Many states have laws on the books that create square pegs for newly-created round holes under healthcare reform…
I recently had a discussion with a behavioral healthcare provider in Florida who was commenting that her patient volume was down, managed care contract rates were too low to be sustainable, and she was concerned about the continued viability of her practice. She wanted help to increase her contracted managed care payments. I had to ask a few questions to start to size up her actual leverage. To do that I had to switch hats and get into the mindset of a payer – a place I have been many times in my career.
- I asked her which managed care organizations (MCOs) she currently participated with. “Only a few. The rest wouldn’t entertain a contract with [her].”
- I asked her what she had done to align with any of the six nearby Accountable Care Organizations (ACOs). “What’s that?” She’d never heard nor paid attention to ACOs. I took the time to explain, she didn’t seem to be too interested.
- I asked her what was her unique value proposition that would give her competitive advantage in the market and with payers. No answer. She’d never given it any thought.
- I asked her if she knew her fully-loaded costs of running her practice. She said “Too much, I can’t afford what it costs me now.” She didn’t understand the question.
Then I took a peek at her website. It was very 1990s. In fact, it was atrocious and had not been updated in what appeared to be years, but she was paying for a service to maintain it. Why? What good did it do? They had her fine tuned for ancient SEO best practices, but those practices would put her on the bottom of the list by today’s requirements. The template was ancient by current standards. The colors used were 1990s if not older. The information on it was tantamount to a “flyer”. The photograph of the practice was a snapshot, poorly exposed, not cropped, unretouched. Then I went searching for her social media rankings and scores and recommendations by patients. Oops! Only one comment, not too old, ONE STAR… complaint or comment unanswered. Not Good!
So what was this behavioral health provider thinking? What was it she expected me to do for her? Make miracles? I considered quoting Luke 4:23 to her, (Physician Health Thyself..) but held my tongue. Why? Because in reality, she’s just not all that different from many of her peers. But do she and her colleagues have a future in the reformed system of integrated healthcare delivery and accountability? It depends.
Welcome to the World of Healthcare Reform
Some would argue that behavioral health providers need to prepare to participate in integrated care funded by bundled payments or capitation under healthcare reform. I’ve consulted for behavioral health providers who believed that there was a definite need to establish a new business model, with particular emphasis on establishing episode of care rates, being prepared for capitated reimbursement, and creating a multidisciplinary group practice of a variety of behavioral health practitioners. Many consultants say that behavioral health providers must prepare to partner with other behavioral health providers in order to have the scale to offer competitive rates.
Unfortunately, many of the consultants and authors blogging about healthcare and reform and innovation are coming at this from a generic business approach. It is likely that they were never trained in the nuances of healthcare regulatory compliance that flies in the face of may commonplace business tenets. I encounter this all the time when I interview MBAs who want a job with our firm but haven’t worked in healthcare. I don’t hire them. They are of no use to me.
Many states have laws on the books that create square pegs for newly-created round holes under healthcare reform. One troublesome situation in particular are the states’ Corporate Practice of Medicine (CPOM) doctrines. Many states don’t allow a physician to be in a corporate that bills for healthcare services if it is owned by non-physicians. So, if an entrepreneurial psychotherapist or social worker decided to start a provider group, and wanted to have an MD or DO medical director work within the group, in many states, the MD /DO would have to be the owner. That’s a non-starter for some. If psychiatrists wanted to be in the business of integrated health delivery, they would have done so. In reality, a practicing psychiatrist needs a one-room office that resembles a sitting room, parlor or someone’s living room, sometimes a secretary. More often, they need a competent billing service and a box of tissues handy nearby; a coffee maker is a nice amenity, but not usually present. They work, on average, 9-5pm, see patients for 45 minutes, say goodbyes and hellos and make next appointments and take a bio-break in the 15-minute intervals between 45-minute sessions. Life is peachy-keen by comparison to their primary care brothers and sisters who see 40 patients or more in a day.
