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Arizona Behavioral Health Payment Reform Toolkit Project Kick-Off “Boot Camp” DAY 1 Curriculum (February 5, 9:00am – 5:00pm) Welcome, Boot Camp Agenda and Overview Project Goal: Develop an Arizona Behavioral Health Payment Reform Toolkit that can be used by the RBHAs and Provider Agencies to support movement toward the triple aim. Seven Toolkit Chapters 1. RBHA and Provider Readiness Self-Assessment Tools 2. Menu of Triple Aim Transformation Strategies 3. Menu of Alternative Payment Models 4. Pay for Performance Strategies 5. Information Technology Requirements 6. Regulatory Implications 7. Implementation Strategies Boot Camp Objectives 1. Gain a deeper understanding of the interconnectedness of the people, services, and money. 2. Connect payment reform to system transformation. 3. Learn about a recommended approach to behavioral health payment reform. 4. Begin to form opinions about how that payment reform approach will need to be modified to fit each of the Arizona RBHAs. 5. Organize the workgroups that will be developing the toolkit. 6. Have fun! Module 1: Transformation Strategies and Return on Investment (ROI) Break Module 2: A Recommend Approach to Payment Reform Lunch (60 minutes) Module 3: Designing an Alternative Payment Model at the Payor Level to Achieve the Triple Aim Break Module 4: Organizing at the Provider Level to Succeed under Alternative Payment Models Post It Exercise Meeting Evaluation and Adjourn Day 2 Curriculum (February 6, 9:00am – 12:00pm) Debrief Day 1 – Learnings and Questions Module 5: Developing a Pay for Performance System Break Organizing the Workgroups and Meeting Schedule Evaluation and Adjourn Sponsored by Arizona Council of Human Service Providers, MCAP, Behavioral Health Coalition of Southern Arizona, Cenpatico, Community Partnership of Southern Arizona, Mercy Maricopa Integrated Care, and Northern Arizona Regional Behavioral Health Authority Packet Page 1

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Arizona Behavioral Health Payment Reform Toolkit Project Kick-Off “Boot Camp”

DAY 1 Curriculum (February 5, 9:00am – 5:00pm) Welcome, Boot Camp Agenda and Overview

Project Goal: Develop an Arizona Behavioral Health Payment Reform Toolkit that can be used by the RBHAs and Provider Agencies to support movement toward the triple aim.

Seven Toolkit Chapters

1. RBHA and Provider Readiness Self-Assessment Tools 2. Menu of Triple Aim Transformation Strategies 3. Menu of Alternative Payment Models 4. Pay for Performance Strategies 5. Information Technology Requirements 6. Regulatory Implications 7. Implementation Strategies

Boot Camp Objectives

1. Gain a deeper understanding of the interconnectedness of the people, services, and money.

2. Connect payment reform to system transformation. 3. Learn about a recommended approach to behavioral health payment reform. 4. Begin to form opinions about how that payment reform approach will need to be

modified to fit each of the Arizona RBHAs. 5. Organize the workgroups that will be developing the toolkit. 6. Have fun!

Module 1: Transformation Strategies and Return on Investment (ROI)

Break

Module 2: A Recommend Approach to Payment Reform

Lunch (60 minutes)

Module 3: Designing an Alternative Payment Model at the Payor Level to Achieve the Triple Aim

Break

Module 4: Organizing at the Provider Level to Succeed under Alternative Payment Models

Post It Exercise

Meeting Evaluation and Adjourn

Day 2 Curriculum (February 6, 9:00am – 12:00pm)

Debrief Day 1 – Learnings and Questions

Module 5: Developing a Pay for Performance System

Break

Organizing the Workgroups and Meeting Schedule

Evaluation and Adjourn Sponsored by

Arizona Council of Human Service Providers, MCAP, Behavioral Health Coalition of Southern Arizona, Cenpatico, Community Partnership of Southern Arizona, Mercy Maricopa Integrated Care, and Northern Arizona Regional

Behavioral Health Authority

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Arizona Behavioral Health Payment Reform Toolkit

Project Kick-Off “Boot Camp”February 5-6, 2015

Dale Jarvis, CPAKaren Linkins, PhDJennifer Brya, MA, MPP

Project Goal

• We are coming together to develop an Arizona Behavioral Health Payment Reform Toolkitthat can be used by the RBHAs and Provider Agencies to support movement toward the Triple Aim.

2

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Seven Toolkit Chapters1. RBHA and Provider Readiness Self-

Assessment Tools2. Menu of Triple Aim Transformation

Strategies3. Menu of Alternative Payment Models4. Pay for Performance Strategies5. Information Technology Requirements6. Regulatory Implications7. Implementation Strategies

3

Our vision is a web-based toolkit that contains written material we’ve created, Excel tools that RBHAs and providers can use, resource documents from other sources, web links to great stuff including you tube talks, and anything else that will be helpful.

Project Timeline

• February: Kickoff and First Workgroup Webinars

• March: Workgroup Webinars Continue

• Early April: Face to Face Design Session

• Mid April: Workgroup Webinars Continue

• Late April: Face to Face Design Session

• May-June: Finalize and Roll Out Toolkit

4

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Boot Camp Objectives1. Gain a deeper understanding of the interconnectedness of

the people, services, and money.2. Connect payment reform to system transformation.3. Learn about a recommended approach to behavioral

health payment reform.4. Build an outpatient behavioral health case rate system in a

small group simulation.5. Begin to form opinions about how that payment reform

approach will need to be modified to fit each of the Arizona RBHAs.

6. Organize the workgroups that will be developing the toolkit.

7. Have fun!

5

Agenda – Day 1• Agenda Review and Overview • Module 1: Transformation

Strategies and Return on Investment (ROI)

• Module 2: A Recommended Approach to Successful Payment Reform

• Module 3: Designing an Alternative Payment Model at the Payor Level to Achieve the Triple Aim

• Module 4: Organizing at the Provider Level to Succeed under Alternative Payment Models

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Agenda – Day 2

• Debrief Day 1 – Learnings and Questions

• Module 5: Developing a Pay for Performance System

• Organizing the Workgroupsand Meeting Schedule

• Evaluation and Adjourn

7

Why A Boot Camp: Computers, Small Groups, and a Flight Simulator

The 4 Learning

Styles

Visual(remembers names, not

faces)

Auditory

(good listener, talks out

problems)

Kinesthetic

(learn by doing, not watching or

listening)

Tactile

(takes notes, hands on activities)

8

• But most important, this is not a workshop or training (where you might retain 10% of the material).

• This is the beginning of a process that requires your active involvement to ensure that the product supports your future financial viability.

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Payment Reform Flight Simulator

• The airline has two big lessons for healthcare:

– Use a preflight checklist before surgery (Atul Gawande, The Checklist Manifesto)

– Practice flying in a Flight Simulator before you try it in a real plane.

9

Payment Reform Flight Simulator• Excel Workbook with 6 tabs

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After Lunch Today• Module 3: Designing an Alternative Payment

Model at the Payor Level

11

Later This Afternoon• Module 4: Organizing at the Provider Level to

Succeed under Alternative Payment Models

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What’s In Your Boot Camp Packet• Agenda

• PowerPoint Slides

• Flight Simulator Printout

• Small Group Worksheets for Modules 1, 3,4,5 and Transformation Strategies List

• Workgroup Descriptions

• Meeting Schedule for Workgroups

• Link to Michael Porter Article: How Should We Pay for Health Care? http://hbs.me/1wp0pZB

• Dale Jarvis Paper: Case Rate Toolkit – Preparing for Bundled Payments, Case Rates and the Triple Aim

13

Ground Rules for Successful Boot Camp Engagement

1. Speak one at a time.

2. Keep discussion moving- we want new ideas.

3. Limit multi-tasking (texting, checking email, social media); use designated break times & lunch.

4. Be brilliant – but brief.

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Module 1: Transformation Strategies and Return on Investment (ROI)

15

Paul Keckley, Healthcare Thought Leader and Smart Guy

• The New Rule of Healthcare Economics:

• “Don’t expect to get paid more tomorrow for the same work you’re doing today.”

