The Survivability of Independent Private Mental Health Practice Requires Stakeholder Protective Legislation
Federal and State legislation and regulations are compelling insurance payers to either transform into Healthplans or be acquired by existing Healthplans. Concurrently, Healthplans are being mandated to transition from fee-for-service (FFS) models to value-based payment contracts. The stakeholders are patients, provider practices, employers, purchasers, taxpayers, Healthplans, and Federal and State Regulators
Legislation is vital for addressing the significant challenges posed by the shift to value-based payment models. By ensuring transparency, fairness, and ethical practices in healthcare contracts, the legislation must protect provider practices, improve patient care, and foster a more sustainable and equitable healthcare system. The Healthy Contract initiative is essential for rebuilding trust between providers and Healthplans, reducing administrative and financial burdens, and promoting collaborative relationships that benefit all stakeholders. This initiative is essential for protecting the interests of patients, providers, and Healthplans alike, fostering a more sustainable and equitable healthcare system.
Background
Physical medical care differs significantly from mental health care in several aspects, including treatment modalities, patient engagement, and outcome measurement. For instance, mental health care often involves longer-term treatment and more subjective outcome measures, making it challenging to apply the same value-based principles as those used in physical health care. The Oregon Health Authority defines value in health care as evidence-based, patient-centered care that leads to increased quality and improved health at an appropriate cost. This definition underscores the importance of aligning patient outcomes with the costs incurred in providing care. The Centers for Medicare and Medicaid Services (CMS) have redefined "medically necessary and appropriate" to mean "medically necessary and reasonable" to support the implementation of value-based care. This redefinition aims to ensure that treatments provided are both effective and cost-efficient.
The shift to value-based care relies on Alternative Payment Methods (APMs), including measurement-based care (MBC). MBC involves the systematic collection of data to assess patient outcomes and set benchmarks for payments and incentives. Benchmarks are negotiated and serve as targets for provider performance. Value-based contracts are essentially experimental models. The reliability, validity, and overall value of these payment models have not been conclusively established. They involve multiple stakeholders, including patients, provider practices, employers, purchasers, taxpayers, Healthplans, and federal and state regulators. In a fee-for-service private practice, administrative costs account for approximately 20% of expenses. Participating in and administering an MBC contract adds another 8% in costs. Managing a value-based payment contract, in addition to MBC, can increase costs by up to 10%. These additional costs pose significant financial challenges for provider practices.
Healthplans often negotiate contracts in ways that place clinical, ethical, and financial risks on provider practices. They seek to gather quality and outcome data from providers for their own use, which helps them set benchmarks. However, Healthplans may withhold data and analysis, making it difficult for provider practices to negotiate fair contracts. Healthplans typically negotiate only with provider groups that have leverage. They often employ "take it or leave it" contracts, also known as contracts of adhesion, which can lead to gaming behaviors from both Healthplans and provider practices. In these scenarios, providers have little recourse other than legal action, which is costly and time-consuming.
The solution is not to rely on legal action but to prevent the need for it by ensuring fair and transparent contract negotiations from the outset. This involves creating frameworks that protect the interests of all stakeholders and promote collaborative, rather than adversarial, relationships between Healthplans and provider practices.
Survivability of Independent Private Practices
Creating a sustainable and equitable healthcare system that benefits patients, providers, and Healthplans alike is possible but requires significant changes in current contracting practices. Ensuring fair, transparent, and collaborative contract negotiations is essential. Without legislative support and organizational structures like IPAs or group practices, independent private practices may struggle to survive, potentially leading to a shift towards employment within for-profit group practices who will “game” Healthplans.
Importance of the Proposed Legislation
The proposed healthy contracts legislation is crucial because it seeks to reform the current healthcare contracting landscape, specifically addressing the challenges posed by the transition to value-based payment models. These reforms aim to ensure that contracts between Healthplans and provider practices are fair, transparent, and promote ethical practices. This initiative is essential for protecting the interests of patients, providers, and Healthplans alike, fostering a more sustainable and equitable healthcare system.
Problems the Healthy Contracts Proposed Legislation Will Solve:
1. Prevent contracting practice that are anticompetitive, fraudulent, not accountable and have a high risk of failure.
Current Issue: MRI has found evidence that 4 out of 5 value-based payment contracts fail and concludes that the contracts offered do not follow rigorous industry best practices and instead are experiments without essential controls.
Proposed Solution: Value-based payments contracts for mental health services must adopt (1) an ethics point portal open to providers, overseen by (2) an independent certified internal auditor who is responsible for monitoring, investigating and reporting shared measurement and value-based contracts as well as ethic point portal submissions, and (3) understandable and plainly stated contract and policy language that maps to operations.
2. Lack of Transparency and Fairness in Contracts:
Current Issue: Many value-based contracts are complex, ambiguous, and often unfair to providers, placing them at a significant disadvantage.
Proposed Solution: The legislation would mandate clear, understandable, and enforceable contracts, ensuring that all parties fully comprehend their obligations and rights. Auditing and compliance procedures must have transparent and shared value, objective, controls, key performance measures, ethics point portals.
3. Administrative Burden and Financial Strain on Providers:
Current Issue: The shift to value-based care increases administrative costs and financial pressures on provider practices, which can threaten their sustainability.
Proposed Solution: By addressing the root causes of these burdens, such as excessive documentation and reporting requirements, the legislation aims to streamline processes and reduce the financial strain on providers.
4. Ethical and Clinical Risks:
Current Issue: Providers often face ethical dilemmas and clinical risks when contract terms conflict with their professional standards, potentially leading to compromised patient care.
Proposed Solution: The legislation would ensure that contract terms align with ethical standards and clinical best practices, supporting providers in delivering high-quality care without moral injury. Contract must include understandable and plainly stated contract and policy language that maps to operations.
5. Erosion of Trust Between Providers and Healthplans:
Current Issue: Ambiguous and unfair contract terms erode trust and foster adversarial relationships between providers and Healthplans.
Proposed Solution: Transparent and fair contract negotiations will help rebuild trust and promote collaborative relationships, ultimately benefiting patient care.
6. Lack of Leverage for Independent Practices:
Current Issue: Independent practices often lack the leverage to negotiate favorable contract terms, leading to "take it or leave it" scenarios.
Proposed Solution: The legislation would support independent practices by promoting fair negotiation practices and potentially providing mechanisms for collective bargaining.
7. Gaming and Legal Conflicts:
Current Issue: Both Healthplans and providers may engage in gaming behaviors due to unfair contract terms, leading to legal conflicts and financial penalties.
Proposed Solution: By ensuring fair and transparent contract terms from the outset, the legislation aims to prevent gaming behaviors and reduce the need for costly legal actions.
8. Impact on Quality of Care and Patient Outcomes:
Current Issue: The financial and administrative pressures of value-based contracts can negatively impact the quality of care and patient outcomes.
Proposed Solution: By addressing these pressures and ensuring contracts support ethical and high-quality care practices, the legislation seeks to improve patient outcomes and overall healthcare quality.
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, and research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.
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