Mentor Research Institute

Healthy Contracts Legislation; Measurement & Value-Based Payment Contracting: Online Screening & Outcome Measurement Software

503 227-2027

Why Teachers, Counselors and Legislators Should Support Healthy Contracts Legislation

A Discussion Document

In an unbridled rush to transition from fee-for-service to value-based payment contracts, there are significant risks that unchecked contracts will divert public funds to Healthplan profit, to the detriment of teachers, their families, students, and their families. Such contracts could incentivize providers to avoid treating children or families with complex mental health issues, leading to severe negative consequences.

Many of us know but do not fully realize that mental health services in Oregon are ranked worst in the United States (50th out of 51). Measurement and value-based payment contracts for mental and behavioral health services are, ironically, promoted as solutions to problems created and controlled by Healthplans in the first place. Yet, nationally, 4 out of 9 value-based mental health contracts have failed. The first contract in Oregon failed because it lacked adequate controls. The problems included timely routine and urgent access, difficulties finding specialized care, and restrictions on intensive, frequent and extended care intended to reduce the cost of medical care.

Value-based payment contracts are being developed with the intention to replace traditional fee-for-service contracts. Fee-for-service is patient-centered. Value-based payment contracts often create incentives for providers if they reduce the number of appointments and provide “good enough” counseling or psychotherapy services.

Value-based contracts are not solving these problems if Healthplan and providers are not monitoring progress, the therapist-patient alliance, and not engaged in continuous improvement. Solutions are not possible if the contract is vulnerable to profiteering; based on unfounded marketing that the plan has value. Healthplans are vulnerable to profiteering if management is responsible for monitoring itself. Independent oversight with active involvement is creating contracts, and monitoring controls validated by rigorous tests of design and effectiveness are necessary.

The problems are complex. The consequences for not enacting Healthy Contracts legislation have a probable to almost certain moderate to catastrophic impact on adhering to values and achieving objectives. These 3 solutions can resolve the problems that undermine value-based contracts.

Healthy Contracts Legislation has 3 Parts

1. Healthplans shall retain the services of Independent Certified Internal Auditors who will monitor Healthplan practices to stop activities that undermine service quality, access, and the duration of appropriate care.

Internal auditing must be an independent, objective assurance and organizational activity designed to add value and improve an organization's operations. Internal auditors help organizations achieve objectives by systematically evaluating and improving the effectiveness of risk management, controls, and governance processes.

Independent Certified Internal Auditors (CIAs) should report to an independent Board, not to a Healthplan’s management. This structure will maintain the independence of the CIAs, ensuring unbiased evaluation and recommendations. Such independence of oversight is vital to uphold the integrity of mental and behavioral health services and to prevent fraud. Key aspects include:

  • Risk Management: Identifying and assessing risks to ensure they are managed effectively.

  • Control Processes: Evaluating the adequacy and effectiveness of internal controls.

  • Governance Processes: Ensuring that the Healthplan’s processes support its strategic objectives and comply with relevant laws and regulations.

2. Healthplans shall create ethics point portals which provide a secure, self-identified and anonymous platform for reporting unethical and illegal practices, and non-compliance. This would include reporting access problems and special needs. A portal will encourage transparency and accountability within Healthplans, allowing providers and other stakeholders to report concerns without fear of retaliation. Contracts and policies must be written in plain, understandable language to ensure that providers, purchasers, and all stakeholders can easily comprehend the terms and requirements. Clarity will help prevent misunderstandings and reduce the risk of “gaming”, fraud or misrepresentation.

3. Healthplans shall write contracts and policy in plain and understandable language that ensures all stakeholders, including providers, purchasers, and auditors, can easily comprehend the terms, benefits, risks, incentives, appeal and audit processes, as well as performance requirements. Transparency helps prevent misunderstandings, reduces the risk of fraud or misrepresentation, and facilitates smoother implementation of value-based payment models. When contracts are written in plain language, it is easier to hold all parties accountable, maintain ethical standards, and ensure that healthcare services are delivered effectively and are aligned with shared values and objectives.

In order to create Healthy Contract, Healthplans, Provider practices and Stakeholder must have transparent shared values, objectives, controls, key leading indicators, rigorous tests of design and effectiveness, a risk impact analysis (RIO), a risk control matrix (RCM), a residual risk analyses, and key performance indicators. Those components are essential for maintaining the integrity and effectiveness of value-based payment contracts. These are services that certified internal auditors are trained to provide.

