Expanding Value-Based Care to Addiction Treatment

imagesThe shift to value-based care is impacting every aspect of healthcare. As has been well documented in many places, including this blog, value-based care is built upon the concept of driving enhancements to the quality of care while taking focus away from quantity or volume. While value-based care is often touted as intended to change the entire healthcare system, most of the efforts have focused on traditional medicine and perceived high-cost aspects of care. For example, bundled payments are often centered around surgical episodes of care and accountable care organizations ostensibly place primary care are the center.

While each of the value-based care models making headlines attempts to incorporate the full scope and continuity care, physical or “traditional” components of medicine receive the most attention. While care management, care coordination and some aspect of mental health certainly are part of the design, those aspects are not front and center.

With that in mind, the recently announced addiction recovery medical home – alternative payment model is intriguing. The “ARMH” is the result of a number of players in the healthcare industry coming together and recognizing the significant impact on overall healthcare driven by substance use addition and other issues. As explained by the alliance that established the ARMH, it is composed of five elements: (1) payment; (2) quality metrics; (3) integrated treatment and recovery network; (4) care recovery team; and (5) treatment and recovery plan.

While none of those elements is unique in and of themselves when it comes to alternative payment models in a value-based care world, the nature of addiction treatment is new. Addiction treatment can be quite difficult in practice because it may involve a patient population that frequently falls through the cracks in other systems, may not be on “lucrative” if any insurance plans, and otherwise does not usually receive the best attention. In attempting to reach this population, the ARMH will certainly face challenges and need to be fluid in its approach. However, challenges, whether anticipated or unexpected, are not a reason to forego trying to drive change.

The ARMH proposal comes at an appropriate time in light of the well-documented opioid epidemic driving so much of the news cycle as well as general substance use related issues. If providers are presented with a plan for incorporating treatment into other modalities, then the ripple effect could be significant. Since substance use disorders often lead to broader health issues, leaving aside its top or near to place in terms of causes of death, if substance use issues are removed as an issue for individuals, then other medical issues may resolve or decrease in frequency too.  Additionally, utilization of resources could decrease, which means less drain on system resources and fewer access issues. As noted, the ripple effect can be potentially very big.

The fact that the ARMH has been proposed and now being implemented in some places is very significant. Substance use issues were often held back and kept in the shadows. That is the case in fewer circumstances now and stigmas are slowly being removed. If improving the overall health of America is the goal, substance use disorders cannot be ignored. Hopefully the ARMH is the first of many more steps in getting needed treatment to all individuals.

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HIPAA as Facilitator

facilitator-roleThe excuses for health information not freely flowing are numerous, but very often come back to alleged privacy concerns under the Health Insurance Portability and Accountability Act and its associated regulations, or “HIPAA” as it is more often referred to. The excuses often fall back on a position that HIPAA requires all patient-related information to be fully locked down and maintained in “airtight” systems that can only be opened with permissions. While that is the perceived standard, actual systems do not really reflect this position. Despite the likely reality, the privacy concerns are raised between providers, by providers to patients, between vendors and any number of combinations among those groups.

The end result arising out of the fear about HIPAA compliance is data being locked down and “not” openly shared when or where needed. The “not” is put into quotations because even before getting to what the regulations permit, the reality is that information in many instances does get shared around. The sharing may occur in the ordinary course of business and without the actors sharing the information knowing that such sharing is allowed directly because of HIPAA. The prime example of such information sharing would be for payment purposes as no provider will forego getting paid for services rendered. When information is locked down though, barriers are thrown up to prevent it from going from one system to another or between providers. Such restrictions result in frustration, anger, or some other similar emotion.

However, while waiting for further regulations through the 21st Century Cures Act, some unknown future law or just modifications to existing regulations, there is hope under HIPAA. A recent blog post from the Office for Civil Rights and Office for the National Coordinator of Health IT emphasized the information portability and encouragement for sharing of data already contained within HIPAA. Those points are very accurate and certainly bear repeating.

Taking the behind the scenes side of things first, a very broad swath of actions is permissible under the HIPAA Privacy Rule to enable movement of data. Namely, the permissible actions fall under what are referred to as “TPO” or treatment, payment, and healthcare operations. Each of those terms is specifically defined under HIPAA.

