RICO: An Analysis of Moda Health, Regulatory Inaction, and the Case for Oversight Reform in Oregon’s Public Health Contracts
A Discussion Paper
Moda Health Complaint and Legislative Analysis (5 page Brief and 65 page Comprehensive Analysis)
Summary
This paper responds to the Oregon Department of Consumer and Business Services' decision to investigate only one aspect of a broader complaint against Moda Health: the issue of "phantom networks." While this concern is valid, it fails to address the more severe and systemic allegations involving fraud, coercive contracting, misuse of taxpayer funds, and potential antitrust violations.
Moda Health’s contracting practices in public programs such as the Oregon Health Plan (OHP), Oregon Education Benefit Board (OEBB), and Public Employees Benefit Board (PEBB) demonstrate patterns of misconduct that undermine provider autonomy, reduce patient access, and distort competitive markets. By focusing only on phantom networks, regulators are ignoring fiduciary breaches and ethical violations that could erode trust in value-based payment models altogether. This paper presents a reframed analysis of these issues through the lens of oversight failure and offers policy-focused recommendations.
Introduction: A Pattern, Not an Incident
Moda Health has emerged as a dominant contractor in Oregon’s public health insurance landscape, particularly within Medicaid and public employee benefits. Since engaging in value-based payment (VBP) contracting, Moda has been the subject of complaints by providers alleging coercion, bad faith negotiations, and retroactive financial penalties. These are not isolated grievances but form a coherent pattern of asymmetric and anti-competitive behavior.
Mentor Research Institute (MRI), acting on behalf of independent mental health providers, submitted formal complaints to OHA and DCBS. Despite the volume and consistency of these concerns, DCBS is currently investigating only one narrow element: phantom networks. This selective focus avoids confronting the more complex and damaging practices at the heart of Moda’s contracting strategy.
Overview of Alleged Misconduct
A. Bad Faith and Coercive Contracting
Moda is accused of modifying performance metrics mid-contract, applying retroactive penalties, and using ambiguous language to manipulate provider obligations. This results in a dynamic where providers cannot reliably assess their risks or compensation.
B. Fraudulent Concealment and Financial Misrepresentation
Moda withheld material information regarding the financial upside of House Bill 4069 and refused to disclose the structure of incentive calculations. Contracts are offered on a take-it-or-leave-it basis, with critical terms left undefined or obscured.
C. Phantom Networks and Market Deception
The use of phantom networks misleads purchasers about the availability of providers. Moda lists clinicians who are not taking new patients or are unwilling to contract under coercive terms, creating an illusion of network adequacy.
D. Violation of Antitrust and Procurement Principles
Moda’s control over network inclusion and contract terms limits market competition. Practices such as exclusionary contracts, contracts of adhesion, and retaliation against dissenting providers align with anti-competitive behavior prohibited under ORS 646.725 and federal law.
Regulatory Inaction: A Case Study in Oversight Failure
A. Narrowcasting Investigations
By focusing solely on phantom networks, regulators avoid confronting the full scope of contracting abuses. Phantom networks are easy to measure, hard to prove, and politically palatable. In contrast, investigating systemic fraud and antitrust violations could expose regulatory agencies to scrutiny for their prior inaction.
B. Shared Financial Incentives and Institutional Deference
Moda and state agencies both benefit from the appearance of functioning VBP models. This mutual interest may lead to institutional bias and a reluctance to hold plans accountable, especially when contractual mismanagement threatens the credibility of state-run health programs.
C. Capacity and Risk Aversion
OHA and DCBS may lack the legal infrastructure, personnel, or political support to pursue complex allegations. Limited budgets and institutional inertia often lead agencies to resolve complaints through low-risk compliance issues.
RICO as a Directionally Appropriate Lens
While the conduct alleged may not yet meet the full legal threshold for a RICO prosecution, the framework is directionally appropriate. Key elements include:
Enterprise: Moda Health and associated administrative entities.
Pattern of Activity: Repeated acts of financial misrepresentation, coercive contracting, and network manipulation.
Predicate Offenses: Fraud, wire fraud, extortion, and market manipulation.
However, due to the high legal threshold for proving criminal enterprise intent, civil remedies through antitrust and contract law remain more effective and immediate. That is, if the agencies are not subject to political oversight that undermines government oversight responsibilities.