The absence of healthy contracts for mental and behavioral healthcare can negatively impact public safety, particularly within school communities. Decreased access to quality mental health care can lead to higher absenteeism, poor academic performance, and more school behavior problems.

Healthplan operations and profits are the responsibility of Healthplan managers. Assurance of ethical implementation, information gathering, monitoring, investigations, and reporting is the responsibility of independent certified internal auditors. Providers are disincentivized by unhealthy contracts and avoid treating complex mental health issues. Children and families with significant mental health problems may not receive necessary care or enough care. An example: contracts which require excessive patient-progress monitoring by mental health professionals may reduce available services. Untreated mental health issues among students are manifest in dropout rates, bullying, and violence.

Compromised public health and safety results from untreated mental health issues, affecting the entire school environment and creating unsafe situations. Unmanaged mental health conditions lead to severe long-term health issues, a burden on public health systems and negative impact of students' education and social outcomes. Misrepresentation of requirements and the value creates a risk of failure. Without mitigation in a timely manner, value-based contracts will erodes trust in Healthplans. Providers disengage for risk as means of self-defense. Families become skeptical of mental health services, and reluctant in seeking needed support for their children. Schools that are unable to access adequate mental health support see reduced trust from parents and students, lower attendance rates and diminished community support.

Excessive administrative burdens and financial pressures lead to burnout among mental health professionals, reducing the quality of care and a shortage of qualified professionals. School administrators may need to spend more time addressing mental health-related issues, detracting from their primary focus on education. Students with untreated mental health issues are at higher risk of engaging in isolating, avoidant, irritable, aggressive, destructive, self-harming, suicidal, and other violent thoughts or behavior. Adequate mental health services are essential to early intervention and prevention. Poor mental health and inadequate services contribute to broader community safety issues, including higher rates of crime and violence.

Case Example

As a case example, the Moda Health contract which includes a behavioral health incentive program (BHIP), deviates from state, federal, and industry guidelines and best practices. One group of Providers which entered BHIP contract negotiation with Moda discovered, after investigation, that over the next 3 years the contract has a probable to almost certain moderate to catastrophic impact on teachers insured under the Oregon Education Benefits Board (OEBB) and Public Employee Benefit Board (PEBB)​​. Negative impacts will include the consequences of undertreatment of families, high risk patients, patients with severe conditions, and patients released from emergency departments. Provider burnout is almost certain.

The Moda contract can be described as an uncontrolled experiment at best. Moda has admitted they are “making it up as we [they] go’. The probability of fraud perpetrated thus far, and the inflexibility of Moda to have informed conversation, is evidence which validates a need for independent oversight of new, experimental, measurement and value-based payment contracts. Moda declared to MRI that they are as knowledgeable value-based contracting as MRI about value-based payment contracts, despite the fact that MRI does not understand the contract when compared to state, federal and industry standards and guidance. The Moda contract at this time is ill-defined, misleading, ambiguous, deceptive, and requires that Provider practices weigh the current power differential impact which can lead Providers to “game” Moda in self-defense and defense of their patients. Should this happen, this will create a culture devoid of conversation and collaboration. Providers who sign the Moda Health contract may want to consider that MRI believe there is a probable to almost certain moral injury to providers and patients because they are incentivized to put profits above common sense and informed ethical decision making, not realizing the target necessary to receive an incentive payment is not something they can understand, learn from, manage or challenge.

The Healthy Contracts legislation is essential to ensure that mental and behavioral health services are delivered in a useful manner with integrity, transparency, and effectiveness. By supporting this legislation, teachers and the broader community can help protect taxpayers, public funds, improve access to quality mental health care, and ensure a safer and healthier environment for teachers, students and their families.

Essential Requirements of Healthy Contracts Legislation

The legislation will require that Healthplans implement these requirements for all mental and behavioral health contracts:

  1. Independent Certified Internal Auditors: To monitor Healthplan practices and stop unethical activities that undermine service quality, access, and care duration. Independence is crucial to ensure unbiased evaluations and reporting, which will increase quality and improve outcome, health and prevent fraud.

  2. Ethics Point Portal: Provides a secure, anonymous or self-identified online platform for reporting unethical practices and non-compliance, encouraging transparency and accountability within Healthplans, among Healthplans and Providers practice, and among Healthplans.

  3. Clearly Written Plain and Understandable Contracts and Policies: Ensures that all stakeholders can easily comprehend the terms and requirements, preventing misunderstandings and reducing the risk of misrepresentation and fraud.

Draft Legislation for the Implementation of Healthy Contracts Requirements

Following is brief summary of a Legislator Draft Request available from Mentor Research Institute by request.