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The Problem with the Care System for People with Behavioral Health Disorders

Too Little Effective Care Too Much Sick Care

17

Theory of Change/Logic Model

18

1. As-Is State: Funding

and Services fragmented;

most money flows after

you get sick

3. Deployment of First

Round of High Impact

Strategies focused on

High Cost Individuals

4. Reduce Hospital,

Emergency Room,

Imaging, and Medical

Specialty Spending

5. Integrated Funding

allows a region to

Recycle Savings into

Second Wave in Triple

Aim Initiatives

2. Integrated Funding

and Commitment from

All to Support Integrated

Care to Reduce Morbidity

and Mortality

6. To-Be State: Reduced

Morbidity and Mortality,

Increased Wellness,

Better Costs

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Oregon’s Results July 2013 – June 2014

19

Paying Close Attention to ROI• Change does not always equal Improvement.• Not all innovations have a Return on Investment.

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Washington State Project

21

This tool will be included in the Arizona Toolkit!

Exhibit A

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Today’s Triple Aim Strategies Menu• Strategy 1: MHIP Program or Lookalike• Strategy 2: Medication Assisted Treatment in Primary Care• Strategy 3: BHC-Based Care Management Program• Strategy 4: BHC-Based Primary Care Clinic• Strategy 5: Community-Based Care Coordination Team ("Hot Spotting")• Strategy 6: Community Health Worker (CHW) Program for Adult• Strategy 7: Supportive Housing-Based Care Management• Strategy 8: Hospital/ER-Based SBIRT

23

1) Organize for

Sustainability

2) Serve

High Cost

Individuals

3)Track and

Analyze Health

Cost & Utilization

4) Build the

Business

Case

Creating Your Sustainability Plan

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4-Step Sustainability Plan1. Organize for Sustainability

– Become Best Friends with the Health Plans serving your Clients

– Develop a Hot Spotting Strategy

– Develop Tracking Systems

2. Serve High Cost Individuals

– Successfully wrapping care around those with high healthcare costs

– Becoming emergency room and hospital prevention systems

25

4-Step Sustainability Plan3. Track and Analyze Cost and

Utilization Data

– Triple Aim Initiative Utilization & Cost

– ER, Inpatient, Outpatient Hospital, Specialty Medical Utilization & Cost

4. Build the Business Case

– Compute the Actual and Projected Cost Savings

– Develop a Return On Investment (ROI) Analysis

– Pitch the Business Case to Payors to Fund the Program Shortfall on an Ongoing basis through the Healthcare SavingsP&L Overhead

Departments

Revenue

Expense

Excess(Deficit)

P&L Service

Departments

Revenue

Expense

Excess(Deficit)

Financial Accounting System

Service

Records

Direct Cost

Indirect Cost

Total Cost

Service

Records

Date

Provider

CPT Code

Diagnosis

Charge

Patient Accounting System

Cost

Alloca-

tion

System

Micro-Costing or RVUs

Direct Costs

to Services

Overhead

Costs to

Services

Information Reporting System

25%

25% 25%

25%

10

0 9080

7060

5040

3040

5060

70

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Expand the Program(and keep building)

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Module 1: Small Group Exercise

• Small Group Background:– You will gather at your table based

on your small group number.

– This is the group you will be working with for the next day and a half.

– Simulation Scenario: • You are a multi-disciplinary design team

within a fictional region in a fictional state named Arizona.

• Your design team is made up of MCO staff, providers, and consumers and advocates.

• You have important problems to solve.

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Module 1 Small Group Exercise• Small Group Organizing:

– Introduce yourselves– Choose a pilot (who will operate the computer for later modules)– Choose a recorder (who will take careful notes about the changes)– Choose a timekeeper (who will make sure to keep you on task)

• Small Group Exercise:– Individual Assignment: Read the list of Practices with ROI evidence and put a

checkmark next to the ones that appear to have relevance to your Region’s Target Population.

– Small Group Work Step 1: Discuss any practice you’d like to add to the list.– Small Group Work Step 2: As a group, code each practice as follows:

a) This is widely in use in the Arizona Medicaid systemb) This is somewhat used in Arizona and should be expandedc) This is not really used in Arizona and should be expandedd) None of the above

– Small Group Work Step 3: Your region is going to receive a $2 million Transformation Grant to implement two Initiatives that have a high probability of achieving the Triple Aim for Medicaid enrollees in your region with behavioral health disorders.• Identify your two priority initiatives.• Describe the sub-population that will be served by each initiative.• Write a brief description about why each will be a good investment. 29

Break Time

• Followed by Small Group Check-In.

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Module 2: A Recommend Approach to Payment Reform

31

5-Step Process1. Identify your

Problem Areas and Develop Transformation Strategies

2. Determine and Size Your Funding Pools

3. Develop the Payment Models in Each Funding Pool

4. Design the Pay for Performance System

5. Develop Needed Plan and Provider Infrastructure

32

1. Identify Your Problem Areas and Develop

Transformation Strategies

2. Determine and Size Your Funding Pools

3. Develop the Payment

Models in Each Funding Pool

4. Design the Pay for

Performance System

5. Develop Needed Plan and Provider Infrastructure

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Step 1: Identify your Problem

Areas and Develop

Transformation Strategies

33

Step 2: Determine and Size the Funding Pools

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Health Plan Funding Pools• Budgets for each major

category of care and provider type.

• Providers in each pool hold some degree of risk based on the payment model.

• Initial pool sizes based on history with goal to right-size over a defined time period.

• A major problem with the US healthcare system: current pools are weighted toward “sick care” system.

35

Where Many Systems are Headed• Reduced Inpatient Admissions, Days, and Cost per Day + Reduced

Emergency Department Visits + Reduced Diagnostic Imaging + Reduced Specialty Procedures =

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Step 3: Develop the Payment Models in Each Funding Pool

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Menu of Payment Models

1. Capacity Funded

2. Fee for Service/Per Diem

3. Stratified Case Rate/Bundled Payment

4. Global Budget

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Payment Mechanisms1. Capacity Funded: The Fire Department

model; identify the staffing requirements and buy capacity.

2. Fee for Service/Per Diem: Payment for all authorized visits or days, paid at an agreed rate. This also includes bundled per visit (FQHC and CCBHC PPS) and bundled per diem.

3. Stratified Case Rate/Bundled Payment: Payment of a flat fee per patient for a predefined episode at a specific level of care, regardless of how much time and money was spent (e.g. Hospital DRGs and Mental Health Case Rates).

4. Global Budget (Sometimes called Partial Capitation): A set monthly budget for every assigned patient for a portion of their care. The emerging model for Primary Care.

39

40

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How to Decide Which Payment Model to Use?

• The Risk Triangle tells us that there are 5 types of Financial Risk.

• The Provider Payment Model is how Risk and Flexibility is Transferred from the Payor to the Provider.

• Theoretically, you wantto use the Provider Payment Model thatmoves as muchRisk and Flexibilityto the Provider asthey can handle.

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Types of RiskIn the Risk Triangle

1. Cost: Services cost more per unit than payment rates per unit.

2. Utilization (Individual): Individuals, on average, use more units of service than estimated.

3. Utilization (Case Mix): The mix of patients is weighted toward higher severity or complexity than estimated.

4. Penetration: More individuals from the covered population use services than estimated.

5. Population: The population requiring coverage grows faster than originally estimated (Held by Purchaser).

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Let’s Try a Case Rate Scenario• The provider is being paid case rates for 80 people.

• There are two levels of care: Level 1 and Level 2.

• Individuals at both levels , on average, use more units of service than planned.

43

Let’s Try a Global Budget Scenario• The provider is being paid a fixed per member per month amount

to provide outpatient mental health care to all that need it.