Reframing the Solution: From Prosecution to Policy
A. Fiduciary Breach as Core Concern
Moda's alleged behavior is not just unethical; it misuses public funds. Contracts funded by Medicaid and state agencies must meet basic fiduciary standards. When regulators tolerate vague terms and coercive enforcement, they expose state resources to waste and mismanagement.
B. Provider Burnout and Patient Harm
Unethical VBP contracts force clinicians into moral distress, leading to withdrawal from networks and reducing access to care. Vulnerable populations suffer when experienced providers are replaced with less stable or less willing participants.
C. Legislative and Regulatory Accountability
Failure to investigate full complaints sends a message that manipulation is acceptable if it occurs under the cover of innovation. Oregon risks undermining its own health reform goals by refusing to confront these practices.
Recommendations for Oversight and Reform
Expand Investigations to include provider reports of coercive contracting, fraud, and antitrust behavior.
Mandate Contract Transparency requiring disclosure of financial risks, incentive calculations, and participant structure.
Launch Independent Audits of Moda Health’s value-based contracts with OEBB, PEBB, and OHP.
Strengthen Whistleblower Protections for providers who report contracting abuse.
Enact Fiduciary Safeguards in public procurement policies to prohibit vague or manipulable VBP agreements.
Develop an Independent Oversight Body for alternative payment models to protect public funds and ensure ethical contracting.
Conclusion
Moda Health’s practices, if left unchallenged, risk normalizing unethical contracting across Oregon’s public healthcare system. While phantom networks offer a starting point for enforcement, they are merely a symptom of a deeper structural problem. To restore integrity, protect patients, and support sustainable value-based care, Oregon must confront the full scope of misconduct, not just the easiest part to measure.
References
Preventing Crucial Legislative Voids and Regulatory Gaps in Oregon House Bill 3725
This article critiques Oregon House Bill 3725 (HB 3725), highlighting its shortcomings in addressing health plan accountability. While the bill introduces oversight mechanisms and reporting requirements, it lacks provisions to prevent health plan fraud, coercion, unethical behavior, and market manipulation. Notably, it does not grant enforcement powers to the proposed Mental Health Parity Ombudsman, nor does it impose penalties for non-compliance or mandate audits for health plan adherence. The article references a 2024 complaint filed by the Independent Mental Health Professional Alliance (IMHPA) against Moda Health, alleging bad faith and illegal contracting practices, which revealed a lack of accountability for such complaints under current Oregon law. To strengthen HB 3725, the article proposes five key provisions:
Strengthening Independent Oversight and Enforcement: Establish an Independent Health Plan Oversight Board within each health plan, equipped with enforcement powers to conduct annual audits, investigate provider complaints, and ensure compliance with state laws and regulations.
Enhancing Contract Transparency and Fairness: Mandate clear, plain-language contracts with standardized definitions, prohibit coercive contracting practices, and require disclosure of any changes to contract terms in a timely manner.
Implementing Whistleblower Protections: Provide robust protections for providers and employees who report unethical or illegal practices by health plans, including safeguarding against retaliation and ensuring confidentiality.
Establishing Penalties for Non-Compliance: Introduce meaningful penalties for health plans that violate parity laws, engage in fraudulent practices, or fail to comply with contract transparency requirements.
Requiring Independent Audits and Public Reporting: Mandate regular independent audits of health plans, with findings reported publicly to ensure transparency and accountability.
By incorporating these provisions, HB 3725 could become a robust law ensuring fairness, transparency, and protections for all mental health practices in Oregon.
https://www.mentorresearch.org/closing-critical-legislative-voids-and-regulatory-gaps-in-oregon-house-bill-3725Exposing Loopholes: How Health Plans Can Exploit Regulatory Gaps
This discussion document examines how health plans cab exploit regulatory gaps in Oregon to engage in unethical practices with minimal risk of consequences. Despite efforts by organizations like Mentor Research Institute (MRI) to promote ethical value-based payment contracting, health plans operate without substantial oversight. MRI's attempts to address these issues through state agencies and legislative offices have highlighted the lack of effective legal channels for reporting and investigating health plan misconduct. The document emphasizes the need for substantial investments in oversight mechanisms, including outcome measurement technology, ethics point portals, and independent audits, to ensure ethical value-based payment contracting.
