Narrative Case Example, Regulatory Argument and Complaint: Value-Based Payment Contracting for Psychotherapy Services
A Discussion Paper
Definitions of Terms for Value-Based Payment Contracting:
https://www.mentorresearch.org/healthy-contracts-bill-definitions
Narrative Case Example History
In the evolving landscape of healthcare, a provider group has been collaborating with a Healthplan since 2015 to create alternative and value-based payment contracts for mental and behavioral health services. This collaboration produced a significant investment of time and resources by the provider group, developing an online patient-reported outcome measurement and charting system and provider locator system, including analytics, feedback, and measurement reminder functions. The provider group created this because they wanted to be ready and at the forefront of measurement and value-based payment contracting.
The federal government and the State of Oregon are gradually phasing out fee-for-service models replacing those with value-based payment contracts. Oregon legislation is causing Healthplans to foreclose the market for fee-for-service providers, compelling them to adapt to new payment models that are compliant with Oregon Health Authority healthcare reform programs.
The provider group business model prevents it from being sold to a larger group, a Healthplan or a venture capital company because the group is a member owned not-for-profit. The group is structured for a mutual membership goal of independent practices which support legal, ethical and successful contracts that can increase quality and improved health at a reasonable price.
The provider group believes there is significant ambiguity and lack of clarity in the Healthplan’s contract definitions, values, objectives, controls, and key performance indicators. The Provider has committed to resolving these issues with the Healthplan. Surprizingly the Healthplan has presented the contract as a “fait acommpli”. The contract is negotiated in a manner that the terms and requirements have already been decided or completed before those affected by it are in a position to react or oppose it. The phrase “fait acommpli” is used aptly to describe a decision or action that is presented to others as irreversible and therefore not open to discussion or change.
The provider group is dedicated and committed to signing the contract because their financial survival requires that they adapt to Healthcare reform. While the Providers must sign the contract, they cannot sign the contract. The Providers analyzed the contract and reached a conclusion “a priori” that there is a probable to almost certain risk that the contract is fraudulent and violates antitrust laws.
Providers cannot sign a contract if they believe the contract has a probable to almost certain risk that it is unethical and illegal, and that it will fail.
The Healthplan offers 2 contracts to Purchasers and Providers that involves risk sharing. The base contract is a standard fee-for-service contract that reimburses providers based on the Centers for Medicare and Medicaid conversion factor which is projected to decrease annually by approximately 3.5%. The Heathplan offers a second contact that is referred to as the Behavioral Health Incentive Program (BHIP). During contract negotiations, the Healthplan referred to the second contract as a value-based contact. The characteristics of the BHIP is not aligned with Oregon Health Authority and the federal government guidance, but the BHIP is most definitely a “risk-share” contract.
A risk share is a financial arrangement in healthcare contracts, particularly in value-based payment models, where healthcare providers and Healthplans share financial risks and rewards associated with quality improvement and patient outcomes. This arrangement incentivizes providers to deliver high-quality care efficiently by aligning their financial interests with those of the Healthplan and patients. In risk-sharing contracts, providers may receive a portion of the savings if they deliver care maintaining or lower cost while maintaining or improving quality. Any saving is referred to as shared savings. Conversely, they may also share in the losses if the costs of care exceed expectations, known as shared losses or downside risk. Performance metrics and benchmarks are specified in the contracts, and risk adjustment mechanisms ensure fairness by accounting for varying patient health statuses. Successful risk-sharing requires clear communication, transparency, and collaboration between providers and Healthplans, allowing providers to understand the terms of the agreement and access data for informed decision-making. This approach encourages providers to focus on preventive care, reduce unnecessary services, and improve overall care coordination, leading to better health outcomes and cost savings. Risk-sharing arrangements are integral to many value-based care models.
The Healthplan is offering a meager incentive for participating in the BHIP for which the Healthplan intends keep any savings. The providers do not believe there can be any savings because the contract makes no sense and the providers efforts are not organized or designed to create a savings. Instead, provider receive an incentive based on how much money the Healthplan spends of total care. The amount of money the Healthplan spends is insignificant and nothing to do with mental and behavioral health services. In fact, provider can expect that their reimbursement will decrease and their will be no adjustment for inflation.
In order to paticipate in a risk share providers must know who they are sharing the risk with. The providers have asked the Healthplan but were not given the identities of all other providers groups who supposedly have the same risk-performance-reward incentives. The reward is a function of how much money the Healthplan spends, not a Provider benchmark based on key performance indicators (KPI). In mental health, KPIs would be patient reported outcome measures (PROM).
Providers surmise the Healthplan contract is “window dressing” for something else. To the untrained eye, the contract looks like a measurement and value-based payment contract, but it clearly does not adhere to federal or state industry publication, government guidelines or thought leaders. There are no coherent or shared values, objectives, controls, or key performance indictors that make sense in ways necessary to measure, monitor or reward achievement. If there is method or process, the Healthplan is not cocreating or sharing that with providers or prospective providers.
The Healthplan is also unwilling to identify providers who are part of the risk pool. The Healthplan representative presenting the contract stated he did not know what a “risk share” was. A value-based contract is by definition a risk share. Providers cannot be effective, and pro-competitive, if they are denied the opportunity to share information, align objectives and identify shared values and concerns. They also cannot assess the risk and need for risk adjustments.
The Healthplan offers a pay-for-measurement program. The Healthplan is offering 4% bonus to Providers for measurements, which is less 50% of the cost to measure which is 12%. The added value of the contract over fee-for-service as a baseline (i.e., treatment as usual) is zero. The provider assume there is some value, but there is no information or frameworks to evaluate the risk, the cost benefit, the upside risk, share risk or downside risk
Providers suspect the Healthplan also has a hidden benefit if providers sign the contract. This would explain why the Healthplan is offering a value-based contract without a framework they can reply on. By creating this contact, and getting providers to sign the contract, the Healthplan apparently hopes retain their existing contracts which cover all state and county employees. That is an estimated $140,000,000 contract. Plus, the Healthplan will almost certainly qualify for an additional $2,000,000 a year if they participate in the Aligning for Value-based Contracts Program managed by the Oregon Health Authority. Provider data will be collected and transmitted to the Healthplan who will report to the OHA. We believe the data alone will we worth several million dollars. Finally, the contracted reimbursement rate will decline by projected 3.5% per year with no increase for inflation.
Providers are not informed that the contract is designed to give the Healthplan an advantage over other Healthplans in retaining multimillion-dollar contracts to serve public employees. The contract has no value to Providers. Our analysis, based on a risk-impacting objective analysis, rick-control matrix and residual risk analysis suggests that there is a probable to almost certain moderate to catastrophic impact on provider and public health. Additionally, providers are not told that the contract is also intended to align the Healthplan with legislation that funds the Healthplan to gather information invaluable to the Healthplan and State's program to shift from fee-for-service to value-based contracts. The contract is structured to attract providers into an agreement while preventing them from becoming sufficiently organized and resourced to compete. If the Healthplan retains its contracts, the terms will almost certainly be changed to benefit the Healthplan, and probably to the detriment of the providers and public health. The bait is the promise of a 6% increase with a declining annual rate of 3% which providers are not aware of. The switch is that Provider contract is going to change and providers will almost certainly be feel deceived.
The scenario described raises several legal and ethical concerns that could potentially make the contract problematic or illegal, particularly if the Healthplan is funded by state and federal taxpayer dollars.
Challenges Faced by the Provider Group
Ambiguity and Lack of Clarity
The provider group faces significant ambiguity and lack of clarity regarding the contract’s definitions, values, objectives, controls, and key performance indicators. This uncertainty poses a challenge as the group strives to align with the Oregon Health Authority's quality and outcome standards. Despite these challenges, the provider group remains dedicated to resolving these issues to participate in value-based payment contracts that either meet quality standards or position them for future opportunities, such as mergers with venture capital investors.
“Fait Accompli” and Financial Pressures
The Healthplan has presented the contract as a "fait accompli," meaning the terms have already been decided without input from affected parties. This situation forces the provider group into a position where they must sign the contract to survive financially, yet they cannot agree to terms they believe may be fraudulent or violate antitrust laws. The concept of a "fait accompli" highlights the unilateral decision-making process, leaving providers with little room for negotiation or opposition.
The Healthplan's Contract Offerings
Dual Contract Structure
The Healthplan offers two contracts: a standard fee-for-service contract and a Behavioral Health Incentive Program (BHIP), described as a value-based contract. However, the BHIP is more accurately a "risk-share" contract, not fully aligned with federal and state guidelines. Risk-sharing contracts are financial arrangements where healthcare providers and Healthplans share financial risks and rewards based on patient care outcomes. These contracts incentivize providers to deliver efficient, high-quality care by aligning financial interests with those of the Healthplan and patients.
