How to Operate Within a Fee-for-Service and Value-Based World

The future of healthcare is in value-based payment systems, which compensate providers based on the quality of service delivered rather than on the number of patients served–as has been done in the traditional fee-for-service model. However, transitioning to a value-based system is challenging for behavioral health providers.

A Humana study revealed that patients in value-based payment systems experienced 22 percent fewer hospitalizations, used telehealth more, and saw their primary care providers more often. As many as 67 percent of patients covered by Humana insurance receive value-based healthcare, and the trend is increasing. However, behavioral healthcare providers have faced challenges adapting to a value-based approach, resulting in a slower rate of adoption.

Fee-for-Service vs. Value-Based Care

In a fee-for-service system, health insurers pay providers based on the number of patients they treat. Providers receive a predetermined payment for each service provided, regardless of the outcome. This system incentivizes providers to treat as many patients as possible, while disincentivizing quality outcomes. Under this system, patients struggle to manage rising healthcare costs without corresponding improvements in outcomes.

In a value-based care system, insurers reward providers who offer a higher quality of care. According to the peer-reviewed health policy journal Health Affairs, a value-based system seeks to lower costs while improving the quality of care by establishing baseline costs for procedures and incentivizing providers to prioritize patient health outcomes.

Forms of Value-Based Care

Implementing value-based care requires collaboration among different types of providers, who share in the risks and savings. Providers typically collaborate using one or a combination of the following models:

Shared risk - Providers share in the costs and agree to share in any losses
Shared savings - Providers share the financial burden and redirect funds where they’re needed to meet budgetary goals, with each provider paid a portion of the savings generated
Bundled system - Providers save by unbundling services to ensure that patients can choose the specific services they need without the provider having to offer services patients do not need
Global capitation - short-term and long-term patients share costs based on a per-person/per-month model

Value-Based Care: Imperative for Healthcare, Specifically Behavioral Health

A study by the Commonwealth Fund revealed that healthcare in the United States is far more expensive than in other developed countries, but with the worst outcomes. A value-based care model can shift providers’ emphases from quantity to quality. Approached correctly, it can reduce the cost of healthcare and improve health for individuals and the community.

Enhances and Operationalizes Health Equity

According to the National Committee for Quality Assurance (NCQA), individuals with behavioral health conditions pay a disproportionate share of total healthcare spending. The average behavioral health patient pays 2.8 to 6.2 times more to treat medical conditions than other patients. Although behavioral health services account for 4.4% of services, over half of the healthcare spending is by those with behavioral health services.

Despite the higher levels of spending, behavioral health patients generally experience higher morbidity, poorer health outcomes, and lower life expectancies. This may occur because, in addition to the high cost of behavioral health services, behavioral health patients lack the support they need to address barriers to care, adhere to care plans, or access preventative care for comorbid health conditions.

Whole-Person Health

A holistic, multidisciplinary team approach in a value-based environment can afford behavioral patients equal access to the services they need, behavioral and otherwise, without the premium on behavioral services, so they can enjoy better outcomes without paying more.

While fee-for-service systems encourage providers to treat each condition separately, value-based care models support a holistic approach. Rather than being left to navigate the healthcare system alone, patients in a value-based care system benefit from a multidisciplinary team that helps them solve problems and address all of their healthcare needs.

In this model, patients are empowered as important members of their respective healthcare teams. The team may include a combination of doctors, social workers, behavioral health specialists, nutritionists, and health coaches who work with patients to achieve important benchmarks, such as returning to work or avoiding re-hospitalization.

Focus on Outcomes

Healthcare is one of the few industries that has not traditionally tied quality with payment for services. In virtually every other market segment, customers rightfully expect to receive a quality guarantee. Yet, in arguably the most important industry, providers in a fee-for-service model receive the same level of pay regardless of the care quality or the outcome.

The Centers for Medicare and Medicaid Services (CMS) defines value-based care as paying for healthcare services in a manner that directly links performance to cost, quality, and the patient’s experience of care. This system holds providers accountable for outcomes and fosters innovation. Value is based on patients rather than policy-makers. It empowers patients and makes healthcare less about bureaucracy and more about patients.

Improves the Patient and Provider Experience of Care

A study of 25 providers revealed that utilizing the skills of a variety of team members while focusing on efficiency resulted in improvements in all four focuses of a value-based system, also known as the Quadruple Aims, consisting of the following:

The National Council for Mental Wellbeing piloted a four-year program in partnership with other agencies in New York State, thanks to a CMS grant, which supported 275 behavioral health practices throughout the State. The purpose of the program was to empower behavioral health providers through a value-based approach.

This was accomplished by providing the necessary tools to accomplish the following:

Reduce hospitalizations
Improve outcomes
Offer value
Implement best practices consistent with the ever-changing healthcare environment
Improve engagement with behavioral health treatment
Increase care coordination and continuity

By the end of the four-year program, 75 percent of the practices had achieved significant improvements including:

The practices saved a combined total of $204 million, mostly due to decreased hospital utilization.

These improvements and savings undoubtedly had significant positive impacts on the patients, who would have enjoyed a higher quality of care, an improved quality of life, and substantially reduced medical costs.

Challenges with Transitioning from Fee-for-Service to Value-Based Care Models

The transition to value-based care can be challenging due to the resources needed upfront to facilitate such a change. Payment for value-based care services works differently from fee-for-service payments, which are individually billed. In value-based programs, billing and payment are bundled to allow payment to be made based on outcomes.

A value-based approach encourages the integration of behavioral services providers with physical medical providers, but several factors specific to behavioral medicine introduce challenges to this process.

Industry Challenges

Lack of Network Incentives to Support Behavioral Health Outcomes

A study published in Psychiatric Services revealed that mental health services are largely overlooked by value-based payment systems. Despite the fact that the majority of mental health patients would benefit from an integrative approach, many accountable care organizations (ACOs), lacked behavioral health professionals in their practices.

