Will the Moda Measurement and Value-Based Payment Contract for Mental and Behavioral Services Fail?
Discussion Paper (June 28, 2024)
Purpose: Following is a summary based on 70+ discussion papers of which 31 specific papers are abstracted and referenced below. The purpose is to support education and training for Healthplans, Attorneys, and mental and behavioral health Provider practices. This paper is a living document providing information including definitions, concepts, concerns, challenges, inferences and conclusion about the first commercial Healthplan in Oregon (and possibly the Pacific Northwest) to offer a measurement and value-based payment contract to Provider practices for mental and behavioral health services. The inferences and conclusion are generally reliable because they draw upon commonly accepted principles of clinical practice workflow, professional and business ethics, and business and healthcare law, research, information, or events.
For example, if a person is walking outside and it is visibly raining, and they are not using umbrella or walking in a covered area, you might conclude they are wet. All inferences or conclusions in this discussion paper are subject to revision as new information becomes available. What is presented should not be assumed to be fact, the only fact is that it was asserted.
Introduction
In what may be an unbridled effort to increase market share, and retain contracts funded by Oregon taxpayers, just one Healthplan is offering a measurement and value-based contract for mental and behavioral health services. This discussion paper provides evidence and reasons to suggest that this Healthplan has deviated far from state, federal, and industry guidelines and best practices, and that any benefits to the Healthplan will almost certainly be to the detriment of purchasers, taxpayers, employers, patients and public health. And if the contract fails, 128 Providers practice groups will be blamed because the contract was doomed from the beginning.
Thus far, Moda is offering a “take-it-or- leave” contracting model rather than a model that would be closer to a joint venture where the stakeholder are partners, or at least collaborators. Failure is almost certain unless Moda adopts a collaborative approach and is willing to be receptive to the issues raised in this discussion paper. While Mentor Research Institute (MRI) and the Independent Mental Health Practices Alliance (IMHPA) intend to proceed in good faith, MRI and IMHPA have also crafted legislation to create guardrails and controls that could protect the public.
The core of this discussion paper is that the Moda’s behavioral health incentive program (BHIP) fails to meet essential requirements necessary to predict a successful measurement and value-based contract for mental and behavioral health services; sometimes called measurement-based care (MBC) and value-based payments (VBP). In particular, the absence of transparent shared values and objectives, effective controls, key indicators of success, and rigorous tests of design and effectiveness cripples the contract’s potential for success. Additionally, insufficient administrative support, unrealistic expectations, and lack of collaboration between Providers and Healthplans, and among Providers’ practices, further exacerbate the challenges. Intentional or not, the Moda contract is ambiguous, deceptive, ill-defined and or misleading. Given these deficiencies, it is probable to almost certain that the Moda measurement and value-based payment model will fail to achieve better outcomes, will lead to poor patient care, provider dissatisfaction, and financial inefficiencies and losses. At best, the Moda measurement and value-based payment contract for mental and behavioral services is an uncontrolled experiment which has not been negotiated with Provider practices in good faith or with fair dealings. This discussion paper delves into 42 critical requirements abstracted from 26 papers excerpted from 70 discussion papers.
How effective and efficient are mental and behavioral health services in Oregon?
Oregon ranks near the bottom nationally in terms of the quality and effectiveness of its mental and behavioral health services. According to the 2023 rankings by Mental Health America, Oregon is ranked 48th overall for mental health care, indicating a high prevalence of mental illness and low access to care compared to other states. Specifically, Oregon has significant challenges related to the number of residents with mental illness, including dependence on alcohol or drugs and serious thoughts of suicide.
Despite this low overall ranking, Oregon did somewhat better in terms of access to care, ranking 21st, which suggests some improvement in the availability of insurance and mental health services. However, this improvement may be artifact of Healthplans and Provider practices “gaming” the state's overall poor access. Providers are asked to report to Healthplans how many openings they have and whether they have waiting lists. It may be that providers have openings and waiting lists, but have openings only for patients who would not increase their case mix-severity. Providers do not treat every sub-population with high risk scores. That pattern means the Providers are managing their own stress and risk.
What are stakeholders?
When Healthplans contract with mental and behavioral health providers, several key stakeholders are involved. These stakeholders each have distinct interests and roles in ensuring the effective delivery and management of mental and behavioral health services.
Stakeholders collectively contribute to the ecosystem of mental and behavioral health services within Healthplans. Understanding their roles and interests is crucial for developing effective contracts, fostering collaboration, and ensuring that the needs of all parties are met. Recognizing and appreciating, rather than ignoring and deprecating stakeholders, is required to achieve a shared goal of delivering high-quality, improved health, and cost-effective care.
Stakeholders in value-based contracts are:
Purchasers
Taxpayers
Physician practices
Hospitals-Physician networks
Regulators
Healthplans
Provider practices
Patients
Consumer advocacy organizations
What is the economic value of psychotherapy without value-based payment contracting?
The economic worth of psychotherapy for the healthcare sector is that psychotherapy reduces medical costs. Medical cost-offset research has demonstrated this fact for decades. Recently Cigna’s research found that when psychotherapists treat patients for at least 3 appointments and fewer than 14 appointments, the savings to the Healthplan in medical and prescription costs is between $755 to $1377 per person the first year. Improvements for 75% of patients occurred in the 3 -14 session window. 25% of patients continued for longer terms. Medical cost-offset calculations for care beyond 14 sessions were not part of the Cigna report. (This is pre-pandemic data.)
Restricting the average duration of treatment provides net savings. One thousand providers each treating 25 patients per week in the 3 to 14 session pattern can save a Healthplan 18.9 to 34.4 million dollars.
What is the value of giving a Healthplan your patients’ assessment data?
Healthplans, venture capital investors, and managed care start-up companies that provide referrals and claims management want (1) psychotherapist assessment data, including (2) psychotherapist and patient names. Healthplans that subsidize measurement-based care (MBC) do not tell psychotherapists that they want or already have dashboards that give visible access and analysis of provider-patient screening, progress, satisfaction and outcomes. This information can be used to profile and grade provider performance, create risk score, and target providers for so-called educational-audits; or worse, recoupment of payments.
They only way Healthplans can gather, aggregate, analyze or use psychotherapists data is to convince psychotherapists to use online software. A provider who uses software subsidized by a Healthplan or managed care company is giving away data worth at least $23,000 to $36,000 per year (to the Healthplan). These estimates are based on these requirements: provider training, patient training, additional charting, subsequent reviews, technical problems, technical support calls, review and discussions with patients, breech notification insurance, 2 measures per patient per month, reduction in episodes of care, the complexity of using different measures for different Healthplans, and the financial value of data for Healthplan marketing.) For that, a provider may receive a small (by comparison) increase in their fee-for-services. Assuming the fee-for-service is $100 per appointment, the cost of measurement-based care should be in the range of no less than $20 to $30 per patient per measure.
