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Announcement in Response to Moda Health’s NCQA Compliance Addendum

A Discussion Paper

In October 2024, Moda Health sent a NCQA Compliance Addendum to all clinicians and groups contracted with them. In response to that, we want to make you aware that Mentor Research Institute (MRI) has been expressing serious concerns about fraudulent, deceptive, and anticompetitive contracting practices for many months. MRI asserts that Moda’s behavior includes bad faith negotiation tactics that, while not per se illegal, are fraudulent and violate antitrust principles. MRI emphasizes that the evidence they have gathered presents a prima facie case for the Oregon Health Authority (OHA) and the Department of Justice (DOJ) to investigate Moda’s practices. Given Moda’s silence during negotiations, MRI insists that it is the regulators’ duty to act, not MRI’s, since Moda’s actions pose a significant threat to providers, patients, and public funds.

What if the contracts you signed to help your patients are the very ones that sabotage their care? Moda Health's new NCQA Compliance Addendum introduces sweeping changes disguised as quality improvement—but at what cost? Beneath the surface, this addendum misled providers into a “lock-in” compliance framework which can be used to justify unregulated micromanagement of mental and behavioral health care. By deflecting and ignoring requests for crucial conversations about shared risks, clinical autonomy, and transparent metrics, Moda Health used “take-it-or-leave-it” contracts that shift administrative burdens onto providers, leaving little room for individualized care or flexibility to treat minority and vulnerable subpopulations.

MRI filed a complaint to the OHA and DOJ in September 2024, weeks before Moda’s NCQA contract addendum was issued. The complaint predicted Moda’s imposition of vague compliance requirements through unilateral contract amendments.

MRI identifies these tactics as bait-and-switch and bait-and-obfuscate — where initially reasonable terms transform into burdensome obligations through shifting metrics and retroactive penalties. MRI warns that Moda’s example sets a dangerous precedent, signaling what other health plans may adopt unless regulatory intervention happens swiftly.

MRI acknowledges that Moda Health has historically supported value-based contracts (VBP) and quality improvement, but their recent mental and behavioral health contracting practices undermine these goals. Moda’s ambiguous contracts, shift administrative responsibilities onto providers in ways that foreclose competition and violate good faith and fair contracting principles.

The Future of Independent Practice Without Collective Action

If providers fail to engage with these issues and act collectively, the future of independent practice will be at serious risk. MRI warns that providers will face a wave of unsustainable contracts from multiple health plans, each adopting Moda’s ambiguous and exploitative practices. Providers will become trapped in financially unsustainable agreements, buried under administrative overload and opaque performance metrics.

As other health plans mimic Moda’s tactics, providers will encounter "lock-in" situations, where leaving contracts becomes impossible due to sunk costs and mounting obligations. Patient care will suffer when providers prioritize compliance over care, leading to burnout, moral injury, and deterioration of patient outcomes. Many providers may be forced to withdraw from VBP models, reducing patient access and crippling efforts toward meaningful healthcare reform.

Antitrust Violations and Market Manipulation

While Moda’s actions may not constitute direct antitrust violations, their practices undermine fair competition. MRI identifies phantom networks, where Moda lists providers as in-network despite their inability to accept new patients, as a deceptive practice that misleads public purchasers such as the Oregon Educators Benefit Board (OEBB), Public Employees Benefit Board (PEBB), and the Oregon Health Science University (OHSU). Moda's manipulation of network capacity not only misuses public funds but also blocks other health plans from competing fairly for contracts. This market manipulation restricts patient access to care and harms the overall healthcare ecosystem by foreclosing competition and stifling innovation.

Impact on Providers and the Healthcare System

MRI highlights the emotional and financial harm caused by Moda’s practices. Providers are forced to prioritize compliance over patient care, leading to moral injury, burnout, and weakened therapeutic relationships. Shifting metrics, retroactive penalties, and administrative burdens create operational instability and force providers into “lock-in” situations, where they must remain in unsustainable contracts to recover sunk costs. These conditions discourage participation in value-based payment models and undermine patient outcomes by compromising care continuity and quality.

Further, the absence of whistleblower protections in Moda’s contracts discourages providers from reporting unethical practices to Moda and regulators. Those who raise concerns face professional retaliation, such as reduced referrals, exclusion from Moda’s network, or contract termination. MRI argues that secure reporting channels and whistleblower protections are essential to ensuring accountability and transparency in healthcare contracting.

Call for Legislative and Regulatory Action

MRI believes regulatory and legislative actions are the most effective solution to address the issues exposed by Moda’s behavior. Rather than pursuing legal prosecution, MRI recommends clear contracting standards and public procurement reforms to prevent other health plans from adopting similar practices. These reforms should require transparent and stable performance metrics, whistleblower protections, and fair negotiation practices. MRI argues that without these changes, Oregon’s healthcare system will continue to suffer from ambiguous and burdensome contracts that jeopardize providers and patients.

MRI also encourages healthcare providers and stakeholders to educate themselves on the risks of ambiguous contracts. To support these efforts, MRI has created a comprehensive online library of definitions and discussion papers on value-based contracts, ethical contracting practices, and healthcare market dynamics. These resources aim to empower providers and policymakers to navigate complex contracts and advocate for better practices in the healthcare industry.

Mentor Research Institute’s Mission and Role in Consumer Protection and Ethical Contracting

Mentor Research Institute (MRI) is a 501(c)(3) non-profit organization governed by a volunteer working Board. MRI’s mission includes training mental health professionals, conducting research, and providing education for consumer protection. Over time, MRI’s efforts have evolved to include collaborations with health plans and education concerning the ethical implementation of value-based payment models.

In 2017, MRI began collaborating with health plans to advocate for ethical contracting practices. MRI’s negotiations with Moda Health in 2022 focused on key issues for successful VBP implementation, such as administration, technology infrastructure, training, and evidence-based practices. MRI has also emphasized the importance of fiduciary responsibilities and contractual integrity to ensure that VBP models serve both providers and patients effectively. During these negotiations, the financial aspects of contracts are represented by an attorney who reports directly to the provider group, ensuring transparency and accountability.

MRI remains committed to promoting clear, fair, and ethical contracts that protect both providers and consumers. Their mission includes research, training, and advocacy to safeguard the future of value-based care. MRI calls on the OHA and DOJ to investigate Moda’s practices and implement regulatory reforms that prevent further harm to Oregon’s healthcare system. Through ongoing collaboration and public education, MRI aims to restore integrity to healthcare contracting and ensure that value-based models benefit providers, patients and purchasers.

Healthy Contracts Education and Training References

DISCLAIMER and PURPOSE: This discussion document is intended for training, education, and or research purposes. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.

For more information see: https://www.mentorresearch.org/disclaimer-and-purpose

Key words: Supervisor education, Ethics, COVID Office Air Treatment, Mental Health, Psychotherapy, Counseling, Patient Reported Outcome Measures,