Lack of Shared Savings Model that Makes Sense for Behavioral Health Providers

Behavioral health practitioners struggle to find a shared savings model that works for them due to the following:

These challenges increase their level of risk and disincentivize practitioners from participating in risk-sharing systems.

Individual states are increasingly implementing behavioral health payment systems while also expanding the focus on integrating behavioral health services with physical healthcare and social services. Including mental health services in a multidisciplinary environment ensures behavioral patients receive assistance navigating their healthcare needs and improves the likelihood that they will follow through with preventive care.

Lack of Quality Benchmarks

Determining valid and reliable quality measures in behavioral medicine is more challenging than in physical medicine. Measures of success in behavioral medicine can vary from patient to patient, and practitioners often adhere to different philosophies.

The National Quality Forum (NQF) is a nonprofit organization that evaluates and endorses quality measures. NQF has endorsed 653 total quality measures in medicine, only 55 of which are in relation to behavioral medicine. Of these, only nine are outcome measures, while the rest are process measures.

Process measures are used to evaluate the actions of the provider, such as whether the provider followed up with the patient within a specified time period. While process measures can be useful, especially while transitioning to a value-based program, they are inferior to outcome-based measures as a means to incentivize healthcare innovation and quality.

Provider Challenges

Reporting and Data Requirements

Behavioral health clinicians must adhere to strict privacy regulations beyond those required in physical medicine, especially with regard to substance use disorders. They are also subject to reporting requirements that vary from state to state. This can make integration with other practices and disciplines logistically difficult.

Clinician Alignment and Lack of Buy-In

According to the Harvard Medical School Center for Primary Care, the behavioral health field is highly fragmented. Psychiatrists are more than twice as likely as other practitioners to have private practices. Most do not accept insurance, and they have little or no motivation to integrate with other practices or share costs and savings with others.

Limited Resources

Many behavioral health providers lack the capacity to undergo the changes that are necessary for a transition to a value-based practice model. Adopting the technology, assuming the risk, and managing finances during a new payment system transition require capital that many practitioners do not have.

Lack of Integration Across Systems

Collaboration with partners is an important component of a value-based program, but to work effectively, the partners must adopt a uniform system for sharing and accessing data, allowing for interoperability.

Outdated practice workflows

Value-based payment systems require providers to use electronic methods of managing records. Approximately 46 percent of psychiatric hospitals have adopted electronic health records (EHR), compared to 96 percent of general medicine and surgical hospitals.

Initially, this was because behavioral health providers were not included in incentive programs or health information exchanges that were the catalyst for the initial transition. Adoption has continued to progress slowly due to financial and regulatory challenges.

Technology as a Path to Future-Proofing the Organization

Value-based payment systems are becoming the primary reimbursement method across the industry, including behavioral healthcare. Underpinning risk-bearing models are Electronic medical records (EMRs) solutions.

Lessons from Physician’s Practices and Hospitals

Electronic medical records are beneficial on an everyday, practical basis. They have been proven to improve the quality of medical care and the work environment for physicians.

EMRs Improve Care Quality and Coordination

EMRs enable staff to communicate seamlessly through the propagation of inputted information through the system. The results in the following benefits:

Improved quality measures
Improved access to lab data
Increased patient perception of quality of care
Improved physician access to individual patient data
Improved communications with patients
The ability to offer patient portals where patients can access their medical records
The ability to send patients automated preventive care reminders

EMRs Lower Demands on Clinicians and Staff

EMRs promote better communication and relationships between staff, with chart summaries and medical notes readily available in a legible format, resulting in the following benefits:

Facilitate the delegation of tasksReduce medication errors
Make booking appointments easier
Save doctors time searching for labs and reports
Provide doctors with easy access to comprehensive medical histories
Allow physicians to see more patients

EMRs Capture and Facilitate Data Intelligence to Support Reporting and Accreditation Requirements

EMRs allow for the printing of important values such as weight and blood pressure in easy-to-read formats such as graphs and charts, providing efficient means of tracking changes over time. EMRs also make resources, tools, and assessments instantly accessible to clinical staff.

Application in Behavioral Health

Electronic medical records provide behavioral health providers with the tools they need torevolutionize the way they manage their practices. The seamless platform afforded by Sunwave Health’s (Sunwave’s) treatment journey platformimproves patient workflows and increases staff efficiency.

Assess and Monitor Performance Across Every Point in the Treatment Journey

Sunwave EMR provides a 360-degree view of the patient lifecycle, allowing team members to enjoy uniform access to essential data so everyone stays on the same page.

Access Patient Data and History

Sunwave’s patient-centered system makes readmissions and future visits simple by reducing the need to capture the same information repeatedly.

The fully responsive platform enables users to easily switch from mobile to PC, while the user-friendly interface provides a reliable means to monitor each patient’s progress, manage medication, and update treatment plans while offering patients a positive experience and ensuring every team member remains informed.

Track Outcomes and Quality Improvements

Tracking outcomes is the hallmark of a value-based program. Sunwave provides an effective solution to allow providers to track preset metrics and ensure quality processes are applied consistently.

Ensure Visibility into Risk Across Clinical Care Coordination, Financial Performance, and Patient Engagement

Sunwave helps providers identify deficiencies that could expose the practice to liability or adverse administrative actions.

Simplify Reporting, Auditing, and Accreditation Requirements

Electronic systems can ensure your facility is compliant with accreditation and licensing requirements. Sunwave’s EMR system ensures that you are always audit-ready thanks to the automated auditing workflow and alert system that ensures forms are completed on time.

If your facility is ready to take your practice to a new level, contact Sunwave today to schedule a free demo.