Value Based Contracting

1. Value Based Contracting Alice Farrar, Chief of Employment Services and Program Development, DVR Stacy A. Smith, Adult Mental Health Team Lead, DMHDDSAS April 25, 2019

2. Session Objectives • Define Value Based Contracting/Purchasing, compared to fee for service • Identify the benefits and risks of value based contracting/purchasing • Review one potential value based contracting/purchasing scenario for IPS MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

3. Value Based Purchasing- What’s the big deal? Chee TT, Ryan AM, Wasfy JH, Borden WB. Current State of Value-Based Purchasing Programs. Circulation. 2016;133(22):2197–2205. doi:10.1161/CIRCULATIONAHA.115.010268 Purchasing a lot of something that the value might be good…might not be good…. Purchasing something where the outcome is clearly defined … MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

4. Value Based Purchasing- Lessons from Arizona • The Arizona Behavioral Health Payment Reform Toolkit identifies the following four elements for successful value based purchasing: • 1. Standardized Performance Measurement • 2. Accountable Payment Models • 3. Pay for performance • 4. Balancing the Funding Portfolio • http://azpaymentreform.weebly.com/value-based-purchasing-basics.html MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

5. Why NC, and why now? • Medicaid Transformation! • Value based purchasing (VBP) is a requirement of Standard Plans (SPs) • Six months after SPs have been awarded, they are to have an initial VBP assessment and strategy • There are clear expectations regarding how much of medical expenditures must be distributed via VBP • https://files.nc.gov/ncdma/NC-VBP-Initial-Guidance-Final-for-Comms-20190218.pdf MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

6. Value Based Purchasing • https://files.nc.gov/ncdma/NC-VBP-Initial-Guidance-Final-for-Comms-20190218.pdf MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

7. NC Division of Vocational Rehabilitation MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

8. Why milestones? DVR has been using outcome based/milestone payments since 2013, and has found the following: • Improves quality and expedience of service delivery • Reduces administrative burden on staff • Allows providers to be paid at key points throughout service delivery • Built in incentive for quality not quantity • Field Staff review documentation for impact of service as opposed to matching notes to time spent • Providers spend less time documenting as they are not accounting for units of time. MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

9. Why IPS? • IPS is the only service that can access three sources of funding: • State funds for individuals without insurance • Medicaid (b)(3) funds for individuals with Medicaid • DVR milestones for individuals that have open cases with DVR MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

10. Where are we at with the VBP elements? • Standardized Performance Measurement- stakeholders must agree upon and implement a set of performance measures that support person centeredness, are clinically effective and cost effective. • There should be transparency and the public should have knowledge/access • Element One • IPS in NC • DVR has an established set of performance measures they have been using since 2013 • DMHDDSAS worked with DVR and with the IPS evidence based practice to identify additional performance measures that align with the model that could expand the milestone/value based purchasing for the service • Currently fidelity scores and outcomes aren’t public, though DMHDDSAS is considering how and where this information should be shared MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

11. Where are we at with the VBP elements? • Moving to value-based purchasing also requires the use of Accountable Payment Models where the financial reward is embedded in the payment model. • We believe that four payment models are appropriate for Behavioral Health: Capacity-Based, Fee for Service, Case Rate/Bundled Payment, and Sub-Capitation. • Accountable Payment Models • IPS in NC • IPS is currently paid for two different ways- • FFS for Medicaid and State funds • Case rate/bundled payment for DVR funds • The difference in payment models creates confusion for providers, and also increases the chance of double billing • The pilot model we will be reviewing will shift all payments to one model- case rate/bundled MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

12. Where are we at with VBP? • Moving to value-based purchasing requires the use of a payment approach where high performing providers are directly rewarded for the efforts to successfully provide patient centered, clinically effective, and cost effective care. • Pay for Performance • IPS in NC • Current rate recommendations made by DMHDDSAS are based on fidelity/performance • Some LME-MCOs have adopted this payment structure, some have provided incentivized rates to providers that are scoring in the Fair Fidelity range • We have not yet been able to operationalize paying for outcomes, as providers are not consistently completing NC TOPPS MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

13. Where are we with VBP? • Allocating dollars to achieve the proper balance of spending across the service array is often needed to correct existing imbalances that prevent reaching better care and better health. • Examples include ensuring adequate spending on primary prevention to reduce the need for treatment of preventable illness and higher spending on health homes to reduce the use of crisis and emergency room use as well as medical and psychiatric inpatient admissions. • Balancing the Fund Portfolio • IPS in NC • The IPS pilot program has not addressed this MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

14. The Benefits and Risks of Milestone/Outcome based payment- LME-MCO - You know what you’re paying for, i.e.- you are only paying when the identified milestone/outcome is reached You can align better/best practice to payment and reward pro-fidelity work Possibly easier to cost out how much per person/per year you need to budget for each provider and for the service Difficult for teams to cover operational expenses in between service initiation and the first milestone For existing teams, this will be a transition and some individuals receiving services will start out in the middle of the milestone series Benefits Risks MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

15. The Benefits and Risks of Milestone/Outcome based payment- Providers Less confusing, you don’t have to worry about who to bill for what and when You can focus more on delivering the service and less on tracking units for billing purposes If you are well linked with DVR and implementing the model to fidelity, milestones should be achievable in a reasonable amount of time. Teams will need to actively engage with DVR to ensure a maximum number of cases are shared (but this isn’t a bad thing!) Need to be able to cover operating expenses between milestones Teams that aren’t implementing well/not aligned with the model might have difficult meeting the milestones Benefits Risks MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

16. The Benefits and Risks of Milestone/Outcome based payment- State level Better able to estimate cost to provide the service Funds are going towards quality services and teams that are providing the identified outcomes Inconsistent tracking of outcomes make it difficult to establish thresholds for incentive payments Potential to over or underestimate amount of time that goes into each milestone/bundled payment Benefits Risks MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

17. Well, what are your thoughts? MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

18. IPS milestone pilot Developed with feedback and input from the Office of Disability Employment Policy (ODEP) Employment First State Leadership Mentoring Program (EFSLMP) High level of collaboration between DMHDDSAS and DVR, as well as NC Medicaid Outreach to LME-MCOs and targeted providers MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

19. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 1 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

20. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 2 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

21. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 3 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

22. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 4 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

23. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 5 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

24. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 6 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

25. DVR, DMH/DD/SAS and NC Medicaid Proposed Milestone 7 MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2

26. Questions? MEDICAID SAMPLE PRES | MONTH DAY, YYYY | v2