• We’re using the same assumptions as the Case Rate Scenario: Individuals at both levels , on average, use more units of service than planned.

• Plus, more people present for care than planned.

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Distribution of RiskAmong Providers, Plans

and Purchasers

Distribution of Risk

Fee for

Service

Stratified

Case Rate Capitation

Cost Risk provider provider provider

Individual Risk plan provider provider

Case Mix Risk plan plan provider

Penetration Risk plan plan provider

Population Risk purchaser purchaser purchaser

Types of Flexibility and RewardIn the Risk Triangle

• Fee for Service: Limited Flexibility; Reward if services cost less per unit than payment rates per unit (e.g. not much risk or reward).

• Care Rate: Not tied to counting widgets – much more flexibility to provide the right care in the right setting; Reward if individuals, on average, use less units of service than estimated.

• Global Budget: Even greater flexibility; Reward if individuals use less service, are able to help people move toward recovery, lowering case mix, or have fewer needing care because of your prevention and early intervention efforts.

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Let’s Try a 2nd Global Budget Scenario• We’re using the same basic assumptions, but with favorable

numbers that are due mainly to the provider implementing a series of triple aim strategies internally in their organization.

47

Risk, Reward and Incentives

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49

Step 4: Design the Pay for Performance System

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Step 5: Develop Needed Plan and Provider Infrastructure

51

Brainstorm at Your TableWhat questions do you have about:

1. Funding pools?

2. The four payment models?

3. Connecting service areas to payment models?

4. How provider risk increases as you go down the risk triangle?

5. How provider flexibility and reward increases as you go down the risk triangle?

6. Anything else from Module 2?

52

1. Identify Your Problem Areas and Develop

Transformation Strategies

2. Determine and Size Your Funding Pools

3. Develop the Payment

Models in Each Funding Pool

4. Design the Pay for

Performance System

5. Develop Needed Plan and Provider Infrastructure

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Module 3: Designing an Alternative Payment Model at the Payor Level

to Achieve the Triple Aim

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Module 3 Assumptions• Each Small Group represents a RBHA Alternative

Payment Model Design Team.

• Your Job is to develop a Mental Health Outpatient Case Rate System for your Region.

• Part 1: Full Group Walkthrough of the Case Rate Development Steps.

• Part 2: Small Group Case Rate Design Project.

• Part 3: Full Group Discussion of Key Learnings.

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Why Start with Case Rates?

• Key Concept:

– If you do it “right”, each of the Big 3 Payment Models…• Fee for Service

• Case Rates

• Capitation

– Require the same “Ingredients”

1. Enrollment

2. Penetration Rate

3. Levels of Care

4. Case Mix

5. Utilization

6. Unit Cost

– Case Rates may do the best job connect the dots.

55

The 10-Step Case Rate Model Design Process

Step 1: Identify Your Aims

Step 2: Define the Population

Step 3: Estimate the Penetration Rate

Step 4: Define the Categories and Levels of Care

Step 5: Estimate the Case Mix

Step 6: Estimate the Average Utilization at Each Level

Step 7: Estimate the Cost per Unit of Service

Step 8: Run Multiple Scenarios, Testing for Financial Feasibility

Step 9: Identify the Feasible Scenario that Best Matches Your Aims

Step 10: Design Your Implementation Plan

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Step 1: Identify Your Aims• Develop a payment model that:

1. Contains incentives to move toward the Triple Aim.

2. Provides greater flexibility to provide the right care, at the right time, in the right setting (contrasted with the care that will generate the most volume).

3. Aligns payment with need.

4. Ensures financial accountability (to prevent taking the money and running).

5. Supports administrative simplification (to the extent possible in an era of high levels of compliance).

57

A word about encounter data

• CMS requires the submission of encounters for all treatment services provided, regardless of how the services are funded.

• This is still how we report to the federal government what services were provided for the Medicaid funds.

• MUST continue to be submitted.

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Step 2: Define the Population• Admirable Mental Health Partners serves 30,000 Medicaid enrollees

across a four-county region. • The population includes newborns through older adults who are assigned

to a number of Medicaid eligibility groups that includes Medicaid expansion, non-disabled traditional Medicaid, and disabled traditional Medicaid.

• Admirable is responsible for providing a broad set of mental health services to all Medicaid enrollees that meet medical necessity criteria.

• Admirable is beginning their payment reform effort by developing outpatient case rates individuals with a serious mental illness or serious emotional disturbance who are served by the specialty behavioral health System.

• Payment models for enrollees with mild and moderate mental health disorders, substance use disorders, and co-occurring disorders will be developed in the next phase.

• Admirable has several years of utilization data for all but the Medicaid expansion population.

• Key Variable 1:

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Step 3: Estimate the Penetration Rate• Admirable must use historical data to estimate how many of the

30,000 enrollees will experience a serious mental illness or serious emotional disturbance and need community-based specialty mental health care.

• Since one can never predict the future with great precision, it will be important to identify a range.

• This metric is called the Penetration Rate.• Key Variable 2: Penetration Rate and Cases for 30,000 Enrollees

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Step 4: Define the Categories and Levels of Care

• For Medicaid enrollees with a serious mental illness or serious emotional disturbance, Admirable has organized their benefit package into the following categories, each with a designated payment method.

61

Step 4: Define the Categories and Levels of Care

• Since we are developing Case Rates for the Community-Based Services category, Admirable has drilled down into this category to develop four levels of care that will be paid different Case Rates.

62

Level Community-Based Services Level Descriptions

Recovery Maintenance and Health Management

(generally crosswalks to LOCUS Level 1)

Low Intensity Community Based Services

(generally crosswalks to LOCUS Level 2)

High Intensity Community Based Services

(generally crosswalks to LOCUS Level 3)

Wraparound ACT-Level Care

(generally crosswalks to LOCUS Level 4)

Level A:

Level B:

Level C:

Level D:

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Step 5: Estimate the Case Mix• In order to create Case Rates, we need to estimate how many

people will be served at each level of care. • Fortunately, Admirable has a long history of utilizing the LOCUS

Level of Care tool for Adults and the CALOCUS for youth. • This will greatly improve the quality of the case mix estimation

process. • If no such tool had been in place, Admirable would have had to look

to other communities for case mix figures and analyze historical utilization levels within the Admirable enrollment base.

• Key Variable 3: Case Mix

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Step 6: Estimate Average Utilization at Each Level of Care

• We have created multiple levels of care in order to ensure that organizations serving more higher-need cases receive more money and organizations serving more lower-need cases receive less money.

• Just think what would happen if provider organizations received the same Case Rate regardless of the level of need. There would be a huge incentive to “cherry pick” low need cases; a term called “adverse selection”.

• We want to remove this incentive and, if anything, create a financial incentive to serve more complex cases.

• Key Variable 4: Average Hours per Level

64

Level Description Minimum Maximum Average

Level A: Recovery Maintenance and Health Management 5 15 10

Level B: Low Intensity Community Based Services 10 35 20

Level C: High Intensity Community Based Services 30 80 50

Level D: Wraparound ACT-Level Care 80 140 110

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Station Break

• We’re getting close to computing the Case Rates and the Total Case Rate Budget.

– We have estimated how many people will need community based care, the distribution of cases across levels, and how much care the average person will need at each level.

• Important Note: What Case Rates are NOT

– Case Rates are NOT a fixed budget for an individual consumer.

– Case Rates are an AVERAGE payment for all of the consumers who will be served at a given level of care.

– By definition, some individuals will require MORE care at a given Case Rate Level and some will require LESS care in order to achieve the intended outcomes.

– Case Rates are meant to provide flexibility to the provider and consumer, not lock them into a rigid box.

• Questions? Comments?

65

Step 7: Estimate the Cost per Unit of Service

• Generally, the overall average cost per hour will be moved forward to the next step.

• Key Variable 5: Rate per Hour:

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Step 8: Run Multiple Scenarios• The following two tables show the first scenario based on steps 1-7. • The first table shows the Case Rate figures.• The second table computes a total annual budget for Admirable’s

community-based services.