Misalignment with Regulatory Standards
The providers find the BHIP misaligned with Oregon Health Authority and federal government standards. The Healthplan’s representative, unfamiliar with the term "risk share," failed to clarify the arrangement, complicating the providers' understanding of the contract's objectives and performance expectations. In value-based contracts, transparency and clarity are essential for providers to collaborate effectively and achieve shared goals.
Hidden Agendas and Misleading Incentives
Lack of Transparency
The providers are not informed of other provider groups involved in the same risk-performance-reward incentives. The contract appears as "window dressing" because it resembles a measurement and value-based payment contract without adhering to recognized industry standards. The Healthplan's reluctance to identify providers in the risk pool raises concerns about transparency and fairness.
Financial Implications and Misleading Terms
The Healthplan offers a 4% bonus for measurements, covering only half of the 8% cost to measure. The contract seemingly aims to retain multimillion-dollar contracts with state and county employees, valued at approximately $140 million, and qualify for additional incentives from the Oregon Health Authority's Aligning for Value-based Contracts Program. This strategic positioning suggests that the contract benefits the Healthplan more than the providers, as the collected data has significant value.
Risks and Implications for Providers
Deceptive Contract Structure
The contract's structure gives the Healthplan an advantage in retaining public employee contracts, providing little value to providers. A risk-impacting objective analysis and risk-control matrix indicate a probable moderate to catastrophic impact on providers and public health. Providers are not informed of the contract's true intent, aligning the Healthplan with state initiatives to transition from fee-for-service to value-based models.
Bait and Switch Tactics
The contract promises a 6% increase but conceals a declining annual rate of 3%, creating a "bait and switch" scenario. Providers are not fully aware of these terms and may feel deceived once contract terms change to benefit the Healthplan, potentially harming providers and public health.
Complaint to the State Insurance Commission
Mentor Research Institute
818 NW 17th Avenue #11,
Portland, Oregon 97209
503 227-2027
Oregon Department of Consumer and Business Services (DCBS)
Division of Financial Regulation
P.O. Box 14480
Salem, OR 97309
Subject: Whistleblower Complaint Against Healthplan: Evidence of Fraud and Antitrust Violations.
To whom it may concern,
I am writing to formally lodge a whistleblower complaint against [Healthplan name is Healthplan X], concerning its contracting practices with mental and behavioral health providers. I am a clinical psychologist and a board member of Mentor Research Institute (MRI), a 501(c)(3) organization committed to promoting ethical healthcare practices. MRI is providing technical support and guidance during a years long contact negotiation with an Oregon Based Healthplan, hereafter referred to as Healthplan X.
Background and Provider Group Involvement
Since 2015, the Provider group has been working collaboratively with Healthplan to develop innovative payment models, transitioning from traditional fee-for-service to value-based payment contracts. The provider group has invested significant resources into developing a robust patient-reported outcome measurement system (PROM) aimed at increasing quality of care and increasing health at an appropriate cost.
These efforts have been driven by federal and state healthcare reforms mandating a shift towards value-based payment contracts. This shift, funded by state and federal taxpayer dollars, is effectively eliminating the viability of fee-for-service models, compelling providers to adapt to new payment structures to maintain financial sustainability and align with healthcare policy changes. Here some example problems encountered during contract negotiations.
Allegations and Concerns
1. Lack of Clarity and Transparency in Contract Terms
The Behavioral Health Incentive Program (BHIP) contract lacks clear definitions and alignment with recognized federal and state standards for value-based payment models. The terms are ambiguous, particularly regarding performance metrics, objectives, and risk-sharing mechanisms. This ambiguity raises significant concerns about the integrity and legality of the contract. The Healthplan is not forthcoming. The information provided is asymmetrical, suggesting the contract I not fair and negotiated in good faith. The providers are denied information necessary to properly analyze the risk in a risk-sharing contract.
2. Fait Accompli Tactics
Healthplan has presented the contract as a “fait accompli,” a situation where terms are predetermined without input or negotiation from the provider group. This approach limits providers' ability to negotiate terms that reflect their operational realities, necessary costs, ethical standards, and regulations under Federal and State Law.
3. Risk-Sharing Misrepresentation
The contract includes a risk-sharing component that is inadequately explained and misaligned with industry standards. Providers are not informed about the identities of other groups involved or the specifics of the risk pool. The Healthplan’s representative was unable to clarify these aspects, suggesting a lack of genuine understanding or intentional obfuscation of the contract’s true nature.
4. Potential Antitrust Violations
The contract may contravene antitrust laws by restricting providers' ability to form collaborative networks and establish baselines, set benchmarks, align objectives and targets with peers, and create necessary controls. Such restrictions will hinder competition and foster monopolistic practices, violating the Sherman and Clayton Acts, which protect against monopolies and promote fairness and competition (establishing pro-competitive standards).
5. Misuse of Government Funds and Incentives
The contract appears to be designed to secure Healthplan's existing multimillion-dollar contracts with public entities, leveraging provider data to qualify for additional state taxpayer funded incentives. This design suggests a potential misuse of government funds intended to support genuine value-based care initiatives, possibly constituting fraud against taxpayers who need mental and behavioral health service.
6. Financial Exploitation of Providers
The Healthplan offers a 4% bonus for measurement activities, which is 25% of the actual costs incurred by providers. Additionally, the contract’s financial terms, including a projected annual reimbursement decline, create unsustainable financial conditions for providers while benefiting the Healthplan through data acquisition and retention of large-scale contracts. Providers, discovering the contract is voidable, but lacking an objective reporting system (for Whistleblowers) or the resources to litigate can legally boycott Healthplan.
7. Evidence that the Healthplan Contract will Fail.
Healthplan X is an uncontrolled experiment. There are no shared values, objective, controls, tests of design and effectiveness, or key performance indicators. The is no risk-impacting objectives analysis, no risk control matrix analysis, and no residual risk analysis. The Healthplan stated in a contract negotiation that “we are making it up as we go.” MRI analysis of the contract and negotiation thus far indicates that if Healthplan continues to negotiate in bad faith and an unfair manner, there is a probable to almost certain moderate to catastrophic impacts.
Request for Investigation
There are a great many examples and additional concerns which arise after a close examination of the Healthplan contract and negotiations. Given these substantial concerns, I respectfully urge the State of Oregon Insurance Commission to conduct a thorough investigation into Healthplan's contracting practices. It is essential to ensure compliance with legal standards, and to protect Purchasers, Providers, regulators, and patients from unethical practices, and safeguard public resources (e.g., taxpayer and employer funds) from misuse.
Mentor Research Institute stands ready to provide further documentation and cooperate fully with any investigation to uphold the integrity and fairness of Oregon's healthcare system. We have a library of discussion papers intended to inform and train Purchasers, Healthplans, Patients, Providers and State of Oregon Legislators and Regulators. Sensitive discussion papers are password protected. https://www.mentorresearch.org/healthy-contracts-categorized
Thank you for your attention to this urgent matter. I look forward to your response and I am available for further discussion at your earliest convenience.
Sincerely,
Mentor Research Institute
Direct line: 541 388-5660
Attachment A: Summary of Questions and Allegations.
Attachment B: Requirements and Consideration Checklist Value-Based Payment Contracts
Attachment C: Outline of Specific Relevant Laws - Legal Framework and Analysis
Attachment D: Proposed Health Contract Bill: Value-Based Payment Model Integrity and Transparency Act
Attachments
The Healthplans promotion, contract, and negotiations touches to various degrees on the following ethical considerations, and legal principles, laws and regulations.
Centers for Medicare & Medicaid Services (CMS) Regulations
Health Insurance Portability and Accountability Act (HIPAA)
Federal Trade Commission (FTC) Act.
Section 5: Prohibits "unfair or deceptive acts or practices in or affecting commerce," including unfair methods of competition.
Section 13(b): Allows the FTC to seek injunctions and other equitable relief to prevent ongoing or future violations.
The Sherman - Anti-Competitive Practices and Deceptive Acts ·
Section 1: Prohibits contracts, combinations, or conspiracies that restrain trade or commerce.
Section 2: Prohibits monopolization, attempts to monopolize, or conspiracies to monopolize any part of trade or commerce.
The Clayton Act
Section 2 (Robinson-Patman Act): Prohibits price discrimination that lessens competition or creates a monopoly.
Section 3: Prohibits exclusive dealing and tying arrangements that may substantially lessen competition or tend to create a monopoly.
Section 7: Prohibits mergers and acquisitions that may substantially lessen competition or tend to create a monopoly.
Section 8: Prohibits interlocking directorates (the same person making business decisions for competing companies).
Federal Acquisition Regulation (FAR)
Part 1: Federal Acquisition Regulations System,
Part 3: Improper Business Practices and Personal Conflicts of Interest,
Part 9: Contractor Qualifications,
Part 12: Acquisition of Commercial Items,
Part 15: Contracting by Negotiation,
Part 16: Types of Contracts.
ORS 165.013 - Aggravated Theft by Deception
False Claims Act (31 U.S.C. §§ 3729–3733)
Contract Law Principles
Good faith and
Fair dealings.