https://www.mentorresearch.org/exposing-loopholes-how-health-plans-can-exploit-regulatory-gaps-1Moda Health's Termination of Contract Negotiations After Moda Negotiators Agreed to Ensure they Had a Certified Internal Auditor and an Ethics Point Portal
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-violationsHealthy Contracts Legislation Proposal
This proposal seeks to reform health plan contracting practices in Oregon, particularly in behavioral and mental health services. It mandates plain language in contracts, requires fair dealing to prevent deceptive practices, enforces transparency in financial risk-sharing and reimbursement calculations, and establishes independent ethics oversight. The legislation also introduces penalties for violations, including fines and potential license suspension for repeat offenders. By implementing these measures, the proposal aims to protect providers, ensure ethical oversight, and maintain financial integrity in healthcare contracting.
https://www.mentorresearch.org/healthy-contracts-legislation-proposalCreating a Value-Based Payment Model: A Stepwise Approach to Success
This discussion paper outlines a structured approach to developing and implementing value-based payment (VBP) models in mental and behavioral health services, transitioning from traditional fee-for-service to performance-based contracting. The paper emphasizes the necessity of a deliberate framework to align provider incentives with patient outcomes, enhance transparency, ensure legal compliance, foster collaboration, and mitigate financial and operational risks.
Key Steps:
Establish Clear Objectives and Shared Values: Define common goals such as improving patient outcomes, enhancing care coordination, reducing costs, and maintaining access to services.
Develop Transparent Contracts: Craft agreements in plain language, clearly outlining service scope, performance benchmarks, risk-sharing mechanisms, and quality assurance protocols to prevent misunderstandings and disputes.
Define Measurement and Performance Metrics: Implement measurement-based care with key performance indicators, including clinical outcomes, patient satisfaction, and service utilization rates, to objectively assess provider performance.
Implement Data Infrastructure and Analytics: Invest in technology systems capable of collecting, analyzing, and reporting data to support informed decision-making and continuous quality improvement.
Provide Training and Support: Offer education and resources to providers and staff to ensure understanding and effective participation in VBP models, fostering a culture of continuous improvement.
Establish Continuous Monitoring and Feedback Mechanisms: Regularly review performance data, provide feedback, and adjust strategies as needed to maintain alignment with objectives and respond to emerging challenges.
The paper concludes that a methodical, collaborative approach is essential for the successful adoption of VBP models, ultimately leading to improved patient care and more efficient healthcare delivery systems.
https://www.mentorresearch.org/creating-a-contracts-agreements-and-policy-for-value-based-mental-and-behavioral-health-servicesProtecting 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-populationWhen Denial Becomes Deadly - United Healthcare
This article examines the public outcry over health insurance practices following the killing of UnitedHealthcare CEO Brian Thompson. It highlights growing frustrations with insurers prioritizing profits over patient care, with high claim denial rates and prior authorization delays leading to worsened health outcomes. The piece also explores the role of algorithms in increasing denials and the financial burdens placed on patients. Social media reactions reflect deep-seated anger toward the healthcare system, emphasizing the urgent need for reforms to ensure fair and transparent insurance practices.
Empowering 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-behaviorsSuccessful and Failed Case Studies of Measurement-Based Care and Value-Based Payment Contracts: Recommended Requirements
This discussion article compares successful and failed value-based contracts in healthcare. It analyzes the key factors that contribute to each outcome, such as clear performance metrics, aligned incentives, and effective care coordination. The article highlights common pitfalls in failed contracts, including poor communication, misaligned goals, and inadequate data sharing. Lessons learned from these case studies are presented to guide the development of value-based contracts that can achieve better clinical and financial results.
