THE COLORADO MODEL PROVIDER’S AT-RISK

Geographic Area of 17 Mental Health Centers

Geographic area of 5 Behavioral Healthcare organizations

Capitation BHOs are paid a PMPM for every client enrolled, regardless of whether or not they access services BHO submit their encounters to the Department, the Department builds the cost of previous years services into future rates BHOs pay community mental health centers with a sub- capitation arrangement

History of BHO’s Statutory authority in created in 1995 CO Medicaid Department administers a statewide, prepaid, capitated system to provide behavioral health services to Medicaid members The Department run this Program under SPA and a waiver approved by CMS under Section 1915(b)

1915 (b)(3) waiver is Important . . . Allows program to offer extra services or (b)(3) services if they are cost effective Allows automatic enrollment in a BHO

(b)(3) Services Available to BHO-Enrolled Clients Vocational services Clubhouse/drop-in centers Residential services (not available for SUD clients) Assertive Community Treatment Peer advocate services Respite services Prevention/early intervention activities School-based and day treatment services for children/youth Targeted case management

state plan mental health and SUD services Assessment Inpatient hospital mental health care (not available for SUD) Outpatient mental health services Outpatient SUD services Psychiatrist services Emergency/crisis services Individual and group therapy Medication management Detoxification services Drug screening and monitoring Medication Assisted Treatment for opioid addiction

Health Reform Goals--Value-Based Payment Full Capitation Partial Capitation Shared Risk Shared Savings Bundled Payments Pay-For-Performance Incentive Payment Fee-For-Service

Key Takeaways. . . Capitation is a value-based payment model Even with health reform, many payment models continue to rely on volume Under volume-based payment--providers who develop more-cost-effective approaches don’t receive any of the savings. Instead, the money goes mainly to insurers. The solution is to pay for health care with population- based payment.

Takeaways. . . Under this approach, providers in a capitated payment are also held accountable for high-quality outcomes. It’s the only payment system that fully aligns providers’ financial incentives with the goal of eliminating waste. HMOs of the 1980’s and 90’s failed because insurance companies were payed a capitated rate, but then paid providers fee-for-service. To be successful--providers must be invested in the outcomes and savings.

Now ENTER Colorado PHASE 2 Colorado is looking for a Medicaid redesign (Accountable Care Collaborative (ACC) Phase II) Shifting away from BHOs to a combined entity that manages behavioral health, and elements of physical health Will have 7 geographic regions instead of 5

Key Takeaways… Capitated payment models encourage efficient care delivery and can slow the growth of healthcare budgets over time. The initial ACC Phase II Concept Paper released by the Colorado Medicaid Department in October 2015 proposed to end the use of capitation for behavioral healthcare and move towards a fee-for-service model with value-based elements. The current funding levels for Colorado's BHOs are consistent with well- managed behavioral health patterns of care, as evaluated against tthe 2016 Milliman Health Cost Guidelines.

Key Takeaways… ACC Phase II may change the breadth of BH benefits under a capitation payment model, or may change the care management responsibilities to organizations that do not have the history of behavioral care management of the BHOs, or both, each of which could lead to increased behavioral healthcare costs Milliman estimates that total FY19 costs would reach $844 million under the continuance of the well-managed BHO care delivery system. Milliman estimates that costs increase of between $279 million and $581 million if changes to the current behavioral care delivery system result in a more loosely-managed care delivery system.

More Key Takeaways. . .we are different than Physical Health There is more subjectivity within the delivery of behavioral healthcare than physical healthcare. Additionally, there is a broader range of service utilization across the country of behavioral healthcare services than physical healthcare services. The difference between well-managed and loosely-managed healthcare utilization and costs is significantly larger for behavioral healthcare services than for physical healthcare services. Therefore the cost increase in moving from a well-managed behavioral healthcare system to a more loosely-managed system would cost more proportionally than in a similar system change for physical healthcare.

So what’s Next? State agreed to keep BH Capitation—but don’t know what this means for BH providers (mental health centers) Still have a map with seven regions – can this population mix support risk? CO needs to expand covered services—Medicaid benefit New CMS Managed Care Rules---CO may need to seek waivers System Goals—better alignment (physical, BH, and hospitals)