Ethical Considerations
The risk to public trust and health
Undermining the trust of provider.
Analysis of Bait and Switch Tactics in the Healthplan’s Contract Scenario
Overview of Bait and Switch
"Bait and switch" is a deceptive marketing practice where a company advertises an attractive offer (the "bait") to lure customers in, only to substitute it with a less favorable deal (the "switch") once the customer is engaged. This tactic is considered fraudulent because it misleads customers about the true nature of the offer.
The Bait
The Healthplan offers providers a contract under the Behavioral Health Incentive Program (BHIP), which is presented as a value-based agreement. It promises a 4% bonus for performance measurements, portraying the contract as a beneficial, innovative opportunity aligned with federal and state guidelines for value-based care. Additionally, the contract promises an additional 2% increase in reimbursement rates in a specific risk pool, creating the impression that providers will receive better compensation and financial incentives.
The Switch
Once providers are engaged, they discover that the promised 4% bonus does not cover the 12% cost required to conduct performance measurements. Furthermore, the reimbursement rate is projected to decline by 3.5% per year with no adjustment for inflation, significantly reducing the actual value of the contract. Providers are not informed that the contract's primary purpose is to help the Health plan retain its multimillion-dollar contracts with state and county employees and qualify for additional incentives from the Aligning for Value-based Contracts Program. This critical information, which impacts the contract's value and implications, is concealed. The contract is structured to appear as a genuine value-based agreement, but it lacks adherence to established guidelines and fails to provide the anticipated benefits. The Healthplan representative's ignorance of what a "risk share" entails further underscores the deceptive nature of the offer.
Why This is a Bait and Switch
The Health plan attracts providers with the promise of a beneficial value-based contract, enhanced reimbursement rates, and performance bonuses, which constitutes the bait. After providers commit, they face unfavorable terms such as inadequate bonuses, hidden costs, declining reimbursement rates, and a lack of transparency regarding other providers in the risk pool, which constitutes the switch. The Health plan's actions demonstrate an intent to mislead providers into signing the contract by offering seemingly attractive terms upfront, only to reveal less favorable conditions later. This practice is intended to benefit the Healthplan by securing large contracts and additional incentives at the expense of the providers.
Legal and Ethical Implications
Providers do not have the training or resources to challenge Healthplans in court. This bait and switch tactic undermines trust between providers and the Healthplan, leading to long-term damage to professional relationships and cooperation. The deceptive practices involved in a bait and switch can be subject to legal scrutiny under various statutes, including fraud, false advertising, and consumer protection laws. Providers may have grounds to pursue legal action against the Health plan for misrepresentation and breach of contract. Such tactics may also attract the attention of regulatory bodies, such as the Federal Trade Commission (FTC), which can impose penalties and require corrective actions to address deceptive practices.
Conclusion
The Healthplan's contract with providers under the Behavioral Health Incentive Program (BHIP) is analogous to a bait and switch tactic. The Healthplan uses the promise of a beneficial value-based contract and attractive incentives as bait to lure providers in. However, once providers commit, they face less favorable terms, hidden costs, and declining reimbursement rates, representing the switch. This deceptive practice undermines trust, violates legal and ethical standards, and may result in legal action and regulatory intervention to protect providers and maintain fair competition in the healthcare market.
Discussion Outline
The described scenario involves a Healthplan offering a dubious contract to mental and behavioral health providers, raising concerns about appropriate contracting, fraud, false claims, antitrust violations, enforceability, good faith, fair dealing, and the consequences of a provider's loss of trust.
1. Contracting and Enforceability
Appropriate Contracting:
Transparency and Clarity: Contracts must be clear, transparent, and comply with both federal and state guidelines, particularly for value-based contracts. Lack of clarity and transparency can render a contract unenforceable.
Offer and Acceptance: For a contract to be enforceable, both parties must have a clear understanding of the contract terms. In this case, providers are not fully informed about the risk-sharing arrangement or the identities of other providers in the risk pool.
Enforceability:
Legality and Compliance: Contracts must comply with existing laws and regulations. If the health plan's contract misrepresents the nature of the agreement (e.g., claiming it is a value-based contract when it is not), this could lead to issues of enforceability.
Good Faith and Fair Dealings: Contracts must be executed in good faith. If the health plan intentionally conceals information or misleads providers, the contract could be challenged and potentially deemed void due to bad faith practices.
2. Fraud and False Claims
Fraudulent Activities:
False Representation: If the health plan misrepresents the nature of the contract (e.g., suggesting it is a value-based contract), this constitutes fraud. Providers signing under false pretenses can claim they were deceived.
Omission: Failing to disclose critical information, such as the real incentives and benefits for the health plan, the declining reimbursement rate, and the hidden agenda, also constitutes fraud.
Regulations and Penalties:
State Laws: Oregon law (ORS 165.013 - Aggravated theft by deception) penalizes fraudulent activities with severe fines and imprisonment.
Federal Laws: Under the False Claims Act (31 U.S.C. §§ 3729–3733), the health plan could face significant penalties if found guilty of defrauding federal programs by misrepresenting contract terms or the nature of provided services.
3. Antitrust Violations
Unfair Competitive Advantage:
Market Power: The health plan's use of its market power to prevent providers from forming pro-competitive collaborations can violate antitrust laws. Exclusive contracts and lack of transparency hinder competition and provider autonomy.
Exclusive Contracts and Market Allocation: If the health plan's contract prevents providers from collaborating or competing effectively, this could be seen as anti-competitive behavior under the Sherman Act and Clayton Act.
Legal Framework:
Sherman Act: Prohibits monopolistic practices and ensures fair competition. Health plans engaging in exclusive dealings or coercive tactics could be in violation.
Clayton Act: Addresses specific practices like exclusive dealing and tying arrangements that may reduce competition.
4. Good Faith and Fair Dealing
Ethical Concerns:
Misleading Contracts: Contracts must be executed with honesty. Misleading providers about the nature and benefits of the contract breaches the duty of good faith and fair dealing.
Hidden Agendas: Concealing the Healthplan's true motives and the declining reimbursement rate undermines trust and violates ethical contracting standards.
Consequences:
Loss of Trust: When providers realize the deception, they lose trust in the Healthplan, which can lead to strained relationships, decreased cooperation, and potential legal challenges.
Impact on Public Health: Deceptive contracts can ultimately harm public health by discouraging provider participation and collaboration, leading to poorer health outcomes for patients.
5. Strategies for Providers
Understanding Legal Rights:
Educate Providers: Providers should be educated on their legal rights under contract and antitrust law to identify and challenge unfair practices.
Seek Legal Counsel: Engaging legal counsel specializing in healthcare and antitrust law can help providers navigate complex legal landscapes.
Enhancing Transparency and Collaboration:
Advocate for Transparency: Providers should advocate for transparency in provider networks to foster better collaboration and competition.
Form Legally Compliant Collaborations: Providers should seek to form collaborations that comply with antitrust laws, enhancing their ability to compete and improve patient care.
Negotiation Strategies:
Fair and Clear Contracts: Providers should ensure contracts are clear, fair, and in compliance with antitrust laws. Avoid exclusive contracts that limit collaboration.
Good Faith Negotiations: Engage in negotiations with Healthplans in good faith, focusing on mutual benefits and ethical practices.
Monitoring and Reporting:
Independent Audits: Utilize independent certified internal auditors to ensure compliance with contractual and legal standards.
Ethics Point Portals: Implement portals for reporting provider concerns, unethical or anti-competitive behaviors anonymously or self-identified.
Advocacy and Policy Change:
Engage in Advocacy: Work with professional associations and advocacy groups to promote policy changes that enhance competition and transparency in healthcare.
Legal Challenges: Consider legal challenges to anti-competitive practices under antitrust laws.
Conclusion
The scenario described involves significant legal and ethical issues related to contract law, fraud, false claims, antitrust violations, enforceability, good faith, fair dealing, and the consequences of losing provider trust. To address these issues, it is essential for providers to be well-informed, seek legal counsel, and advocate for transparency and fair practices. By understanding and leveraging relevant laws and regulations, providers can protect their interests, promote fair competition, and ultimately improve patient care.
Relevant Laws and Regulations
The following are laws that directly pertain to Moda Health conduct during negotiations. Some of these laws touch on Moda Health’s conduct during contract negotiations but may be less relevant or provide no added value. For example, the false claims act may be relevant, and demonstrate related principles of law but is not sufficience alone to win an legal argument.
1. Transparency and Disclosure Requirements
Regulatory Compliance
Centers for Medicare & Medicaid Services (CMS) Regulations. CMS requires Healthplans to maintain transparency in their operations, particularly when they involve public funds. Failing to disclose pertinent information that affects the risk and value of contracts to providers may violate CMS rules.
Health Insurance Portability and Accountability Act (HIPAA). Although primarily concerned with patient privacy, HIPAA also mandates transparency in certain aspects of Healthplan operations.