Psychotherapists who participate in Healthplan subsidized AND directed measurement and data collection systems are giving Healthplans visibility into provider services and patient data. This allows Healthplans to steer psychotherapy interventions, procedures, processes, modalities, levels of care, durations of treatment and more. Rather than using provider-patient data to improve provider services, Healthplans can monetize the data, or use the data to direct mental health services; thereby using provider’s own data against them.
Moda Health is not discussing the economic benefit of the information the Providers’ practices gather. The data is the property of providers. Healthplans do not wish to share their economic benefit related to provider screening, progress, outcome, alliance and satisfaction measures.
What is a measurement and value-based payment contract?
A measurement and value-based contract is a type of agreement in healthcare where payment for services is tied to the quality and efficiency of care provided, rather than the volume of services. This contract focuses on achieving specific health outcomes and uses performance metrics to assess the effectiveness of care. Providers are incentivized to deliver high-quality, cost-effective care, with financial rewards for meeting or exceeding predefined benchmarks, and potential penalties for underperformance. The goal is to improve quality, increase access, improve patient outcomes and health, manage healthcare costs, and promote accountability and transparency in healthcare delivery.
What is high case-mix severity?
High case-mix severity in measurement and value-based payment contracts for mental and behavioral health services refers to the complexity and intensity of healthcare needs among a provider’s patient population, and especially sub-populations, characterized by severe mental health disorders, multiple diagnoses, and/or significant socioeconomic challenges. Those patients require comprehensive, multi-modal treatment plans, frequent visits, emergency interventions, and long-term management, demanding more resources and specialized care. Effective value-based payment models must include risk adjustment mechanisms and adjust performance metrics to ensure fair compensation and quality care, supporting providers in delivering patient-centered care while maintaining financial sustainability and improving health outcomes.
What are the reasonable fears that Provider practices have about entering into value-based contracts?
Entering into a value-based contract presents a range of logical fears for providers, from financial viability and increased administrative burdens to ethical dilemmas and operational challenges. Providers are justifiably concerned about the potential erosion of trust, legal risks, and the impact on the quality of patient care. Addressing these fears through transparent, good faith, fair, and supportive contract practices, along with legislative and regulatory reforms, is essential to foster a sustainable and ethical healthcare environment. Providers can unwittingly be drawn into signing contracts that benefit Healthplans and over time function to the detriment of tax payers, purchasers, employers, patients, public health, and Providers’ practices. Providers who knowingly participate in a measurement and value-based contract which may be a “ruse” by a Healthplan to retain or win contracts paid for by taxpayers could be exposed to allegations of participation in illegal behavior by submitting claims subject to the False Claims Act.
Are Provider practices adequately educated, trained or prepared to understand, negotiate, and participate in measurement and value-based payment contracts?
Providers will face significant challenges when it comes to understanding, negotiating, and participating in measurement and value-based payment contracts. Here are some key points:
Education and Training: Many providers are not educated or trained in the intricacies of value-based payment models. Their clinical training typically focuses more on patient care than on the business and administrative aspects of healthcare. This lack of information can make it difficult or virtually impossible for them to fully grasp the financial and operational implications of the contracts they are offered.
Complexity of Contracts: Measurement and value-based contracts can be complex, with detailed provisions about performance metrics, risk-sharing arrangements, and financial incentives. Providers may struggle to understand those complex terms and ways they impact their practice financially and operationally.
Negotiation Skills: Providers, especially those in smaller practices, may lack the negotiation skills and experience needed to effectively advocate for favorable contract terms. Large group practice (> 150 providers) have greater leverage and more resources and experienced colleagues than smaller Provider practices that are at a disadvantage during negotiations.
Administrative Burden: Participating in value-based contracts often requires significant administrative effort, including data collection, reporting, and compliance with performance metrics. Providers may not have the necessary technology or administrative support to manage these additional tasks effectively.
Financial Risk: Value-based contracts often involve financial risk-sharing, which can be daunting for provider practices which focus on treating different sub-populations. They may be unprepared for the potential financial implications if they fail to meet performance benchmarks, leading to financial losses.
Support and Resources: Adequate support and resources from Healthplans or external consultants can help bridge the knowledge gap. However, such support is not generally available, leaving providers to navigate these contracts on their own.
Provider Competence: Provider practices are not adequately prepared to understand, negotiate, and participate in measurement and value-based payment contracts due to a lack of education, training, negotiation skills, and administrative support. This unpreparedness can lead to challenges in effectively managing the contracts and achieving the intended outcomes.
What is the definition of value in measurement and value-based payment contracts?
Value in healthcare is defined by the Oregon Health Authority (OHA) as (1) evidence-based, (2) patient-centered care that leads to (3) increased quality and improved health at an appropriate cost. This definition underscores the importance of aligning healthcare services with outcomes that matter to patients while ensuring that these services are delivered efficiently and cost-effectively. The OHA emphasizes that value is not just about reducing costs but about optimizing the entire healthcare experience to achieve the best possible outcomes for patients. This approach involves integrating quality measures, outcome measures, alliance measures, patient satisfaction, and cost management to create a balanced and effective healthcare system.
What are transparent and shared values and objectives?
Shared transparent objectives are clearly defined goals and targets mutually agreed upon by all stakeholders involved in a project or contract. These objectives are openly communicated and understood by everyone, ensuring that all parties are working towards the same end results. In the context of value-based payment contracts, these objectives typically include specific, measurable outcomes related to patient care, cost management, and overall healthcare quality.
What are controls?
Controls are mechanisms, policies, procedures, and practices that organizations implement to ensure that their processes and operations function as intended. Controls are designed to mitigate risks, ensure compliance with regulatory requirements, prevent errors and fraud, and achieve desired outcomes. In the context of healthcare and value-based payment contracts, controls are critical for maintaining the integrity, quality, and the delivery of evidence based care delivery.
What are key indicators of success?
Key indicators of success in measurement and value-based contracts are specific, quantifiable metrics used to evaluate the performance and effectiveness of healthcare services provided under a contract. These indicators are designed to assess whether the goals of the value-based contract are being met, including improvements in patient outcomes, cost efficiency, quality of care, and overall patient satisfaction. They provide a basis for determining the success of the contract and guide decision-making for continuous improvement.
What is risk?
Risk is the possibility of an adverse event or outcome that could have negative consequences. In a broader context, risk involves the likelihood of an event occurring and the potential impact it may have. It encompasses various aspects, such as financial loss, operational disruption, regulatory non-compliance, or reputational damage. Risk management involves identifying, assessing, and prioritizing risks, followed by implementing strategies to mitigate, transfer, accept, or avoid them.
What is upside risk?