Taking treatment first, the term is designed to enable providers to interact with one another and ensure that information gets to where it is needed for the benefit of patients. This means providers can consult with one another or request information from a patient’s prior provider. It does not mean that a prior provider should make access overly difficult. For instance, an example that I have used frequently is a primary care physician being in the exam room with their patient. The physician wanted information from the patient’s ob/gyn’s office. With the patient in the room, the call was placed, but the ob/gyn’s office would not release the information without a signed release from the patient. That is not required and just imposed unnecessary burdens on the ability of the primary care physician to work with the patient. The refusal to provide information was premised upon not wanting to breach privacy, but done so in an extreme manner.

Turning to payment, information can be shared for purposes of obtaining or verifying payment obligations. Such sharing goes to information going back and forth between providers and insurance companies. As suggested above, it is highly unlikely that providers will not take necessary or appropriate action to be compensated for services provided. Payment can also extend to collections when individuals are not paying obligations that are owed. That may not be expected, but collections are a part of payment.

Lastly, the definition of health care operations is arguably the broadest permissible use of patient information. Many providers and entities are surprised when the breadth of activities is discussed. Operations include utilization review, quality improvement and release of information when pursuing a sale or other fundamental transaction impacting the entity. All of the actions go to enabling the smooth running of a business.

While the above is a brief description of how information may be used and shared in the general course of a healthcare business for TPO, on many occasions the TPO permissible uses and disclosures are either overlooked or not known. Ultimately, the TPO categories should show that HIPAA does not interfere with the ability to let information go and be where it is needed. Instead, HIPAA encourages the use and disclosure of information. It is also important to remember that there are other uses and disclosures that can occur with authorization or an opportunity to object, though those become more specific.

It is also important to consider the times when a patient or individual can direct or request the use or disclosure of their own health information. This is the second point made by the OCR and ONC post. Individuals are granted significant rights of access and some control over their own information. Access is certainly a prime area where misconceptions exist. The HIPAA regulations include very limited times as to when access can be denied, which do not apply in the vast majority of circumstances. Assuming that access is granted appropriately, individuals should get almost free access to their information and be able to ensure that it is sent to other providers. Reality is far from this ideal, but it is important to keep what should happen in mind to hopefully spread the correct understandings of what HIPAA permits.

The persistence of information blocking and other impediments to the free flow of health information underscores the deep-rooted nature of HIPAA myths or willful ignorance. Too many organizations quickly move past HIPAA without even attempting to understand what it does and what it allows. Accordingly, it is important to continually work to dispel such misunderstandings about HIPAA. One of the main considerations at this point is to get those in the industry from the provider, payor and vendor perspective to understand how HIPAA enables sharing of information and does not align with information blocking or other barriers. Instead, HIPAA is really a facilitator when its actual terms are correctly interpreted. If the correct message continues to be spread, then eventually understanding will catch up with the current state of regulation.

Posted in Business, Compliance, Health IT, HIPAA, HITECH, Uncategorized | Tagged , , , , | 1 Comment

Direct Contracting: Less Explored Value Based Care Concept

symbolic-2062576_640Value based care is an amorphous concept that covers a lot of the so-called alternative payment methodologies driving a lot of current transformation in healthcare. The basic premise for value based care is to transform healthcare from a quantity based system to a quality based system. The common way to advance the transformation is to shift the manner in which healthcare services are reimbursed or paid. Namely, the shift goes from paying on a per service basis to paying based either on a predetermined amount per patient or episode of care.

When payment becomes premised upon managing the amount of care provided to a particular patient or on a particular issue, understanding all of the potential costs, complications, and other factors about that item becomes paramount. If the provider is taking the risk of a preset payment, then the applicable scope of services (to the extent controllable) should align with or be better than the payment. If success cannot be achieved in managing cost, then that provider will quickly find mounting financial deficits that may not be able to be overcome.

The ability of providers to accurately assess cost is not one to be taken lightly. A provider may have little to no insight into the actual cost of performing a service. An in-depth review of one provider, found the provider routinely increasing its list price for a particular procedure by a few percentage points each year. However, the provider never bothered to examine its supply costs, staffing costs, or other costs in delivering the particular service. When the provider finally conducted that exercise, it was revealed that the list price was nearly five times greater than the actual cost of providing the service. While the example demonstrates an extreme in a “positive” direction, it would be just as easy to consider an example in the direct opposite direction.

