A Measurement and Value-Based Payment (VBP) Agreement for Psychotherapy Services
A Measurement and Value-Based Payment (VBP) Agreement for Psychotherapy Services is a contractual arrangement between psychotherapy providers and payers (such as health plans or insurance companies) that links payments to the quality, outcomes, and efficiency of the psychotherapy services delivered. Such an agreement incentivizes providers to deliver high-quality care by tying reimbursement to specific performance metrics, including clinical outcomes, patient satisfaction, and cost-efficiency. The goal is to improve patient mental health outcomes, enhance care coordination, and reduce unnecessary healthcare costs.
Value-Based Payment Collaboration Example
This Agreement is made and entered into as of [Date], by and between [Healthplan Name], an organization with its principal place of business at [Healthplan Address] (hereinafter referred to as the “Healthplan”), and the Independent Mental Health Practices Alliance (IMHPA), an organization with its principal place of business at [IMHPA Address] (hereinafter referred to as the “Provider Group”).
WHEREAS, the Healthplan and the Provider Group desire to enter into a value-based payment arrangement to improve patient outcomes, enhance the quality of care, and promote cost-effective healthcare services;
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the parties hereto agree as follows:
1. Group Size and Leverage
1.1 The Provider Group shall consolidate its practice to form a group of [Number] mental health professionals who treat an average [Number] patients who are covered by Healthplan’s insurance. This size and the number of patients treated provides sufficient leverage to effectively collaborate and negotiate with the Healthplan and other stakeholders.
1.2 The Healthplan acknowledges the group size of the Provider Group and agrees to negotiate in good faith with fair dealings to achieve mutually beneficial outcomes.
1.3 Participation is at the Minimum Necessary Level to Demonstrate Increased Quality, Improved Outcomes and a Reasonable Cost
2. Collaboration
2.1 The Provider Group and the Healthplan shall collaborate actively. The Provider Group has been collaborating with Moda Health since 2015 and has been ready to provide measurement and value based payment contracts since 2018. The Provider group may seek additional collaboration with other provider groups.
2.2 All parties who share risk will participate in joint meetings to identify and agree on transparent shared values, objectives, controls, and key indicators of success.
2.3 If a party declines to provide necessary information or fails to collaborate effectively, they shall notify the other party in writing, specifying the reasons and proposed solutions.
3. Shared Values and Objectives
3.1 The Provider Group adopts values from the Oregon Health Authority to guide their practice.
3.2 The parties agree in principle on the following 18 objectives and will implement those based upon Provider and Healthplan agreement:
Reducing payment.
Managing utilization.
Improving quality of care.
Reduce risks of future medical/psychological events.
Collaborate without undermining competition.
Facilitate the flow of patient data.
Trust and alignment of incentives among all parties.
Ensure that patient access is supported versus hindered.
Positive and/or stable patient outcomes.
Reduced cost through elimination of inappropriate or unnecessary use of services.
Sharing of savings captured through lowered costs of care.
Increased volume through gains in market share resulting from enhanced value to customers.
Identify outcomes, mutually recognized by payors and providers, which reflect the clinical or economic benefits expected from health care services for specific conditions in specific populations.
Defines the measurement of specific clinical outcomes in real-world populations to include the specification of reference data sources, protocols, and processes used and the outcome thresholds that represent “good” and “poor” outcomes.
Specifies a formula that determines the net price to be reimbursed for services rendered. The payment of the net price being contingent upon the achievement of specified measured outcomes. The mechanism of implementation also is specified, usually as a rebate. The contract terms also delineate auditing and reconciliation processes acceptable to both parties
Determines what services are being provided that add little or no benefit to patient outcomes and eliminate them.
Patient-Centered Care: the patient-centric approach is how healthcare systems can establish partnerships among practitioners, patients, and their families to align treatment decisions with patients’ wants, needs, and preferences. This includes delivery of specific education and support which patients need to make these decisions and participate actively in their own care. A patient-centric approach is considered to be key to high-quality healthcare
Quality assurance and compliance through implementation of an Ethics Point online reporting portal which is secure, anonymous and sent directly to an independent certified internal auditor.
