Addiction Treatment Programs in the 21st Century—The Habits of Successful Programs

Thriving in the age of Parity and ACA

Phil Herschman, PhDCCO CRC Health Group

WCSADMay 29,2014

2

Two Major Federal Activities Impacting our Field:

The Parity Act (MHPEA)

Federal Healthcare Reform (ACA)

What is “Parity” anyway?

Insurance plans offering mental health and substance abuse treatment can no longer offer coverage that differs in dose, frequency, or quantity from coverage for physical health services such as diabetes or cancer.

But…

Notice the wording – “insurance plans offering mental health and substance abuse treatment..”

The Parity Act doesn’t require that plans cover Substance Abuse and Mental Health treatment

Healthcare Reform mandates the inclusion of substance use disorder treatment as one of the TEN Essential Benefits.

It must be included by all companies offering health insurance (along with the 9 other Essential Benefits:Emergency Services, outpatient and inpatient services, pediatric and lab services…)

That’s OK Because…..

In total, the CBO (Congressional Budget Office) estimates that the ACA will cover

27 million previously uninsured individuals

12 million more in Medicaidand

15 million in marketplace insurance plans

Estimates on Healthcare Reform

Unprecedented increase in the potential market for mental health and addition treatment services

7

MHPAEA and the ACA expected to expand behavioral health coverage for 62.5 million people

30.4 million individuals will have expanded behavioral health coverage and benefits.

32.1 million individuals could access substance abuse benefits for the first time

Estimates on Healthcare Reform

Unprecedented increase in the potential market for mental health and addition treatment services

Implications of the Parity Act.The Final/Final rule was promulgated in November—it contained new language that supported the “intermediate levels of care” in behavioral healthcare (not implemented until July 2014).However, the potential repercussions of the Final Parity Bill have not been fully vetted in the marketplace-What does intermediate care mean?-How will Payers (Public and Private) interpret this?.Parity will dictate what is covered as an essential benefit

in the exchanges; however--Medicaid was “exempted” from Parity

Implications of ACA and Parity—Lot’s of unintended consequences

8

Implications of ACA.The ACA will offer new markets for treatment services. New populations previously not served will have access to services but not necessary in the inpatient setting.As exchanges evolve, manage costs and adopt outcome driven models- more patients will likely be directed into lower levels of care, shorter lengths of stay and new forms of contracted reimbursement—this is a trend evolving now.There will be impacts on Medication Assisted Treatment—parity assures that these services will be covered for the expanded Medicaid populations, however exchanges will decide the scope

Implications of ACA and Parity—Lot’s of unintended consequences

9

The Treatment Market Today

Low Level Use

?

Little or No Use

In treatment: ~ 2,300,000

Abuse/Dependent

~ 23,000,000Harmful

Users

40,000,000

Neither Parity nor ACA createdemand

Most People in Need of Addiction Treatment Do Not Receive It

11

Substance Use Disorders

Hypertension Diabetes Major De-pression

0%

20%

40%

60%

80%

10%

77% 73% 71%

Penetration Rate (% with Disorder who receive Treatment)

More detail on the scale of the current market

23,000,000 --met criteria for substance abuse dependence…

2,300,000 --received treatment…20,700,000 -- needed treatment but did not

receive treatment 800,000 -- who say they tried to get

treatment and could not. (Will ACA help?)

19,900,000 Didn’t try to get treatment(Do we understand why? And will ACA help?)

. Highly fragmented and dominated by treatment techniques developed in the 1950s.Many providers do not deliver Evidence-Based Treatment.Many staff in the treatment field overall have few credentials and little education and no consistent credential for Counselors or Managers. Limited use of technology . Poor coordination of service with the medical community. Little use of data and research . Limited consumer knowledge of treatment—patient admission decisions based on perceptions not fact . Patients are marginalized, stigmatized and lack advocacy and currency with payers

Despite this, we are dealing with the single most important public health problem in our nationWe now have the potential for significant growth in the long run and the opportunity to fully leverage favorable law and regulation

So what’s the state of the field and why are we not reaching more people in need?

