Value-Based Payment Comes to Medicaid, Private Market Plans

This is the final installment in the series “Changing Practice/Changing Payment.”

The American health care system is moving from paying physicians for the volume of services they perform to paying for the value of the care they provide. This trend toward “value-based payment” has gathered momentum in recent years with a proliferation of value-based payment programs in both the public and private sectors. These changes encompass dramatic reforms in the way physicians participating in Medicare and Medicaid will be paid and the emergence of a variety of new models of care by which physicians can organize themselves to deliver value-based care.

The goal of this evolution is summed up in the so-called Triple Aim: better patient experience of care, better population health, and lower per capita cost of health care.

Through a series of articles titled “Changing Practice/Changing Payment,” Psychiatric News has sought to organize and explain in detail all of these changes and how they will affect psychiatrists and other clinicians. In previous issues, the series has covered the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-Based Incentive Payment System (MIPS), Alternative Payment Models, and electronic health records. In the final installment of this series, Psychiatric News looks at how these changes are playing out in the Medicaid program and in the private sector. This article also looks at how the federal parity law may impact Medicaid and private plans and how parity may also interact with these trends in payment policy.

The Medicaid program, though subsidized by the federal government, is administered separately by the 50 states, five territories, and the District of Columbia. Value-based payment policies may differ depending on how the patient receives coverage: traditional Medicaid; Alternative Benefit Plans for new enrollees in the Medicaid expansion under the Affordable Care Act (ACA); or dual eligibility for Medicare and Medicaid when the primary carrier is Medicare. Likewise, policies may differ depending on how the provider gets paid (fee for service or Medicaid managed care).

Q: What kind of value-based payment strategies are being employed in Medicaid? Are there strategies specifically focused on mental health and substance use treatment?

A: To date, nine states—Colorado, Illinois, Maine, Minnesota, New Jersey, Oregon, Rhode Island, Utah, and Vermont—have launched Medicaid accountable care organizations (ACOs). These are groups of doctors, hospitals, and other health care providers who organize to provide coordinated care for a defined population with the goal of keeping patients healthy and costs manageable. Colorado, Minnesota, and Oregon have shown promising results for integration of behavioral health with primary care in their ACOs.

The states may implement either a shared savings arrangement or global budget model to reimburse providers in a Medicaid ACO. Under a global budget, ACOs receive a capitated per-patient payment to provide services and accept full financial risk for the health of their patient population. Shared savings programs employ a fee-for-service model of payment but compare those payments to a target budget for the managed population based on a “control group” or market baseline trend, along with a set of quality metrics. If payments come under the target budget and quality metrics are achieved, then a percentage of the savings is shared with the participating providers.

Additionally, the ACA included section 2703, which created an optional Medicaid State Plan benefit for states to establish health homes for people with two or more chronic conditions, including serious and persistent mental health conditions, to improve the coordination of their care. Under the option, states receive a 90 percent enhanced Federal Medical Assistance Percentage (FMAP) for the first eight quarters the program is effective. There are 26states and the District of Columbia with approved health homes, and 17 of those have a focus on mental health—Alabama, D.C., Iowa, Kansas, Maine, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, and West Virginia.

In 2011, the state of Missouri made a commitment to its citizens to focus on prevention efforts. Using an integrated care approach, Missouri’s Department of Mental Health collaborated with the state’s Medicaid system (known as MO HealthNet) and community mental health system to establish health homes throughout the state’s 29 community mental health centers. All adults enrolled in the Missouri Community Mental Health Center Health Home Program have a serious mental illness, and all children and youth in the program have a serious emotional disorder.

The health home approach allows eligible Medicaid enrollees to receive health care for targeted chronic conditions such as diabetes, chronic obstructive pulmonary disease, hypertension, and asthma, as well as mental health care. Health homes either strengthen linkages to community primary care providers (PCPs) or bring PCPs in house.

Missouri’s investment in integrated care has resulted in improved care coordination and has placed Missouri on a national stage as a model in integration. The Missouri Community Mental Health Center Health Home Program received an APA Gold Achievement Award at the 2015 IPS: The Mental Health Services Conference.

The Missouri program and others like it are vital to address the physical health needs of the MI/SUD population whose primary (and often only) contact is with the specialty care system.

Q: What challenges are there for psychiatrists participating in these models?