Upside risk refers to the potential for a positive or favorable outcome that exceeds expectations or projections. In the context of risk management, upside risk is the possibility that actual results will be better than anticipated, leading to benefits such as higher revenues, improved performance, or other gains. While traditional risk management often focuses on minimizing negative risks (downsides), managing upside risk involves recognizing and capitalizing on opportunities that can enhance value or outcomes.
Upside assessment:
The upside risk for MODA is almost certainly high.
The upside risk for Provider practices is almost certainly low.
What is downside risk?
Downside risk refers to the potential for a negative or unfavorable outcome that falls short of expectations or projections. It encompasses the possibility of losses, adverse events, or other detrimental impacts that can harm financial performance, operational efficiency, reputation, or overall objectives. Managing downside risk involves identifying, assessing, and mitigating these potential negative outcomes to minimize their impact on the organization or individual.
Downside risk assessment:
The downside risk for MODA is almost certainly low.
The downside risk for Provider practices is almost certainly high.
What is shared risk?
Shared risk in the context of healthcare and financial agreements refers to a situation where multiple parties—such as health plans, providers, and sometimes patients—collectively assume the financial and operational risks associated with delivering care or managing a particular initiative. Shared risk arrangements are designed to align incentives across stakeholders, encouraging collaboration to achieve common goals, such as improving patient outcomes and reducing costs.
In value-based healthcare contracts, shared risk typically involves:
Financial Incentives: Both gains and losses are shared. For example, if cost savings are achieved while maintaining or improving care quality, both providers and payers share in the financial benefits. Conversely, if costs exceed projections, both parties share the financial losses.
Performance Metrics: Specific metrics are used to evaluate the success of the arrangement, such as increased quality, patient-centered practice, improved outcomes, improved health, evidence-based practices, patient satisfaction, and appropriate costs.
Accountability: All parties are accountable for meeting agreed-upon goals and standards. This ensures that everyone involved is incentivized to work together towards achieving high-quality, cost-effective care. The required collaboration and communication among mental health providers because not all providers cannot treat the sub-populations they same way.
Shared risk models can help drive better health outcomes by promoting cooperation and accountability among stakeholders. They encourage innovative approaches to care delivery, emphasize preventive care, and focus on achieving long-term health improvements rather than short-term financial gains.
Shared risk assessment:
MODA is unwilling to share risk. This includes Moda’s upside risk.
Provider practices have offered to share risk.
What is risk adjustment?
Risk adjustment is a statistical process used in healthcare to account for the underlying mental and physical health status and related risk factors of individuals when determining payment rates, measuring performance, or comparing outcomes across different providers, plans, or populations. The purpose of risk adjustment is to ensure fair comparisons and equitable compensation by considering the varying levels of risk associated with different patients or groups. Accurate data collection is critical for effective risk adjustment. This typically involves gathering detailed patient information from medical records, claims data, or health assessments to identify relevant risk factors. Patients or groups are assigned risk scores based on their risk factors. Higher scores indicate greater expected healthcare needs and costs.
Various risk adjustment models, such as the Hierarchical Condition Category (HCC) model used by Medicare, are employed to calculate these HCC scores. Payment rates to healthcare providers or health plans are adjusted based on the aggregated risk scores of their patient populations. This ensures that providers or plans serving higher-risk populations receive higher compensation to reflect the greater expected costs of care. Risk adjustment is also used to adjust performance metrics, such as hospital readmission rates or patient outcomes, to account for differences in patient risk profiles. This allows for more accurate comparisons across providers or health plans.
Risk adjustment assessment
A Healthplan’s refusal or inability to provide risk adjustments when initiating a measurement value-based payment contract increases Providers’ downside risk and lowers Providers’ upside risk unless they game the contract. This is an important reason why Oregon’s first and value-based payment contracts failed.
What is a cost-benefit ratio?
A cost-benefit ratio (CBR) is a financial metric used to compare the costs of an action or investment to its benefits. It is calculated by dividing the total expected costs by the total expected financial benefits. The CBR provides a quantifiable means to evaluate the economic value of a project, decision, or investment, helping to determine whether the benefits outweigh the costs or vice versa.
The formula for the cost-benefit ratio is:
Cost-Benefit Ratio=Total Costs divided by the Incentive. (Total Cost/Incentive).
If the ratio is less than 1 (CBR < 1), it indicates that the benefits outweigh the costs, suggesting a positive return on investment.
If the ratio is equal to 1 (CBR = 1), it indicates that the benefits and costs are equal, suggesting a neutral outcome.
If the ratio is greater than 1 (CBR > 1), it indicates that the costs outweigh the benefits, suggesting a negative return on investment.
CBR assessment:
Moda Health’s proposal has a CBR<1
Provider practices have a CBR>1
What is the Institute of Internal Auditors (IIA)?
The Institute of Internal Auditors (IIA) is a global professional association dedicated to the advancement of the internal audit profession. Founded in 1941, the IIA provides leadership, advocacy, professional development, and standards for internal auditors worldwide. The organization serves as the primary resource for internal auditing professionals, offering guidance, certification, and educational opportunities.
The IIA develops and maintains the International Standards for the Professional Practice of Internal Auditing (Standards), which provide a framework for performing and promoting internal auditing.
The IIA’s International Professional Practices Framework (IPPF) includes the Code of Ethics, Standards, and Practice Advisories, guiding internal auditors in delivering high-quality services.
While the Institute of Internal Auditors (IIA) is widely recognized as the leading global organization for internal audit certification, other organizations also offer certifications that can be considered equivalent or, in specific contexts, potentially more specialized or relevant.
What is hidden upside risk and its implications?
Hidden upside risk refers to potential positive outcomes or benefits that are not clearly disclosed or are obscured within a contract or business arrangement. In the context of health plans like MODA Health, hidden upside risk means that the health plan may gain additional financial or strategic advantages that are not apparent to other contracting parties, such as providers or patients.
For instance, if a health plan designs a value-based contract in a way that it can significantly benefit from cost savings or performance incentives without transparently sharing this potential with the providers, it creates a hidden upside risk. This could happen if the metrics for performance incentives are set in a way that favors the health plan or if certain savings thresholds are harder to achieve than disclosed.
When is bad faith contracting?
Bad faith contracting occurs when one party to a contract intentionally deceives or misleads another party, fails to disclose critical information, or acts in a manner that violates the agreed-upon terms and principles of fairness. In the context of health care, this can involve:
Misrepresenting the terms or potential outcomes of a contract.
Failing to disclose information that could materially impact the other party’s decisions.
Designing contracts that unfairly benefit one party over another.
Is hidden upside risk an example of bad faith contracting?
Yes, hidden upside risk can be an example of bad faith contracting if it involves intentional concealment or misrepresentation. Here’s how:
Lack of Transparency:
If MODA Health does not disclose the potential for its own significant financial gain from cost savings or performance incentives that are not apparent to providers, this lack of transparency can be seen as acting in bad faith.