13

Payer Response

• Utilize recognized best practices• Focus on Patient safety• Documentation (EHR)• Credential and licensed staff• Cost

Cost Effective Quality Service

• Readmission Rates• Retention Rates• Participate in the Continuum• Use of Medication

Improving Outcomes

Reward Provider Performance

15

• Ranked on patient experience• Quality of Documentation• Patient Safety• Outcome Measures

What do Payers Want in this new market?

Provider Response

Little or No Use

Treating only the most acutely

impaired clients

Notable

Problems

Acute Problems

From Here:

Who do we Treat?

Little or No Use

Continue with our current

clientsNotable

Problems

Acute Problems

Add treatment options for less severe

clients

To Here:

Who could we Treat?

Six Critical things for Treatment Programs going forward:

1. Programs must be “fleet of foot”2. Develop financial sophistication3. Establish a “Continuum”4. Data Driven5. Compliance is important6. Evolve out of the “Residential” moniker

Six Habits of the Highly Effective Treatment Program

19

Or…Who’s going to thrive in the New World……

1. Programs must be “Fleet of foot”:· Program rigidity, resistance to change and failure to

adopt evidence based treatment will limit a programs involvement in the new market· Deliver effective (Evidence-Based) Practices· New services to meet the new demand

· Organizations must have an ability to change critical components of their clinical and operational structure· Clinical and financial flexibility

Six Critical areas for Treatment Programs going forward

20

Implications for Treatment Programs

21

2. Programs must be financially sophisticated· Financial Manger will be key member of the Program Team

· Billing and collecting is a given provided- additional requirements for documentation and processes

· Understand “risk”· New levels of analysis and data management· Cost management· Contract evaluation

· Programs will need to document and bill like all other healthcare providers

3. Establish a Continuum:• Integrate the concept of Chronic Care

• Disease management – Continuing Care critical• Ability to transition to lower and higher levels of behavioral healthcare within the community

• Ability to transition data and records to the broader medical community and the payer

• Develop a portable EHR for patients• Not necessary to be a one stop shop—but an integral part of the care system in a community

22

Six Habits of the Highly Effective Treatment Programs

From Here:

WHERE DO WE WANT TO PROVIDE SERVICES?

Partner with Other Healthcare Providers

Bricks And Mortar

To Here:

Partner with Other Healthcare Providers

ACOsMentalHealth

Providers

Bricks and

Mortar

Home and School Based

Programs

HospitalsCommunity

Providers

4. Programs Must be Data Driven:- Three Key areas of data :

•Management Data- Operational and management performance reports (financials and critical

operating metrics, KPI’s)- Internal and external benchmarks- Dashboards- Operational Analytics—the deep dives

•Outcomes/Performance Data- Measure our performance/show value- Patient satisfaction- Educated, credentialed staff- Clinical interactions and measurements- Failure rates- Participation in the continuum

Six Habits of the Highly Effective Treatment Programs

25

.Market Data- Is your organization a market out organization?

•Demand data•Competitor data•Payers (Public and Private) market penetrations•Rates and Pricing

Six Habits of the Highly Effective Treatment Programs

26

5. Rigorous Compliance Program:-Playing in the public markets and new commercial insurance

markets will demand a higher degree of compliance and consistency of documentation

-Private Insurers are demanding more documentation and support of claims and compliance with standards

-Utilize the concept of medical necessity and supporting criteria in support documentation

- Programs will need to support a robust compliance program•EHR will be a critical component of a compliance program

-Rigor of Compliance will be a factor supporting the of the quality of a program the eyes of third party payers

Six Habits of the Highly Effective Treatment Programs

27

6. Evolve out of the “Residential” Moniker:Part of the issue resides in the definition for “residential care”

- Widely perceived as social model or therapeutic community- Limited understanding of services provided in the residential level of care- Insurance contracting practices often shift contracted services to residential

from inpatient despite significant overlapping services:The “residential model”

Detox is medically supervisedPhysician services24 Hour Nursing coverageCredentialed and licensed staff

.Residential Care evolved as a licensing artifact and does not reflect actual scope of service: detox, rehabilitation/inpatient, and partial services

Six Habits of the Highly Effective Treatment Programs

28

Detox

PartialInpatient

It is estimated that 20-40% of substance abuse treatment

programs will not be ready for healthcare reform.

Healthcare Reform & SA Treatment

Don’t be one of those programs!

Questions

30