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Finishing Steps 8 and 9

Step 1: Identify Your Aims

Step 2: Define the Population

Step 3: Estimate the Penetration Rate

Step 4: Define the Categories and Levels of Care

Step 5: Estimate the Case Mix

Step 6: Estimate the Average Utilization at Each Level

Step 7: Estimate the Cost per Unit of Service

Step 8: Run Multiple Scenarios, Testing for Financial Feasibility

Step 9: Identify the Feasible Scenario that Best Matches Your Aims

Step 10: Design Your Implementation Plan

Questions about Module 3 before we shift over to Excel?

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Small Group Work

• We are going to use the Arizona Payment Reform Flight Simulator.

• Make sure your group has identified a Pilot, a Recorder and a Timekeeper.

• You will be working with Tab 1: Rates of the Flight Simulator.

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Module 3: Small Group Instructions• Small Group Exercise:

– Decide the Name of your Small Group; enter it in cell C6 of tab 1 Rates.– Walk through steps 1 – 8 of the rate setting tab, identifying any questions you have

about the scenario. If you can’t answer any of the questions within the group, grab Dale, Karen or Jennifer.

• Balancing Activity 1– Test making changes to each variable, one at a time. – Describe the change you made.– Record the new Excess (Deficit).– Undo your change.– Repeat until you’re ready to move on.

• Balancing Activity 2– Discuss the pros and cons of changing each variable and develop an approach to

balancing the budget. – Example 1: I'm just going to change the Rate because providers can live with less. – Example 2: I'm going tweak all four variable rather than make one big change.

• Balancing Activity 3– Balance the budget and enter your changes below. – Write down your justification on the Module 3 Worksheet. – Be prepared to defend your scenario.

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Break Time

• Followed by Small Group Check-In.

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Module 4: Organizing at the Provider Level to Succeed under

Alternative Payment Models

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Module 4 Assumptions• Gear Shift: Each Small Group represents the Management

Team of a Specialty Behavioral Health Provider Organization.

• You have been part of the RBHA Case Rate Design Team and have come up with a set of Case Rates.

• You have gone back to your agency, run the numbers, and realize that you don’t have enough staff to meet demand and you will lose money under the new rates.

• Part 1: Full Group Walkthrough of the Scenario.

• Part 2: Small Group Work to Balance your Budget.

• Part 3: Full Group Discussion of Key Learnings.

73

Flight Simulator Overview

• The module in pictures.

Consumers

Service Mix

Units of Service

Service Staff

Productivity Hours

Available Hours

Direct Staff Costs

Other Direct

Overhead

Risk Reserve

Enrollees

Consumers

Service Units

Capitation/Case/

FFS Rates

Demand Capacity Revenue Expense

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Module 4 Overview

• Tab 2: Utilization Management Guidelines

• Tab 3: Demand/ Capacity Projections

• Tab 4: Revenue

• Tab 5: Expenses and Excess (Deficit)

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Module 4 Highlight 1

• You’ve done your homework implementing a Level of Care system and determined that you need 31.40 Clinician FTEs.

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Module 4 Highlight 2

• You’ve counted your Clinicians and you’re 2.40 FTEs short.

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Module 4 Highlight 3

• You’ve projected your revenue.

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Module 4 Highlight 4

• You’ve calculated your expenses, and you’re 4% short.

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Full Group Walkthrough in Excel

Shift over to Excel…80

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Module 4: Small Group Instructions• Balancing Activity 1

– Is there an Excess or Deficit of FTEs? If YES, your options are…• Adjust the Clinician FTEs up or down in Step 3.• Revise the Direct Service Hours per FTE per Week by Clinician up or down in Step 1 or 3.• Revise the number of Active Clients in Step 2 above.• Do a combo of the above.

– Record your changes on the worksheet.

• Balancing Activity 2– Is there an Excess or Deficit of Revenue over Expense? If YES, work on one or

more of the following variables, but keep make sure to keep Capacity and Demand in Balance.

1) Revise the Average Hours per Client per Level of Care (Tab 2 UM).2) Revise the Clinician FTEs (Tab 3 Demand).3) Revise the Direct Service Hours per FTE (Tab 3 Demand).4) Revise Salaries or Benefits (this tab).5) Revise Other Expense (this tab).

– Note: Assume for this exercise that you cannot change any of the Revenue Variables in tab 4.

– Note: Having a large Excess is normally a sign of a problem somewhere in the system.

– Record your changes on the worksheet.

• If you finish early, take a short break.81

Post-It Exercise

• What is the most important thing I’ve learned today?

• What is the most important question I have right now?

• Write each answer on a post-it and put them up on the flip charts.

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Day 1 Evaluation

1.Enlightened and Energized

2.Enlightened and Exhausted

3.In the Dark and Energized

4.In the Dark and Exhausted

Agenda – Day 2

• Debrief Day 1 – Learnings and Questions

• Module 5: Developing a Pay for Performance System

• Organizing the Workgroupsand Meeting Schedule

• Evaluation and Adjourn

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Debrief Day 1: Learnings and Questions

85

• Discuss questions and comments from the Day 1 Post-It Exercise.

• Tell us about your biggest AHA moment from yesterday…

Module 5: Developing a Pay for Performance System

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Outcomes and P4P• A Behavioral Health Center of

Excellence is known for achieving results for clients.

• The organization can measure what is important to clients and achieve excellent outcomes on those measures.

• Pay for Performance is a vehicle for incentivizing and rewarding organizations that commit to this journey.

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P4P and Outcomes• Bucket 1: The work

we do makes a measurable difference in people’s lives and we can demonstrate our excellent outcomes and high success rates with data (using validated clinical instruments).

• Bucket 2: We can’t make the above statement either because we aren’t measuring well (but we believe we provide great care), or we have started tracking outcomes and we’re not as great as we thought.

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There are two categories of P4P1. P4P can be Embedded in the Payment Model.

2. A Payment Layer is added on top of the Payment Model.

89

Four Phases of “Add-On” Payments1. Pay for Participation

– “We agree to participate in developing a ‘quality contract’ that describes the P4P design and measures.”

2. Pay for Reporting– Additional payments to support the cost of moving to a P4P

including implementation and use of health information technology.

3. Pay for Performance– Pay for hitting process targets (X% of patients have had breast

cancer exams and colorectal exams).

4. Pay for Outcomes– Paying for whether the care is “working”

• Pay for X% of patients with A1c levels under 7.• Pay a share of emergency room cost reduction.

90

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The P4P Process1. Develop the Benchmark Metric for each Measure (the

goal).

2. Identify the Baseline Metrics for each Measure for each Provider (where are you now).

3. Measure Frequently.

4. You earn your Bonus if you:

– Show Improvement, or

– Hit the Benchmark (you’re already there)

• Benchmarks may change over time, but should always be based on reasonable expectations of where the system needs to go.

91

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Paying for Outcomes• Systemwide Outcomes:

– Follow-up after hospitalization.

– Reduction in inpatient admissions per 1,000.

• Individual Outcomes:

– Major experiment unfolding in the Portland Oregon area –rollout of an Outcomes-Based Care/Treat to Target Initiative.

• You Need to Have Both in Place!

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System-Wide Outcomes CCBHC Sidebar

• On Monday February 2nd, SAMHSA released their draft Criteria for what it will take to become a Certified Community Behavioral Health Clinic.

• Comments are due February 16th.• Section 5 contains 3 pages of

draft “Quality and Other Reporting Requirements”.

