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					How are we Going to Get Paid Tomorrow?
Emerging Models for Health and Behavioral Healthcare
Michigan Association of Community
Mental Health Boards

  Dale Jarvis, Managing Consultant
  MCPP Healthcare Consulting
  dale@mcpp.net

                                                       1
 My Hypotheses
• Healthcare Reform is going to dramatically change the healthcare
  system in this country from a sick care system to a true health care
  system
• Federal Parity and New Research on the Prevalence and Costs
  associated with Americans with BH Disorders is going to alter the role
  of behavioral health in the new health care system:
    – Behavioral Health Clinician demand is going
      to significantly increase as they become an
      essential part of this reformed system
    – And the Behavioral Health Practice Setting
      of 2014 will likely look quite different than it
      does today

                                                                           2
   Delivery System Redesign Elephant in the Room
                                          Current Resource Allocation
• Need to invert the resource
  allocation triangle to achieve the          Acute Care

  Delivery System Goals
• Prevention activities must be funded       Specialty Care
  and widely deployed                                           Acute
                                              Prevention,       Care
• Primary Care must become a desirable          Primary

  occupation                                     Care
                                                            Specialty Care

• Behavioral Health services must be funded
  and widely deployed                                        Prevention &
                                                            Primary Care
• Demand needs to decrease in the
  Specialty and Acute Care Systems                   Needed Resource Allocation

• These are dramatic shifts that will not magically take place
                                                                                  3
Two Types of Payment Reform are the Key
Value-Based Purchasing (VBP) Value-Based Insurance Design (VBID)




                                                               4
 Value-Based Purchasing – The Holy Grail
         Global Capitation to an Integrated Health System
                                Integrated Health Care System




                                   Supportive Health Plan
                                             Clinic
                                            Food Mart




                                        High Performing                     High
                                        Specialty Clinics                performing
                                             Clinic
                                            Food Mart          High       Hospitals
                    Person
                                                            performing
            Person Centered Person                           Hospitals
           Centered  HC     Centered
             HC     Homes     HC        High Performing
            Homes            Homes      Specialty Clinics



But... Integrated Health Systems will be only one of many system models
                                                                                      5
   Value-Based Purchasing – Medical Homes
• Fee for Service is headed towards extinction
• Health Care Home models will begin with a 3-layer funding design with the
  goal of the FFS layer shrinking over time
• Being replaced with case rate or capitation with a pay for performance layer

                                         · Prevention, Early Intervention, Care
                         Case Rate         Management for Chronic Medical Conditions


                                         · Per Service Payment
                      Fee for Service/
                                         · Prospective Payment System (PPS)
                           PPS             Settlement (FQHC model) to cover shortfalls
      Person
     Centered                            · Share in Savings from Reduced Total
       HC                   Bonus          Healthcare Expenditures (bending the
                                           curve)
      Homes
                                                                                         6
   Value-Based Purchasing – Inpatient Care
• Payment for inpatient care will
  bundle hospital and physician
  services
• Bundled payments that only pay
  for part of Potentially Avoidable
  Complications (PACs) will
  penalize providers that have
  higher error rates and reward
  those with lower PAC rates
• Bundled payments may
  include all costs in the 30
  days post an inpatient stay,
  including any return to the
  hospital                                   7
 Value-Based Purchasing – Other Strategies

                                                         Provider
• Pay for Performance funding layer                     Bonuses &
                                                        Incentives

• Differential Rates for providers that use published
                                                        Differential
  Practice Guidelines (EBPs)                               Rates


                                                        Capacity-
• Capacity-Based Funding to kick start innovations       Based
                                                        Funding


• Funding to community organizations that improve       Community
                                                         Incentive
  health status and bend the cost curve                    Pool


                                                                       8
   Value-Based Insurance Design (VBID)
• Developed in response to problems related to increases in co-payments
  implemented by employers and insurance companies to save money




                                                                          9
 Value-Based Insurance Design Features (VBID)

• Decreasing cost-sharing for
  interventions that are known to be
  effective
• Increasing cost-sharing for those that
  are not known to be effective
• Providing financial incentives based
  on behavioral economics research
• Providing a deep education
  component to explicitly guide patients
  to use high-value, and avoid low-
  value, interventions

                                                10
VBP/VBID Summary

                     Community            Direct
                      Incentive        Payments to
Low Risk
                        Pool             Patients


