Alternative Payment Models for Behavioral Health

1. Alternative Payment Models for Behavioral Health • March 14, 2016 • 12:00 – 1:15 pm ET

2. Welcome • Anne Gauthier • LAN Project Leader • CMS Alliance to Modernize Healthcare (CAMH)

3. Agenda

4. Guiding committee welcome Bill Golden, MD Member LAN Guiding Committee Chair Medicaid Medical Director Network

5. Session Objectives • Learn About • How one health system has incorporated value-based payment approaches in behavioral health to improve quality and population health • Areas where alternative payment approaches have resulted in measurable improvement in member outcomes and supported health care savings • Some of the challenges that inhibit the movement towards alternative-based payments and potential solutions • Engage • Ask your questions of the presenters

6. Poll • Who is in the audience

7. Panel Introductions Andrew Sperling Director of Legislative Advocacy National Alliance on Mental Illness (NAMI)

8. Panel speaker Deborah Adler Senior Vice President, Network Strategy Optum

9. LAN Deb Adler, SVP, Network Strategy, Optum

10. About Optum’s Behavioral Solutions Optum is a collection of technology-enabled health services companies, including the largest managed behavioral health company in the country We work with our business partners to build comprehensive and integrated systems of care that address behavioral health issues in order to improve overall population health • Serving 33 million Americans1 • Serving 59% of the Fortune 100 and 40% of the Fortune 5002 • Largest performance-tiered behavioral health network in the country3 (145,000+ providers nationally) • Staff of 1,100+ licensed Care Advocates and 70+ board-certified psychiatrists4 • Recognized quality leader 1. Membership count conducted by T. Corning, Optum Finance Consultant, on 12/8/15, based on 2016 monthly average of unique contracted lives. 2. Comparison of Behavioral book of business against Fortune 500 listings by G. Chacin on 5/1/13. 3. Based on an Optum competitive study through a national third-party research firm, September 2015. 4. Clinical staff count conducted by K. Keytel, Optum VP of Care Advocacy Clinical Operations, on 11/13/15.

11. Optum Network Priorities Engagement • To become the most respected managed care organization • To treat our providers as important customers and valued resources • To listen and respond to provider’s needs and expectations • To provide feedback to providers to promote improved performance • To facilitate informed decisions through cost and quality transparency • To provide real-time access to the right providers at the right cost Transparency Affordability • To use tools that support a shift towards outcome-based payment models and delivery systems • To use network tiering to support access to preferred providers or places of service • To use network tools to make the healthcare system more engaging, effective and affordable in the local community

12. APM Framework: Where It Fits Population-Based Payment • The Optum APM Model fits in Categories 2, 3 and 4.

13. Our work in the reimbursement continuum Small % of financial risk Moderate % of financial risk Large % of financial risk Fee-for-service Performance-basedContracting Shared Savings Bundled and Episodic Payments Shared Risk Capitation Capitation + Performance-based Contracting Low Accountability Moderate Accountability Maximum Accountability P4P/Shared Savings Contracts with Qualified Facilities and Outpatient Providers (national footprint across all payor types) • SUDS Medication Assistance Therapy (MAT) Providers ACOs, medical-behavioral integration in health homes Examples • DRG • Inpatient • Quality: HEDIS 7-day follow-up; CMS readmission rate for 30 and 90 day (case mix adj) • Cost: Case-mix adjusted ALOS and episode cost • Outpatient • Quality : Case-mix adjusted member reported outcomes (wellness assessment) • Cost: Case-mix adjusted average visits per episode and episode cost • Quality: Readmit rate (case-mix adjusted) – 30 and 90 day • Cost: Case-mix adjusted average visits per episode and episode cost • DRG/Bundled payment methodology • 8 metrics across 6 domains • Care coordination • Care transition • Referral management • Health promotion • Individual support • Family/caregiver support Metrics • 15% to 20% reduction in readmit rates • Ambulatory follow-up rate improved from 3% to 10% Data Analysis in Process • Improved care coordination • 9% increase in adherence to quarterly PCP visits • 4% increase in primary caregiver or peer support linkages Results

14. Achievements in clinical excellence Achievements in Clinical Excellence (ACE) is an extension of our network tiering process that pinpoints and eliminates variation in practices that drive increased costs and poor clinical outcomes • Raises the bar on provider performance with new cost and quality measures and additional tier levels • Allows provider transparency that help providers to improve results (dedicated Optum team conducts monthly review meetings to discuss improvement plans) • Offers transparency to members to guide provider selections • Includes technology to support providers’ achievement of rewards This national program is integrated with our reimbursement models to reward results and encourage providers to advance to higher tiers of performance