• Appendix A contains 16 pages of 18 pages of potential Quality Measures, almost all of which are system-wide outcome measures.

http://www.samhsa.gov/about-us/who-we-are/laws-regulations/section-223

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Treat to Target/Outcomes-Based Care1. A multidisciplinary care team works with

an individual with behavioral health disorders to complete a multi-dimensional assessment;

2. The assessment is used to identify specific and measurable goals for the individual including at least one clinical goal and one personal goal;

3. The client and their team develop a professional care plan and self-care planthat includes setting targets related to the goals, utilizing validated tools to measure improvement;

4. The team supports client engagementthroughout the process, engaging the client in all aspects of the care planning and treatment, understanding how the client is progressing through the stages of change, and providing high-touch care management;

5. The client and team monitor progress in a persistent and individualized way to determine whether the care is working, using the clinical measurement tools to determine whether the targets are being reached;

6. There are regular case reviews with the team and with the client to determine whether the care plan is working or needs adjusting; if targets are not being met, care plans are changed;

7. Electronically shared information is available to all members of the care team, ideally through the use of a patient registry, including the care plans, medication list, and results from the outcomes tracking tools;

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What Makes a Treat to Target Tool?Portland’s Clinical Tools Menu Criteria

The following criteria are included to help ground us in both the tools and how to use them.

1. The tool must measure a clinically relevant symptom, function or behavioral domain.

2. The tool must use a scoring scale that supports the ability to do sequential measurement and has a track record for reliability and validity.

3. The tool must help the client and clinician determine whether the client is making progress.

4. The tool must be short and preferable self-reported by consumer/client when possible.

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Current List of Portland’s Tools

97

w ww.T he Na t io na lC ou nc i l . o rg

What percentage of your clients meet the “quick definition” of Treat to Target?

1. Over 2/3

2. 1/3 to 2/3

3. 0% to 1/3

4. I don’t know

Paying for Outcomes Question:

Quick Definition of Treat to Target

I have at least one short-term clinical goal that’s measured on a regular basis (monthly, weekly, every visit) and my care plan and/or self-care plan is adjusted if my goal is not being met.

Measurement tools include the PHQ-9, GAD, MDQ, etc.

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Quality Reporting/P4P Steps

99

Individual Outcomes

100

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Module 5: Small Group Instructions• The Task for Your Small Group:

– Develop a Behavioral Health Pay for Performance Program for your Region.

– Feel free to steal shamelessly from the Portland project.– Keep in mind the Four Phases of Add-On Payments (slide 90)

• Rules for the Exercise:– The Program has to be organized around a Treat to Target approach to

Outcomes at the Individual Client Level. – Phase 1 of the Program has to be ready to go live within 90 days.– The Program has to have at least 2 Phases.

• Questions to Answer:1. What is the Name of your P4P Program?2. What is the Aim/Goal of your P4P Program?3. Provide a brief description of your Program Design.4. How will you use Add-On Payments to support the Program in each

Phase (picking from the 4 Phases on slide 90)?5. How will you determine whether a Provider Organization has earned

their P4P Bonus in each Phase?

• If you finish early, take a short break. 101

Questions or Comments?

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Organizing the Workgroups and Meeting Schedule

103

Workgroup Overview1. What is the intended purpose and audience for the tool kit?2. What are the different groups/topics and the anticipated timeline,

format, and structure? 3. What is the type of information that will be covered in each

group/topic?4. What is the ideal composition/number of members of

workgroups?5. What are the proposed meeting dates and time commitments for

each workgroup?Organizing the Workgroups

• Sign up on big sheets on walls around the perimeter of the room. • If time, pre-convene each workgroup for a meet and greet face-to-

face.

Workgroups

1. Population, Service Areas, Payment Models

2. Pay for Performance Design

3. Information Technology Requirements

4. Regulatory Requirements or Provider Readiness (pick one)

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105

Day 2 Evaluation

1.Enlightened and Energized

2.Enlightened and Exhausted

3.In the Dark and Energized

4.In the Dark and Exhausted

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Boot Camp Closing Remarks

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Welcome to the ...

Payment Reform Flight SimulatorWe Hope Your Stay is a Pleasant One!

Overview

This Microsoft Excel-based Toolkit contains a set of spreadsheet models to assist

your small group during the Boot Camp.

Module 3: Designing Case Rates Tab

- Case Rate Scenario Building 1. Rates

Module 4: Provider Case Rate Prep Tab

- Estimate service hours per level of care 2. UM

- Project Demand 3. Demand

- Project Capacity 3. Demand

- Balance Capacity and Demand 3. Demand

- Project Revenue 4. Revenue

- Project Expenses 5. Expense

- Balance Revenue and Expenses 5. Expense

- Estimate caseload sizes 6. Caseload

If you have any questions, please contact: Dale Jarvis at [email protected]

Case Rate Flight Simulator, January 2014, Page 1Packet Page 56

Payment Reform Flight Simulator1. Case Rate Scenario Building RBHA Excess(Deficit): -$1,059,234

Team Name: Your Team's Name Here

1. What is the Population 30,000

2. How many people will be served?

Penetration Rate 10%

Number of Clients 3,000

3. How will they distribute across Level A 20% 600

levels of care? Level B 37% 1,110

Level C 33% 990

Level D 10% 300

100% 3,000

4. How much care will the average Level A 10 Clinician Hours

person need at each level? Level B 20 Clinician Hours

Level C 50 Clinician Hours

Level D 110 Clinician Hours

5. What's the Average Cost per Hour? $158.62

Clients Hrs/Client Total Hours

6. What are the Total Costs if our Level A 600 10 6,000

Estimates are Accurate and we Level B 1,110 20 22,200

paid Fee for Service? Level C 990 50 49,500

Level D 300 110 33,000

Total Hours 110,700

Average Hourly Rate $158.62

Total Costs $17,559,234

Hrs Rate Amount

7. What are the Case Rate amounts? Level A 10 $158.62 $1,586

Level B 20 $158.62 $3,172

Level C 50 $158.62 $7,931

Level D 110 $158.62 $17,448

8. What is the total Case Rate Budget? Clients Case Rate Total $

Level A 600 $1,586 $951,720

Level B 1,110 $3,172 $3,521,364

Level C 990 $7,931 $7,851,690

Level D 300 $17,448 $5,234,460

Total $17,559,234

Available Funding $16,500,000

|---------------- OOPS --------------------> Excess (Deficit) ($1,059,234)

|---------------- OOPS --------------------> Excess (Deficit) % -6%

Case Rate Flight Simulator, January 2014, Page 2Packet Page 57

Payment Reform Flight Simulator1. Case Rate Scenario Building RBHA Excess(Deficit): -$1,059,234

Hrs Clients Average

9. What's the Blended Case Rate? Total 110,700 3,000 36.90

Rate $158.62

$5,853

10. What's the Capitation Rate? Budget $17,559,234

Covered Population 30,000

Per Member Per Year $585.31

Per Member Per Month $48.78

11. Balancing the Budget Exercise

You have 4 variables you can adjust:

A. Penetration Rate C. Hours per Case

B. Case Mix D. Cost per Hour

Balancing Activity 1

Test making changes to each variable, one at a time.

Record the change you made.

Record the new Excess (Deficit)

Balancing Activity 2

Discuss the pros and cons of changing each variable and develop an approach

to balancing the budget.

Example 1: I'm just going to change the Rate because providers can live with less.

Example 2: I'm going tweak all four variable rather than make one big change.

Balancing Activity 3

Balance the budget and enter your changes on the Module 3 Worksheet.

Write down your justification on the Module 3 Worksheet.

Be prepared to defend your scenario.

Case Rate Flight Simulator, January 2014, Page 3Packet Page 58

Payment Reform Flight Simulator2. Utilization Management Guidelines Agency Excess(Deficit): -$172,154

Team/Program/Agency Name:

This tab lists the range of hours that would generally expected to be provided at a given

level of care; and the average hours that we should shoot for with all clients on a team,

program or agency-wide, based on the Case Rates being paid by your Medicaid payor.

Hours per Client per Episode

Hours Hours Average Payment

Level Low End High End Hours Hours

Level A: 5 15 8.0 8.0

Level B: 10 35 18.0 18.0

Level C: 30 80 48.0 48.0

Level D: 80 140 96.0 96.0

Client Average Length of Stay

What is the average length of stay for cases at each level (in months)?