3.3 These values and objectives shall be transparent and shared among all providers and the Healthplan.
4. Measures and Reporting
4.1 Providers shall use both problem lists and standardized measures to track patient progress, including but not limited to:
Symptom burden
Functional problems
Therapist-patient alliance
Patient-reported outcomes
Patient satisfaction
4.2 Providers will receive payment for both measurement and reporting activities that will cover at least the cost of those activities. Measurement is a separate activity from psychotherapy and behavioral health services.
4.3 Providers will use a common electronic measurement platform with built-in analytics for data collection, analysis and reporting. Providers will report that data in summary format which is necessary to demonstrate that providers measurement is reasonable engaged in good faith.
4.4 Providers will measure patients symptom burdens and progress when medically necessary and reasonable as defined by the Centers for Medicare (CMS).
5. Database Development
5.1 The Provider Group shall develop a comprehensive database, stratified by DSM diagnosis, and Z Code social determinants of health, to create baselines and benchmarks.
5.2 This database will be developed over a period of two years, requiring the collection of thousands of patient measures. This data will be used to help set reliable, valid and useful baselines and benchmarks.
6. Performance Measures
6.1 The Healthplan and the Provider Groups must agree on specific performance measures to share-risk. Data will be aggregated for the purpose of establishing risk-adjustments, and setting new baseline and benchmarks.
6.2 Patient-reported outcome measures shall be administered initially and every 2 to 3 weeks, with mandatory measurements 1 to 2 times per month.
7. Payment Structures and Policies
7.1 The Provider Group shall align its internal policies and payment structures with the established quality goals.
7.2 Providers will be incentivized through performance-based bonuses and payments for measurement and reporting activities.
8. Continuous Improvement and Transparency
8.1 The Provider Group and the Healthplan shall foster a culture of continuous improvement by holding regular review meetings, encouraging feedback, and updating practices based on new evidence.
8.2 The parties shall ensure transparency by making quality metrics and outcomes accessible through web-based dashboards and regular reports.
8.3 The Healthplan will retain the services of an independent certified internal auditor (CIA) who will report to the Healthplan’s Board of Directors, or an independent audit and compliance committee. The CIA may report to the CEO, but not to Healthplan management.
For more information see:
Independent Certified Internal Auditor – Example Job Description.
https://www.mentorresearch.org/independent-certified-internal-auditor
8.4 The Healthplan will establish an Ethics Point portal open to the public. The Ethics point Portal will be overseen directly by the CIA who may delegate subsequent responses and will oversee and investigations.
9. Term and Termination
9.1 This Agreement shall commence on the date first written above and shall continue for a period of [number] years, unless terminated earlier in accordance with this Agreement.
9.2 Either party may terminate this Agreement with [number] days written notice to the other party.
9.3 In the event of termination, both parties shall work together to ensure a smooth transition and minimal disruption to patient care.
10. Miscellaneous
10.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral, relating to such subject matter.
10.2 This Agreement may be amended only by a written instrument executed by both parties.
10.3 This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles.
10.4 Any disputes arising under or in connection with this Agreement shall be resolved through mediation or arbitration, as mutually agreed upon by the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
[Healthplan Name]
By: ___________________________
Name: _________________________
Title: __________________________
Independent Mental Health Practices Alliance (IMHPA)
By: ___________________________
Name: _________________________
Title: __________________________
Date: __________________________
What are Measurement and Value-Based Payment Agreements?
Definition of Measurement and Value-Based Payment Agreement
A Measurement and Value-Based Payment (VBP) Agreement is a contractual arrangement between healthcare providers and payers (healthplans or insurance companies) that shifts focus from traditional fee-for-service payment models to systems where payments are tied to the quality, outcomes, and/or efficiency of care provided. These agreements typically include specific performance metrics, financial incentives, and risk-sharing mechanisms designed to encourage high-quality and cost-effective healthcare delivery.
Measurement and Value-Based Payment Agreements (VBP) are a transformative approach to healthcare implemented actively for medical care since passage of the Affordable Care Act (ACA) in 2010. By their focus on performance metrics, financial incentives, risk-sharing, and patient-centered care, VBP agreements seek to align the interests of providers and payers towards a common goal of delivering high-quality, cost-effective healthcare to the public. Mental and behavioral health care providers are now experiencing the attempts by healthplans to implement such payment structures. There are very few examples of successful mental and behavioral health VBP agreements.