15. ACE Metrics Guide Performance-Based Contracting • In our 3rd year of outpatient for providers achieving two-star rating (effectiveness first and supplemented with efficiency ratings) • Enhanced facility pay-for performance initiative to tie to enhanced facility metrics under ACE – Achievements in Clinical Excellence Clinician Metrics Facility Metrics Quality Severity-adjusted effect size from the Wellness Assessments Cost Case-mix-adjusted average number of visits Average cost per episode Quality 30-day readmission rate Risk-adjusted 30-day readmission rate Follow-up after mental health hospitalization (HEDIS) Peer review rate Cost Case-mix-adjusted average length of stay Spending per beneficiary

16. ACE increases referrals to the best providers and rewards them for excellence ACE and Pay for Value Member Transparency • Preferred clinicians “star-rated” for quality can earn a second star rating for meeting cost-efficiency standards • Launched mid-2015 – Preferred Eating Disorder programs: High-performing eating disorder inpatient and residential programs notated with • Expanding in 2016– Express Access Sub-network in pilot market – National expansion of providers contractually committed to meet a more stringent access standard of one week for routine appointments • Coming in 2016 – Preferred Substance Use Disorder providers Pay for Value/Transparency Pay for Value Only Future Rollout • Reward providers for increased outcome-based results and improved efficiencies • High performing outpatient providers achieving quality and cost metric thresholds earn increased reimbursement; inpatient providers incentivized to improve key quality and efficiency metrics

17. NETWORK STRATEGY • We use “heat maps” of episode-cost data and tiered network providers to identify underserved regions • 1 • Expand the recruitment of Medication-Assisted Therapy providers (e.g., suboxone, vivitrol) as an alternative to inpatient and residential programs • Expand the recruitment of Licensed Alcohol and Drug Counselors (LADAC), increasing specialized providers • 2 • Enhance our use of age-specific peer support groups (e.g., recovery coaches), leveraging new certification protocols from The Association for Addiction Professionals • 3 • 4 • Develop Preferred Substance Use Disorder Provider Network directing members to the best providers • 5 • Decrease Inappropriate Drug Screening (e.g. excessive testing and excessive charging for lab tests) • Incent providers to improve member outcomes/reduce costs via alternative reimbursement approaches, bundled episodic payments 6 • Example of MAT network expansion

18. Challenges – Solution Identification in process • Lack of an industry-standard outcome tool (Optum working with ABHW – Association for Behavioral Health and Wellness to encourage standardization) • Low number of patients/admits; many low-volume providers • Lack of assignment of members challenges use of capitation (Identifying other methodologies to share risk) • Provider readiness to manage risk and challenges to achieve metrics

19. Challenges and Solutions for Performance Based Contracting • Meeting the 7 and 30 day follow up metrics (Bridge programs) • Appointment “no shows” (Appointment Reminders) • Member Engagement/Community Tenure (Peer Services/Recovery and Resiliency Toolkit) • Outlier physician practice patterns (Attending MD data share) • Administrative Burden (Review Online)

20. TOOLS WE CAN USE TO HELP IMPROVE ACE SCORES The benefit of ACE is that it gives us insight into emerging trends and indicates for us how we might help intervene Bridge-on-Discharge is a facility-based program in which the facility’s clinical staff provide a session to a member immediately following discharge from the facility’s acute inpatient unit. Once variations in practice patterns are identified, we have a number of tools in the tool box to foster improvement Peer Coaches have successfully managed their own recovery, and so they understand and can help other members in ways no one else can. Their goal is to help members return to the community sooner and reduce relapse or readmission. Appointment Reminder Program takes advantage of today’s instant communications to help improve compliance and follow-up rates. It has also been shown to decrease no-show rates and increase patient (and provider) satisfaction. It’s a free program to both providers and members.

21. TOOLS WE CAN USE TO HELP IMPROVE ACE SCORES The benefit of ACE is that it gives us insight into emerging trends and indicates for us how we might help intervene Tools cont. Once variations in practice patterns are identified, we have a number of tools in the tool box to foster improvement Attending MD Data ShareProvides a collegial ongoing forum that enables Optum MD’s to dialogue and share data with facility attending MD’s. The goal is to increase clinical understanding and alignment between Optum and our ACE facilities ReviewOnline Is a quick and efficient option for submitting clinical information securely online, ReviewOnline reduces person-to-person contact, which allows providers to focus more on members and helps relieve operational burden and preserve enterprise resources. Recovery & ResiliencyOptum offers a host of resources designed to engage and activate consumers so that they may more fully participate in the advancement of their own treatment and continued wellness.