Unfair Advantage:
Designing a contract with metrics or thresholds that are entirely under the control of the healthplan rather than negotiated. understood, or agreed upon creates an unfair advantage benefiting the health plan.
Misleading Terms:
If the contract terms are intentionally complex or intentionally vague, making it difficult for providers to understand the full implications, that could be seen as misleading, thus constituting bad faith.
Undermining Trust:
By hiding its potential benefits, the health plan undermines the trust required for a successful partnership. Providers may feel exploited if they later discover that the health plan reaped significant benefits without fair disclosure.
Healthplans can create measurement and value-based payment contracts and assert the contract has value without evidence and expert opinions demonstrating is has value. These contracts have what is called “face validity.” Meaning, that on the face of it, the contract looks and sounds like it has value. The MODA Health contract has high face validity but offers no evidence that the contract is constructed in a way that can protect purchasers, employers, taxpayers, patients, public health or benefit provider practices. In reality, using the perspective of an auditor, Mentor Research Institute asserts that the MODA contract is not accountable to its stakeholders, and that the BHIP contract cannot be managed to ensure there is an equitable benefit to the stakeholders.
MODA Health has not been forthcoming during contract negotiations. They have not discussed the financial value of the contract to themselves, nor provided any risk analysis. Nor has MODA been willing to discuss the weaknesses in the contract, nor provide any requested information that would allow providers to make an fully informed decision. A typical Provider practice is not educated, trained or experienced in measurement and value-based provider practices. Because of MODA’s greater resources and the power differential, they have the responsibility to fully inform provider practices, especially as part of their contract negotiation. Fee-for-service contracts (which are take-it-or-leave-it) do not require this. Value-based contracts absolutely require this because the nature of those contracts is that they are are unstable and likely to fail. The MODA contract most definitely has a “hidden” value to MODA. (i.e., a marketing advantage and a hidden upside risk estimated at nearly 100 million dollars). The contract is detrimental or has no value to Provider practices because MODA does not want to share their upside risk. And the MODA Provider BHIP contract creates a high downside risk and negligeable upside risk.
What are 9 requirements missing from the MODA measurement and value-based payment contract?
Independent, certified internal auditors define 9 requirements to manage the risk for business operations which involve Healthplan contracting with more than one Provider practice. MODA Health is unwilling to discuss and consider the 9 requirements. The contract cannot be managed to the benefit of all stakeholder without these requirements.
Nine deficiencies in the MODA Health measurement and value-based payment contract:
Lack of Transparent Shared Values: Shared values are essential for fostering trust and collaboration between health plans and providers. The Moda behavioral health contract does not discuss transparent shared values, which can lead to misaligned goals and a lack of unified approach in care delivery. Without a strong foundation of shared values, parties may prioritize different outcomes, leading to conflicts and inefficiencies that can compromise the quality of care and patient satisfaction.
Lack of Transparent Shared Objectives: Value-based contracts require clearly defined objectives to guide efforts and align strategies. The Moda contract lacks widely generally accepted objectives. This absence makes it difficult for providers to understand what is expected of them and how their performance will be measured. Without clear objectives, providers may struggle to align their practices with the contract’s goals, resulting in inconsistent care delivery and poor patient outcomes.
Lack of Transparent Shared Controls: Effective controls are necessary to ensure that processes function as intended and to prevent fraud, errors, and non-compliance. The Moda contract does not include robust controls for patient confidentiality, treatment guidelines, or financial management practices. This gap increases the risk of operational failures and non-compliance with regulatory requirements. Ineffective controls can lead to mismanagement, financial losses, and compromised patient care.
Lack of Transparent Shared Key Indicators of Success: Key indicators of success are crucial for evaluating performance and outcomes. The Moda contract does not specify clear measures for patient satisfaction, therapist-provider alliance, increased quality, improved treatment outcomes, and appropriate costs. Without at least some of these indicators, it is impossible to monitor the effectiveness of a value-based payment model. Providers do not have the necessary feedback to improve their practices, and a Healthplan cannot accurately assess the impact of their initiatives, leading to missed opportunities to improve value and to poor patient outcomes.
No Tests of Design: A test of design evaluates whether controls are appropriately designed to achieve their objectives. The Moda contract does not undergo rigorous tests of design, which means potential flaws and weaknesses in the contract’s structure remain unaddressed. Without these evaluations, the contract is likely to contain design flaws that hinder its ability to meet its goals. These flaws can lead to operational inefficiencies, increased risks, and ultimately, failure to deliver the intended value.
No Tests of Effectiveness: A test of effectiveness evaluates whether controls are operating as intended. The Moda contract lacks such tests, making it impossible to confirm if the implemented controls are functioning correctly. Without testing effectiveness, there is no assurance that the contract’s measures are achieving their objectives. This oversight can result in persistent issues, undetected errors, and a failure to realize the benefits of the value-based model.
Insufficient Administrative Support and Training: Providers need adequate administrative support and training to adapt to new value-based payment models. The Moda contract does not provide sufficient resources or guidance for providers to navigate or negotiate the complexities of the new system. This lack of support can lead to misunderstandings, incorrect implementation of contract terms, inability to respond effectively to differing population case-mix severities, and increased administrative burdens. Providers who are ill-informed may sign contracts they otherwise would not if the Healthplan withholds the necessary information to make an informed decision (i.e., the contract was negotiated in bad faith with unfair dealings). Providers may feel deceived, become frustrated and disengaged, leading to decreased participation and poor performance.
Unrealistic Financial and Operational Expectations: Value-based contracts must balance financial incentives with realistic expectations for providers. The Moda contract sets financial and operational expectations that are not aligned with the realities of mental and behavioral health services. Providers may find it difficult to meet these expectations without compromising the quality of care. This misalignment can result in financial strain, reduced provider participation, and ultimately, failure to achieve the desired outcomes.
Absence of Collaboration and Communication: Successful value-based contracts require ongoing collaboration and open communication between Healthplans and providers, and among Provider groups which are sharing both risk and rewards. The Moda contract does not facilitate regular interactions, feedback loops, or collaborative problem-solving among provider groups. This lack of communication can lead to misunderstandings, unresolved issues, and a disconnect between the health plan and providers. Provider groups will not have the ability to share concerns, targets, strategies and effectiveness of their efforts. Effective collaboration and conversation is necessary to adapt to changing circumstances, address challenges, and continuously improve care delivery.
Without these requirements, the Moda Health measurement and value-based contract is an uncontrolled experiment, and if anything goes wrong, there is no transparent, agreed upon, accountable pathway to take corrective action in timely manner.
What is an unenforceable contract for measurement and value-based payment contract?