2. Fraud and Abuse Laws
False Claims Act (FCA). If the Healthplan knowingly conceals information or makes false statements to receive payments from government programs, it could be liable under the FCA. This law imposes liability on individuals and companies who defraud governmental programs.
Anti-Kickback Statute (AKS). Offering financial incentives or arrangements that are not transparent and potentially lead to unfair competitive practices could be seen as violations of the AKS, which prohibits the exchange of remuneration to induce or reward referrals for services covered by federal healthcare programs.
3. Antitrust Concerns
Sherman Act. If the contract is designed to give the Healthplan an unfair advantage over competitors, it may raise antitrust issues under the Sherman Act, which prohibits activities that restrict interstate commerce and competition in the marketplace.
Federal Trade Commission (FTC) Act. The FTC Act outlaws unfair methods of competition and unfair or deceptive acts or practices in commerce. The lack of transparency and potential manipulation of contract terms to maintain market dominance could be investigated under this act.
4. Good Faith and Fair Dealings
Contract Law Principles. Most jurisdictions recognize the implied covenant of good faith and fair dealings in contracts. If the healthplan intentionally withholds critical information or plans to change the contract terms detrimentally for providers, it could be seen as a breach of this covenant.
5. Government Contracting Regulations
Federal Acquisition Regulation (FAR). For contracts involving federal funds, FAR outlines the policies and procedures governing acquisition planning, contract formation, and contract management. Non-disclosure of crucial information affecting contract value and risk could violate FAR requirements.
State Contracting Laws. Similar to federal regulations, state laws governing contracts funded by state taxpayer dollars will require transparency, fairness, and adherence to specified terms and conditions.
Ethical Considerations
Fairness and Integrity. Ethically, Healthplans must ensure fair dealing and transparency with providers. Concealing critical information undermines trust and the ethical foundation of contractual relationships.
Impact on Public Health. Changes to contracts that negatively affect providers could lead to reduced quality of care, adversely impacting public health. Ethical business practices require prioritizing patient outcomes over financial incentives.
Relevance of the Federal Trade Commission (FTC) Act in the Healthplan Contract Scenario
Overview of the Federal Trade Commission (FTC) Act
The FTC Act, enacted in 1914, aims to prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce. It empowers the Federal Trade Commission to enforce antitrust laws and protect consumers by investigating and addressing anti-competitive behavior and deceptive practices.
Key Provisions of the FTC Act:
Section 5: Prohibits "unfair or deceptive acts or practices in or affecting commerce," including unfair methods of competition.
Section 13(b): Allows the FTC to seek injunctions and other equitable relief to prevent ongoing or future violations.
Application to the HealthPlan Contract Scenario:
Anti-Competitive Practices and Deceptive Acts by the HealthPlan:
Section 5: Unfair or Deceptive Acts or Practices
Section 5: Prohibits "unfair or deceptive acts or practices in or affecting commerce," including unfair methods of competition.
Section 13(b): Allows the FTC to seek injunctions and other equitable relief to prevent ongoing or future violations.
Application to the HealthPlan Contract Scenario:
Anti-Competitive Practices and Deceptive Acts by the HealthPlan:
Section 5: Unfair or Deceptive Acts or Practices
Misrepresentation of Contract Terms: The healthplan presents the Behavioral Health Incentive Program (BHIP) as a value-based contract. However, it lacks adherence to federal and state guidelines defining such contracts. This misrepresentation can be seen as a deceptive act intended to mislead providers.
Concealment of Critical Information: The healthplan fails to disclose important details such as the identities of other providers in the risk pool, the true purpose of the contract, the declining reimbursement rate, and the associated costs of measurement. This omission is deceptive and prevents providers from making fully informed decisions.
Unfair Methods of Competition: The healthplan's practices, including exclusive dealing and offering misleading incentives, can be considered unfair methods of competition designed to disadvantage other healthplans and reduce competition.
Impact on Competition and Providers:
Deceptive Practices: By misrepresenting the nature of the BHIP contract and using misleading terms, the healthplan engages in deceptive practices that violate the FTC Act. Providers are induced into signing contracts under false pretenses, which could result in financial losses and operational challenges.
Restrictive Agreements: The healthplan’s refusal to disclose the identities of other providers in the risk pool and its exclusive dealing arrangements restrict providers' ability to collaborate, share information, and compete effectively. This creates an unfair competitive environment, harming both providers and other healthplans.
Market Manipulation: The healthplan's goal of retaining multimillion-dollar contracts by misleading providers undermines fair competition. By securing a dominant position through deceptive practices, the healthplan can manipulate the market to its advantage, reducing competition and potentially harming consumers by driving up costs and lowering the quality of care.
Legal and Ethical Implications:
FTC Investigations and Enforcement: The FTC has the authority to investigate the healthplan’s practices and enforce compliance with the FTC Act. If the healthplan is found to have engaged in unfair or deceptive acts, the FTC can seek injunctive relief, monetary penalties, and corrective actions.
Protection for Providers and Consumers: The enforcement of the FTC Act protects providers from deceptive practices and ensures a competitive market that benefits consumers. By addressing unfair competition and deceptive acts, the FTC helps maintain the integrity of the healthcare market.
Case Analysis:
Deceptive Marketing: The healthplan’s marketing of the BHIP contract as a value-based agreement, despite its failure to meet established guidelines, is a deceptive act that violates the FTC Act.
Exclusive Dealing and Non-Disclosure: The healthplan’s refusal to disclose key information and its use of exclusive dealing arrangements restrict competition, constituting unfair methods of competition under the FTC Act.
Consumer Harm: The anti-competitive practices and deceptive acts of the healthplan can lead to higher costs, reduced quality of care, and fewer choices for consumers, which the FTC Act is designed to prevent.
Conclusion:
The FTC Act is highly relevant to the described healthplan contract scenario due to the potential deceptive practices and anti-competitive behavior involved. The healthplan’s actions, including misrepresenting contract terms, concealing critical information, and engaging in exclusive dealing, violate Section 5 of the FTC Act. These practices harm competition and deceive providers, warranting investigation and enforcement by the FTC to ensure compliance with the law and protect the integrity of the healthcare market. Providers and regulators should closely examine the healthplan’s conduct and seek remedies under the FTC Act to address these issues.
Relevance of the Sherman Act in the HealthPlan Contract Scenario
Overview of the Sherman Act
The Sherman Antitrust Act is a landmark federal statute enacted in 1890 to preserve free and unfettered competition as the rule of trade. It prohibits anti-competitive agreements and unilateral conduct that monopolizes or attempts to monopolize a market.
Key Provisions of the Sherman Act:
Section 1: Prohibits contracts, combinations, or conspiracies that restrain trade or commerce.
Section 2: Prohibits monopolization, attempts to monopolize, or conspiracies to monopolize any part of trade or commerce.
Application to the HealthPlan Contract Scenario:
Anti-Competitive Practices by the HealthPlan:
Section 1: Restrictive Agreements and Collusion
Exclusive Contracts: The Healthplan’s contract with providers potentially includes exclusivity clauses that prevent providers from collaborating with other Healthplans. This restricts trade by limiting providers' ability to enter into agreements with multiple Healthplans, reducing competition.
Lack of Transparency: By not disclosing the identities of other providers in the risk pool, the Healthplan prevents providers from forming pro-competitive collaborations. This lack of transparency can be seen as a tactic to stifle competition among providers, inhibiting their ability to collectively negotiate better terms or share best practices.
Misleading Contract Terms: Presenting the contract as a value-based agreement while it does not meet such criteria under federal or state guidelines could be viewed as deceptive, potentially inducing providers into an agreement under false pretenses. This can be construed as a form of collusion if the intent is to mislead multiple providers collectively.
Section 2: Monopolization and Attempts to Monopolize
Market Power and Monopolistic Intent: The Healthplan’s practices suggest an intent to monopolize the market for mental and behavioral health services for state and county employees. By locking in providers under misleading contracts, the Healthplan attempts to dominate this market segment and exclude competitors.
Anti-Competitive Effects: The contract terms, such as the declining reimbursement rates and the hidden agenda to qualify for additional incentives, are designed to weaken the competitive position of other Healthplans. This undermines the competitive process, potentially leading to higher prices, lower quality of care, and reduced innovation in the long term.
Legal and Ethical Implications:
Hindering Competition: The Healthplan’s actions can hinder competition by restricting providers’ choices and creating barriers to entry for other Healthplans. This lack of competition can lead to monopolistic control over the market, harming both providers and patients.
Potential Violations: If the Healthplan’s conduct is found to restrict trade unreasonably or to be part of an attempt to monopolize the market, it could be deemed in violation of the Sherman Act. This could result in legal action, significant fines, and mandatory changes to business practices.
Case Analysis:
Provider Agreements: Providers must enter into agreements with the Healthplan without knowing all the details or having the ability to negotiate fairly, reducing their bargaining power.
Competitive Harm: Other Healthplans that wish to compete for contracts to serve state and county employees may be unfairly disadvantaged, as the dominant Healthplan uses its market power to maintain and expand its control.