22. Panel speaker Henry Chung, MD Vice President and Chief Medical Officer Montefiore Care Management Organization Medical Director Montefiore Accountable Care Organization

23. Value Based Payments in Behavioral Health for Montefiore ACO Henry Chung, M.D. Chief Medical Officer Montefiore Care Management And Associate Professor of Clinical Psychiatry Einstein-Montefiore College of Medicine

24. Montefiore Medical Center • Recent merger with Albert Einstein College of Medicine to form Montefiore-Einstein School of Medicine • 6 acute care hospitals plus a children’s hospital on 5 campuses • 1,900 beds: 97,000 admissions • 6 emergency departments: >350,000 visits • 3,900 providers • 22 community primary care centers: • >1 million visits • Home care agency: 500,000 visits • Nursing home: 150 beds • School of nursing

25. The Bronx 1.4 million residents in the poorest urban county in the nation Median household income $34,000 54% Hispanic, 37% African-American High burden of chronic disease Per capita health expenditures 22% higher than national average 80% of health care costs paid by government payers

26. APM Framework: Where It Fits Population-Based Payment • The Montefiore ACO APM Model fits in Category 4 • Rationale: • Long history of managing financial risk in various Category 2 and 3 arrangements • Provides best alignment among payor partners and delivery system to meet triple aim objectives • Provides flexibility in using evidence based approaches not easily supported in FFS

27. Overview of Value-Based Payment Arrangements at Montefiore Goal: To reach 1,000,000 covered lives

28. Montefiore IPA, BIPA & CMO • Montefiore IPA • Established in 1996 • Wholly-owned subsidiary of Montefiore Medical Center • Performs care management delegated by health plans as well as other administrative functions, (e.g. claims payment, credentialing) • Over 1,200 staff • Formed in 1995 • MD/ Hospital Partnership • Contracts with managed care organizationsto accept and manage risk • Supplies network of par providers committed to cooperation in care improvements • 4000+ providers • 2,691 physicians • 73 psychiatrists • 78 BH licensed providers • BH Clinics

29. Montefiore Behavioral Care Management: University Behavioral Associates • Founded in 1996 by the Department of Psychiatry at Albert Einstein College of Medicine and Montefiore Medical Center • 200,000 covered lives at full financial risk • Ensures easy access to quality mental health & substance abuse services • Provides utilization management, case management and quality management • Administrative management: provider relations, credentialing, and claims payment through the Montefiore Care Management Organization

30. UBA Network and Behavioral Care Management Program • Provider Network composed of both employed Montefiore Providers, Community Providers, and BH clinics • Network Preferred Providers accept case based payment upon completion of initial evaluation • 24/7 clinical referral line coverage including access to clinical staff to direct members in crisis to necessary • Clinical phone triage to assist member access to appropriate level of care • Provides utilization management and identifies high risk members for ongoing care management.

31. UBA Case Management Activities • Identification of high risk members who would benefit from ongoing care management • Case Management stratification process includes: • Post discharge follow up on all admissions • Urgent Care Management • Complex Case Management • Health Home (NYS Medicaid Complex) • Health And Recovery Plan (Medicaid SMI) Case Management • Co-Management of behavioral health and medical case management

32. Outcomes: Reduction in Admissions

33. Outcomes: Improvement in Depression Scores

34. Outcomes: Post Discharge Followup Performance Comparison

35. Panel speaker Don Fowls, MD President Don Fowls and Associates

36. Alternative Payment Models and Behavioral Health Mercy Maricopa Integrated Care Don Fowls, MD President, Don Fowls and Associates LAN Learnings March 16, 2016

37. Why Now? • Payment models are misaligned • With member outcomes • Among providers and payers • Makes integration very difficult • Makes managing high cost, high needs members impossible • Resulted in high cost care delivered inefficiently with poor or unknown outcomes • It is virtually impossible to improve healthcare without transforming how it is reimbursed

38. Value Based Purchasing (VBP): What is it? HealthCare.Gov Defn Linking provider payments to improved performance by health care providers. This form of payment holds health care providers accountable for both the cost and quality of care they provide. It attempts to reduce inappropriate care and to identify and reward the best-performing providers. Value • What someone is willing to pay for a good or service • A consideration of quality and price • Value = Quality/Price • Value = Outcomes/Dollars spent for care and services • Purchasing services in ways that optimize results for dollars spent and produces value for the member and customer

39. APM framework: Where It Fits Population-Based Payment • The Mercy Maricopa Integrated Care APM Model fits in Category 2,3, and 4.