An enforceable measurement and value-based contract ensures that all key elements of a valid contract are met: clear offer and acceptance, mutual consent, consideration, capacity, legality, possible performance, clear terms, proper documentation, compliance with formalities, and enforceability clauses. These elements provide a framework for transparency, accountability, and collaboration, ensuring the contract serves its intended purpose and benefits all parties involved.
In contrast, an unenforceable contract fails to meet one or more essential elements. It might include vague terms, lack mutual consent, is based on illegal purposes, or be impossible to perform. Such contracts lack the necessary clarity and legal grounding to hold parties accountable, leading to disputes, legal challenges, and failure to achieve the intended outcomes of the value-based payment model. The absence of enforceability clauses further complicates the resolution of conflicts, undermining the contract's effectiveness and trustworthiness.
An unenforceable contract is voidable. Proving that contracts are unenforceable is not the solution. Ensuring that a contract is enforceable and not voidable supports a collaboration and removes distrust and contract “gaming”. The goal is to increase enforceability and reduce the risk of gaming so that Oregon can move toward increased quality of care and improved outcomes. It is important to increase enforceability and reduce voidability before contracts are offered. A contract that is voidable is unlikely to be challenged because providers avoid conflict. A voidable contract that is not challenged will still have a range of negative effects.
Is there a way to visually represent the inherent risk of harm in the Moda measurement and value-based contract? Yes!
To answer this question, Internal Auditors must create what is called a “Bubble Map” or a “Heat Map”. To do that, the internal auditor would need to conduct a “risk-impacting objectives analysis”, a “risk control matrix” and “residual risk analysis.”
What is a risk-impacting objectives analysis?
A risks-impacting objectives analysis (RIO) is a systematic process used to identify, assess, and prioritize risks that could affect the achievement of an organization's objectives. This type of analysis involves examining potential risks and evaluating their potential impact on the organization's ability to meet its strategic, operational, financial, or compliance goals. A risks-impacting objectives analysis is a critical tool for integrating risk management with organizational strategy, helping to ensure that potential threats are systematically identified, assessed, and managed to safeguard the achievement of key objectives.
What is a risk control matrix?
A risk-control matrix (RCM) is a tool used in risk management to document and assess the relationship between identified risks and the controls implemented to mitigate those risks. It serves as a comprehensive framework for evaluating the effectiveness of controls in managing risks, ensuring that all potential threats to the organization's objectives are adequately addressed.
What is a residual risk analysis?
Residual risk analysis is a critical component of effective risk management. It helps organizations understand and manage the risks that remain after implementing controls, ensuring a comprehensive and proactive approach to risk management. By continuously monitoring and assessing residual risks, organizations can enhance their resilience and achieve their strategic objectives more effectively.
Residual risk analysis is a process of identifying and assessing the remaining risk after implementing controls and mitigation strategies. It aims to determine the level of risk that persists despite the efforts to manage or reduce it. These could be risks that were not entirely eliminated by the controls or new risks that emerged due to changes in the environment or operations. This analysis helps organizations understand the effectiveness of their risk management strategies and identify areas where additional measures may be needed. Residual risk analysis ensures that all risks are identified and managed, not just those which are initially apparent. It provides a more comprehensive understanding of an organization’s risk profile.
Continuous monitoring of residual risks and the effectiveness of controls helps ensure that risk levels remain within acceptable limits and that new risks are promptly identified and managed. The analysis provides valuable insights for decision-making, helping organizations prioritize resources and efforts to manage risks effectively. Monitoring identifies operational risks that persist despite process improvements and administrative controls.
What does a Top Risk Review Heatmap (bubble map) illustrate?
A top risk review bubble map analysis was created based on what information we could get from Moda Health during contract negotiations.
Figure 1. “Top Risk Review Bubble Map” for Moda Health’s measurement and value-based payment contract for mental and behavioral health services.
The Figure 1. graphic titled "Top Risk Review Bubble Map" illustrates the risk landscape for Moda Health using a bubble map to display the relationship between the likelihood and significance of various risks. The Y-axis represents the likelihood of risks occurring, ranging from "Rare" at the bottom to "Almost Certain" at the top, while the X-axis represents the significance of risks, from "Insignificant" on the left to "Catastrophic" on the right. The heatmap uses color coding to indicate the level of concern: green for low risk, yellow for moderate risk, orange for high risk, and red for critical risk.
The risks identified include short-term thinking and patient overutilization, both located in the yellow zone, indicating moderate risk with high likelihood but moderate impact. Asymmetric information is positioned in the red zone, indicating a critical risk with high likelihood and more than moderate negative impact. Patient under-utilization is found in the orange zone, suggesting a high risk with probable likelihood and more than moderate negative impact. Other risks such as non-agreement on measures and metrics, failure to align value/incentives, provider overtreatment, and inability to reconcile agreements are also placed in the yellow and orange zones, indicating varying degrees of moderate to high risk. Low-risk areas, such as data ownership and financial risk, are positioned in the yellow zone, indicating moderate risks that can significantly impact objectives.
The graphic highlights that the high-risk areas, indicated by yellow, orange, and red zones, need additional controls as they are likely to lead to failure. Effective controls (i.e., risk management strategies) are essential to mitigate these critical issues and ensure the viability of value-based payment contracts. Viable contracts should design controls that keep risks within the green zone, thereby minimizing potential negative impacts on objectives.
What are contracts of adhesion (take-it-or leave it contracts)?
Contracts of adhesion, or "take-it-or-leave-it" contracts, are standard form agreements presented by one party with more power (such as health plans) to another party with less power (like healthcare providers) with little room for negotiation. In the healthcare industry, such contracts pose several issues. Providers frequently find themselves unable to negotiate terms, leading to acceptance of unfavorable conditions that may not align with their practice needs. This reinforces the power imbalance between health insurers and individual or small group provider practices, as insurers have the leverage to dictate terms due to their size and control over patient access.
Take-it-or-leave-it contracts can result in financial pressures for providers, including lower reimbursement rates, complex billing requirements, and increased administrative burdens, which can strain their practices. The financial stress and restrictive clauses within such contracts can inadvertently reduce the quality of care, when providers choose to see more patients for less time to maintain financially viable practices. Detailed and complex administrative requirements detract from patient care time, contributing to provider dissatisfaction and burnout. Moreover, these contracts may contain restrictive clauses that limit providers' autonomy and their ability to make independent patient care decisions, leading to legal and ethical concerns. This can further limit patient choice and access to care by reducing the number of providers within a network, particularly providers capable to serve culturally diverse populations.
To mitigate these issues, healthcare providers are advised to seek legal counsel, obtain expert guidance to challenge Healthplans before signing such contracts, and to seek legislative solutions that would create regulations ensuring good-faith and fair dealing in contract negotiation. Collective bargaining and legislation that prohibits unenforceable contracts would give providers practices greater leverage and protection.
What Happens if Unfair, Bad Faith, Ambiguous, Ill-Defined, Unethical, or Voidable Provisions in Value-Based Contracts go Unchallenged?