               Provider                                   Can/Should
                             Differential     Grants &      Mix and
Low Risk      Bonuses &
                                Rates        Seed Money    Match the
              Incentives                                  Components
                                                          based on the
                                                            Design
                       Bundled
Medium Risk                            Case Rates
                      Payments


                                       Primary &
                       Global
Higher Risk                             Specialty
                    Subcapitation
                                      Subcapitation
                                                                         11
Emerging MH/SU Delivery System and
Payment Reform Models




                                     12
  So how do CBHOs Get Paid for this Work?
• Remember, in the near future...
        New Medical Patients     New Behavioral Health     Infrastructure Funding
           and Funding          Consumers and Funding
            Uninsured                        Insured            Comparative
                               Uninsured
                to                           Covered     Effectiveness, Workforce
                                   to
             Insured                        by MH/SU      Development, IT, etc.
                                Insured
                                              Parity




                       Service Delivery System (and Redesign)
                       Management Structures (and Redesign)
                    Financing Mechanisms (and Payment Reform)
                                                                                    13
   So how do CBHOs Get Paid for this Work?
• Most of the VBP and
                                                    Integrated/Partnership              CBHO with Linkage to
                                                       Healthcare Home                 Multiple Medical Homes

  VBID action will be                                               Food Mart
                                                                     CBHO                               Food Mart
                                                                                                         CBHO

  taking place where
  the costs are – the                            Primary Care Case Rate with:
                                                                                 Primary Care          Behavioral
                                                 - Screening/Registry Tracking
  healthcare side                                  - Care Mgmt/BH Clinicians
                                                   - Psychiatric Consultations
                                                                                 Case Rate for
                                                                                    Svcs in
                                                                                                      Health Case
                                                                                                      Rate for Svcs
                                                                                 Medical Clinic         in CBHO
                                                 - Non-BH Prevent/Mgmt Work
                    Direct
                 Payments to
  Provider                                                        Behavioral                          Behavioral
                   Patients
 Bonuses &                                        Healthcare         Health       Healthcare             Health
 Incentives                       Community         Funding        Funding          Funding            Funding
                Case Rates      Incentive Pool    Streams for     Streams for     Streams for         Streams for
                                                 Primary Care    Mental Health   Primary Care        Mental Health
     Bundled                                       Services      & Substance       Services          & Substance
    Payments          Primary &                                  Use Services                        Use Services
                       Specialty
                     Subcapitation
        Global
     Subcapitation




                                                                                                                      14
 So how do CBHOs Get Paid for this Work?
• Remember this Question: Will funding levels (beyond newly insured) come
  closer to matching need? What about in the states that are 1/3 or 1/4 of the
  average of the top 10?
• I think not, which generates the following idea...

                         Untangling the MH/SU Funding

                                        General Healthcare System Funds
                                           MH/SU Services for Mild &
             Current
                                        Moderate Levels of Care (mostly in
            Healthcare
                                             Primary Care Settings)
             Funding
                    Current            Specialty MH/SU System Funds MH/
                    MH/SU
                                         SU Services for Serious & Severe
                    Funding
                                        Levels of Care (mostly in Specialty
                                                   Care Settings)
                                                                                 15
FQHCs and FQBHCs

• Which brings us to Federally
  Qualified Behavioral Healthcare
  Centers
• A parallel structure for CBHOs,
  Federally Qualified Behavioral
  Healthcare Centers (FQBHC),
  based on the FQHC accountability
  and payment structures
• 10 benefits and the 8
  responsibilities come with FQHC
  status

                                     16
Hypothesis: Federally Qualified
Behavioral Healthcare Centers will come into Existence
• Congress will pass Legislation that creates FQBHCs
• This will result in a single set of national standards that will serve
  as a blueprint for the types of services and infrastructure that need
  to be in place to better support the full healthcare needs of persons
  with serious mental health and substance use disorders.
• In addition, FQBHC status has the potential to serve as a Good
  Housekeeping Seal of Approval for CBHOs as they interact more
  with the general healthcare system.
• Not all MH/SU providers will achieve
  FQBHC designation.