40. Value Based PurchasingA continuum

41. Value Based PurchasingThe Challenge in Maricopa County • Historic fee for service and block payment system • Very siloed healthcare system • Nonintegrated data at the outset • Delivery system lacked infrastructure and financial stability to take risk or manage care • Conclusion: crawl before you walk, walk before you run • Strategy • Start with pay for performance • Move to bundled payments for identified conditions • Consider capitation

42. Pay for Performance • A portion of potential payment is tied to performance on defined measures centering on access, quality, satisfaction and utilization/cost. • Bonuses may be paid for meeting performance goals – use of the “carrot,” not the “stick.” • Performance measures • Initially structure, process and outcome • More focus on outcome over time • Facilitate integration • Manage high cost, high needs members • Include reducing unnecessary ED and inpatient stays

43. Initial Step in AZ Pay for Performance – Integrated SMI Adults • Implemented the first value based contracts:  • Community Bridges – Forensic ACT (effective August 2014) • Southwest Network – ACT (effective November 2014) • Partners in Recovery – Medical ACT (effective February 2015) • Circle the City – ACT (effective May 2015) • Assurance – fully integrated clinic (effective August 2015) • Performance Measures • 10% Reduction in inappropriate emergency room use for assigned members • 10% Reduction in readmission rates • 10% Increase in employment • 10% Increase in housing rates • 10% Increase in PCP visits

44. 3 – Way Contracting P4P Non-Integrated Non-SMI Adults PROVIDER

45. Pay for Performance Advantages • A way to get started • Minimum risk to safety net • Does not necessarily require major changes or investments in infrastructure • Targets desired results and can evolve over time • Additional dollars for good performance Disadvantages • Focused on one provider, not a network or system of care, and does not align incentives • Does not as strongly support integration and managing high cost, high needs members • More narrow focus on performance measures, not the whole person or population • Less adaptive to continually improving quality and outcomes or saving costs • Less flexible

46. Bundled Payments • An opportunity to align incentives for providers serving the same members and conditions. • Captures all units of service and costs from all providers for a specific condition. • Bundles these into a case rate payment over a period of time that may be related to a cycle of care. • All payments to all providers come from this bundle • Performance and outcomes measures are used to identify and continually improve best practices, refine the bundling model, and add bonuses or penalties based on performance. • Over time centers of excellence are identified for referral. • Potential conditions for bundling payments derive from the data based on those receiving services

47. Bundled payments Advantages • Organizes around conditions to impact • Focuses on member outcomes • Aligns financial incentives • Aligns clinical, operational, and financial components • Supports integration and management of high cost, high needs members • Flexibility • Uses data, measures outcomes, and seeks to continually improve • Supports development of centers of excellence and systems of care Challenges • Focuses only on special need or population – what about the rest? • Counting units and costs under block payment • Historically siloed data that is not shared • Resistance to change • Potentially undermining the safety network • Managing cash flow • Members choosing different providers • Going too fast

48. Capitation • A set amount of money paid per member per month (PMPM) for each member assigned. • Provides all reimbursement for services, administration and margin from the PMPM. • The provider is at risk if costs exceed revenue and can gain if revenue exceeds cost. • Comparison with bundled payments • The methods to develop are similar. • Capitation applies to a total population, not just the specific bundles • Payment is PMPM • A greater degree of risk and reward • Bundles for specialty programs, capitation for systems and regions • Successfully deployed in parts of the country • California • Integrated health systems like Intermountain

49. Capitation Advantages • Management at the local level where care is provided • Covers a population • Guaranteed volume and income • Money follows the member and establishes a relationship w patient • Flexibility • Less unnecessary admin burden • An incentive to continuously improve quality • Engages the provider and fosters practice development and expansion • Better payer relationships • Less overtreatment Disadvantages • Providers at risk may fail and in public systems compromise the safety net • Incentive to provide less care • Potentially less flexibility for members • Certain needed services may get undervalued, eg, BH • Must have the ability to accept and manage risk • May incent street underwriting

50. Thank You! Don Fowls, MD Don Fowls and Associates 3260 N Hayden Rd. Suite 105 Scottsdale AZ, 85251 djfowls@aol.com C: 602-309-2582