https://www.mentorresearch.org/successful-and-failed-valuebased-contractsWhistleblower Protections in Oregon: Rights, Incentives, and the Role of Public and Private Funding
This discussion paper examines the varying degrees of legal safeguards and financial incentives available to whistleblowers in Oregon, contingent upon the nature of the funding involved—public or private. It highlights that individuals reporting misconduct related to public programs, such as Medicaid, Medicare, or the Oregon Health Plan, benefit from robust protections and potential financial rewards under statutes like the False Claims Act. Conversely, those disclosing issues within commercial health plans encounter more limited protections and lack financial incentives. The paper underscores the importance of consulting legal resources, including the Oregon Bureau of Labor and Industries (BOLI) or specialized attorneys, to navigate the complexities of whistleblower protections effectively, tailored to the specific funding context of the reported misconduct.
https://www.mentorresearch.org/whistleblower-protections-in-oregon-rights-incentives-and-the-role-of-public-and-private-fundingHow and Why Should the Independence of Certified Internal Auditors be Ensured?
This discussion paper addresses the importance of maintaining the independence of internal auditors in health plan contracting. It explains how independent auditors can objectively evaluate compliance, detect unethical practices, and provide unbiased recommendations without external influence. The paper highlights common threats to auditor independence, such as conflicts of interest and management pressure, and offers strategies for preserving impartiality, including clear reporting structures and adherence to professional standards.
https://www.mentorresearch.org/maintaining-independence-of-internal-auditorsBreaking 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-antitrustContract “Gaming”: Reasons Why Value-Based Contracts Can Fail.
This discussion paper analyzes various forms of contract gaming that can undermine the success of value-based contracts. It describes tactics such as manipulating patient risk scores, selective reporting of outcomes, and redefining performance metrics to skew results. The paper explains how these practices can distort the intended goals of value-based care, leading to mistrust and reduced effectiveness. Strategies to identify and prevent contract gaming, including stronger oversight and clearer definitions, are also discussed.
https://www.mentorresearch.org/contract-gaming-reasons-why-value-based-contracts-will-failEthics Point Portal: Definition and Benefits for Value-Based Contracts in Mental and Behavioral Health Services.
This paper defines ethics point portals and outlines their benefits in health plan contracting. It explains how these portals provide a secure and confidential way for stakeholders to report unethical practices, compliance concerns, or contract violations. The paper highlights how ethics point portals promote transparency, accountability, and ethical conduct within organizations. Recommendations for implementing effective portals, including ensuring independence and accessibility, are also discussed.
https://www.mentorresearch.org/ethics-point-portal-definition-and-benefitsEthics-Point Portals Overseen by Independent Certified Internal Auditors (CIA): A Resource to Serve Stakeholders and the Public.
This discussion paper emphasizes the importance of having ethics point portals overseen by an independent certified internal auditor (CIA). It explains how independent oversight ensures that reports of unethical practices or contract violations are handled objectively and free from internal influence. The paper highlights the benefits of this structure, such as increased trust, better compliance, and reduced risk of retaliation against reporters. Recommendations for maintaining auditor independence and promoting transparent investigations are also included.
https://www.mentorresearch.org/ethics-point-portals-overseen-by-independent-certified-internal-auditorControls in Fee-For-Service, Alternative and Value-Based Payment Contracting.
This discussion paper defines the concept of a "control" in the context of health plan contracting and compliance. It explains how controls are mechanisms put in place to ensure that operations align with established policies, prevent unethical behavior, and detect potential issues. The paper outlines different types of controls, such as preventative, detective, and corrective controls, and discusses their role in promoting accountability and reducing risk. Strategies for implementing effective controls within contracting frameworks are also provided.
https://www.mentorresearch.org/what-is-a-controlSigns of Bad Faith in Value-Based Payment Contracts for Mental and Behavioral Health Services Offered by Healthplans.
This discussion paper outlines signs of a bad faith value-based payment contract. It describes indicators such as vague performance metrics, unilateral changes to terms, and excessive administrative requirements that disadvantage providers. The paper also highlights how these contracts can undermine trust and compromise care quality. Strategies for identifying and avoiding bad faith contracts, as well as recommendations for promoting more transparent and equitable agreements, are also discussed.
https://www.mentorresearch.org/signs-of-a-bad-faith-valuebased-payment-contractHigh Case-Mix Severity Must be Considered in Value-Based Contracting.