Impact on Market Dynamics: By securing a large market share through potentially anti-competitive means, the healthplan disrupts the natural competitive dynamics, which could lead to negative outcomes for the healthcare market in terms of cost, quality, and innovation.
Conclusion
The Sherman Act is highly relevant to the described Healthplan contract scenario due to the potential anti-competitive practices involved. The Healthplan's actions may constitute restrictive agreements and attempts to monopolize the market for mental and behavioral health services, thereby violating both Sections 1 and 2 of the Sherman Act. These practices restrict trade, hinder competition, and may result in significant legal and ethical consequences. The providers and regulators should closely examine the Healthplan’s conduct to ensure compliance with antitrust laws and to protect the integrity of the healthcare market.
Relevance of the Federal Acquisition Regulation (FAR) in the Healthplan Contract Scenario
Overview of the Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation (FAR) is the primary set of rules in the Federal Acquisition Regulation System, governing the acquisition process by which the United States federal government purchases goods and services. It ensures that government acquisitions are conducted with integrity, fairness, and transparency.
Key Provisions of FAR:
Part 1: Federal Acquisition Regulations System
Part 3: Improper Business Practices and Personal Conflicts of Interest
Part 9: Contractor Qualifications
Part 12: Acquisition of Commercial Items
Part 15: Contracting by Negotiation
Part 16: Types of Contracts
Application to the HealthPlan Contract Scenario:
Improper Business Practices and Personal Conflicts of Interest (FAR Part 3):
Misrepresentation of Contract Terms: The health plan's misrepresentation of the Behavioral Health Incentive Program (BHIP) as a value-based contract, while it fails to adhere to federal and state guidelines, could constitute improper business practices. FAR Part 3 prohibits deceptive practices and ensures that all transactions are conducted with honesty and integrity.
Concealment of Information: The health plan’s failure to disclose critical information, such as the true purpose of the contract, the declining reimbursement rates, and the identities of other providers in the risk pool, can be considered a violation of FAR’s requirements for transparency and full disclosure.
Contractor Qualifications (FAR Part 9):
Integrity and Business Ethics: FAR Part 9 requires that contractors (including health plans) demonstrate a record of integrity and business ethics. The deceptive practices described, including misrepresenting the nature of the contract and hiding critical information, suggest a lack of integrity and could disqualify the health plan from federal contracts.
Performance History: The health plan’s inability to meet the standards of a true value-based contract could negatively impact its performance history, a critical factor in determining contractor responsibility under FAR.
Contracting by Negotiation (FAR Part 15):
Fair and Transparent Negotiation: FAR Part 15 emphasizes the importance of fair and transparent negotiation processes. The health plan’s deceptive tactics in presenting the BHIP contract undermine the principles of fair negotiation, as providers are not given all the necessary information to make informed decisions.
Proper Representation: The health plan’s representatives must accurately represent contract terms and conditions. The misrepresentation of risk-sharing and performance incentives violates the requirements for truthful and transparent negotiation practices.
Types of Contracts (FAR Part 16):
Appropriate Contract Type: The FAR outlines different types of contracts, including fixed-price, cost-reimbursement, and incentive contracts. The health plan’s contract must align with the appropriate type as defined by FAR. Misrepresenting a cost-reimbursement or incentive-based contract as a value-based contract without adhering to the necessary criteria can lead to improper classification and potential violations.
Ethical and Legal Implications:
Compliance with Federal Standards: Contracts funded by federal programs must comply with FAR standards. The health plan’s deceptive practices and misrepresentations may result in non-compliance with these regulations.
Potential Sanctions: Failure to adhere to FAR standards can lead to various sanctions, including contract termination, debarment from future federal contracts, and financial penalties.
Investigations and Audits: The health plan could be subject to audits and investigations by federal agencies to ensure compliance with FAR. Any findings of non-compliance could have significant legal and financial repercussions.
Case Analysis:
Deceptive Practices: The health plan’s misrepresentation of the BHIP contract terms, concealment of critical information, and lack of transparency in negotiations are clear violations of FAR’s requirements for integrity and fair dealing.
Impact on Federal Contracts: The health plan’s practices not only harm providers but also undermine the integrity of federal procurement processes. This could result in the health plan losing its ability to secure future federal contracts and facing penalties for its current deceptive practices.
Conclusion:
The Federal Acquisition Regulation (FAR) is highly relevant to the health plan contract scenario because it sets strict standards for transparency, integrity, and fairness in government acquisitions. The health plan’s deceptive practices in misrepresenting the BHIP contract, failing to disclose critical information, and violating fair negotiation principles directly contravene FAR provisions. These actions not only undermine trust with providers but also jeopardize the health plan’s compliance with federal contracting standards, potentially leading to severe legal and financial consequences.
Relevance of ORS 165.013 - Aggravated Theft by Deception in the Health Plan Contract Scenario
[This law is related but relavent to the core argument.
Overview of ORS 165.013
ORS 165.013, also known as "Aggravated Theft by Deception," is an Oregon statute that penalizes individuals or entities for committing theft through deceptive means. This law applies when someone unlawfully takes property or money from another person or entity by using deceitful tactics, false representations, or concealment of material facts.
Key Elements of ORS 165.013:
Theft by Deception: Involves obtaining property or money through fraudulent means or misrepresentation.
Aggravated Theft: Occurs when the value of the stolen property or money exceeds a certain threshold, making the offense more severe.
Penalties: Includes severe fines and imprisonment for individuals or entities found guilty of committing this offense.
Application to the Health Plan Contract Scenario:
Deceptive Practices by the Health Plan:
False Representation: The health plan presents the Behavioral Health Incentive Program (BHIP) as a genuine value-based contract. However, it lacks adherence to federal and state guidelines for such contracts, indicating potential misrepresentation.
Concealment of Information: The health plan fails to disclose critical information to providers, such as the true purpose of the contract, the identities of other providers in the risk pool, and the declining reimbursement rate. This omission prevents providers from making fully informed decisions.
Intent to Defraud:
Hidden Benefits: The health plan has a hidden agenda to retain existing multimillion-dollar contracts and qualify for additional incentives by misleading providers into signing the BHIP contract. This involves significant financial gains for the health plan at the expense of the providers.
Misleading Incentives: The offered 4% bonus for measurements does not cover the actual cost (8%), further indicating that the contract terms are not as beneficial to providers as portrayed.
Financial Impact:
Significant Losses: Providers are likely to incur financial losses due to the declining reimbursement rate and inadequate compensation for measurement costs. The health plan, meanwhile, stands to gain financially from retaining large contracts and collecting valuable data.
Aggravated Theft: If the total value of money or services deceptively obtained from providers exceeds the threshold defined by ORS 165.013, it qualifies as aggravated theft.
Conclusion:
The relevance of ORS 165.013 - Aggravated Theft by Deception in this scenario lies in the health plan's use of deceptive practices to induce providers into signing a contract that benefits the health plan financially while disadvantaging the providers. By misrepresenting the nature of the BHIP contract and concealing critical information, the health plan may be committing theft by deception. Given the significant financial implications for providers and the health plan's potential gains, this situation may not meet the criteria for aggravated theft under ORS 165.013, and does not warrant a thorough investigation and appropriate legal action.
Relevance of the False Claims Act (31 U.S.C. §§ 3729–3733) in the Health Plan Contract Scenario
Overview of the False Claims Act (FCA)
The False Claims Act (FCA) is a federal law that imposes liability on individuals or entities who defraud governmental programs. The Act covers a wide range of fraudulent activities, including submitting false claims for payment or approval, making or using false records or statements, and conspiring to commit fraud against the government.
Key Provisions of the FCA:
False Claims: Prohibits knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval.
False Records or Statements: Prohibits making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim.
Conspiracy: Prohibits conspiring to commit any violation of the FCA.
Penalties: Includes significant financial penalties, treble damages, and liability for the costs of a civil action.
Application to the Health Plan Contract Scenario:
Deceptive Practices by the Health Plan:
Misrepresentation of Contract Terms: The health plan presents the Behavioral Health Incentive Program (BHIP) as a value-based contract that aligns with federal and state guidelines, which it clearly does not. This misrepresentation can lead to the submission of false claims.
False Statements: If the health plan submits claims to the Oregon Health Authority (OHA) for incentives based on the misrepresented nature of the BHIP contract, it could constitute making or using false records or statements.
Intent to Defraud Government Programs:
Misleading Providers: By misleading providers about the nature and benefits of the BHIP contract, the health plan aims to secure their participation, thereby enabling the health plan to retain and potentially gain multimillion-dollar contracts funded by state and federal taxpayer dollars.
False Reporting: The health plan’s collection and transmission of provider data to the OHA under false pretenses (i.e., misrepresented contract terms and incentives) can result in the submission of false claims to a government program.
Financial Impact:
Government Program Funds: The health plan's intent to qualify for additional incentives from the Aligning for Value-based Contracts Program managed by the OHA involves federal and state funds. If these incentives are obtained through fraudulent means, it directly impacts government resources.
