Value-Based Contracting is Coming To Behavioral Health: Prepare Yourselves to Prosper!

By Art Kelley, MD Chief Medical Officer, Emtiro Health, and Sarah Jagger, JD, MPH, Vice President, Atromitos


Physical health providers are well on their way down the path of value-based contracting.  Many primary care providers receive bonus payments under pay-for-performance payment models. Medicare Accountable Care Organizations are participating in shared savings programs. Some orthopedists are being paid a single bundled payment for hip replacements. Out of this bundled payment, they must cover all care from the admission to the hospital through post-surgery rehabilitation in the community.

As payers continue to enhance value-based purchasing for physical healthcare, they are now thinking about ways to bring this contracting system to behavioral health care. Billing under a fee-for-service (FFS) model that rewards volume over value and saying “Trust us, we provide excellent care” will no longer suffice. Given this, behavioral health care providers need to begin their preparations to ensure success in this new environment. This article provides an overview of value-based payment, reviews quality performance measures related to behavioral health, and highlights the value that performance measurement brings to the patient, the practice, and the behavioral health system.

Value-based care seeks to accomplish the triple aim of providing better care for individuals, improving population health management strategies, and reducing healthcare costs. At the direction of the Centers for Medicare and Medicaid Services (CMS), the Health Care Payment Learning & Action Network (LAN) was created to drive alignment in payment approaches across the public and private sectors of the U.S. health care system. LAN created the Advanced Payment Model (APM) Framework to advance the goal of moving payments away from FFS payment and into APMs that reduce the total cost of care while improving quality. This framework classifies APMs based on the extent to which payments reward value of services rather than volume of services. In this context, the updated APM Framework establishes a common vocabulary and pathway for measuring and sharing successful payment models.

The APM Framework. Click to expand.

The APM Framework is presented as a continuum of clinical and financial risk that payers and providers can utilize to gradually move from FFS to risk-based payment. Behavioral health providers may already be participating in one of the early stages of APM if they are receiving payments based on achievement of performance in addition to a FFS payment. As shown in the LAN APM framework above, Category 2 recognizes that engagement in pay for reporting and pay-for-performance activities allows providers to begin to develop the data infrastructure and reporting capabilities that are necessary to successfully participate in risk-based arrangements under Categories 3 and 4.

Role of Quality Measurement in Value Based Payment

Quality measures are tools that help us measure or quantify healthcare processes, outcomes, patient perceptions, and organizational structure/systems that are associated with the ability to provide high-quality health care.  Understanding the types of metrics and datasets that are needed to facilitate quality measurement is an important first step in value-based contracting.

Structural Measures

Structural quality measures demonstrate a health care provider’s capacity, systems, and processes to provide high-quality care. Whether or not a practice has an electronic health record from which it can pull reports is one example of a structural quality measure. A practice that achieves a special accreditation is demonstrating structural quality. Many behavioral health agencies seek CARF accreditation. The National Committee for Quality Assurance (NCQA) now offers Patient Centered Specialty Practice accreditation. The proportion of psychiatrists in a practice with board certification or the proportion of psychotherapists in a practice with a National Board of Certified Counselors certification are both examples of structural quality.

Process Measures

Process measures assess the ways in which providers systematize their work to improve health through the application of best practices and evidence-based care. For example, it is best practice that all patients with suicidal ideation receive a suicide risk assessment. Having a measure that tracks what percentage of these patients have a documented risk assessment represents a process measure. Based on this measure, a practice can track how well it is doing as a whole and it can also benchmark individual providers against the group. In this example, any percentage less than 100% would indicate the need for improvement.

Another process measure that payers often track for behavioral health providers is Follow-up after Hospitalization for Mental Illness. This measure was developed to track the care being provided to patients post-discharge because the 30-90 day period after a psychiatric hospitalization for self-harm is a period of high risk for repeated self-harm. Practices that begin to measure and improve their “days from discharge to follow-up” will be better prepared to enter into value-based payment discussions with payers.

Outcome Measures

The World Health Organization defines an outcome measure as a “change in the health of an individual, group of people, or population that is attributable to an intervention or series of interventions.” In short, outcome measures indicate the results of a process. Outcome measures are primarily defined and prioritized by national organizations, including CMS, The Joint Commission, and the NCQA.

A behavioral health provider may wish to assess whether its patients being treated for major depression are improving. To do so, a clinician can monitor patient progress in psychotherapy or antidepressant therapy using the PHQ-9. By tracking process on each PHQ-9 administered over time, a provider can report on the percentage of patients who achieve remission (a score of 5 or less on the PHQ-9) and the percentage who achieve at least 50% improvement. The same can be done to assess improvement for the patient population with a generalized anxiety disorder using the GAD-7.  Being able to demonstrate improvement at the population health level is important when behavioral health providers are preparing for contracting with payers.

What’s the Value of Performance Measurement?

Three things happen when practices and providers begin to measure quality. Initially, the data can provide insights into individual physician activities and approaches to care. With these insights, practices can provide guidance on best practices that will enable the group or an individual physician to improve his or her care. Secondly, when physicians begin to engage in best practices and evidence-based practices, the quality of the care improves and more patients achieve improved health status. Finally, measuring and demonstrating quality increases the value a practice can bring to the table during value-based contracting negotiations. The practice can demonstrate in real numbers the quality of the care they provide. A practice can confidently enter into a contract that pays a financial incentive for achieving quality targets and eventually will be positioned to receive greater financial benefit from risk bearing contracts.

Final Thoughts

Quality measurement in behavioral health is in its infancy. There are far fewer recognized quality metrics in behavioral health care than in physical health care. Value-based contracts have only recently begun to enter the behavioral health market, but they are coming! It behooves all of us in behavioral health to begin preparing. As they say, we can either be invited to dinner or be the dinner. Get an electronic medical record and start to measure something!   

Brea Neri