Collaboration Agreements Toward Value-Based Payment Services and Contracts
A Discussion Paper
Introduction
Discussing and creating proposed collaboration agreement with a Healthplan is essential for provider groups to ensure viability, fairness, and success of value-based payment (VBP) models. By addressing financial, operational, and legal aspects collaboratively, providers can enhance patient care, achieve financial stability, and foster a culture of continuous improvement and innovation. This proactive engagement not only benefits individual providers it also contributes to overall efficiency and effectiveness in the healthcare system.
Importance of Discussing the Collaboration Agreement with a Health Plan
The proposed collaboration agreement between a provider groups and a health plan is worth discussing for reasons primarily centered around enhancing quality of care, financial stability, and operational efficiency. These are reasons why provider groups should engage in discussions with Healthplans to create collaboration agreements.
1. Improved Patient Outcomes
Enhanced Quality of Care
By sharing clinical data and patient outcomes, providers can develop a more accurate understanding of treatment effectiveness, identify best practices, and implement evidence-based care protocols. Such collaborative efforts can lead to better patient outcomes, reduced or abbreviated readmission to treatment rates, and improved overall health. It is essential to have transparent shared values. The Oregon Health Authority defines value as care which is (1) evidence-based, (2) patient-centered, and (3) increased value and improved health outcomes at an appropriate cost.
Standardized Measures
Collaboration allows implementation of standardized measures for tracking patient progress and outcomes. This ensures consistency in care delivery and facilitates identification of areas needing improvement. It is essential to use measures which are valued by patients and providers, not just measures that are valued by Healthplans. the use of measures that at not patient centered will increase the risk of “gaming” the questionnaire, especially when measures are not valued by the patient and the providers. There are many sub-populations in which the answer to one question, not the average of 9, can be more important than the average.
2. Financial Stability and Viability
Accurate Risk Assessment
Sharing information enables providers to conduct comprehensive risk analyses, leading to more accurate risk assessments. This is crucial for setting realistic performance targets and financial incentives under VBP models. The use of comprehensive and appropriate questionnaire can measure progress but the progress is not correlated with questionnaire more commonly used. This especially true across different cultures.
Shared Costs
By forming a joint venture, providers can pool resources to cover the costs associated with risk management and data collection. This reduces individual financial burdens and makes participation in VBP models more feasible. Healthplans are used to offering “take or leave it” contracts to individual provider who cannot collectively bargain in ways that have the same values without violating Antitrust Laws. Value-based contracts require providers to contract and function as a group and yet be patient-centered. To do that, Healthplans cannot offer “take it or leave it” contracts, and instead must enter into collaborate agreements with providers which require contracts are negotiated in “good faith” and “fair dealing”.
Incentive Alignment
Discussing and agreeing on incentive structures ensures that financial incentives are sensible and aligned with the goals of providers and health plans. Such alignment motivates providers to achieve performance targets without compromising care quality. Incentive must not only be aligned, but the calculations my be transparent and determined by independent auditors such that they are reliable, valid and useful and published in ways that allow for corrective actions and continuous improvement. Providers should not be set up to fail.
3. Operational Efficiency
Reduced Administrative Burden:
Collaboration can streamline administrative processes by creating standardized protocols for data collection, reporting, and risk analysis. This reduces redundancy and allows providers to focus more on patient care.
Economies of Scale:
By leveraging the collective size of the provider group, the collaboration can achieve economies of scale in purchasing supplies, negotiating contracts, and implementing technology solutions. This enhances operational efficiency and reduces costs.
4. Transparency and Trust
Building Trust:
Engaging in open discussions about a collaboration agreement fosters transparency and trust between providers and a health plan. Transparent practices ensure that all parties are on the same page and working toward shared objectives.
Accountability:
Clearly defined roles, responsibilities, and performance metrics hold all parties accountable for their contributions to the joint venture. This accountability is crucial for the success of VBP models. Accountability is ensure if appropriate controls are created and implemented by independent auditor who are not accountable to Healthplan management, but instead to the CEO, an independent audit committee or a Board of Directors.
