Telehealth Example: Pay-For-Value.
Closely related to bundled payments are episodes of care (EOC), which are currently being implemented by state Medicaid programs. What is an episode of care (EOC)? Generically, the term episode of care (EOC) means a bundled reimbursement for all health care services delivered in response to a particular health issue or for a package of treatment services that can be defined by diagnosis, time, or locale. Common examples of episodes of care include perinatal care or knee replacements.
Essentially, episodes of care are “case rate” initiatives where a primary provider is assigned retroactively based on attribution (see In “Accountable Care”, Who Is Accountable For What Consumer?). A claims code or diagnosis triggers an episode and during the episode period, all claims related to the episode count towards the cost of care. At the end of the episode, the provider organization with the highest number of claims is held financially responsible for the episode, which is factored into their average episode cost at the end of the performance year. The provider organization’s average episode costs are compared to the cost thresholds and they either owe losses or receive a share of the savings.
Thus far, two states, Arkansas and Tennessee, have implemented episodes of care for behavioral health. Two more states expect to implement behavioral health episodes in the next couple of years. Both Arkansas and Tennessee have implemented EOC for youth (with varying age ranges) for attention deficit hyperactive disorder (ADHD) and oppositional defiant disorder (ODD). Arkansas introduced their first behavioral health episode in 2014 and Tennessee introduced their first behavioral health episode in 2016.
The challenges to EOC are many. The first is what constitutes an episode of care. Tennessee and Arkansas have approached the length of their episodes in different ways. Tennessee’s ADHD episode lasts 180 days while in Arkansas the same episode lasts for twelve months.
The second challenge is what to measure. Neither state has an answer yet. Most of what states are tracking at this point is related to process or the number of visits per consumer during the episode. In Tennessee, provider organizations meet the ADHD quality requirements if a consumer meets the minimum number of visits (five) during the episode period. In Arkansas, providers meet the ADHD quality requirements if 90% of episodes have a completed quality assessment or continuing care certification. Other measures being tracked, but not included in quality scores include:
- The percentage of “new episodes” in which the beneficiary received behavioral health medications is under 20% (Tennessee ODD)
- Percentage of episodes certified as non-guideline concordant (Tennessee ADHD)
- Average number of therapy visits per valid episode (Arkansas ADHD)
- Percentage of valid episodes that had a claim with ODD as the primary diagnosis in the prior year (Arkansas ODD)
And then there is the actual management of the episode at the provider level. I talked to two executives from behavioral health provider organizations in Arkansas and Tennessee to get their on-the-ground perspective. Doug Stadter, Chief Executive Officer of Centers for Youth and Families in Arkansas and OPEN MINDS Advisory Board member said, “As a behavioral health provider, we have been impacted very little by the episodes of care for ADHD and ODD. Most of our clients have multiple diagnoses and are excluded from the episode. For the most part, clients with ADHD are only treated by their primary care physician.” For now, in Arkansas, the behavioral health episodes of care are rooted in the primary care space.
Robert N. Vero, Ed.D, Chief Executive Officer of Centerstone of Tennessee has a slightly different experience in Tennessee. As Tennessee approaches the first performance year for behavioral health episodes, provider organizations have asked for a postponement of the EOC payment model due to concerns about the use of evidence-based care, quality measures, and clinical guidelines. The first two concerns are related. Currently the model does not require the use of evidence-based care and because quality measures are linked to process, there is no way to check or encourage the use of evidence-based care. Finally, Dr. Vero has serious concerns underlying the episode’s clinical criteria. The clinical exclusion criteria related to “care pathways” do not appear to either include the clinically appropriate exclusionary (co-morbid) diagnoses nor currently function as intended. Higher needs families, the groups traditionally referred to community mental health centers, are not accounted for and this is creating adverse selection.
Despite these challenges, Tennessee is considering additional episodes of care for depression, schizophrenia, bipolar disorder, and other behavioral health conditions. Additionally, Ohio has put out a call for consultants to develop ADHD and ODD episodes of care to compliment the state’s physical health episodes of care. And other states, such as New York, are in the early planning stages of developing episodes of care for behavioral health.
For more detailed information on state behavioral health episodes of care, be sure to check out our new OPEN MINDS Market Intelligence report Key Features Of Medicaid Behavioral Health Episodes of Care. The report discusses how EOC payment models work and provides all the details about Arkansas and Tennessee’s EOC, including the episode trigger, eligible provider organizations, the length of the episodes, what is included in the cost of the episode, and the episodes quality measures.
When it comes to designing value-based payments in general, and episodes of care in specific, that are good for consumers, professionals, provider organizations, and payers alike, “the devil is in the details.” We’ll keep you posted on how emerging reimbursement models work – and how to plan accordingly.