Value-based payment (VBP) contracts are experimental, with nearly half of them failing. VBP contracts require collaboration and transparent shared values, objectives, controls, rigorous testing of design and effectiveness, and key indicators of success. Unfair, bad faith, ill-defined, unethical, or voidable provisions compromise outcomes, quality of care, and the financial stability of providers. Moreover, such provisions create legal and compliance risks, imbalance contractual power, and negatively impact contractual values and objectives.
When this happens, health plans and provider practices cease to collaborate. If health plans exploit provider practices, providers will adapt by “gaming” the contract. When health plans use contract policies to force compliance, providers will find ways to circumvent these measures. Measures designed to control provider or patient behavior become less reliable and valid. Ethical informed consent for measurement and treatment can have a chilling effect on patients. Providers may ethically justify services that health plans want to curtail.
The more unethical the contract, the more providers disengage from the health plan. Providers may also limit their case-mix severity to exclude patients requiring a level of care and resources that the provider practices do not have. Instead of collaborating and managing contracts for the shared benefit of stakeholders, health plans historically audit providers using tactics such as intimidation, coercion, and threats of clawbacks as penalties for non-compliance. This reinforces the belief that health plans are unethical and profiteering. Health plans are no longer given the benefit of the doubt, and their brand is damaged among provider practices, who stop referring to each other except as a professional favor.
What is “Gaming”?
Health plans engage in gaming primarily to optimize financial returns, manage risks, maintain a competitive advantage, meet regulatory requirements, and improve administrative efficiency. While these practices can benefit health plans financially, they often undermine the goals of value-based contracting by distorting performance metrics, eroding trust, increasing costs, and potentially compromising patient care quality. Addressing these issues requires transparent, fair contract practices, independent oversight, and a focus on genuine improvements in patient outcomes.
Health plan gaming refers to the manipulation or strategic exploitation of value-based contract terms, performance metrics, and reporting mechanisms to maximize financial returns or achieve favorable outcomes. Provider gaming involves manipulating or exploiting contract terms and performance metrics to maximize or protect financial returns, often justified as improving patient health but not necessarily public health. Examples include cherry-picking healthier patients, upcoding the severity of diagnoses, undertreating patients with severe problems, and delaying or manipulating the timing of services to meet specific access targets.
Psychologically, cognitive dissonance and moral licensing may drive providers to rationalize gaming as necessary to protect their practice and patients. Gaming also leads to inefficiencies and increased costs, counteracting the cost-effectiveness goal of value-based contracting. Additionally, moral injury to providers decreases their morale and increases burnout, ultimately reducing care quality and continuity.
What is healthcare fraud? How might this apply to the Moda measurement and value-based payment contract?
Healthcare fraud involves the intentional deception or misrepresentation made by an individual or entity in a healthcare transaction that could result in unauthorized benefit or payment. The misrepresentation does not need to be intentional. This can include false claims, kickbacks, misrepresentation of services, and fraudulent billing practices. When a health plan misrepresents the reliability, validity, usefulness and value of its contracts to secure funding from a state or federal government, and these contracts are based on misleading and unethical terms offered to providers of Medicare, Medicaid, or other taxpayer funded healthcare programs, it constitutes healthcare fraud.
By misrepresenting contract terms, requirements and deliverables necessary to deliver a product, a Healthplan is submitting false claims if based on false information. This can include inflated claims about the feasibility of value-based care requirements or the scope of services provided. Additionally, offering misleading contracts to providers, which causes them to bill government programs based on false premises, further extends the fraudulent activity. Providers may knowingly or unknowingly submit claims for services under contract terms that are not accurate or ethical. A Healthplan's actions thereby lead to the improper allocation of taxpayer funds, diverting money from legitimate healthcare services to fraudulent (in effect) schemes.
Without regulation and controls, Healthplans can falsely represent the effectiveness, compliance, and outcomes associated with their value-based contracts to secure funding and or public contracts. Misrepresentation can include exaggerated claims about their adherence to industry standards, and the benefits they provide, which can be used to justify receipt of state or federal funds. That Healthplan might offer contracts to providers that are inherently misleading, promising certain benefits or reimbursement rates that are not fully delivered. Frustrated, demoralized, and disengaged Provider practices will submit claims based on these false premises, affecting the integrity of claims submitted to Medicare, Medicaid, and government employers. Additionally, Healthplans may manipulate data and performance metrics to encourage Provider practice participation offering a false profit incentive. By withholding comprehensive data collection, such as Provider practice feedback, and presenting skewed information, Healthplans can create a false narrative that supports their funding claims and the incentives awarded to providers, impacting the negotiations and contractual agreements with providers and government programs.
What we can conclude about the Moda contract is that it systematically holds every benefit to Moda secret, and that risk is disproportionately placed on Provider practices to the detriment of patient and public health. The answer is not definitive, but this conclusion is based on the information that is not forthcoming. So…the risk of fraud is probable to almost certain.
Solutions
Why is legislation necessary?
A Legislator Draft Request created by Mentor Research Institute (MRI) and the Independent Mental Health Practices Alliance IMHPA) provides evidence and reason for concern that Moda Health has created the appearance of value-based contracts to help win or maintain contracts funded by taxpayer dollars. Despite presenting their contract as value-based, there is substantial evidence to suggest that the contracts will fail because MODA is turning a blind eye to the necessary standards, requirements and industry guidance brought to their attention. The Moda value-based contract lacks the necessary operational framework and requirements for success. Moda’s use of metrics and data does not align with a reasonable, good faith and fair implementation of a measurement and value-based payment contract. Intentionally or not, this ill-defined misleading or deceptive representation could result in substantial misuse of taxpayer funds, and ultimately fail to deliver any proposed increase in care quality and improved health at a reasonable cost.
Legislation is necessary and appropriate for several reasons
Protecting Taxpayer Funds: The concerns raised by the Mentor Research Institute (MRI) and the Independent Mental Health Practices Alliance (IMHPA) suggest that Moda Health's contracts may misuse taxpayer funds. Legislation can establish independent oversight and accountability measures to ensure taxpayer money is spent effectively and responsibly.
Ensuring Quality of Care: Without proper standards and frameworks, value-based contracts can fail to deliver improved care quality and health outcomes. Legislation can mandate the necessary operational frameworks and standards to ensure that Healthplans genuinely improve care quality.
Promoting Fair Practices: Legislation can address the issue of Healthplans presenting misleading or deceptive representations of their contracts. By setting clear definitions and requirements for value-based contracts, legislation can promote fair practices and prevent health plans from exploiting loopholes.
Enhancing Transparency and Accountability: The lack of alignment with industry standards and the potential for deceptive practices highlight the need for greater transparency and accountability. Legislation can require health plans to provide clear and accurate information about their contracts and their performance metrics.
