May 3, 2024

May Newsletter: Payers’ Progress with Value-Based Payment Adoption in the SUD Treatment Space

At the core, value-based payment (VBP) strategies seek to improve cost, efficiency, and quality of care within very complex service delivery systems with competing incentives. Both government and commercial lines of business within payer organizations have a good deal of potential for launching VBP models, yet there has been a slow adoption of these models. According to the November 2023 Substance Abuse and Mental Health Services Administration (SAMHSA) Center for Financing Reform and Innovation report “Exploring Value-Based Payment for Substance Use Disorder Services in the United States,” only eight states have “well-developed and ongoing VBP initiatives for substance use disorder (SUD) treatment and recovery services.” As referenced in a January 2024 report from the National Conference of State Legislatures (NCSL), an analysis from the Health Care Payment Learning and Action Network APM Measurement Effort shows that the commercial sector has the lowest percentage of payments in any Alternative Payment Model (APM) (45.5 percent) or advanced APMs (34.6 percent) compared to Medicaid, Medicare Advantage, and traditional Medicare.

Despite improvement in both clinical and cost outcomes, provider hesitancy/trust and a lack of patient satisfaction and access improvement have impeded VBP and APM adoption. However, the health care industry as a whole is shifting away from fee-for-service payments toward VBP models. According to the Health Care Payment & Learning Action Network (LAN), over half of health care payments in 2022 were made through value-based payment models.

To learn more about behavioral health VBP adoption from payer organization perspectives, I connected with Alliance for Addiction Payment Reform (Alliance) participant Jessica Kelley, J.D., M.H.A. of the Association for Behavioral Health and Wellness (ABHW), a leading association working to advance federal policy and mental health (MH) and SUD services. Specifically, I focused our conversation on how participating ABHW members have been adopting VBPs and APMs and where they have experienced success/challenges.

Jessica Kelley, J.D., M.H.A. of the Association for Behavioral Health and Wellness (ABHW)

Eric (Alliance for Addiction Payment Reform): Jessica, thanks so much for meeting with me regarding this topic. First, can you tell me a bit more about who ABHW represents?

Jessica (ABHW): ABHW is the national voice for payers that manage behavioral health insurance benefits. ABHW member companies provide coverage to approximately 200 million people in the public and private sectors to treat MH, SUD, and other behaviors that impact health and wellness.

Eric: Has any notable legislation passed that has been particularly helpful for your members regarding the successful launch of VBP or APMs within their organizations?

Jessica: I am unaware of any notable legislation directly impacting the launch of VBPs or APMs. However, recent developments surrounding telehealth can indirectly impact the success of VBPs. Innovative programs delivering medication-assisted treatment (MAT) are more likely to be interested in and willing to use alternative contracting strategies and collect and share outcome and quality data. The extension of telehealth flexibilities can indirectly contribute to the success of VBP initiatives by satisfying parameters for HEDIS metrics. ABHW and our members are hopeful that there can be permanent authorization for patients to start buprenorphine through a telehealth visit and the removal of the in-person visit requirement.

Eric: From your perspective, is it accurate to say that there has been more progress with the adoption of VBP and APM opportunities within government lines of business, such as through state-level Managed Care Organization (MCO) frameworks that service the Medicaid-covered population?

Jessica: Yes, that is accurate to say. There are several factors to which this can be attributed. First, governments have the authority to enact policies and regulations that encourage or mandate the adoption of VBPs. Programs like Medicaid and Medicare cover large segments of the population, giving them leverage to influence providers into VBPs. Government providers are usually under pressure to manage or contain expenditures while still meeting healthcare needs. VBPs can help control costs and drive outcomes and member satisfaction.

Commercial lines of business are also well suited to negotiate VBPs. Medicare and Medicaid are limited to a specified set of codes and rates when constructing VBP arrangements, but in the commercial space, plans are not limited to a specified set of codes, which means there is more flexibility in negotiating appropriate all-inclusive arrangements that ensure appropriate reimbursement for a fuller array of services.

Eric: What have been some of the biggest challenges payer organizations have experienced when it comes to VBP and APM adoption?

Jessica: There are several. Provider readiness and eligibility have been a significant challenge. Many SUD providers may not have the experience or resources to take on a VBP arrangement. This can include financial resources, the need for data analytics expertise, and patient/population health engagement strategies. Another theme is determining what constitutes quality care, especially in the context of SUD treatment. SUD treatment is complex, and recovery is multifaceted. The long-term nature of recovery and potential relapses can complicate efforts to measure treatment, and savings may not be immediate if that is an outcome being measured. Plans also encounter challenges in ensuring that their members get care where a VBP exists. Members have many choices, both in-network and out-of-network. They rely on various sources of information, such as Google, relatives, and friends, to determine where to seek care without necessarily consulting their health plan. Additionally, data challenges are another potential problem. Data is critical in a VBP, and the lack of electronic health records and privacy regulations related to SUD data can make it challenging for providers to coordinate care and report quality metrics.

Eric: As you’re aware, the Alliance, which includes representation from some of the largest payer organizations in the United States, created the framework for the Addiction Recovery Medical Home Model in 2017. From your organization’s perspective, what can we do to promulgate this model more effectively going forward?

Jessica: The challenge our plans have observed with this model is that while an excellent concept, it needs to contemplate and account for member choice, member willingness to engage, and the volatility of member plan choices and mobility. For example, members may want to avoid engaging in a model that provides a whole care team but prefers to separate their care. Additionally, it is complex to manage a five-year treatment model across a commercial health plan structure.

Eric: What are some final considerations you would like to pass along to our Alliance participants?

Jessica: There is a lot to be excited about regarding VBP models. These models can improve the delivery of the integrated and coordinated care necessary for the complex and continuing needs of individuals with SUDs. Working with this Alliance presents an opportunity to tackle the challenges as the movement to VBPs in SUD care continues.

Eric: Jessica, thanks for your thoughtful responses to this important conversation. You’ve given us a great deal to consider when considering payer/provider partnerships with VBP initiatives. Despite the challenges, it appears as though progress is being made in moving toward VBP structures, albeit incremental.

The Alliance for Addiction Payment Reform (Alliance) is a national multi-sector alliance of health care industry leaders – including payers, health systems, recovery service providers, and subject matter experts – dedicated to aligning incentives and establishing a structure that promotes the type of integration and patient care capable of producing improved outcomes for patients, payers, and health systems. The Alliance brings together clinical, addiction, information technology, primary care, social, regulatory, and policy expertise and has logged hundreds of hours of workgroup meetings, ratifying consensus principles and outputs.

Association for Behavioral Health and Wellness (ABHW) is dedicated to advancing federal policy and educating the public on mental health and substance use disorder care. By advocating on behalf of health plans for improved access and higher quality care, we are focused on ensuring better health outcomes for individuals and communities.