Liability for False Claims: Any false claims submitted by the health plan to the OHA for these incentives could trigger liability under the FCA, leading to substantial penalties and damages.
Whistleblower Provisions:
Qui Tam Actions: The FCA allows whistleblowers (including providers who recognize the fraud) to file qui tam lawsuits on behalf of the government. If successful, whistleblowers may receive a portion of the recovered damages.
Protection for Whistleblowers: Providers who expose the fraudulent practices of the health plan are protected under the FCA from retaliation.
Conclusion:
The relevance of the False Claims Act (31 U.S.C. §§ 3729–3733) in this scenario is significant due to the health plan's potentially fraudulent practices in presenting the BHIP contract. Misrepresenting the nature of the contract and using false statements to secure government incentives directly contravenes the FCA. Should the health plan submit claims for payment or approval based on these misrepresentations, they could be held liable for false claims. The FCA provides a legal framework for addressing such fraud, protecting whistleblowers, and ensuring that government funds are used appropriately and lawfully.
Relevance of the Clayton Act in the Healthplan Contract Scenario
Overview of the Clayton Act
The Clayton Antitrust Act of 1914 is a key piece of antitrust legislation in the United States aimed at promoting fair competition and preventing anti-competitive practices that could harm consumers or stifle innovation. It builds on the Sherman Act by addressing specific practices that could lead to anti-competitive behavior.
Key Provisions of the Clayton Act:
Section 2 (Robinson-Patman Act): Prohibits price discrimination that lessens competition or creates a monopoly.
Section 3: Prohibits exclusive dealing and tying arrangements that may substantially lessen competition or tend to create a monopoly.
Section 7: Prohibits mergers and acquisitions that may substantially lessen competition or tend to create a monopoly.
Section 8: Prohibits interlocking directorates (the same person making business decisions for competing companies).
Application to the Health Plan Contract Scenario:
Anti-Competitive Practices by the Health Plan:
Section 2: Price Discrimination
Unequal Terms: If the health plan offers different terms or rates to different providers without a justifiable reason, it could be seen as price discrimination. For example, providing certain providers with better reimbursement rates or incentives could harm competition by putting other providers at a disadvantage.
Impact on Competition: Price discrimination can lead to some providers being unfairly favored, thereby reducing competition and potentially leading to a monopoly.
Section 3: Exclusive Dealing and Tying Arrangements
Exclusive Contracts: The health plan's contract may require providers to exclusively work with them, preventing providers from contracting with other health plans. This exclusive dealing can substantially lessen competition by limiting the providers' ability to participate in the market fully.
Tying Arrangements: If the health plan requires providers to accept other conditions or services as a condition of contracting, it may constitute a tying arrangement. For example, tying the acceptance of the Behavioral Health Incentive Program (BHIP) to other unrelated services or contracts.
Section 7: Mergers and Acquisitions
Market Dominance: While this section primarily deals with mergers and acquisitions, it is relevant if the health plan’s practices lead to significant control over the market. If the health plan's contracts effectively eliminate competition, they could be seen as creating a monopoly or substantially lessening competition.
Legal and Ethical Implications:
Restrictive Practices: The health plan’s contracts may be seen as restrictive practices that lessen competition by limiting providers' choices and locking them into unfavorable terms.
Impact on Market Dynamics: These practices can lead to reduced competition, higher costs, and lower-quality care for patients, as well as diminished provider autonomy.
Case Analysis:
Exclusive Dealing: The health plan’s contract prevents providers from engaging with other health plans, substantially lessening competition and potentially leading to a monopoly.
Tying Arrangements: If the contract includes provisions that force providers to accept additional services or conditions, it may be seen as an illegal tying arrangement.
Price Discrimination: Offering different terms to different providers without justification can harm competition and create an uneven playing field.
Conclusion:
The Clayton Act is highly relevant to the described health plan contract scenario due to the potential anti-competitive practices involved. The health plan’s actions may constitute exclusive dealing, tying arrangements, and price discrimination, which are specifically prohibited under Sections 2 and 3 of the Clayton Act. These practices can substantially lessen competition and may lead to the creation of a monopoly, resulting in significant legal and ethical consequences. Providers and regulators should scrutinize the health plan’s contracts to ensure compliance with the Clayton Act and to protect the competitive integrity of the healthcare market.
References
Critique of Oregon's Value-Based Payment December 2023 Roadmap
The article critiques Oregon's Value-Based Payment (VBP) 2023 Roadmap, highlighting concerns about its implementation and potential impact on healthcare providers and patients. It argues that the roadmap may impose significant administrative burdens on providers without adequate compensation, potentially leading to reduced access to care and provider burnout. The critique emphasizes the need for transparent contracting practices, equitable risk-sharing arrangements, and meaningful stakeholder engagement to ensure that the VBP initiatives achieve their intended goals without avoidable negative consequences.
https://www.mentorresearch.org/critique-of-oregons-valuebased-payment-2023-roadmap
Moda Health's Termination of Contract Negotiations When Asked to Ensure Ethical and Lawful Contracts and Policies
The article discusses the abrupt termination of contract negotiations by Moda Health with the Mentor Research Institute (MRI). Despite initial agreements to evaluate proposals for establishing an ethics point portal overseen by an independent auditor, Moda Health ceased discussions without clear justification. Since the State of Oregon will not investigate provider evidence and complaints regarding fraud or violations state and federal antitrust laws, this action raises concerns about Moda's commitment to ethical oversight, transparency, and good faith negotiations. The article suggests that such behavior may indicate a reluctance to implement independent auditing mechanisms, potentially to avoid external scrutiny of their contracting practices. This termination not only undermines trust between the parties involved but also highlights broader issues within healthcare contracting, where power imbalances and lack of accountability can adversely affect provider practices and patient care.
https://www.mentorresearch.org/moda-health-termination-of-contract-negotiations-with-mentor-research-instituteAllegations of Bad Faith, Fraud and Antitrust Violations by Moda Health Submitted to the Oregon Health Authority - Whistleblower Complaint This paper discusses whistleblower allegations against Moda Health, including claims of bad faith contracting, fraud, and antitrust violations. It details how Moda allegedly uses deceptive contract terms and restrictive policies to limit competition and undermine independent practices. The article also compares these practices with legal standards to highlight potential breaches of antitrust and healthcare regulations, supporting the need for legal intervention.
https://www.mentorresearch.org/whistleblower-complaint-allegations-of-bad-faith-fraud-and-antitrust-violations-by-moda-healthAnalysis of Moda Health's Code of Conduct and Allegations of Violations - Appendix 1
The article examines discrepancies between Moda Health's publicly stated Code of Conduct and its actual contracting practices with healthcare providers. Allegations include mid-contract changes to performance metrics, retroactive penalties, and a lack of transparency in financial calculations, which contradict Moda’s commitments to fairness and integrity. These actions have led to provider mistrust and raise concerns about whether Moda Health is adhering to its own ethical standards. The article underscores the need for independent oversight and regulatory intervention to ensure accountability and fairness in Moda’s business practices.
https://www.mentorresearch.org/analysis-of-moda-health-code-of-conduct-and-allegations-of-violationsProtecting Minorities and Underserved Populations: Value-Based Contract Challenges
The article discusses the need for safeguards in value-based contracts to protect minority and underserved populations from systemic inequities. It emphasizes the importance of standardized definitions, clear language, whistleblower protections, and independent oversight to prevent exploitation and ensure transparency. Without these measures, providers serving vulnerable communities may face financial instability, limiting patient access to care. The article advocates for equitable contracting practices that promote health equity and sustainable care models.
https://www.mentorresearch.org/value-based-contracts-protecting-minorities-and-underserved-populationEmpowering Providers to Report Suspicious, Unethical, and Illegal Behaviors
The article highlights the importance of supporting healthcare providers in reporting unethical, illegal, or suspicious practices within value-based contracts and broader healthcare systems. It discusses barriers to reporting, such as fear of retaliation, lack of clear reporting channels, and contractual restrictions imposed by health plans. The article advocates for stronger whistleblower protections, independent oversight, and transparent reporting mechanisms to ensure providers can expose fraud, coercion, and unethical practices without jeopardizing their careers. Strengthening these safeguards is essential for maintaining ethical healthcare delivery and protecting both providers and patients.
https://www.mentorresearch.org/empowering-providers-to-report-suspicious-unethical-and-illegal-behaviorsBreaking the Cycle of Unfunded Health Plan Mandates
The article discusses the challenges posed by health plans that impose administrative tasks on providers without offering corresponding compensation or support. This practice leads to operational inefficiencies, erodes trust between providers and payers, and hampers the effective implementation of value-based care models. The author advocates for health plans to invest in necessary infrastructure and collaborate with providers to ensure sustainable healthcare reform.