Preventing Exploitation and Gaming: The issues of gaming and manipulation of performance metrics can undermine the goals of value-based contracting. Legislation can include provisions to prevent such practices and ensure that both health plans and providers operate in good faith.
Supporting Independent Oversight: Independent oversight is crucial to monitor and enforce compliance with value-based contract standards. Legislation might establish independent bodies or strengthen existing ones to oversee the implementation and performance of these contracts.
Balancing Contractual Power: Legislation can help balance the power dynamics between Healthplans and Provider practices, ensuring that contracts are negotiated fairly and that providers are not unduly pressured or exploited.
By addressing these points through legislation, the government can ensure that value-based payment contracts achieve their intended goals of improving care quality and patient outcomes while safeguarding public funds and maintaining trust in the healthcare system.t is necessary to ensure measurement and value-based payment contract are successful?
Provider practice might consider becoming educated and trained to understand over 281 issues that must be understood and used to negotiate and manage measurement and value-based payment contract. Understanding what is necessary to ensure the success of the Moda measurement and value-based contract is crucial because it highlights the importance of creating a operation framework that can genuinely improve mental and behavioral health services. The proposed solution ensures that all parties involved, including Moda Health, and primary and secondary stakeholders, are aligned with Moda’s goals and strategies, leading to better patient outcomes, cost management, and overall service quality. To ensure the success of the contract, Moda and Provider practices must collaborate closely toward creating transparent shared values and objectives, establishing effective controls, and agreeing on key indicators of success. Moda must also perform rigorous tests of design and effectiveness to ensure that all processes are functioning as intended and in a timely manner should contracts and policies require changes.
The biggest challenge in ensuring the success of the Moda contract will likely be achieving and maintaining effective collaboration and communication between all stakeholders. This involves aligning incentives, managing diverse patient needs, and balancing financial and operational expectations. Additionally, the lack of administrative support, training for providers, unrealistic expectations, and ongoing collaboration and problem-solving are significant hurdles. The complex nature of mental and behavioral health services, combined with the intricate requirements of value-based payment models, further complicates these efforts. To navigate these challenges, it is essential for all parties to remain committed to transparent shared values and objective, controls, tests of design (TOD) and tests of effectiveness (TOE), key predictors of success (KPI), as well as commitment continuous improvement.
Why must Healthplan employ the services of an independent certified internal auditor (CIA)?
Hiring an independent certified internal auditor (CIA) for health plans contracting with providers of mental and behavioral health services is highly beneficial. It would solve virtually every problem and challenge Moda will face. Management is driven by reduction of waste and increasing profit. Independent certified internal auditor are driven to provide accurate and useful information which can be used by management and stakeholder to make decisions and take corrective actions. Independent CIAs are “truth tellers.” Independent CIAs ensure compliance with regulatory requirements and industry standards, such as those from the Centers for Medicare and Medicaid Services (CMS) and the National Commission on Quality Assurance (NCQA), helping to mitigate legal risks and uphold patient confidentiality, accurate billing, and quality care targets. They promote transparency and accountability, building trust among stakeholders through objective assessments and transparent audits. CIAs facilitate effective communication and collaboration between providers and health plans, identifying areas for improvement and fostering constructive dialogues. They improve financial performance and operational efficiency by identifying inefficiencies and optimizing revenue cycles. Additionally, CIAs support data-driven decision-making, and practical services, by leveraging data analytics to provide valuable insights. Their regular audits foster a culture of continuous improvement, not just financial, and help mitigate risks related to patient well-being safety, data security, and financial integrity, ensuring high ethical standards are maintained in all aspects of healthcare delivery and financial management.
The qualifications for an Independent Certified Internal Auditor in health plan contracting for mental and behavioral health services include a combination of educational credentials, professional experience, certification, and adherence to ethical standards. CIAs must have at least a bachelor’s degree, relevant experience in internal auditing, quality assurance, or risk management, and must pass the CIA exam. They must adhere to the Code of Ethics established by The Institute of Internal Auditors (IIA), maintaining independence and objectivity. CIAs must possess strong analytical and communication skills, have in-depth knowledge of healthcare regulations, mental and behavioral health services, and be capable of developing comprehensive audit programs and engaging with various stakeholders to ensure transparency and accountability. They must understand measurement and value-based payment models and comply with state and federal laws governing healthcare contracts to effectively oversee and evaluate health plan operations and support high-quality mental and behavioral health services.
How and why must the independence of internal audits be ensured?
An independent Certified Internal Auditor (CIA) is pivotal in healthcare contracting, especially in ensuring transparency, compliance, and efficiency in managing contracts between healthcare providers and payers, including insurance companies and government agencies. The healthcare sector's complexity, due to intricate regulations and the critical nature of its services, demands strict adherence to ethical and legal standards, which independent auditors help uphold.
To ensure the independence of CIAs in healthcare contracts, several measures can be implemented. First, employing certified internal auditors who adhere to established professional standards and ethical guidelines is crucial. Structural independence is achieved by having auditors report to an independent board or committee, rather than directly to the management of the entities they audit. Regulatory oversight by a dedicated body can further ensure standards for independence and manage certification processes, including addressing any complaints or breaches of contract, policies or standards of care.
The effectiveness of audits is reduced when their scope is controlled by management. Management might limit the areas that auditors can examine to avoid scrutiny of problematic aspects, leading to incomplete assessments. Transparency suffers as well, as audit findings and recommendations may not be fully communicated to the board of directors or other governing bodies, reducing oversight over critical issues.
This reporting structure can erode trust among stakeholders, including investors, regulators, and employees, who may doubt the integrity of the audit findings if auditors report directly to management. Such distrust can diminish confidence in the organization’s financial statements, compliance reports, and overall governance. Additionally, non-compliance with laws and regulations becomes more likely when auditors are less inclined to report issues, increasing legal risks and potential penalties.
Why must Healthplans adopt an online “ethics point” portal?
An ethics point portal is a secure, confidential system that allows individuals to report unethical behavior, fraud, and compliance issues within an organization, and among originations, as well as with concerned individuals. It ensures anonymity, accessibility, and provides a structured mechanism for investigation and resolution. For value-based contracts in mental and behavioral health services, an ethics point portal enhances transparency and accountability, protecting both providers and patients. It improves contract integrity by detecting and preventing fraud, ensuring compliance with contract terms, and promoting trust among stakeholders. Additionally, it supports ethical decision-making, reinforces adherence to ethical standards, and facilitates continuous improvement through feedback and learning opportunities. Implementing such a portal significantly contributes to the success and sustainability of value-based healthcare models by fostering a culture of ethics and integrity.
Why must contracts be written in plain and understandable language?