A: Clinical outcomes are difficult to measure, so pay-for-performance systems usually evaluate process, quality, and efficiency. The problems for psychiatry and the behavioral health field include the validity of performance measures used, whether they will preserve an individual physician’s clinical judgment and a patient’s preferences, and whether they will lower costs or simply increase administrative burden and associated costs. To date, measures developed for psychiatry have not been relevant to the realities of clinical practice, and APA is working with Centers for Medicare and Medicaid Services (CMS) and other stakeholders to develop better quality measures.

Nonetheless, pursuant to the ACA, the CMS identified a set of quality measures, the Adult Health Quality Measure Set, which includes behavioral health measures and which states are encouraged to collect and report. In the 2014-2015 reporting cycle, the most frequently reported performance measures for adults focused on behavioral health (reported by 29 states). The federal government does not currently mandate reporting; however, a state that chooses to report on selected measures may require Medicaid providers to collect and submit data directly to the state, as a condition of reimbursement.

Q: Are there other Medicaid funding streams available for integrated care?

A: Yes. In July 2014, the Department of Health and Human Services launched the Medicaid Innovation Accelerator Program (IAP). Under the initiative, up to 10 states may receive funds. States may also use funds from the Section 1115 Demonstration, Delivery System Reform Incentive Payment (DSRIP), to integrate care. To date, six states have received funds under DSRIP to redesign their Medicaid program to improve access to care. There is also the Section 223 Demonstration, Planning Grant for Certified Community Behavioral Health Clinics, which awards funds to states to allow them to better plan for integrated care.

Q: How is the federal parity law expected to affect patients in the Medicaid program?

A: Passage of the Mental Health Parity and Addictions Equity Act in 2008 was likely the most significant achievement for patients with mental illness in a generation, and it is expected to have enormous implications especially for Medicaid managed care patients and those newly enrolled under the Medicaid expansion made possible by the ACA. Final regulations governing the parity law were issued this spring and are effective October 2017.

APA expects there to be major changes in benefits design and coverage, and significant modifications to utilization practices for patients with mental illness and substance use disorders. A key ACA requirement for coverage is the essential health benefits provision, which mandates that mental health and substance use disorder benefits be included. Parity regulations mandate health plans to provide the same scope of services for both mental health/substance use and medical benefits. For example, if the state or Medicaid managed care plan covers subacute options for medical-surgical services, it must do the same for mental health and substance use services. In practical terms, this means it is likely there will be an expansion of coverage for residential treatment options, especially for substance use disorders.

Q: What challenges remain for effective implementation of parity in the Medicaid program?

A: The challenges for patients and providers in the Medicaid program will likely mirror those encountered in the private sector. For instance, health plans have generally complied with the quantitative aspects of parity—copays and day or visit limits. But enforcement of parity around “non-quantifiable treatment limits” (NQTLs) has been much more problematic. NQTLs include requirements for prior authorization and other strategies for limiting treatment that cannot be strictly quantified. According to the parity law as interpreted by CMS regulations, management strategies that are not used for medical-surgical services cannot be applied to mental health and substance use services.

An NQTL that has been especially challenging for psychiatrists and patients is that of “network adequacy.” The problem is prevalent in Medicaid expansion plans, which often have very inadequate networks of providers offering mental health and substance use disorder services, leaving enrollees with a card but no real access. Moreover, some health plans have employed deceptive marketing strategies advertising networks that appear to be much more comprehensive than they are in reality; some advertised networks include clinicians who are no longer taking new patients, who have moved out of the geographic region, or even who are deceased. APA is working with CMS and with health plans to address this issue and to combat deceptive marketing strategies.

Q: Are health plans in the private sector also adopting value-based payment strategies?

A: Private market health plans are not governed by federal payment policies affecting Medicare and Medicaid, so adoption of value-based payment by private plans has been voluntary and, for that reason, slower. But there are plans that have adopted such arrangements for mental health and substance use disorder treatment. Moreover, the private market has traditionally followed the model of Medicare for reimbursement policies, so psychiatrists should expect that value-based payment will expand in the future for providers treating patients in private market health plans.

A notable example is Optum’s ACE (Achieving Clinical Excellence) program, which is most advanced for facility based care but is being further developed for practitioner-based care. According to Optum’s website, ACE is a “quality-focused measurement program that recognizes excellent service from network clinicians and creates more transparency for care advocates and our members.” Using nationally based, regionally adjusted metrics, the plan will identify clinicians and groups that deliver both effective and efficient care for beneficiaries.

According to Optum, the results of this data-driven system will allow the plan to annually “tier” clinicians—that is, rank clinicians by whether they meet or exceed ACE benchmarks. ■