5. Innovation and Continuous Improvement
Fostering Innovation:
Collaboration encourages the sharing of ideas and best practices, fostering a culture of innovation. Providers can experiment with new treatment approaches and care models, continuously improving patient care. It is essential that Healthplans and Provider have transparent shared objectives which are measurable in ways that are reliable, valid and useful to patients, providers and Healthplans.
Continuous Improvement:
Regular electronic review meetings and electronic feedback loops enable continuous monitoring and improvement of care processes. This iterative approach ensures that the collaboration adapts to changing healthcare needs and evolving best practices.
6. Legal and Regulatory Compliance
Antitrust Compliance:
By discussing and formalizing the collaboration agreement, providers can ensure that their joint activities comply with Antitrust Laws. A proactive approach mitigates legal risks and ensures that the collaboration remains focused on procompetitive benefits. It is crucial that Healthplans implement online Ethics Point portals so that providers can anonymously or self identify when they reports questions, problems, and concerns to Healthplans that otherwise become lost in bureaucratic levels of Healthplan administration.
Regulatory Requirements:
Collaborating on risk analysis and data sharing helps providers meet regulatory requirements for transparency and accountability, particularly when dealing with taxpayer-funded services. Healthplans have a fiduciary responsibility to manage tax-payer dollars responsibly and effectively without undue profit.
7. Collective Bargaining Power
Enhanced Negotiation Power:
A unified provider group has greater leverage when negotiating with health plans. This collective bargaining power can lead to more favorable contract terms, higher reimbursement rates, and better support for care delivery initiatives. Providers and Healthplans must eliminate asymmetrical power differences that will undermine professional relationships and trust in Healthplan contract administration.
Legal Analysis: Evaluating the Framework and Risk Analysis of Healthplan Contracts
Context
Mental health professionals must consider joining forces to evaluate the framework of a value-based payment (VBP) contract and need to conduct risk analyses. One health plan in question is not being transparent, and the calculation of their incentive for measurement is considered nonsensical. Providers may share information to ensure the viability and fairness of contracts while maintaining compliance with antitrust laws.
Antitrust Considerations
Antitrust laws, including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act, are designed to promote competition and prevent unfair practices that harm consumers. These laws prohibit agreements that unreasonably restrain trade and monopolistic practices. However, joint activities that enhance efficiency, improve patient care, and foster innovation can be permissible under antitrust laws.
Key Legal Principles
Rule of Reason
Definition: Courts analyze whether a collaboration's procompetitive benefits outweigh its anticompetitive effects. This involves examining the purpose of the agreement, its effects on competition, and whether it is necessary to achieve procompetitive benefits.
Application to Provider Collaboration: Courts often apply the rule of reason to collaborations among independent practitioners, especially those aimed at improving efficiency, care quality, and innovation.
Procompetitive Benefits
Efficiency: Sharing information can reduce costs and increase efficiency by allowing providers to better understand and manage risk.
Improved Care: Collaboration can lead to better patient outcomes through more accurate baselines and performance targets.
Innovation: Joint analysis can foster innovation in treatment approaches and care delivery.
Relevant Case Law
FTC v. Indiana Federation of Dentists (1986)
The U.S. Supreme Court held that agreements among competitors to withhold information from insurers were anticompetitive. This case underscores the importance of transparency and fair competition.
Arizona v. Maricopa County Medical Society (1982)
The U.S. Supreme Court ruled that maximum fee agreements among competing physicians were per se illegal. This case highlights the prohibition against price-fixing agreements among competitors.
Goldfarb v. Virginia State Bar (1975)
The U.S. Supreme Court found that minimum fee schedules established by a state bar association constituted price-fixing, violating antitrust laws. This case emphasizes that professional associations cannot enforce price-fixing among members.
Dagher v. Saudi Refining, Inc. (2006)
The U.S. Supreme Court held that a joint venture between two oil companies to set prices for their products was not per se illegal. The Court applied the rule of reason, recognizing that joint ventures can have procompetitive benefits.
Analysis of the Proposed Collaboration
Purpose of the Collaboration
The collaboration aims to evaluate the framework of the VBP contract, conduct a risk analysis, and ensure the contract's viability and fairness.
Procompetitive Benefits
Efficiency: By sharing information, providers can better understand the risks and manage them more effectively.
