There is a lot of discussion of bundled rates, case rates, and other forms of episodic payments. But it was very enlightening to hear from two executives who have “been there and done that”—the experience of Elizabeth Woike-Ganga, Chief Operating Officer, BestSelf Behavioral Health; and Tony Rajiv Juneja, M.D., Founder/Chief Executive Officer of Manage Addiction Lifeline, Oriah Behavioral Health, was front and center in the session, How To Develop Alternative Payment Models: A Guide To Building Successful Bundled Payment Models, at The 2019 OPEN MINDS Strategy & Innovation Institute session.
Dr. Juneja presented his work at Oriah Behavioral Health, which develops and offers a telehealth platform and optimizes recovery outcomes for people suffering from addiction and mental health issues—Manage Addiction Lifeline. Manage Addiction Lifeline is an opioid addiction app based on the bio-psycho-socio-spiritual model, that is combined with MAT, Individual Therapy (IT), Group Therapy (GT), and a Digital Curriculum (DC) for a comprehensive and evidence-based approach. This 52-week long treatment program is covered by Optum and Oxford (both under United Healthcare Group) and Aetna insurance plans (see Introducing Manage Addiction Lifeline) through a bundled rate. The reimbursement is an all-inclusive monthly rate per member enrolled in MAT; costs for enhanced services are included in the monthly rate.
BestSelf Behavioral Health is the largest community-based behavioral health organization serving 20,000 consumers (children, adolescents, and adults) in Western New York state, with an annual budget of $60 million. They are a certified community behavioral health clinic (CCBHC) and in the middle of a two-year pilot program, which provides fully integrated behavioral health care for children, adolescents, and adults under strict criteria, certified by the state. BestSelf CCBHC Clinics provides immediate access, personalized care, a “No Wrong Door” approach, and focuses on evidence-based practices. The CCBHCs are reimbursed through a cost-based prospective payment system (PPS) with a fixed daily rate payment. Under the fixed daily rate, CCBHCs receive the same fixed payment for all services provided to a Medicaid beneficiary on a given day, regardless of the intensity of services provided.
Any type of alternative payment model will present its own unique challenges, but there are some key best practices that can help any provider organization that is moving away from fee-for-service. After listening to Dr. Juneja’s and Ms. Woike-Ganga’s presentations, I have five key take aways for successfully developing and managing alternative payment models:
- Understand Your Costs
- Focus On Building Accurate Estimates
- Build An Optimal Infrastructure For New Payment Models
- Scale Slowly & Incrementally
- Develop A Plan To Demonstrate Value
Understand Your Costs—Before you can build an accurate financial model, you need to understand your unit costs. Your unit costs should include all direct program costs, direct administrative expenses, and an allocated portion of organizational overhead. This demands accurate data and reporting from your team and a clear definition of the program or service requirements. Without a true understanding of your costs, you will never be able to accurately manage an alternative reimbursement model (see Three Critical Tools For Unit Cost Management).
Focus On Building Accurate Estimates—To be successful with an alternative payment model, you need to be able to estimate your volume and predict your until costs for the future. Use your current experience to project service utilization. Build a model based on average utilization, but plot out your utilization patterns to assure you understand the distribution of your high and low utilizers. Once a bundled model in implemented monitor utilization closely, watch for adverse shifts in utilization. Both overestimating and underestimating what you can do and how much it will cost is a major risk. Overestimating runs the risk of takebacks, and underestimating runs the risk of deficits.
Build An Optimal Infrastructure For New Payment Models—Managing bundled rates demands a shift in organizational infrastructure—both in operations and culture. Your team needs technology and data management to track and report on clinical outcomes and costs; new workflow processes will need designed and optimized; staff will need to understand changing expectations and undergo new training; and your organization’s culture needs to shift to a data-driven management model (see Making Your Clinical Team Data Driven and A Data-Driven Culture: What It Is & Why It’s Important).
Scale Slowly & Incrementally—Scaling too quickly and in “leaps and bounds” carries with it unnecessary risk. When negotiating a new contract and building relationships with payers, be careful not to over promise when determining the bundled rate; start slow and take the necessary time to scale correctly and proceed serially with your innovations and advancements. Continuously, plan, roll out, measure, tweak your plan, remeasure, roll out again. To innovate and scale relies on having room for improvement and to make adjustments as feedback and data is received. You may want to modify your processes as you learn from roll out what offers the best return on your investment both in terms of efficacy and financially. Dr. Juneja noted, “If you start with a Maserati, you won’t be able to scale.”
Develop A Plan To Demonstrate Value—The point of alternative payment models is to align cost and quality by delivering on a preagreed upon value equation. After you’ve contracted, you need to demonstrate with data how you are delivering on that value equation. A major component of this is to control costs, otherwise payers may shy away from expanding or continuing your arragement. You’ll need real-time data analysis to address issues with cost and clinical outcomes as they arise, and the ability to share cost and outcomes data with payers as needed.
In the end, bundled rates can allow for innovation and positive treatment outcomes—but only if you have key components covered in your rate. For more, check out these resources in the OPEN MINDS Circle Library:
- Options For Alternative Payment Models For Behavioral Health
- Developing Case Rates? Better Find Your ‘Single Source Of Truth’
- Alternate Payment Models – Strategy Implications Of The CMS Roadmap
- Preparing For Value-Based Reimbursement-Even Before The Contracts Are Signed
- Four Ps For Leading A VBR Evolution (Or Any Change)
- Pay For Value-The Glass Half Full, The Glass Half Empty?
- VBR Jumping From Hospital-Centric ACOs To Community-Based Players
- Crawl, Walk, Run To VBR
- The Hospital Perspective On ‘Owning’ Value-Based Reimbursement
- Building A Workforce For Value-Based Reimbursement = Advice From Four Executives
Elite members of the OPEN MINDS Circle can check out the OPEN MINDS web-based readiness self-assessment, Value-Based Reimbursement Readiness Assessment, focused on the organizational and technical competencies provider organizations need to be successful with value-based reimbursement.