Psychiatrists are not of the “ilk” to make an attempt at developing an episode of care rate, their own bundled approach, or really give too much concern to healthcare reform. I heard a consultant on a webinar not too long ago argue otherwise, but the sponsor was the National Council for Behavioral Health on the topic of financing integrated care. The speaker said, “You have to be ready to respond to a managed care or accountable care organization that might show up in your future and say, ‘Hey, what’s your rate for treating schizophrenics with diabetes. How much does it cost you every month to treat someone like that?’ Really? Has he been consulting in integrated healthcare for very long? Because that was as far from reality as I’ve heard in a long, long time.
I agreed with his point that before behavioral health providers can tell potential partners or payers why one should contract with them, they have to articulate their value proposition and the buyers’ benefit to contracting with them instead of their competitor. They should also be able to prove outcomes in relation to costs. But should is far from actually doing it in behavioral health. For one thing, the psychographics of the therapist don’t align with these suggestions. They are either off doing their own thing, or employed by a larger clinic, usually owned by a county mental health center – who has administrators hired to do all that fun business stuff. They’d rather get paid a little less and not bother with all that health administration stuff. Heck, most of the psychiatrists don’t even have an EMR; they still write handwritten notes in a chart in their lap. And arguing that an understanding of outcome data and costs can serve as the foundation of their value proposition, and help them to set episode of care rates is like trying to push a sitting elephant, but the elephant won’t be moving until it wants to.
If a behavioral healthcare provider were so inclined as to want to set an episode of care rate, what would it entail? Here’s where the beauty of ICD-10 and DSM would come in handy. One first must do an analysis of the practice, and group the patients currently being treated and those who started treatment in the past 3 years and ended treatment successfully (rather than just stopped coming to their appointments without resolution) to determine what the course of therapy was, per diagnosis, per age, gender, and if the condition was chronic or a reactive depression or anxiety, etc. Then, of course, there are the treatment styles. Some behavioral therapists work on long-term treatment styles, while others are short-term. Some are medication assisted, and others are talk-based. While there are actuarial data available for this, if it is homogenized and doesn’t sort out the data by treatment approach and condition, it is just a number, and not all that useful for benchmarking in this situation.
Behavioral health providers would also need to factor in overhead costs that aren’t billable, and also the costs of dealing with all “the managed care stuff”, and “ACO stuff” that would become a part of the new episode of care that is not currently a consideration. The bundled payment would have an associated financial risk they currently don’t have because providers would have to spread the payment they negotiate to cover every aspect of delivering care. That means they would have to build in a risk-buffer component, so that if they manage the risk properly, there’s a financial reward for doing so. And that reward has to cover the extenuating circumstances when the care delivery cost more than they anticipated, in what would be (one hopes) a rare instance of a more complicated than expected case. For the behavioral health provider that practices in a quiet little independent practice, with no interference, they will have to reserve administrative time to their calendar for case management or care management conferences with other providers, ACO care navigators, and other tasks. For this, they should establish an administrative RVU amount and allocate that for the time spent.
The webinar speaker from the National Council for Behavioral Health said something that was true but not correct. He said that providers would need to consider that that rates in a bundled care model will be lower than fee-for-service payments because the bundled rates are based on averages. I respectfully disagree. In fact, the only times I’ve ever heard someone say that is when they worked for a health plan as a negotiator and were told to get people to believe that. If one were a provider advocate, they would come at this with the argument that I presented above, that a bundled rate should include the admin time that is not currently required or performed in case management conferences, a financial risk buffer to cover unanticipated risk of extended care, and as a result, the payment should actually be higher than fee-for-service, in fact, by about 20-40%. Otherwise, why should any behavioral health provider agree to this?
For now, I doubt seriously whether individual psychiatrists and behavioral health providers will agree and embrace such a gregarious notion of integration and alignment. It’s a pity really, because by making this choice to remain eagles instead of geese, many patients who might otherwise benefit from their care and an integrated care delivery approach that views the whole creature as a single being instead of a hole in the drape (the surgeon’s perspective) the patient in the next exam room waiting for me (primary care physician’s perspective) and the lab specimen to be examined or xray to be read, we won’t get at the root cause of many disease states that have a psychiatric etiology, and we’ll just keep throwing money at symptoms instead of at the disease itself.