VBP Payment Model Expected to Improve Outcomes, Reduce Costs

NYAPRS Note: Here’s a piece on the move in NYS to value based payments inspired by several presentations at last week’s NYAPRS Conference.

Payment Model Expected to Improve Outcomes, Reduce Costs
Mental Health Weekly September 18, 2017

Taking into account the need to provide better care, improve outcomes and generate savings, New York State over the next few years is embarking on a new payment system for community behavioral health providers. The state is moving toward a value-based payment (VBP) model to help impact health outcomes, especially for high-needs populations.

“Within a five-year period, New York state will go into an at-risk environment [where providers] will receive incentives for supporting good outcomes or be at financial risk for not doing so,” Harvey Rosenthal, executive director at the New York Association of Psychiatric Rehabilitation Services Inc. (NYAPRS), told MHW.

By 2019, all managed care organizations must employ VBP systems. Rosenthal added, “Providers to varying degrees are hard at work in changing their operation to be out-come-oriented rather than visit-oriented. Providers are trying to ramp up.”

Rosenthal is on the state’s steering committee to address value-based payment as a move away from the traditional fee-for-service model and an improved incentive system.

He also sits on a patient confidentiality work group. “In a VBP environment, you want to maximize provider collaboration,” he said. One way of doing that, he noted, is through open sharing of patient protected health information, Rosenthal said. “(However) We believe the state should still allow beneficiaries to give their permission to have their information shared rather than be told it will happen unless you say ‘no,’” he said.

Shopping for Value
Currently, providers are paid for the most part based on how many visits they provide, without taking into account the quality of the care they provide, Joshua Rubin, principal of Health Management Associates, told MHW. “In a VBP environment, we aim to pay providers for what they achieve,” he said.

Managed care companies receive capitated payment per member, per month, Rubin said. “In a VBP environment, we say to providers, ‘you need to be at risk,’” he said. “As providers, we have the best ability to impact someone’s health outcomes, especially if they’re a person with high needs. You need to be responsible for that.”

Rubin presented on the VBP approach last week during the NYAPRS’s 35th annual conference in Kerhonkson, New York. Rubin noted that providers should be entitled to some payment to acknowledge the positive impact they’ve had on the consumers’ outcomes and the system’s costs.

Many states are moving toward VBP, said Rubin. “It’s a trend we’re seeing happen in blue states like New York, red states like Texas and purple states like Ohio,” he said. “I believe that most of the health care payments in every system, including Medicare, Medicaid and the commercial market, are going to be via a VBP system.”

Requirements for Success
In order to be successful in a VBP environment, you will need to have excellent data capture, analysis and sharing systems, Rubin said. Data is the lifeblood of the health care system, and in a VBP environment, it’s not enough to capture data; you need to be able to share it with your partners and payors, he said. “In addition, you can’t enter into a risk-based relationship unless you have a pool of capital you can afford to lose. Otherwise, one bad outcome could mean the end of your agency.”

In New York State, the government committed to 96 percent of all Medicaid dollars going through managed care, and 80 percent of managed care dollars going through VBP. That means about 77 percent of dollars are being paid through some kind of value-based contract.

Beyond the infrastructure needs, the biggest need is collaboration and partnerships, said Rubin. “Consumers have suffered because of the fragmentation of our service system,” he said. “This is an opportunity to create a system that is coherent, comprehensive and coordinated, but in order to do so, everyone will need to find new ways to collaborate and cooperate.” Rubin added, “Finding the right partners, and engaging with them thoughtfully, flexibly and openly will be critical for BH providers to leverage this opportunity on behalf of their clients.”

Provider Concerns
Michael Stoltz, CEO for the Association for Mental Health and Wellness in Suffolk County, New York, said a VBP payment environment could potentially be “exciting”; however, it’s still too early to tell. “The state Office of Mental Health has not yet released a Request for Proposal for a behavioral health collaborative, which will become a mechanism for us to enter into larger value-based propositions,” Stoltz told MHW. “It will help organizations like mine to see what it means for us and what the opportunities are, but it’s still too early.”

Stoltz said he hopes this new payment environment will present more opportunities for organizations to take on some “out-of-the- box” initiatives or solutions. He said it’s important to look at people who are in the most expensive settings in the system: hospitals, ERs and criminal justice. Stoltz would like to see community mental health centers partner with various types of providers, not just hospitals.

Smaller nonprofits that deliver recovery services will have a high bar to get themselves into a VBP environment, noted Rosenthal. Many might not have the financial resources to take on the risk, he said. “I’m afraid they (might be) frozen out,” he noted.

Rosenthal added, “The VBP on paper sounds like a win-win. Consumers will enjoy better outcomes. Providers [will receive] incentives to support those outcomes. (But) a lot has to happen to make that work for some smaller nonprofits.”

Different Way of Doing Business
“The VBP model will require different ways of doing business,” Boris Vilgorin, health care strategy officer for McSilver Institute, part of the Silver School of Social Work at NYU, told MHW. The institute, through the Managed Care Technical Assistance Center, is contracting with New York State to provide training on managed care and VBP throughout the state and working with mental health and substance use disorder providers who are transitioning into the new delivery system. Training is free to NYS Medicaid behavioral health providers, he said.

Providers will need to analyze the data and know if they’re doing the right thing, prompting such questions as “Can I do this alone or can I do it with a partner?” he said. Other questions might include: “Do I have the infrastructure and analytics capability?” “How do you measure value and what is it?” and “How do I as a provider deliver and show value I bring to the individuals?” Vilgorin noted.

The institute provided training during the first wave of the state’s transition into managed care for behavioral health, which took effect in October 2015. In 2014, the organization helped providers focus on how to do the work in a managed care environment, he said. The training involved working with utilization management and other managed care concepts.

“We’re pivoting now to VBP, which has similar concepts involved in the managed care transition training,” said Vilgorin. He co-presented on “Behavioral Health Value Proposition Within DSRIP [Delivery System Reform Incentive Payment] Environment” at the NYAPRS conference.