For more information see:
Successful and Failed Case Studies of Measurement-Based Care and
Value-Based Payment Contracts: Recommended Requirements.
https://www.mentorresearch.org/successful-and-failed-valuebased-contracts
Key Components of a Measurement and Value-Based Payment Agreement
Performance Metrics:
Definition: These are standardized measures used to assess the quality, efficiency, and outcomes of healthcare services.
Examples: Patient outcomes (for behavioral and mental health these might be reduced hospital readmission rates, and/or improved management of chronic conditions), process measures (e.g., adherence to clinical guidelines), patient experience (e.g., satisfaction surveys).
Financial Incentives:
Definition: Payments or rewards that are provided based on the achievement of specified performance metrics.
Examples: Bonus payments for meeting or exceeding quality benchmarks, shared savings programs where providers share in cost savings achieved through improved efficiency.
Risk-Sharing Mechanisms:
Definition: Financial arrangements that distribute the financial risk and rewards between the payer and the provider.
Examples: Upside risk (providers share in savings if costs are lower than expected), downside risk (providers share in losses if costs exceed expectations), or both (full risk-sharing).
Data Reporting and Transparency:
Definition: Requirements for regular reporting of data related to performance metrics and financial outcomes to ensure transparency and accountability.
Examples: Regular submission of clinical data, performance reports, and financial statements.
Patient-Centered Care:
Definition: Emphasis on delivering care that is respectful of, and responsive to, individual patient preferences, needs, and values.
Examples: Inclusion of patient-reported outcome measures, shared decision-making processes, and personalized care plans.
Goals of Measurement and Value-Based Payment Agreements
Improve Quality of Care:
By tying payments to performance metrics, these agreements incentivize providers to deliver higher-quality care, leading to better patient outcomes.
Enhance Efficiency:
Providers are encouraged to reduce unnecessary tests and procedures, streamline care processes, and manage resources more effectively.
Reduce Healthcare Costs:
The shift from volume-based to value-based payments aims to control escalating healthcare costs by promoting cost-effective care delivery.
Increase Accountability:
Providers are held accountable for the quality and cost of care they deliver, fostering a culture of continuous improvement and transparency.
Foster Innovation:
The need to meet performance metrics can drive innovation in care delivery models, care coordination, and the use of health information technology.
Note that the language in the list above is more “medical” than related to measurement and delivery of mental and behavioral health care services. Contracting for VBP in the provision of mental and behavioral care will require some new shared language.
Definition and Use Case Example for a Measurement and Value-Based Payment Agreement for Psychotherapy Services
A Use Case is a detailed description of how a system or process will be used to achieve a specific goal. It outlines the interactions between users (or actors) and the system to accomplish a task, providing a step-by-step sequence of actions and responses. Use cases help in understanding functional requirements and designing systems that meet user needs.
Use Case Example for Measurement and Value-Based Payment Agreement
Organization: Integrated Psychological and Counseling Group
Location: Urban area serving a diverse population with varying mental health needs.
Values: To implement a VBP agreement that demonstrates increased quality and improves outcomes and health at an reasonable cost.
Components of the Agreement for this Use Case
Performance Metrics:
Clinical Outcomes: Measure improvements in patients’ mental health using standardized tools such as the Patient Health Questionnaire-9 (PHQ-9) for depression and the Generalized Anxiety Disorder-7 (GAD-7) for anxiety.
Process Measures: Track the percentage of patients who complete a follow-up visit within 30 days of initial treatment.
Patient Satisfaction: Use patient satisfaction surveys to assess the therapeutic alliance and overall patient experience.
Financial Incentives:
Bonus Payments: Providers receive additional payments for achieving significant reductions in PHQ-9 and GAD-7 scores among their patients.
Shared Savings: Providers share in the savings generated from reduced hospitalizations and emergency room visits due to effective psychotherapy interventions.
Risk-Sharing Mechanisms:
Upside Risk: Providers receive a portion of the savings if the total healthcare costs for their patients are below a predetermined threshold.
Downside Risk: Providers incur financial penalties if total healthcare costs exceed the threshold.
Risk Share: Both the healthcare providers and the payer sharing the financial risks and rewards associated with patient care. Providers may share in the savings if they deliver care more efficiently and effectively, but they may also share in the losses if costs exceed expectations.