https://www.mentorresearch.org/breaking-the-cycle-of-unfunded-mandatesModa Health: Nine Actions and Their Consequences
The article examines nine specific actions taken by Moda Health in its contracting practices, highlighting the negative consequences for healthcare providers and the broader healthcare system. These actions include imposing non-negotiable contracts, utilizing ambiguous terms, retroactively altering performance metrics, and enforcing unfunded mandates. Such practices have led to increased administrative burdens, financial instability for providers, erosion of trust, and potential declines in patient care quality. The article advocates for transparent contracting, equitable risk-sharing, and independent oversight to mitigate these adverse effects and promote ethical value-based care.
https://www.mentorresearch.org/moda-health-9-actions-and-the-consequencesContract Negotiation Tactics Used by Health Plans
The article examines strategies employed by health plans during contract negotiations that can undermine mental health services by limiting providers' ability to negotiate effectively. These tactics include presenting non-negotiable, "take-it-or-leave-it" contracts; using strategic ambiguity to leave critical terms undefined; implementing contract ratcheting by progressively increasing administrative demands; maintaining network secrecy by withholding information about participating providers; and imposing unfunded mandates that require providers to absorb additional costs without reimbursement. By identifying these practices, providers can better anticipate potential risks and advocate for fairer contract terms during negotiations.
https://www.mentorresearch.org/contract-negotiation-tactics-used-by-health-plansThe Fallacy of Better, Cheaper, Faster: How Health Plans Shift Risk to Providers
The article examines how health plans promote value-based contracts under the premise of delivering better, cheaper, and faster healthcare services. In reality, these contracts often transfer significant financial and operational risks onto providers. Tactics include imposing rigid service caps, reducing payment rates, and increasing administrative burdens, all of which can lead to inadequate patient care and provider burnout. The article calls for greater transparency, fair contract terms, and regulatory oversight to ensure that health plans share financial risks equitably and invest in genuine improvements in care quality.
https://www.mentorresearch.org/the-fallacy-of-better-cheaper-faster“Solutionism” in Healthcare: Moda Health’s Contracting Approach and Consequences
The article critiques Moda Health's reliance on "solutionism" the belief that complex healthcare issues can be resolved through technical solutions without addressing underlying systemic problems. Moda's implementation of measurement-based care, incentive-based payments, and administrative streamlining is seen as superficial, failing to consider deeper issues such as unethical contracting practices, lack of transparency, and provider burnout. This approach may lead to unintended consequences, including reduced care quality and erosion of trust between providers and payers.
https://www.mentorresearch.org/solutionism-in-healthcare-moda-healths-contracting-approach-and-consequencesThe Dangers of Using an Ombudsman for Fraud and Antitrust Violations: Undermining Accountability and the Legal Process.
The paper discusses the risks of relying on ombudsmen to address cases of fraud and antitrust violations. It argues that ombudsmen may lack the authority and independence necessary to enforce accountability, potentially delaying or undermining legal actions. The discussion highlights how this approach can create conflicts of interest, allowing fraudulent practices to persist while giving a false impression of oversight. The paper advocates for stronger, independent regulatory mechanisms to handle such violations effectively.
https://www.mentorresearch.org/the-danger-of-using-an-ombudsman-in-cases-of-fraud-and-violations-for-antitrust
Transforming Fee-for-Service to Value-Based Payment Contracts
Transition from Fee-for-Service Step-wise to Alternative Payment Contracts and then Value-Based Payment Contracts: The Good and the Bad.
https://www.mentorresearch.org/transforming-feeforservice-psychotherapy-to-valuebased-payment-contractTransforming Mental Health Services From Fee-for-Service to Value-Based Contracts: A Closer Look.
https://www.mentorresearch.org/transforming-mental-health-services-a-closer-lookWhy Teachers, Counselors and Legislators Should Support the Healthy Contracts Legislation.
https://www.mentorresearch.org/why-teachers-counselors-and-legislators-healthy-contract-legislation
Measurement and Value-based Payment Contracting
Behavioral Health Quality Framework: A Roadmap For Using Measurement To Promote Joint Accountability and Whole-Person Care.
https://www.ncqa.org/wp-content/uploads/2021/07/20210701_Behavioral_Health_Quality_Framework_NCQA_White_Paper.pdfMeasurement-Based Care: Enhancing and Undermining Mental Health Treatment Values.
https://www.mentorresearch.org/what-is-measurement-based-and-out-come-informed-careOutcome Informed Care And Measurement-Based Care Adoption - Challenges in Oregon.
https://www.imhpa.org/measurement-based-care-adoption-challengesPatient Reported Outcomes & Performance Measures (PROM-PM).
https://www.mentorresearch.org/patient-reported-outcomes-progress-measures
“Take-It-Or-Leave-It” Unenforceable and Voidable Contracts
Problems When Contracts of Adhesion are Offered to Mental and Behavioral Health Providers.
https://www.mentorresearch.org/problem-when-contracts-of-adhesion-are-offeredWhat Can Happens if Voidable Provisions in Value-Based Contracts Go Unchallenged?
https://www.mentorresearch.org/contracts-with-voidable-provisionsPreventing the Problems Created by “Take It or Leave It” Contracts in Mental and Behavioral Health Services?
https://www.mentorresearch.org/preventing-contract-of-adhesion-that-harm-public-healthEnforceable and Unenforceable Mental and Behavioral Health Contract Requirements
https://www.mentorresearch.org/enforceable-contract-requirementsWhat Problems are Created When Healthplans Offer Providers “Take it or Leave it” Contracts of Adhesion?
https://www.mentorresearch.org/take-or-leave-contract-in-healthcare
Risk of Contract Failure
Prima-Facia Evidence of Moda Health Fraud and Violation of Antitrust Laws - Discussion Paper
https://www.mentorresearch.org/primafacia-evidence-of-moda-health-fraud-and-violation-of-antitrust-lawsRule of Reason Analysis Using Prima-Facia Evidence of Fraud and Violations of Antitrust and Federal Regulations (A Discussion Paper)
https://www.mentorresearch.org/rule-of-reason-analysis-using-primafacia-evidenceSuccessful and Failed Case Studies of Measurement-Based Care and Value-Based Payment Contracts: Recommended Requirements.
https://www.mentorresearch.org/successful-and-failed-valuebased-contractsWhat Can Happen if Unfair, Bad Faith, Ambiguous, Ill-Defined, Unethical, or Voidable Provisions in Fee-For-Service and Value-Based Contracts Go Unchallenged?
https://www.mentorresearch.org/contracts-with-voidable-provisionsCan Providers Legally Boycott a Healthplan? - Ethical Reasons to Legally Boycott a Healthplan
https://www.mentorresearch.org/ethical-reasons-to-boycott-a-healthplanWill Healthplans Support the Healthy Contracts Legislation
https://www.mentorresearch.org/will-healthplans-support-the-healthy-contracts-legislationWill Value-Based Payments Harm Public Health and Provider Practices? Case Example.
https://www.mentorresearch.org/value-based-contracts-in-oregonCore Psychotherapy Values and the Erosion by Healthplan Practices.
https://www.mentorresearch.org/core-psychotherapy-values-and-the-erosion-by-healthplan-practicesChallenges in Implementing Value-Based Payment Contracts Using W-2 Mental and Behavioral Health Professionals
https://www.mentorresearch.org/challenges-in-implementing-value-based-payment-contracts-using-w-2-mental-health-professionalsCan Providers Legally Boycott a Healthplan? - Ethical Reasons to Legally Boycott a Healthplan
https://www.mentorresearch.org/ethical-reasons-to-boycott-a-healthplan
Good Faith and Fair Dealing
Signs of Bad Faith in Value-Based Payment Contracts for Mental and Behavioral Health Services Offered by Healthplans
https://www.mentorresearch.org/signs-of-a-bad-faith-valuebased-payment-contractGood Faith and Fair Dealing in Healthcare Contracting for Fee-For-Service, Alternative and Value-Based Payment Models
https://www.mentorresearch.org/good-faith-and-fair-dealingPlain Language Contract and Use Case Example.
https://www.mentorresearch.org/plain-language-contract-agreement-and-use-case-exampleHow Can Mental and Behavioral Health Provider Practices Recognize They are Being “Taken for a Ride”?
https://www.mentorresearch.org/in-what-ways-are-mental-and-behavioral-health-provider-practices-being-taken-for-a-rideThe Problems When Contracts of Adhesion are Offered to Mental and Behavioral Health Providers
https://www.mentorresearch.org/the-problem-when-contracts-of-adhesion-are-offered
Gaming, Fraud and Antitrust
Contract “Gaming”: Reasons Why Value-Based Contracts Can Fail
https://www.mentorresearch.org/contract-gaming-reasons-why-value-based-contracts-will-failDescription of Healthcare Fraud in Measurement and Value-Based Care Contracting.
https://www.mentorresearch.org/healthcare-fraud-measurement-an-valuebased-payment-contractsDescription of Healthcare Fraud by using Provider Practices as a Proxy.