Improved Patient Care: Accurate baselines and performance targets can lead to greater efficiencies and provider well-being and better patient outcomes.
Innovation: Collaboration can drive innovation in care delivery and risk management practices.
Potential Anticompetitive Concerns
Information Sharing: While sharing information to improve care is generally procompetitive, it is crucial to avoid sharing competitively sensitive information that could lead to price-fixing or market division.
Uniform Fee for Services: Offering the same fee for services to all providers could raise concerns about price-fixing. It is important that each provider independently decides whether to accept the offered fee without collusion.
Recommendations for Compliance
Clearly Define Objectives
Document the primary objectives of the collaboration, focusing on improving efficiency, patient care, and innovation.
Avoid Price-Fixing Agreements
Ensure that the collaboration does not involve setting prices for services. Each provider should independently determine their acceptance of the health plan's fee schedule.
Maintain Transparency
Clearly outline the information that will be shared within the collaboration. Limit information sharing to what is necessary for improving care quality and managing risk.
Consult Legal Counsel
Seek advice from antitrust legal experts to ensure that the collaboration’s activities comply with antitrust laws.
Implement Safeguards
Establish safeguards to prevent the exchange of competitively sensitive information. Focus information sharing on clinical and operational improvements rather than pricing or market strategies.
Regular Audits
Conduct regular audits to ensure that the collaboration’s activities remain compliant with antitrust laws. Address any potential antitrust concerns promptly.
Example Collaboration Agreement
The proposed collaboration among mental health providers to evaluate the framework and conduct a risk analysis of a health plan's VBP contract is generally permissible under antitrust laws, provided that it focuses on procompetitive benefits such as improving efficiency, patient care, and innovation. By avoiding price-fixing agreements, maintaining transparency, and implementing safeguards against anticompetitive behavior, providers can benefit from the collaboration while remaining compliant with antitrust regulations.
Collaboration Agreement
This Agreement is made and entered into as of [Date], by and between [Provider Group Name], an organization with its principal place of business at [Provider Group Address] (hereinafter referred to as the “Provider Group”), and [Healthplan Name], an organization with its principal place of business at [Health Plan Address] (hereinafter referred to as the “Health Plan”).
WHEREAS, the Provider Group and the Healthplan desire to enter into a collaborative agreement to evaluate the framework of the VBP contract, conduct a risk analysis, and ensure the contract's viability and fairness;
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties hereto agree as follows:
Purpose:
The purpose of this collaboration is to share information to evaluate the VBP contract framework, conduct a risk analysis, and ensure the contract is viable and fair for all parties involved.
Information Sharing:
The parties agree to share relevant information necessary for evaluating the VBP contract and conducting a risk analysis. This information shall include clinical data, patient outcomes, and operational metrics.
Information shared under this agreement shall not include competitively sensitive information such as pricing strategies or market positions.
Uniform Fee for Services:
The Healthplan may offer the same fee for services to all providers. Each provider shall independently decide whether to accept the offered fee without collusion or agreement with other providers.
Transparency and Compliance:
The parties shall maintain transparency in their collaboration and ensure that all activities comply with applicable antitrust laws.
Regular audits shall be conducted to ensure compliance with antitrust regulations.
Safeguards:
Safeguards shall be established to prevent the exchange of competitively sensitive information. Information sharing shall be limited to clinical and operational improvements.
Consultation with Legal Counsel:
The parties agree to consult with antitrust legal experts to ensure that the collaboration’s activities comply with antitrust laws.
Term and Termination:
This Agreement shall commence on the date first written above and shall continue for a period of [number] years, unless terminated earlier in accordance with this Agreement.
Either party may terminate this Agreement with [number] days written notice to the other party.
Miscellaneous:
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter.
This Agreement may be amended only by a written instrument executed by both parties.
This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles.
Any disputes arising under or in connection with this Agreement shall be resolved through mediation or arbitration, as mutually agreed upon by the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
[Provider Group Name]
By: ___________________________
Name: _________________________
Title: __________________________
[Health Plan Name]
By: ___________________________
Name: _________________________
Title: __________________________
Date: __________________________
DISCLAIMER and PURPOSE: This discussion document is intended for training, educational, and or research purposes only. 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.
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