                                                                           17
Hypothesis: Federally Qualified
Behavioral Healthcare Centers will come into Existence
• Federally Qualified Behavioral Healthcare Centers (FQBHCs) will become the
  “other half” of the community-based federal safety net system, supplemented
  by specialized, less comprehensive mental health and substance use provider
  organizations
                           Organizing the Specialty BH System
                                         Smaller, Specialized MH and SU Providers
                                      Supplementing the Service Needs of the Population
           FQBHCs:
     Comprehensive, Quality
       CBHOs as Person                           MH         SU         MH         SU
      Centered Healthcare                      Provider   Provider   Provider   Provider
     Homes via Integration or
       Partnership Model
                                                 SU         MH         SU         MH
                                               Provider   Provider   Provider   Provider



                                                                                           18
 Preparing for Performance-Based Contracting
CBHOs will need to ensure that they meet a set core competencies
(10) in order to participate in P4P Initiatives
1.   A full Array of Specialty Behavioral Health Services
2.   A well defined Assessment Process and Level of Care System
3.   A solid approach to Prevention, Early Intervention, and Recovery
4.   The ability to practice as a Team to Coordinate Care
5.   Demonstrated use of Clinical Guidelines




                                                                        19
 Preparing for Performance-Based Contracting
CBHOs will need to ensure that they meet a set core competencies
(10) in order to participate in P4P Initiatives
6.    Measurement Systems and Tools that measure Improvement & Recovery
7.    A robust Electronic Health Record that includes Patient Registries
8.    Interoperability – ability to connect to the community HIN/HIE
9.    Quality Improvement Processes and supporting Data Systems
10.   Financial Systems to manage Case Rate Payments & the FQBHC
      Prospective Payment System’s                                                                             Fiber




      Cost Reporting Process
                                                                 Hub (10-mb)
                                     Butte, Shadow
                                     VAXes (VMS)
                                                                                                              Ethernet

                                                                                                                                     DBHNet Backbone Switch

                                                              Hubs (10/100 mb)


                                       Asia
                                   Nov ell Serv er


                                                                                            Router Parmac Backbone and
                                                                                                    E-mail Router
                                                        Mordac                                                                                Chicomail
                                                     Security Station        Rune
                                                                                                                                           E-mail / Exchange
                                                     NT Workstation      NT Standalone
                                       Af rica
                                   Nov ell Serv er
                                   Master Replica                                                  Riv a
                                                                                             NT Standalone
                                                                                         (Internet Proxy Serv er)

                                                                                                                                                Caldor
                                                                                                                                             NT Standalone



                                    Antarctica
                                                                                                                         Internet and External
                                                            Krondor      Mordor          Watchguard Firebox II
                                   Nov ell Serv er          NT BDC       NT PDC            Internet Firewall                  Connections
                                    I/S Serv er



                                                                                                                                                               20
Emerging Healthcare Management
System Models and How the MH/SU
System Stays in the Game

                                       Health Plan


                                          Clinic
                                         Food Mart




                                     Specialty Clinics
                                          Clinic
                                         Food Mart
                 Primary
       Primary    Care     Primary                       Hospitals   Hospitals
        Care      Clinic    Care
        Clinic              Clinic   Specialty Clinics
                                                                                 21
  Emerging Behavioral Healthcare System Models
• We’ve learned from 50 years of
  effort that if you work in the
  safety net behavioral healthcare
  system...
• Focusing inward to create a
  high-performing CBHO does not
  always prevent you from ending
  up at the bottom of the food
  chain
• How do we move up the
  healthcare food chain as
  healthcare reform unfolds?
                                                 22
  Emerging Healthcare System Models
• There are 3 emerging healthcare system models that will gain
  widespread acceptance in healthcare
• Understanding these models is critical to the safety net MH/SU provider
  community
   – Integrated Healthcare System
   – Accountable Care Organizations
   – Hybrid




                                                                            23
  Emerging Healthcare System Models
• Status Quo: Fee-For-Service, Non-Integrated Model: All the wrong
  incentives and disincentives



                                       Health Plan


                                          Clinic
                                         Food Mart




                                     Specialty Clinics
                                          Clinic
                                         Food Mart
                 Primary
       Primary    Care     Primary                       Hospitals   Hospitals
        Care      Clinic    Care
        Clinic              Clinic   Specialty Clinics
                                                                                 24
Emerging Healthcare System Models
 – Integrated Healthcare System
                          Integrated Health Care System




                                  Health Plan

                                       Clinic
                                      Food Mart




                                  Specialty Clinics
                                       Clinic
                                      Food Mart
             Medical
   Medical   Homes     Medical                        Hospitals   Hospitals
   Homes               Homes
                                 Specialty Clinics