Level A: 4 months

Level B: 6 months

Level C: 9 months

Level D: 12 months

Client Demand

What are the average hours per client per week provided by you?

How many clients could one FTE see if they were only seeing clients at one level of care?

Hours per Week: 24 Direct Service Time per FTE per Week

Client Client

Hours/Wk per FTE

Level A: 0.47 52 Note that the client hours per week

Level B: 0.70 34 calculation is based on Payment Hours

Level C: 1.24 19 divided by the average number of weeks

Level D: 1.86 13 at each level.

Your Team's Name Here

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Payment Reform Flight Simulator3. Demand/Capacity Projection Tool Agency Excess(Deficit): -$172,154

Team/Program/Agency Name:

Step 1: Hours per Clinical FTE per Year

How many service hours per year and per week should 1.0 FTE clinician be available

to provide direct client service?

Weeks per year 52

Vacation, Sick, Holiday, Training Weeks 6

Work Weeks 46

Hours per week 40

Hours per year 1,840

Direct

Client Time

Paperwork

& Travel

Mtgs, No

Shows, etc.

Misc.,

Other

Unproductive

Time Total Time

Percentage 60% 10% 15% 8% 7% 100%

Hours/Year 1,104.0 184.0 276.0 147.2 128.8 1,840.0

Hours/Work Week 24.00 30.67 46.00 24.53 21.47 146.67

Step 2: Active Clients and FTE Demand

Total Direct Svc Clinician

Active Avg Hrs Direct Svc Client Hrs Hours/FTE FTE

Clients per Week Hrs/Week per Year per Year Demand

Level A 100 0.47 46.5 2,419

Level B 200 0.70 139.5 7,256

Level C 275 1.24 341.1 17,736

Level D 75 1.86 139.5 7,256

Total 650 666.7 34,667 1,104 31.40

Step 3: Clinician Capacity

Direct Svc Clinician

Hours/FTE Annual

FTEs per Week Capacity

12.00 24.00 13,248

10.00 24.00 11,040

4.00 24.00 4,416

2.00 24.00 2,208

1.00 24.00 1,104

24.00 -

24.00 -

Total Capacity 29.00 1,104 32,016

Client Demand 34,667

Excess (Deficit) (2,651)

FTE Excess (Deficit) (2.40)

Balancing Activity 1

Is there an Excess or Deficit of FTEs? If YES, your options are…

- Adjust the Clinician FTEs up or down in Step 3.

- Revise the Direct Service Hours per FTE per Week by Clinician up or down in Step 1 or 3.

- Revise the number of Active Clients in Step 2 above.

- Do a combo of the above.

Peer/Paraprofessional

Psychiatrist

Nurse Practitioner

Your Team's Name Here

Clinician

Type

Master's Level

BA Case Manager

Case Rate Flight Simulator, January 2014, Page 5Packet Page 60

Payment Reform Flight Simulator4. Revenue Tool Agency Excess(Deficit): -$172,154

Team/Program/Agency Name:

Step 1: Gross Charges

Service Average Gross Direct Overhead Total

Hours Charge/Hour Charges Cost/Hr Cost/Hr Cost/Hr

Master's Level 13,248 $120.00 $1,589,760 $55.34 $64.33 $119.68

BA Case Manager 11,040 $90.00 $993,600 $41.21 $47.91 $89.12

Peer/Paraprofessional 4,416 $80.00 $353,280 $37.68 $43.80 $81.48

Psychiatrist 2,208 $500.00 $1,104,000 $235.51 $273.75 $509.26

Nurse Practitioner 1,104 $225.00 $248,400 $105.98 $123.19 $229.17

- - $0 $0.00 $0.00 $0.00

- - $0 $0.00 $0.00 $0.00

Total 32,016 $133.97 $4,289,040 $62.21 $72.31 $134.51

Step 2: Payor Mix, FFS Revenue and Contractual Allowances & Write-Offs

Service Gross Case Rate Allowance/ Net

Payor Mix Hours Charges Payor? Write-Off % Fees

Medicaid FFS 5% 1,601 $214,452 No 60% $85,781

Medicaid Case Rate 70% 22,411 $3,002,328 Yes 100% $0

Medicare 10% 3,202 $428,904 No 40% $257,342

Private Insurance 10% 3,202 $428,904 No 25% $321,678

Self Pay 5% 1,601 $214,452 No 90% $21,445

- $0 $0

- $0 $0

Total 100% 32,016 $4,289,040 $686,246

Source: (input) (calc) (calc) (input) (calc)

Note: Case Rates always have 100% Contractual Allowance; Case Rate Revenue is computed in Step 3.

Step 3: Annual Cases

Average % of Cases Case Rate

Level Active Length of "Turns" Cases Paid via Cases

of Care Cases Stay (Mos) per Year per Year Case Rate per Year

Level A 100 4 3.0 300 70% 210

Level B 200 6 2.0 400 70% 280

Level C 275 9 1.3 367 70% 257

Level D 75 12 1.0 75 70% 53

Total 650 1,142 799

Your Team's Name Here

Clinician Type

Payor

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Payment Reform Flight Simulator4. Revenue Tool Agency Excess(Deficit): -$172,154

Team/Program/Agency Name: Your Team's Name Here

Step 4: Case Rate Revenue

Level Case Rate Case Rate Case Rate

of Care Cases Payment Revenue

Level A 210 $1,120 $235,200

Level B 280 $2,520 $705,600

Level C 257 $6,720 $1,724,800

Level D 53 $13,440 $705,600

Total 799 $3,371,200

Step 5: Other Revenue and Total Revenue

$20,000

$20,000

$20,000

$60,000

$15,000

$2,000

$17,000

$686,246 (Step 2)

$3,371,200 (Step 4)

Total Revenue $4,134,446

Other Revenue

Subtotal

Fee for Service

Case Rate Revenue

Grant Revenue

XYZ Foundation

Federal Block Grant

Fundraising

Interest

Subtotal

State Grant

Case Rate Flight Simulator, January 2014, Page 7Packet Page 62

Payment Reform Flight Simulator5. Expenses and Excess (Deficit) Agency Excess(Deficit): -$172,154

Team/Program/Agency Name:

Step 1: Clinical Staffing Expense

Average Total Average Total Total

FTEs Salary/FTE Salaries Benefits % Benefits Compensation

Treatment Staff

Master's Level 12.00 $47,000 $564,000 30% $169,200 $733,200

BA Case Manager 10.00 $35,000 $350,000 30% $105,000 $455,000

Peer/Paraprofessional 4.00 $32,000 $128,000 30% $38,400 $166,400

Psychiatrist 2.00 $200,000 $400,000 30% $120,000 $520,000

Nurse Practitioner 1.00 $90,000 $90,000 30% $27,000 $117,000

- - $0 $0 $0

- - $0 $0 $0

Total Clinical Staff 29.00 $1,532,000 $459,600 $1,991,600

Step 2: Other Staff Expense

Average Total Average Total Total

FTEs Salary/FTE Salaries Benefits % Benefits Compensation

4.00 $75,000 $300,000 25% $75,000 $375,000

6.00 $32,000 $192,000 25% $48,000 $240,000

$0 $0 $0

$0 $0 $0

Total 10.00 $492,000 $123,000 $615,000

% of Clinical Compensation 31%

Step 3: Other Expense

Amount

$150,000

$500,000

$250,000

$150,000

$650,000

Total $1,700,000

% of Clinical Compensation 85%

Total Expenses $4,306,600

Total Revenue $4,134,446 (from Tab 4)

Excess (Deficit) -$172,154

Excess (Deficit) % -4%

Balancing Activity 2

Is there an Excess or Deficit of Revenue over Expense? If YES, work on one or more of the the following

variables, but keep make sure to keep Capacity and Demand in Balance.

1) Revise the Average Hours per Client per Level of Care (Tab 2 UM).

