For executives of specialist organizations trying to stake out a place in an integrated market, understanding and packaging the “value” of unique expertise is key. My colleague, Monica E. Oss, spoke to the emerging opportunities for specialist organizations as falling in two categories—specialty care coordination and crisis management/diversion programs for consumers with special needs—in her keynote, Reinventing Your Organization: Key Management Best Practices For A Value-Based World, at The 2018 OPEN MINDS Management Best Practices Institute. Success in either of these roles requires specialist organizations to be recognized by health plan managers as “uniquely qualified”—or a “center of excellence” (COE) for that specific consumer population. But that is not the traditional use of the term.
There is not a clear definition of COEs. Traditionally, a “center of excellence” has been defined as a research center focused on promoting best practices related to a certain health care condition or topic. Medicaid plans use COEs in either the traditional sense, or to designate organizations as providing high quality care. But health plans are taking a slightly different approach to the term COE. Generally, most health plan managers now define a COE as “a tertiary or quaternary health care provider organization that is identified as the most expert and cost efficient and produces the best outcomes” (see Mosby’s Medical Dictionary). What this means of course, varies in practice. Each health plan identifies what constitutes expert, cost efficient, and best outcomes for their programs. They also determine how a provider organization would qualify. For provider organizations, there are some clear benefits of COE recognition. Often it means enhanced rates, additional referrals, special status in the provider directory, or additional consultative help from the health plan.
What are some examples of the center of excellence concept in the current health care market? Walmart implemented their center of excellence program for employees in 1996, which pays a bundled rate to designated provider organizations for providing certain surgeries. For selecting these high quality organizations, employees have reduced out-of-pocket costs, and Walmart pays travel and expenses (see Walmart Expands Bundled-Rate Centers Of Excellence Program In Its Employee Health Plan and Emory Healthcare To Launch ACO, Bundled Payment Program With Walmart). At the local level, a Texas health plan made the news when it designated a center of excellence for providing children’s therapy services and in Arizona, one of the state’s health plans has designated centers of excellence for autism services (see Superior Health Selects Care Options For Kids As Preferred Provider For Therapy Services and Mercy Care Plan and Mercy Maricopa Launch Medicaid Centers Of Excellence For Autism For All Ages).
My colleague and OPEN MINDS Senior Associate Deb Adler weighed in:
Health plans are just beginning to “dip their toe” into the COE waters for behavioral health. Much of the pressure to expand COEs to the behavioral health and addiction space are tied to employer pressure. Employers have seen improvement in quality outcomes and significant health care cost savings for their employees and dependents in many of the early medical model COEs (e.g., transplant COEs). Employers see the COE model as an effective approach that could easily translate to behavioral health and substance use disorder and be used to drive new benefit designs and health care savings. Consensus around the member outcome measures is still evolving, albeit savings is typically measured in behavioral health care savings with total cost of care (inclusive of medical) a future goal of most plans.
I recently completed a market scan of the largest health insurers and their current COE initiatives. At this time, most of COE initiatives among the largest plans are focused on medical procedures related to complex physical health treatment such as bariatric surgery and transplants. Most health and human services related COEs are found at the local Medicaid plan level, or are through behavioral health organizations (BHO). Both Optum and Beacon Health Options, two of the largest BHOs, offer programs focused on clinical excellence for behavioral health provider organizations.
To learn more about these initiatives, be sure to check out our latest reference guide: States & Insurers With Health & Human Services Center Of Excellence Programs. The report includes information on state Medicaid programs with health and human services centers of excellence, and health insurers offering programs that reward clinical excellence through a COE-like facility designation.
To continue the discussion on the shifting payer reimbursement market, join us at The 2018 OPEN MINDS Executive Leadership Retreat for the executive seminar, “How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating, & Contracting With Health Plans” featuring Richard Louis, III, Advisory Board Member, OPEN MINDS.