                                                                              25
  Emerging Behavioral Healthcare System Models
Integrated Healthcare System
• If you are operating in a state and community where integration efforts
   are under way and the IHS model is being pushed, your choices are:
• Do nothing and hope                            Integrated Health Care System

   they ignore the SMI/
   SED population
                                                           Health Plan
• Become a Preferred                                           Clinic
                                                                 Food Mart

   Provider of an IHS
• Create a consortium                                     Specialty Clinics

   of BH Providers and                Medical
                                                               Clinic
                                                                Food Mart


                              Medical Homes Medical                           Hospitals Hospitals
   contract with the IHS      Homes           Homes
                                                          Specialty Clinics
   as a Provider Network
• Become an Acquisition Target and become part of the IHS’ BH Division
                                                                                                    26
  Emerging Healthcare System Models
• Accountable Care Organization (ACO) Model


                                       Health   Plan




                               Accountable Care Organization

                                            Clinic
                                           Food Mart




                                       Specialty Clinics
                                            Clinic
                                           Food Mart
                  Medical
        Medical   Homes     Medical                            Hospitals   Hospitals
        Homes               Homes
                                       Specialty Clinics

                                                                                       27
   Emerging Behavioral Healthcare System Models
Accountable Care Organization
• If you are operating in a state and community where integration efforts
  are under way and the ACO model is being pushed, your choices are:
• I’m going to skip “do nothing”
• Become a Preferred Provider to
  the ACO                                                Health Plan


• Become a Member
  of the ACO                                     Accountable Care Organization


• Get in on the ground                                        Clinic
                                                                  Food Mart



  floor and become a                                     Specialty Clinics
  Founding Member/                    Medical
                                                              Clinic
                                                                  Food Mart


  Owner of the ACO            Medical Homes Medical
                              Homes           Homes
                                                                               Hospitals Hospitals

                                                              Specialty Clinics

                                                                                                     28
  Emerging Healthcare System Models
• Hybrid Model: Looks like current model but:
   – Medical Homes paid case rate or capitation to manage the care
   – Health Plans contract with and pay Specialists and Hospitals


                                       Health Plan


                                          Clinic
                                         Food Mart




                                     Specialty Clinics
                                          Clinic
                                         Food Mart
                 Medical
       Medical   Home      Medical                       Hospitals   Hospitals
       Home                Home
                                     Specialty Clinics
                                                                                 29
  Emerging Behavioral Healthcare System Models
• Begin by assessing how things will unfold in your state




                                                            30
 Emerging Behavioral Healthcare System Models

Things
get really
exciting
when we
think
about
MH/SU
Carve-In
and
Carve-
Out
models

                                                31
  Emerging Behavioral Healthcare System Models
Health Plan Involvement
• Another important strategy to consider is forming a Consortium with other
  Behavioral Health
  Providers and
  becoming a co-
  owner of a Safety
  Net Health Plan




                                                                              32
 Emerging Behavioral Healthcare System Models
All of these suggestions presuppose that:
 – Medicaid, Medicare and Private Health Plans read the same studies I do and
   realize that they cannot bend the cost curve without addressing the needs of
   persons with MH/SU disorders
 – Fee for Service is going away, to be replaced by Value-Based Purchasing
   models that offer risks and rewards to health and behavioral health providers
   and necessitate infrastructure development
 – High Performing, Recovery-Oriented CBHOs can play an enormously effective
   role in helping their healthcare partners improve health status & bend the curve
 – Participating at the System Management Level is an important survival strategy
                               Integrated Health Care System

                                                                                                                  Health   Plan



                                       Health Plan
                                                                                                          Accountable Care Organization
                                            Clinic
                                           Food Mart
                                                                                                                       Clinic
                                                                                                                      Food Mart



                                       Specialty Clinics
                                                                                                                  Specialty Clinics
                                            Clinic
                                           Food Mart
                  Medical                                                                                              Clinic
                                                                                                                      Food Mart
                                                                                             Medical
        Medical   Homes     Medical                        Hospitals   Hospitals             Homes
                                                                                   Medical             Medical                            Hospitals   Hospitals
        Homes               Homes                                                  Homes               Homes
                                      Specialty Clinics                                                           Specialty Clinics


                                                                                                                                                                  33
 Q&A Sessionette

• Questions for you:
   – What was new?
   – What you still have
     questions about?
   – What do you
     disagree with?




                           34

				
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