2) Revise the Clinician FTEs (Tab 3 Demand).

3) Revise the Direct Service Hours per FTE (Tab 3 Demand).

4) Revise Salaries or Benefits (this tab).

5) Revise Other Expense (this tab).

Note: Assume for this exercise that you cannot change any of the Revenue Variables in tab 4.

Note: Having a large Excess is normally a sign of a problem somewhere in the system.

Other Overhead

Category

Supplies

Rent

Travel

Professional Fees

Admin Staff

Clinician Type

Support Staff

Your Team's Name Here

Clinician Type

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Payment Reform Flight Simulator6. Caseload Analysis Tool (Bonus Section)

Team/Program/Agency Name:

Step 1: Service Hours per Clinician FTE

How many service hours per year and per week should 1.0 FTE clinician be available

to provide direct client service?

Weeks per year 52

Vacation, Sick, Holiday, Training Weeks 6

Work Weeks 46

Hours per week 40

Hours per year 1,840

Direct Client

Time

Paperwrk &

Travel

Mtgs, No

Shows, etc. Misc., Other

Unproductive

Time Total Time

Percentage 60% 10% 15% 8% 7% 100%

Hours/Year 1,104.00 184.00 276.00 147.20 128.80 1,840.00

Hours/Work Week 24.00 4.00 6.00 3.20 2.80 40.00

Step 2: Levels of Care

How many levels do you have?

Level A

Level B

Level C

Level D

Step 3: Clinician Hours per Client per Level of Care

What are the average number of Clinician Direct Service Hours that will be provided

at each level of care?

(Note: Hours are Clinician Hours, not Client Hours)

Average

Hours

Level A 8.0

Level B 18.0

Level C 48.0

Level D 96.0

Source (UM Tab,

can be

overridden)

Step 4: Client Average Length of Stay

What is the average length of stay for cases at each level (in months)?

Level A 4 months

Level B 6 months

Level C 9 months

Level D 12 months

Your Team's Name Here

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Payment Reform Flight Simulator6. Caseload Analysis Tool (Bonus Section)

Team/Program/Agency Name: Your Team's Name Here

Step 5: Client Demand

What are the average hours per client per week provided by you?

How many clients could one FTE see if they were only seeing clients at one level of care?

Hours/Wk Clients/FTE

Level A 0.46 52 (based on available Direct Service Hours in Step 1)

Level B 0.69 35 "

Level C 1.23 19 "

Level D 1.85 13 "

Step 6: Clinician Client Mix Scenarios

What are typical clinican case mix scenarios of the ratio of clients at each level?

Clinician 1 Clinician 2 Clinician 3 Clinician 4 Clinician 5 Clinician 6

Level A 75% 40% 25% 0% 0% 0%

Level B 25% 50% 25% 25% 0% 0%

Level C 0% 10% 25% 25% 50% 25%

Level D 0% 0% 25% 50% 50% 75%

Total 100% 100% 100% 100% 100% 100%

Step 7: Client Hours Distribution

How many hours would you spend each week serving cases at each level?

Clinician 1 Clinician 2 Clinician 3 Clinician 4 Clinician 5 Clinician 6

Level A 18.00 9.60 6.00 - - -

Level B 6.00 12.00 6.00 6.00 - -

Level C - 2.40 6.00 6.00 12.00 6.00

Level D - - 6.00 12.00 12.00 18.00

Total 24.00 24.00 24.00 24.00 24.00 24.00

Step 8: Caseload Size Scenarios

Based on this analysis, how many active cases would be needed to create a full caseload?

Clinician 1 Clinician 2 Clinician 3 Clinician 4 Clinician 5 Clinician 6

Level A 39 21 13 - - -

Level B 9 17 9 9 - -

Level C - 2 5 5 10 5

Level D - - 3 6 6 10

Total 48 40 30 20 16 15

Case Rate Flight Simulator, January 2014, Page 10Packet Page 65

Page 1

Arizona Behavioral Health Payment Reform Toolkit Module 1: Transformation Strategies and Return on Investment (ROI) Small Group Exercise Worksheet

Instructions

Small Group Background:

• You will gather at your table based on your small group number.

• This is the group you will be working with for the next day and a half.

• Simulation Scenario:

– You are a multi-disciplinary design team within a fictional region in a fictional state named Arizona.

– Your design team is made up of MCO staff, providers, and consumers and advocates.

– You have important problems to solve.

Small Group Organizing:

• Introduce yourselves

• Choose a pilot (who will operate the computer for later modules)

• Choose a recorder (who will take careful notes about the changes)

• Choose a timekeeper (who will make sure to keep you on task)

Small Group Exercise:

• Individual Assignment: Read the list of Practices with ROI evidence and put a checkmark next to the ones that appear to have relevance to your Region’s Target Population.

• Small Group Work Step 1: Discuss any practice you’d like to add to the list.

• Small Group Work Step 2: As a group, code each practice as follows:

– This is widely in use in the Arizona Medicaid system

– This is somewhat used in Arizona and should be expanded

– This is not really used in Arizona and should be expanded

– None of the above

• Small Group Work Step 3: Your region is going to receive a $2 million Transformation Grant to implement two Initiatives that have a high probability of achieving the Triple Aim for Medicaid enrollees in your region with behavioral health disorders.

– Identify your two priority initiatives.

– Describe the sub-population that will be served by each initiative.

– Write a brief description about why each initiative will be a good investment.

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Page 2

Module 1 Small Group Worksheet

Strategy 1 Name:

Subpopulation to Serve:

Why is this a good investment?

Other Comments:

Strategy 2 Name:

Subpopulation to Serve:

Why is this a good investment?

Other Comments:

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Page 3

Triple Aim Strategy Candidates for Your Region’s Medicaid Enrollees with Behavioral Health Disorders

Menu of Strategies Strategy 1: MHIP Program or Lookalike Strategy 2: Medication Assisted Treatment in Primary Care Strategy 3: BHC-Based Care Management Program Strategy 4: BHC-Based Primary Care Clinic Strategy 5: Community-Based Care Coordination Team ("Hot Spotting") Strategy 6: Community Health Worker (CHW) Program for Adult Strategy 7: Supportive Housing-Based Care Management Strategy 8: Hospital/ER-Based SBIRT

Strategy 1: MHIP Program or Lookalike

Category: Behavioral Health in Primary Care

The Mental Health Integration Program (MHIP) has been developed by the University of Washington AIMS Centers. It is a best practice program that integrates behavioral health into primary care with linkages to specialty behavioral health. The program uses a well-defined set of clinical workflows supported by a care team that includes the primary care provider, a behavioral health care manager, a consulting psychiatrist, and other team members who screen, engage, treat and help patients manage their behavioral health conditions in primary care. If a patient's condition is too complex, a stepped care model is used to engage the patient in specialty care for a time limited period.

Financial and Utilization Results: Program Savings are estimated at $5,200 over four years; $1,300 per year average. This is approximately a 4:1 return on investment. A significant portion of this savings comes from reductions in inpatient admissions.

Strategy 2: Medication Assisted Treatment in Primary Care

Category: Behavioral Health in Primary Care

Buprenorhpine/Buprenorphine-Naloxone is an opiate substitution treatment used to treat opioid dependence. It is generally provided in addition to counseling therapies. Buprenorhpine/Buprenorphine-Naloxone is a partial agonist that suppresses withdrawal symptoms and blocks the effects of opioids. Two versions of buprenorphine are used in the treatment of opioid dependence. Subutex consists of buprenorphine only while Suboxone is version of buprenorphine that combines buprenorphine and naloxone. The addition of naloxone reduces the probability of overdose and reduces misuse by producing severe withdrawal effects if taken any way except sublingually. Suboxone is generally given during the maintenance phase and many clinics will only provide take-home doses of Suboxone. Buprenorphine and Buprenorphine/Naloxone are alternatives to methadone treatments and, unlike methadone, can be prescribed in office-based settings by physicians that have completed a special training.