Risk adjustment: A methodology used to account for the health status and related cost differences of patients when determining provider payments and performance targets. It ensures that providers are fairly compensated for treating sicker or more complex patients, and it prevents providers from avoiding high-risk patients
Data Reporting and Transparency:
Regular Reporting: Providers submit quarterly reports detailing clinical outcomes, patient satisfaction scores, and cost savings.
Transparency: Performance data is shared between the health plan and providers to ensure accountability and continuous improvement.
Patient-Centered Care:
Individualized Treatment Plans: Develop personalized treatment plans for each patient, incorporating their preferences, needs, and values.
Patient Involvement: Engage patients in their care through shared decision-making processes, ensuring they are active participants in their treatment.
Purpose of the Agreement
1. Improve Patient Outcomes:
Objective: Enhance the mental health and well-being of patients by focusing on measurable clinical improvements and patient-reported outcomes.
Approach: Use standardized assessment tools to track progress and tailor interventions to individual patient needs, leading to better management of depression, anxiety, and other mental health conditions.
2. Enhance Care Coordination:
Objective: Foster better communication and collaboration among providers, ensuring that patients receive comprehensive and coordinated care.
Approach: Implement follow-up protocols and care coordination strategies to monitor patient progress, prevent relapses, and address any emerging issues promptly.
3. Reduce Healthcare Costs:
Objective: Lower overall healthcare expenditures by reducing unnecessary hospitalizations, emergency room visits, and other costly interventions.
Approach: Encourage providers to deliver effective psychotherapy services that manage symptoms and prevent complications, leading to reduced reliance on more expensive healthcare services.
4. Increase Accountability and Transparency:
Objective: Hold providers accountable for the quality and efficiency of care they deliver through transparent reporting and performance tracking.
Approach: Require regular data submissions and share performance metrics openly between the health plan and providers, fostering a culture of continuous improvement and accountability.
5. Foster Innovation in Care Delivery:
Objective: Encourage the adoption of innovative treatment approaches and care models that improve patient outcomes and efficiency.
Approach: Provide financial incentives for providers to experiment with new therapeutic techniques, digital health tools, and integrated care models that enhance the delivery of psychotherapy services.
Use Case Example for IMHPA
Organization: Independent Mental Health Practices Alliance (IMHPA)
Location: Urban area serving a diverse outpatient population with varying mental health needs.
Objective: To demonstrate quality and meet compliance standards using the minimum necessary effort and resources.
1. Definitions
https://www.mentorresearch.org/healthy-contracts-bill-definitions
2. Group Size and Capacity
Action: IMHPA had consolidated its practice to form a group of [Number] mental health professionals. These providers treat an average of [number] of Moda members. This provides IMHPA with sufficient leverage to negotiate with Healthplans and other stakeholders. IMHPA is expending resources to identify groups to create joint venture to create efficiencies that would improve access and outcomes, and reduce costs.
Outcome: The group venture was successful because Moda supported group alignments which create shared strategies and targets. Such commitment would allow resource pooling, which is essential for meeting quality and performance goals.
3. Collaborate with Healthplans and Provider Groups
Action: The group has actively collaborated with Moda Health since 2015 and is seeking other provider groups seeking contracts with Moda Health. They have requested information to create joint meetings to identify transparent shared values, objectives, controls and key indicators of success. Moda Health declined to provide the requested information.
Outcome: Effective collaboration ensures that all parties are working towards shared objectives, enhancing the overall success of the value-based payment model. The group appealed to Moda for the necessary information. Th information is not forthcoming.
4. Establish Shared Values and Objectives
Action: IMHPA has adopted values from the Oregon Health Authority to guide their practice.
The measures used are based on a provider rating system. These include:
improving patient outcomes,
increasing therapist patient alliance,
increasing patient satisfaction,
reducing somatic complaints, and
increasing functional behaviors
Outcome: The establishment of shared values and objectives created a transparent framework that aligned the goals of providers and Moda, fostering mutual trust and collaboration. The objectives are:
Reducing price.
Controlling utilization.
Improving quality of care.
Reduce the risk of future medical/psychological events.
Collaborate without undermining competition.
Better facilitate the flow of patient data.
Trust among all parties and alignment of incentives.
Ensure patient access is supported versus hindered.
Positive and/or stable patient outcomes.
Reducing cost by eliminating inappropriate and unnecessary use of services.
Sharing of the savings captured through lowered costs of care.
Increasing volume through gains in market share resulting from enhanced value to customers.