Title: An Act to Ensure Transparency, Accountability, and Integrity in Value-Based Payment Contracts for Mental and Behavioral Health Services

Section 1: Purpose The purpose of this Act is to ensure that value-based payment contracts for mental and behavioral health services are transparent, accountable, and free from fraud. This Act mandates the implementation of Independent Certified Internal Auditors’ contract oversight, the establishment of ethics point portals, and the requirement that all contracts and policies be written in plain and understandable language.

Section 2: Definitions

  1. Healthplan: Any organization that provides health insurance or health benefits to enrolled members.

  2. Independent Certified Internal Auditor (ICIA): A professional auditor certified by a recognized accrediting body, such as the Institute of Internal Auditors, who is not part of the Healthplan’s management and has no conflicts of interest.

  3. Ethics Point Portal: A secure, anonymous platform for reporting unethical practices, non-compliance, and other concerns related to Healthplan operations.

  4. Value-Based Payment Contract: A contract that ties reimbursement to the value of care. The Oregon Health Authority defines value as evidence-based, patient-centered, and increased quality and improved outcomes and health.

Section 3: Independent Certified Internal Auditors

  1. Appointment and Role: (a) Healthplans must appoint one or more Independent Certified Internal Auditors. (b) The ICIA must report directly to the audit committee or board of directors of the Healthplan, not to operational management. (c) The ICIA will be responsible for monitoring the Healthplan’s practices to ensure they do not undermine mental and behavioral Health service quality, access, outcomes, or medically necessary and reasonable care. (d) The ICIA will conduct regular audits to detect and prevent fraud, ensuring compliance with all relevant laws and regulations.

  2. Responsibilities: (a) Evaluate the design and effectiveness of internal controls. (b) Ensure the Healthplan's practices align with state, federal, and industry guidelines and best practices. (c) Report findings and recommendations to the audit committee or board of directors. (d) Ensure transparent shared values, objectives, controls, key leading indicators, rigorous tests of design and effectiveness, a risk impact analysis (RIO), a risk control matrix (RCM), and residual risk analysis are implemented.

Section 4: Ethics Point Portal

  1. Establishment: (a) Healthplans must establish and maintain an ethics point portal for the anonymous reporting of unethical practices and non-compliance. (b) The portal must be accessible to all stakeholders, including providers, employees, and patients.

  2. Operation: (a) The portal must allow for secure and confidential reporting. (b) Healthplans must ensure reports are reviewed promptly and appropriate action is taken. (c) Summary reports of the issues raised and actions taken must be presented to the audit committee or board of directors quarterly.

Section 5: Plain and Understandable Language in Contracts and Policies

  1. Requirements: (a) All contracts and policies related to value-based payment must be written in plain and understandable language. (b) Contracts must include clear definitions, obligations, performance metrics, and terms of reimbursement to ensure all parties can easily comprehend the requirements.

  2. Implementation: (a) Healthplans must review and revise existing contracts and policies to comply with this requirement. (b) All new contracts and policies must be drafted to meet this standard.

Section 6: Enforcement and Compliance

  1. Oversight: (a) The state’s regulatory authority will oversee the implementation and compliance of this Act. (b) Healthplans must submit annual compliance reports to the state’s regulatory authority, detailing their adherence to the requirements of this Act.

  2. Penalties: (a) Healthplans found in violation of this Act may be subject to fines, sanctions, or other penalties as deemed appropriate by the state’s regulatory authority. (b) Continuous non-compliance may result in the suspension or revocation of the Healthplan’s operating license.

Section 7: Effective Date. This Act shall take effect on [Date], and Healthplans must comply with all provisions within six months of the effective date.

Section 8: Severability. If any provision of this Act is found to be unconstitutional or otherwise invalid, the remaining provisions shall not be affected and will continue in full force and effect.

Section 9: Legislative Intent. It is the intent of the Legislature that this Act be liberally construed to effectuate its purposes.

Section 10: Legislative Findings. The Legislature finds that ensuring transparency, accountability, and integrity in value-based payment contracts for mental and behavioral health services is essential for protecting public funds, improving access to quality healthcare, and maintaining public trust.

For more information see:

DISCLAIMER and PURPOSE: This discussion document is intended for training, educational, and 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

Key words: Supervisor Education, Ethical Charting, CareOregon’s New Barrier to Oregon’s Mental Health Services, Mental Health, Psychotherapy, Counseling, Ethical and Lawful Value Based Care,