Financial and Utilization Results: Program Savings are estimated at just under $10,000 and program costs are $4,500. This is approximately a 2.2 to 1.0 return on investment.

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Strategy 3: BHC-Based Care Management Program

Category: Medical Care Management in Behavioral Health

Missouri's system of Community Mental Health Centers began the first statewide program of behavioral health clinic-based whole health care management based on a well-defined clinical and staffing model. The program uses a team led be a nurse care manager and staffed with case managers who have been trained to provide medical care management, supervised by a medical doctor.

Financial and Utilization Results: The initial group of highest needs clients had a net savings (after program expenses) of $500 per user per month. After significant expansion of the program the net cost savings are averaging $300 per user per month. There is no net additional cost for the first two years, i.e., investments in integrated behavioral health were offset by reductions in medical costs. For subsequent years, medical cost offsets exceed investments.

Strategy 4: BHC-Based Primary Care Clinic

Category: Primary Care in Behavioral Health

Cherokee Health Systems is one of the first FQHC systems in the country to do a large scale implementation of integrated care based on a community mental health center system being merged with a primary care clinic system. The Washtenaw Health Initiative is a second model, following a related design. Since then, the federal government has developed a grant program to fund over 100 clinics to advance the concept of a primary care clinic in a behavioral health setting.

Financial and Utilization Results: Cherokee has demonstrated 28% reduction in medical utilization for Medicaid patients and 20% decrease in utilization for patients with private insurance. A slight increase in primary care visits were offset by larger reductions in ER use, specialty care and hospitalizations.

Strategy 5: Community-Based Care Coordination Team ("Hot Spotting")

Category: Community-Based Care

In 2007, the Camden Coalition of Healthcare Providers began implementation of a citywide care management program to intervene and direct appropriate outreach to the most frequent utilizers of the emergency rooms and hospitals. The outreach teams consist of a social worker, health outreach worker/medical assistant, and a nurse practitioner. They assist with coordinating primary and specialty care, applying for benefits, securing temporary shelter, etc.

Financial and Utilization Results: The Camden effort made extraordinary progress with a seriously ill, yet engaged population. There was reduction of ER and hospital visits by 40% - 50%, with overall cost reductions of 25% - 50%. Preliminary studies had revealed that one percent of the city's population from a narrow geographic area accounted for a third of its medical costs.

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Strategy 6: Community Health Worker (CHW) Program for Adults

Category: Community-Based Care

There are an increasing number of community health worker programs that are demonstrating improved health outcomes and cost savings for a wide range of populations. This initiative draws on the Denver Health program that used CHWs to provide community outreach to adults as a means of increasing access and continuity to health care services.

Financial and Utilization Results: Average savings per month were $22,943 (5%) for 590 patients; patients received more primary care & BH services and fewer inpatient and urgent care costs. Pre-study PMPM costs were $787. ROI: 2.28 to 1.00.

Strategy 7: Supportive Housing-Based Care Management

Category: Community-Based Care

Several studies of supportive housing programs have shown demonstrated cost savings: A 67% decrease in Medicaid costs pre- and one-year post housing in Massachusetts; a 41% reduction in Medicaid costs after one year for the 1811 Eastlake Project in Seattle; 24% reduction in emergency room and 29% reduction in hospital admissions from Chicago; a 27% reduction in hospital admissions and inpatient days from the California Frequent User Initiative. All programs have care management services that focus on the whole health needs of the residents. These programs have a very successful enrollment rate; that is, with effective outreach to the most severe cases, there is little to no rejection of enrollment by the contacted individuals.

Financial and Utilization Results: Reduced Medicaid costs per above. For this initiative, we have estimated a 30% reduction in high cost services for Disabled Adults, which is consistent with the Center for Health Care Strategies 2012 Policy Brief.

Strategy 8: Hospital/ER-Based SBIRT

Category: Hospital-Based BH EBP

Patients in medical hospitals and emergency rooms are screened for "hazardous" alcohol use. Those screening positive receive a brief intervention, delivered by health care staff or other professional. The intervention includes feedback on the patients’ consumption compared to their peers and motivational interview to encourage reduction in consumption. Patients typically receive a single intervention lasting 15 minutes to one hour. Patients meeting diagnostic criteria would be referred to chemical dependency treatment.

Financial and Utilization Results: Gross savings per person range from $4,500 (hospital) to $6,000 (ER). Costs ranged from $156 (hospital) to $420 (ER). The return on investment ranged from 14 to 1 (ER) to 28 to 1 (hospital).

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Arizona Behavioral Health Payment Reform Toolkit Module 3: Designing an Alternative Payment Model at the Payor Level to Achieve the Triple Aim Small Group Exercise Worksheet

Instructions

Small Group Exercise:

• Decide the Name of your Small Group; enter it in cell C6 of tab 1 Rates.

• Walk through steps 1 – 8 of the rate setting tab, identifying any questions you have about the scenario. If you can’t answer any of the questions within the group, grab Dale, Karen or Jennifer.

• Balancing Activity 1

– Test making changes to each variable, one at a time.

– Describe the change you made.

– Record the new Excess (Deficit).

– Undo your change.

– Repeat until you’re ready to move on.

Change Description Excess (Deficit)

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• Balancing Activity 2

– Discuss the pros and cons of changing each variable and develop an approach to balancing the budget.

– Example 1: I'm just going to change the Rate because providers can live with less.

– Example 2: I'm going tweak all four variable rather than make one big change.

• Balancing Activity 3

– Balance the budget and enter your changes below.

– Write down your justification on the Module 3 Worksheet.

– Be prepared to defend your scenario.

Change Description Excess (Deficit)

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Arizona Behavioral Health Payment Reform Toolkit Module 4: Organizing at the Provider Level to Succeed under Alternative Payment Models Small Group Exercise Worksheet

Instructions

Small Group Exercise:

Balancing Activity 1: Balance Demand and Capacity in Tab 3 Demand

• Is there an Excess or Deficit of FTEs? If YES, your options are…

– Adjust the Clinician FTEs up or down in Step 3.

– Revise the Direct Service Hours per FTE per Week by Clinician up or down in Step 1 or 3.

– Revise the number of Active Clients in Step 2 above.

– Do a combo of the above.

• Record your changes below.

Change Description FTE Excess (Deficit)

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Balancing Activity 2: Balance Revenue and Expense in Tab 5 Expense

Is there an Excess or Deficit of Revenue over Expense? If YES, work on one or more of the following variables, but keep make sure to keep Capacity and Demand in Balance.

1) Revise the Average Hours per Client per Level of Care (Tab 2 UM).

2) Revise the Clinician FTEs (Tab 3 Demand).

3) Revise the Direct Service Hours per FTE (Tab 3 Demand).

4) Revise Salaries or Benefits (this tab).

5) Revise Other Expense (this tab).

Note: Assume for this exercise that you cannot change any of the Revenue Variables in tab 4.

Note: Having a large Excess is normally a sign of a problem somewhere in the system.

Record your changes below.

Change Description FTE Excess (Deficit)

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Arizona Behavioral Health Payment Reform Toolkit Module 5: Small Group Exercise Worksheet

Instructions

• The Task for Your Small Group:

– Develop a Behavioral Health Pay for Performance Program for your Region.

– Feel free to steal shamelessly from the Portland project.

– Keep in mind the Four Phases of Add-On Payments (slide 90)

• Rules for the Exercise:

– The Program has to be organized around a Treat to Target approach to Outcomes at the Individual Client Level.

– Phase 1 of the Program has to be ready to go live within 90 days.

– You must design the first 2 Phases of the Program.

Worksheet

P4P Program Name:

P4P Program Aim/Goal

Phase 1 Phase 2

Phase 1 Description:

Phase 2 Description:

Payment Type (from slide 90)

Payment Type (from slide 90)

What it takes to Earn the Bonus:

What it takes to Earn the Bonus:

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