This discussion paper addresses the importance of considering high case mix severity in value-based contracting. It explains how failing to account for complex patient populations can lead to unfair performance evaluations and inadequate reimbursement for providers. The paper highlights the need for risk adjustment methods that accurately reflect patient severity to ensure that value-based contracts are equitable and do not penalize providers who treat high-risk patients. Strategies for implementing effective risk adjustment measures are also discussed.
https://www.mentorresearch.org/high-case-mix-severity-must-be-considered-n-valuebased-contractingCreating a Value-Based Payment Model: A Stepwise Approach to Success
This discussion paper outlines a structured approach to developing and implementing value-based payment (VBP) models in mental and behavioral health services, transitioning from traditional fee-for-service to performance-based contracting. The paper emphasizes the necessity of a deliberate framework to align provider incentives with patient outcomes, enhance transparency, ensure legal compliance, foster collaboration, and mitigate financial and operational risks.
Key Steps:
Establish Clear Objectives and Shared Values: Define common goals such as improving patient outcomes, enhancing care coordination, reducing costs, and maintaining access to services.
Develop Transparent Contracts: Craft agreements in plain language, clearly outlining service scope, performance benchmarks, risk-sharing mechanisms, and quality assurance protocols to prevent misunderstandings and disputes.
Define Measurement and Performance Metrics: Implement measurement-based care with key performance indicators, including clinical outcomes, patient satisfaction, and service utilization rates, to objectively assess provider performance.
Implement Data Infrastructure and Analytics: Invest in technology systems capable of collecting, analyzing, and reporting data to support informed decision-making and continuous quality improvement.
Provide Training and Support: Offer education and resources to providers and staff to ensure understanding and effective participation in VBP models, fostering a culture of continuous improvement.
Establish Continuous Monitoring and Feedback Mechanisms: Regularly review performance data, provide feedback, and adjust strategies as needed to maintain alignment with objectives and respond to emerging challenges.
The paper concludes that a methodical, collaborative approach is essential for the successful adoption of VBP models, ultimately leading to improved patient care and more efficient healthcare delivery systems.
https://www.mentorresearch.org/creating-a-contracts-agreements-and-policy-for-value-based-mental-and-behavioral-health-servicesValue-Based Payment Contracting for Psychotherapy Services: Requirements and Challenges
This draft discussion paper, dated April 2024, provides a comprehensive overview of the complexities involved in implementing value-based payment (VBP) models within psychotherapy services. It emphasizes the shift from traditional fee-for-service models to VBP, which focuses on quality and patient outcomes rather than service volume. The paper outlines the high risks and complexities associated with VBP contracting, highlighting the need for provider practices to possess significant experience, resources, and strategic approaches to navigate these intricacies effectively.
Key Points:
High-Level Guidance and General Challenges: The transition to VBP in psychotherapy demands expert knowledge, appropriate business structures, financial resources, and experience in contract administration, internal auditing, and risk management. Providers must meet health plan targets while negotiating contracts that allow for reasonable profit and manage the probable risk of financial loss.
Requirements for Successful Implementation: Effective VBP implementation necessitates significant investment by health plans, technology adoption, knowledge of psychotherapy, data analytics, and ethical practices. Provider groups need extensive experience in measurement-based care (MBC) and the capability to gather, aggregate, and analyze data to establish baselines and benchmarks for successful contract negotiation and management.
Opportunities and Challenges with VBP: VBP presents opportunities for improving treatment adherence, patient-centric care models, quality improvement, and incentivization of effective providers. However, challenges include the rarity of independent psychotherapists in VBP arrangements, lack of standardized outcome measures, separation from physical health care systems, undervaluation by payers, complexity of mental health conditions, ethical considerations, risk of adverse selection, and resource limitations.
Negotiating VBP Contracts: The paper outlines strategies for negotiating VBP contracts, emphasizing the importance of assessing provider practice capabilities, understanding the value proposition, identifying measurable outcomes, evaluating legal terms and financial risks, and fostering collaboration and partnership with payers.
Potential Pitfalls and Challenges: Participating in a VBP contract can lead to loss of control over patient care, fragmentation of services, challenges with performance metrics, financial risks, and potential for increased administrative burdens.
The document serves as a living resource, subject to revision as new information and perspectives emerge, aiming to guide providers through the evolving landscape of value-based payment in psychotherapy services.
https://www.mentorresearch.org/value-based-payments-psychotherapy