Impact of Moda Health’s October 2024 Addendum to Private and Group Mental and Behavioral Health Contracts
A Discussion Paper
Moda Health recently sent an NCQA Compliance Addendum to contracted providers, emphasizing compliance with the National Committee for Quality Assurance (NCQA) standards as part of their value-based care initiatives. This addendum amends existing agreements, introducing new Quality Improvement (QI) obligations that are now incorporated into the provider contracts without altering reimbursement terms.
Key Provisions of the NCQA Addendum
Quality Improvement (QI) Participation
Providers are required to actively participate in Moda’s QI programs, which include data collection, evaluation, and cooperation with quality-related activities aimed at improving care quality and patient experience.Performance Data Usage
Moda reserves the right to use provider performance data, including QI metrics and network status, to meet NCQA requirements. This data can also influence how providers are ranked or tiered in Moda’s networks, potentially impacting patient costs and provider visibility.Unilateral Amendments and Compliance Obligations
The addendum allows Moda to update the agreement without advance notice, reflecting changes to regulatory requirements or definitions set by NCQA. Providers are expected to comply with these evolving standards as part of their participation agreements(NCQA addendum sent to a…).Priority of NCQA Compliance Addendum
If any part of the existing agreement conflicts with the new addendum, the terms of the NCQA Compliance Addendum will take precedence for the relevant product or business line. This ensures that NCQA requirements override previous contract terms.
Implications for Independent Private Practice
The NCQA Addendum introduces increased administrative demands for private practices by requiring ongoing data collection, reporting, and QI involvement. Providers must align with standards that may shift over time as Moda updates compliance definitions, leaving practices vulnerable to unpredictable obligations. The use of performance metrics to influence network status and tiering could impact providers’ patient volume and financial sustainability, especially if metrics are not transparent or clearly defined.
Additionally, the addendum illustrates Moda’s ability to unilaterally modify contracts, undermining providers’ ability to negotiate or opt-out of unfavorable changes. This increased operational burden places small, independent practices at risk of burnout, moral injury and making it harder for them to compete with larger groups or continue providing care under value-based models. In response to Moda “gaming” provider, those providers will probably response by lawfully “gaming” Moda Health to protect their patients and their practices.
The Pitfalls of Over-Control in Value-Based Contracts: Lessons from Goodhart and Campbell
Overly controlling value-based contracts risk of triggering both Goodhart’s Law and Campbell’s Law, leading to unintended negative outcomes. Goodhart’s Law warns that when a policy is too rigid or controlling, people will find ways to manipulate the system to meet imposed targets, even if doing so undermines the intended goals. In the context of healthcare, providers might game performance metrics, focusing on activities that boost scores rather than delivering meaningful care.
Similarly, Campbell’s Law suggests that the use of quantitative indicators for decision-making invites corruption and distorts the very processes the indicators are supposed to improve. In behavioral health, for instance, metrics designed to measure outcomes could prompt providers to prioritize short-term, measurable achievements over long-term well-being, creating an incentive to "teach to the test" at the expense of patient-centered care. Together, these principles caution against the dangers of micromanaging providers through rigid contracts, as it can erode trust, distort care delivery, and ultimately compromise the quality of care.
Moda’s Asymmetric Risk Benefit
Figure 1 demonstrates that the asymmetric risks introduced by Moda’s addendum disproportionately burden providers, especially in areas of information asymmetry, misaligned incentives, and unclear compliance terms. Without clear definitions and transparent metrics, providers are exposed to high financial, operational, and ethical risks.
MRI believes that collective action and proactive engagement are essential to mitigating these risks. Providers must ensure that contract terms are clear, fair, and sustainable, or risk being overwhelmed by administrative demands and financial instability. The matrix highlights the need for collaboration between providers and policymakers to secure better protections and maintain the sustainability of independent private practices.
Figure 1.
Impact of Moda Health’s Contract Addendum
Figure 2 reflects the healthcare industry’s ongoing shift from traditional fee-for-service models to value-based care. Providers must prepare for increased adoption of APMs and population-based payments, which focus on delivering high-quality, patient-centered care while controlling costs. Practices that invest in innovation, technology, and quality improvement will be better positioned to thrive in this evolving landscape.
Figure 2.
For independent providers, this transition will likely mean adapting to new payment structures, requiring investment in data management and quality improvement programs. Practices that fail to adjust may struggle to compete in a healthcare environment that rewards outcomes over service volume. The growth in population-based models will necessitate deeper collaboration across care teams, potentially pushing smaller practices to join larger networks or integrated delivery systems.
Critical Conversations Moda Health Refused to Have with Providers During Contract Negotiations
Figure 3 summarizes the crucial conversations and information sharing that are necessary to create successful value-based contracts. Moda Health’s refusal to engage in essential conversations with providers reflects an attempt to micro-manage practices, leaving minimal room for collaboration and flexibility. This approach undermines the nuanced, adaptive nature of mental and behavioral healthcare, where successful outcomes rely heavily on individualized care, clinical judgment, and therapeutic relationships. Attempting to control how providers deliver care through rigid protocols and one-sided compliance frameworks will create significant challenges in care delivery and patient outcomes.
MRI emphasizes the importance of collaborative, transparent contracting processes that allow providers to adjust their approaches based on real-time patient feedback. Without meaningful conversations about risk-sharing, performance metrics, and clinical autonomy, value-based payment models will fail to deliver on their promise, resulting in worsened care outcomes, provider burnout, and reduced patient access. MRI encourages stakeholders to engage in collective action and advocate for fair, sustainable contracts that align with the realities of mental and behavioral healthcare practice.
Figure 3.
Conclusion
Moda Health’s NCQA Compliance Addendum places significant new responsibilities on independent providers. Practices must carefully review and understand the implications of the evolving compliance requirements, as failure to do so will affect their standing within Moda’s networks and increase administrative workloads. MRI emphasizes the importance of collective action, training and education to help providers ethically and lawfully navigate these changes and protect the future of independent practice from becoming overwhelmed by ambiguous, misleading and unsustainable contracts.