Writing contracts and policies in plain, understandable language is crucial for health plan contracting in mental and behavioral health services because it significantly improves comprehension and accessibility for all stakeholders. This is particularly important in this field, where complex jargon can be a barrier to understanding. Simplifying language ensures that patients, Providers practices, and administrators can easily grasp essential details, reducing the risk of miscommunication and errors in care delivery, payments and Healthplan quality and outcome improvement initiative. Clear communication enhances provider and patient engagement and empowerment, leading to better health outcomes. It also supports diverse populations by making information accessible to individuals with varying literacy levels and those for whom English is a second language, ensuring equitable access to care.
Additionally, writing in plain language increases trust and transparency between Healthplans and their members. When terms are easily understood, it fosters a sense of honesty and openness, crucial for building trust, especially in mental and behavioral health, where patients often feel vulnerable. Plain language also facilitates informed consent, ensuring that patients understand their treatment plans, rights, and responsibilities, which is essential for ethical and legal compliance. Moreover, compliance with legal and regulatory standards, such as the Plain Writing Act, helps avoid potential legal issues and maintains the integrity of health plan operations. Plain language contracts streamline the negotiation and implementation processes, leading to cost efficiency and time savings, allowing resources to be more effectively allocated towards patient care.
What are the ethical reasons to legally boycott a Healthplan? A “soft boycott”
Many healthcare providers are engaging in "soft boycotts" of Healthplans based on ethical reasons rather than just financial motivations, as defined in this discussion. Legal advice indicates that boycotting a Healthplan for ethical reasons, such as protesting restrictions on patient care or interference with treatment, can be permissible under antitrust laws, provided it does not aim to manipulate the market. Providers must also consider their existing contractual obligations, as engaging in a boycott while under contract could lead to legal repercussions. A soft boycott, where providers limit their practice to patients they can treat effectively without violating contract terms, is a way to ethically manage their workload and maintain high-quality care.
Providers must carefully consider the ethical and practical implications before initiating a boycott of a health plan. The primary concern should always be patient care, ensuring that any decision does not harm existing patients by limiting their access to services. Providers can communicate transparently with patients about their capacity constraints and refer them back to the health plan for alternative referrals. Public perception is also important, as a well-justified boycott for non-financial reasons might garner support. Before resorting to a boycott, providers should explore all other avenues for resolving grievances, such as negotiations or using dispute resolution mechanisms. Of course that will be difficult if Healthplans do not implement an ethics point portal. Solidarity and collective action, supported by professional associations, can strengthen the ethical justification and effectiveness of a soft boycott.
The concept of a "soft boycott" emphasizes prioritizing self-care and the quality of care for existing patients over taking on new patients. This approach is ethically justifiable as it ensures high-quality care and prevents provider burnout. Provider practices must not be required to carry high case loads with a high case mix-severity. Clear communication and documentation of capacity limits help mitigate legal risks and maintain trust with health plans and patients. Providers should ensure their actions do not systematically deny access to certain groups and that any patient acceptance policies comply with legal and regulatory standards. By managing patient load strategically, providers can balance their well-being with community healthcare needs, maintaining a sustainable practice and upholding their professional obligations.
Discussion Outline for Critical Requirements
I. Introduction
The MODA value-based payment contract for mental and behavioral health services will almost certainly fail due to several critical deficiencies. These include a lack of transparent shared values, objectives, controls, key indicators of success, and rigorous tests of design and effectiveness.
Restricting the average duration of treatment provides net savings. One thousand providers each treating 25 patients per week in the 3 to 14 session pattern can save a Healthplan 18.9 to 34.4 million dollars after paying for psychotherapy services.
II. Importance of Key Components in Value-Based Payment Contracts
1. Transparent Shared Values
Definition and Importance: Shared values between Healthplans and provider practices are essential for fostering mutual trust and collaboration. They ensure both parties are committed to evidence based practices, patient-centered care, increased quality and improved outcome and health at an appropriate cost.
Moda Contract Issue: The Moda contract lacks emphasis on shared values, leading to misaligned goals and a lack of unified approach in care delivery. This absence can cause conflicts and inefficiencies, compromising the quality of care and patient satisfaction.
2. Clear Objectives
Definition and Importance: Clearly defined and transparent objectives set expectations and guide efforts towards common goals. Objectives in value-based payment contracts might include improving patient outcomes, increasing access to care, reducing healthcare costs, and enhancing service quality.
Moda Contract Issue: This absence makes it difficult for providers to understand expectations and measure performance, leading to inconsistent care delivery and poor outcomes.
3. Effective Controls
Definition and Importance: Controls are mechanisms to ensure processes and operations function as intended, preventing fraud, reducing errors, and ensuring compliance with regulatory requirements.
Moda Contract Issue: The contract does not include robust controls for patient confidentiality, treatment guidelines, or financial management practices. This increases the risk of operational failures, non-compliance, and compromised patient care.
4. Key Indicators of Success
Definition and Importance: Key indicators of success are metrics used to evaluate the performance and outcomes of value-based payment contracts, such as patient satisfaction, therapist-provider alliance, increased quality, improved treatment outcomes, reasonable costs, and reduction in hospital admissions.
Moda Contract Issue: The contract does not specify clear metrics, making it challenging to monitor effectiveness and drive improvement. Without these indicators, both Healthplans and providers lack feedback to improve practices and assess the impact on patient well-being.
5. Tests of Design
Definition and Importance: A test of design evaluates whether controls are appropriately designed to achieve their objectives, including assessing control objectives, activities, documentation, and implementation.
Moda Contract Issue: The contract does not undergo rigorous tests of design, leaving potential flaws and weaknesses unaddressed. These flaws can lead to operational inefficiencies and increased risks.
6. Tests of Effectiveness
Definition and Importance: A test of effectiveness evaluates whether controls are operating as intended and achieving their objectives through operational testing, sampling, assessing error rates, and outcome analysis.
Moda Contract Issue: The contract lacks assurance there will be tests of effectiveness, making it impossible to confirm if the controls function correctly. Without this confirmation, persistent issues and undetected errors are likely, undermining the value-based model's benefits.
III. Additional Factors Contributing to Failure
1. Insufficient Administrative Support and Training
Providers need adequate administrative support and training to adapt to new value-based payment models.
Moda Contract Issue: The contract does not provide sufficient resources or guidance, leading to misunderstandings, incorrect implementation, and increased administrative burdens. Providers may become frustrated and disengaged.
2. Unrealistic Financial and Operational Expectations
Value-based contracts must balance financial incentives with realistic expectations for providers.
Moda Contract Issue: The contract sets expectations misaligned with the realities of mental and behavioral health services, causing financial strain and reduced provider participation.
3. Absence of Collaboration and Communication
Ongoing collaboration and open communication are necessary for adapting to changes, addressing challenges, and improving care delivery.
Moda Contract Issue: The contract does not facilitate regular interactions or collaborative problem-solving, leading to misunderstandings and unresolved issues.
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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