Identifies a set of outcomes, mutually recognized by payors and providers, that reflect the clinical or economic benefits expected from health care goods or services in therapy for a specific condition in a specific population.
Defines the measurement of specific clinical outcomes in real-world populations to include the specification of reference data sources, protocols, and processes used and the outcome thresholds that represent “good” and “poor” outcomes.
Specifies a formula that determines the net price to be reimbursed for services rendered. The payment of the net price is contingent upon the achievement of specified measured outcomes. The mechanism of implementation also is specified, usually as a rebate. The contract terms also delineate auditing and reconciling processes acceptable to both parties
Determine what services are being provided that add little or no benefit to the patient outcome and eliminate them.
Patient-Centered Care - A patient-centric approach is a way healthcare systems can establish a partnership among practitioners, patients, and their families to align decisions with patients’ wants, needs, and preferences. This also includes the delivery of specific education and support patients need to make these decisions and participate in their own care. A patient-centric approach is considered by most experts to be key to high-quality healthcare
Quality assurance implementing an Ethics Point online reporting portal that is secure, anonymous and sent directly to the independent certified internal auditor.
5. Implement Transparent Symptoms Checklists and Standardized Measures
Action: Providers recommended using both problem lists and standardized measures to track patient progress. These measures included symptom burden, functional problems, therapist-patient alliance, and patient-reported outcomes. Providers will receive payment for both measurement and reporting. Providers will use a common electronic measurement platform which includes built in analytics.
Outcome: The use of standardized measures consistently will ensure reliable data collection, which is crucial for demonstrating quality and improving patient outcomes.
6. Develop a Comprehensive Database
Action: The group has a comprehensive database, stratified by DSM diagnosis, Z Code social determinants of health, to create baselines and benchmarks. This process will require collecting thousands of patient measures over two years.
Outcome: The database provides a robust foundation for establishing performance benchmarks and improving the accuracy of quality assessments.
7. Agree on Measurement Performance Measures
Action: Healthplans and providers agreed on specific measurement performance measures. This included administering patient-reported outcome measures initially and every 2 to 3 weeks, with mandatory measurements 1 to 2 times per month. As many as 4 are permissible if medically necessary and reasonable.
Outcome: Regular and systematic measurements ensure continuous monitoring of patient progress and adherence to quality standards.
8. Align Payment Structures and Policies
Action: IMHPA aligned their internal policies and payment structures with the established quality and outcome target. Providers sufficiently incentivized through performance-based bonuses and payments for measurement and reporting.
Outcome: This alignment motivated providers to achieve and maintain high standards of care, thereby improving overall performance and patient outcomes.
Here are 13 Processes about which Healthplans and Provider Practices Must Create Agreement Before Signing & During Implementation of a Contract:
Identify VALUE TENANTS - done
Identify VBC JOINT PROCESS & OBJECTIVES - done
Create a RISK LIBRARY
Identify Risks Impacting the joint process & objectives - done
Generate a HEAT MAP / BUBBLE GRAPH - done
Create a RISK CONTROL MATRIX - done
Create a CONTROL LIBRARY
Identify the RESIDUAL RISK considering the risk control matrix requirements - done
Perform a RISK EVAUATION - done
Implement TEST PROGRESS
RETEST PROGRESS
Establish KEY LEADING INDICATORS of SUCCESS - done
Establish REPORTING REQUIREMENTS
9. Foster Continuous Improvement and Transparency
Action: IMHPA and other groups fostered a culture of continuous improvement by holding regular review meetings, encouraging feedback, and updating practices based on new evidence. They also ensured transparency by making quality metrics and outcomes accessible through web-based dashboards and regular reports.
Outcome: Continuous improvement and transparent reporting has built trust with patients, payers, and other stakeholders, showcasing their commitment to quality.
Conclusion and Results
Within one year, IMHPA achieved significant improvements in patient outcomes:
The average combined PHQ-9 and GAD-7 scores of their patients decreased by [Number]%, indicating reduced depression-anxious severity.
Their functional problem checklist improved by [Number]% indicating greater function in their life.
Therapist-Patient alliance rates increased by [Number]%, reflecting higher adherence to treatment plans.
Health issues were addressed more effectively, with a minority of patients showing notable improvements in their somatic symptoms score.
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, or research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.
For more information see: https://www.mentorresearch.org/disclaimer-and-purpose