Given the very real challenges in succeeding with value based care, the growing number of reports concerning direct contracts between providers and companies for employees generates a lot of questions along with hope. The direct contract creates a scenario where a hospital or health systems contracts with a company, such as Walmart or General Motors, to provide the full or some other defined scope of healthcare services needed by that company’s employees. In essence, the provider takes on the role of both providers of healthcare services and insurance company.

As such, the provider, through negotiation, is attempting to conduct actuarial calculations to determine the appropriate fee to charge. The actuarial rating and risk determination is a function traditionally handled by an insurance company. Arguably, the determination, assessment, and management of risk is the entire core of an insurance company’s business as it tries to set premiums in an amount to cover potential costs while enabling return on investment until the premium funds are paid. Shifting that function to the provider directly theoretically removes the administrative intervention created by an insurance company. Since direct contracting represents a full shift of old functions, the question is whether provider organizations or facilities are appropriately staffed to be making these determinations.

In most instances, the answer to that question is likely no. Consultants may be available to assist, but consultants come at a cost that could be viewed in a similar manner as the insurance company in the first place. Accordingly, providers should be trying to staff up in actuarial and related departments to almost replicate an insurance company. At least those actions should occur if the provider wants to be serious about succeeding with a direct to employer contract. Still, the road will not be easy because even providers that attempted to run traditional insurance operations often find such operations to be significantly less than profitable.

Another challenge with a direct contract is finding an employer with a sufficiently large employee pool such that risk can be spread around. A small pool with a high degree of cost risk will either be prohibitively expensive to the company or run the risk of financially decimating the provider. It may not be enough to find a company that has a lot of employees if those employees receive coverage through a spouse or other source. The employees must obtain the coverage through the company contracting with the company. From the company’s perspective, it may also be more beneficial, though not necessary, if a large portion (or at least large chunks) are located in a specific geographic area. If the workforce is spread across a large region, it would be difficult to force those employees to see a provider that is not geographically convenient.

If these fundamental operational challenges can be overcome or deemed sufficiently satisfied, then negotiating the terms of any direct contract will be very important. For instance, as suggested above, data will be essential to undertaking any actuarial analysis and maintaining an ongoing assessment of performance. To ensure data are available, what terms would be needed in a contract? Should a party be penalized if it fails in its obligation to provide data? It would likely be quite beneficial for the parties to work their way through such issues and permutations to enable inclusion in the governing contract.

Another important consideration could be the ability to terminate the arrangement. For example, in Massachusetts, a contract between a provider and an insurance company cannot be terminated without cause, which means the contract can only be terminated by mutual agreement, if one party breaches the agreement, or certain other actions that would provide cause to terminate. Neither party is allowed to terminate merely because it no longer likes the arrangement. It is not clear whether a direct provider to company contract would be covered by the same statutes or regulations governing insurance. If the matter is left to negotiation of the parties, it would be easy to predict that the provider would want to include termination without cause as protection against it doing a less than ideal job on setting rates whereas the company would more likely want to keep the provider locked into the arrangement and without the ability to back out at any time.

A third area set for heavy negotiation would be the rates. As discussed, rates would likely need to be based upon some form of actuarial analysis. Who would conduct that analysis or would each side produce its own and then have to reach some mutually agreeable middle ground. Regardless of the actual process, some amount of negotiation should be expected because the old axiom is true that everything can be a negotiation. However, the specific rate may not be the only factor impacting payment. If the contract covers multiple years, how would the payment rate be adjusted, on what frequency and by whom? Those factors could arguably be even more important than the initial rate because increases should be needed since the cost of supplies and services never remains static.

With all of the challenges, it is not surprising that direct contracts between providers and companies are not popping up around every corner. Success is very much uncertain. However, it is clear that direct contracts are yet one more means of proceeding into value based care. If providers can become more proficient inassessing and succeeding with risk, then direct contracts could very well become a major part of the healthcare landscape. Until that time, growing pains will occur.

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