https://www.mentorresearch.org/healthcare-fraud-in-measurement-and-value-based-contractingHealthplan Fraud Perpetrated on Mental Health Providers: What is It and How to Prevent it.
https://www.mentorresearch.org/preventing-healthplan-fraudIs Moda Health Violating Antitrust Law?
https://www.mentorresearch.org/is-moda-health-violating-antitrust-lawValue-Based Payment Fraud: When Heathplan Misrepresentation Turns into Conspiracy.
https://www.mentorresearch.org/preventing-healthplan-fraudWhat Can Happens If Unfair, Bad Faith, Ambiguous, Ill-Defined, Unethical, or Voidable Provisions In Fee-For-Service and Value-Based Contracts Go Unchallenged?
https://www.mentorresearch.org/contracts-with-voidable-provisionsCollaboration Agreements For Value-Based Payment Contracting.
https://www.mentorresearch.org/collaboration-agreements-for-valuebased-payment-contractingIntersection of Mental Health, Value-Based Payment Contracts, and the Law: A Case Study of Moda Health.
https://www.mentorresearch.org/intersection-of-mental-health-and-value-based-contracts-a-case-studyHealthy Versus Toxic Contracts
https://www.mentorresearch.org/healthy-toxic-contracts-conversations-and-auditsInformed Consent Motivates Patients to Game Outcome Measures.
https://www.mentorresearch.org/informed-consent-motivates-gaming-outcome-measures
Negotiation Issues
Medically Necessary and Reasonable Psychotherapy Services.
https://www.mentorresearch.org/medically-necessary-reasonableWho are the Stakeholders When Contracting for Mental and Behavioral Health Services?
https://www.mentorresearch.org/who-are-stakeholders-in-contractingHigh Case-Mix Severity Must be Considered in Value-Based Contracting.
https://www.mentorresearch.org/high-case-mix-severity-must-be-considered-in-valuebased-contractingPlain Language Contract Agreement and Use Case Example.
https://www.mentorresearch.org/plain-language-contract-agreement-and-use-case-exampleProvider Practice and Value-Based Payment Contracting for Psychotherapy Services: Requirements and Challenges.
https://www.mentorresearch.org/value-based-payments-psychotherapyReasonable Fears Providers have About Entering into Measurement and Value-Based Contracts
https://www.mentorresearch.org/logical-fears-providers-about-value-based-contractsRisks, Reasons, and What to Do When Healthplan Measurement and Value-Based Payment Contracts are a Contract of Adhesion.
https://www.mentorresearch.org/risks-reasons-and-what-to-do-with-contracts-of-adhesionThe Problem When Contracts of Adhesion are Offered to Mental and Behavioral Health Providers
https://www.mentorresearch.org/problem-when-contracts-of-adhesion-are-offeredTransition from Fee-for-Service Step-wise to Alternative Payment Contracts and then Value-Based Payment Contracts: The Good and the Bad.
https://www.mentorresearch.org/transforming-feeforservice-psychotherapy-to-valuebased-payment-contractHealthy Contracts: Ensuring Ethical and Collaborative Agreements in Mental Health Services.
https://www.mentorresearch.org/healthy-contracts-ensuring-ethical-and-collaborative-agreements-in-mental-health-services
Ethics Point Portals
Ethics Point Portal: Definition and Benefits for Value-Based Contracts in Mental and Behavioral Health Services.
https://www.mentorresearch.org/ethics-point-portal-definition-and-benefitsEthics-Point Portals Overseen by Independent Certified Internal Auditor's: A Resource to Serve Stakeholders and the Healthplans
https://www.mentorresearch.org/ethics-point-portals-overseen-by-independent-certified-internal-auditorThe Results of Audits and Mitigation Options Should be Posted on a Public Electronic Platform Webpage.
https://www.mentorresearch.org/posted-on-a-public-electronic-platform-webpage
Independent Certified Internal Auditor
Independent Certified Internal Auditor – Example Job Description
https://www.mentorresearch.org/independent-certified-internal-auditorA Case For The Value and Importance Of Independent Internal Auditors In Contracting For Fee-For-Service, Alternative, and Value-Based Mental And Behavioral Health Services.
https://www.mentorresearch.org/value-and-importance-of-independent-internal-auditorsHow Can an Independent Certified Internal Auditor Support Mental and Behavioral Health Contracting.
https://mentorresearch.org/how-can-an-independent-certified-internal-auditor-supportHow and Why Should the Independence of Certified Internal Auditors be Ensured?
https://www.mentorresearch.org/maintaining-independence-of-internal-auditorsIndependent Certified Internal Auditor: The Bridge Between Stakeholder and the Healthplan https://www.mentorresearch.org/auditor-shall-be-a-point-of-contact-for-stakeholders
The Independence of Healthplan Auditors Must Comport with Standards Set the U.S. Office of Inspector General U.S. Office of Inspector General (OIG).
https://www.mentorresearch.org/why-use-oig-standardsWhat Can Certified Internal Auditors Do That Will Prevent Healthplans From “Gaming” Providers, Purchasers, and The Public?
https://www.mentorresearch.org/gaming-a-valuebased-contractWhy is Hiring an Independent Certified Internal Auditor a Good Idea?
https://www.mentorresearch.org/why-hiring-an-independent-certified-internal-auditor-is-a-good-idea
Value, Objectives, Controls, Tests of Design and Effectiveness, Key Indicators of Success
Controls in Fee-For-Service, Alternative and Value-Based Payment Contracting
https://www.mentorresearch.org/what-is-a-controlControls, Tests of Design (TOD) and Tests of Effectiveness (TOE) in Measurement and Value-Based Contracting For Mental and Behavioral Health Services
https://www.mentorresearch.org/tests-of-design-and-tests-of-effectivenessCore Psychotherapy Values and the Erosion by Healthplan Practices.
https://www.mentorresearch.org/core-psychotherapy-values-and-the-erosion-by-healthplan-practicesImportance of Transparent Shared Values, Objectives, Controls, Key Indicators of Success, Tests of Design, and Tests of Effectiveness in Value-Based Payment Contracts for Mental and Behavioral Health Services.
https://www.mentorresearch.org/importance-of-shared-values-objectives-indicators-of-successThe Results of Audits and Mitigation Options Should be Posted on a Public Electronic Platform Webpage.
Employee Retirement Income Security Act (ERISA)
ERISA and The History Of Conflict With Psychotherapy Practice
https://www.mentorresearch.org/erisa-and-the-history-of-conflict-with-psychotherapy-practiceAlignment of ERISA with Healthy Contracts Legislation: Supported by Federal Regulations
https://www.mentorresearch.org/aligning-erisa-with-healthy-contracts-legislation-is-supported-by-federal-regulationsUnderstanding and Overcoming ERISA Preemption Doctrine using Healthy Contracts.
https://www.mentorresearch.org/understanding-and-overcoming-erisa-using-healthy-contractsUnderstanding and Overcoming ERISA Preemption Doctrine using Healthy Contracts.
https://www.mentorresearch.org/understanding-and-overcoming-erisa-using-healthy-contracts
Moda Contract
Is Moda Health Violating Antitrust Law?
https://www.mentorresearch.org/is-moda-health-violating-antitrust-lawPrima-Facia Evidence of Moda Health Fraud and Violation of Antitrust Laws.
https://www.mentorresearch.org/primafacia-evidence-of-moda-health-fraud-and-violation-of-antitrust-lawsRule of Reason Analysis Using Prima-Facia Evidence of Fraud and Violations of Antitrust and Federal Regulations.
https://www.mentorresearch.org/rule-of-reason-analysis-using-primafacia-evidenceWill the Moda Measurement and Value-Based Payment Contract for Mental and Behavioral Services Fail? A Discussion Paper.
https://www.mentorresearch.org/why-the-moda-value-based-contract-will-almost-certainly-failThe MODA Behavioral Health Incentive Program (BHIP): Bold and Reckless?
https://www.mentorresearch.org/moda-behavioral-contract-bold-or-recklessIMHPA Collaboration with Moda Health for VBC, VBP, VBR, MBC, OIC.
https://www.mentorresearch.org/mri-amha-moda-collaboration-for-mbcFiduciary Responsibility in Healthplan Contracting: A Critical Examination.
https://www.mentorresearch.org/fiduciary-responsibility-in-healthplan-contracting-a-critical-examination
Legislative Opportunities
3 Ways to Improve House Bill 4069.
https://www.mentorresearch.org/3-ways-to-improve-house-bill-4069
Draft Legislation for the Implementation of Healthy Contracts Requirements.
https://www.mentorresearch.org/draft-legislation-for-the-implementation-of-healthy-contracts-requirementsFiduciary Responsibility in Healthplan Contracting: A Critical Examination.
https://www.mentorresearch.org/fiduciary-responsibility-in-healthplan-contracting-a-critical-examinationWill Healthplans Support the Healthy Contracts Legislation?
https://www.mentorresearch.org/contract-gaming-reasons-why-value-based-contracts-will-fail
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, legislation, 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