What is Value-Based Contracting (VBC) for Independent Psychotherapy Practice?

• More than 40 years of research provides convincing evidence concerning why and how psychotherapy works and clarifies the problems when it doesn’t work; regardless of the type of psychotherapy used.

• In psychotherapy, most VBC programs are better described as value-based reimbursement (VBR).

• …a Healthplan must be willing to add resources to increase the level of care (LOC) rather than restrict the frequency of appointments or terminate care.

A value-based contract (VBC) for Independent Psychotherapy Practice is a contractual agreement between a Healthplan and psychotherapists where reimbursement for services is contingent on mutually agreed requirements. The requirements may include clinical circumstances, patient outcomes, and/or specified measures of appropriate, timely and effective services. Rather than payment being based on the quantity of service provided (i.e. number or length of sessions), payment is determined by the value of care delivered.

Physician VBCs

Independent physician VBCs are rare; because use of the various medical VBC models requires physicians to be paid employees of a medical clinic or hospital network. Except for rural settings, independent medical practices are now nearly non-existent. The evidence that new compensation models for medical services are in place is visible in the extinction of private medical practices.

Typical VBC medical contracts are:

• Hospital and/or physician pay-for-performance contracts.

• Hospital and/or physician shared savings contracts.

• Bundled pricing contracts.

• Capitation or global budget contracts.

• Private-label health plans with private payor contracts.

Psychotherapist VBCs

Private Psychotherapy value-focused reimbursement contracts are rare at present, because psychotherapists are typically not employees whose services are reimbursed under their employer’s Tax ID. Private practice psychotherapists are typically independent or in small, loosely affiliated groups which may be associated in their use of office space and/or consultation, but in nearly all regions of the US, they submit claims for reimbursement using their personal or individual business Tax ID.

For psychotherapy, most value focused reimbursement models are better described as value-based reimbursements (VBR).

VBCs or VBRs for psychotherapy practice are based on demonstrating:

• Appropriate and necessary services (i.e. medically necessary).

• Accountable treatment processes (e.g. screening, progress measures, alliance measures, confidential peer review, coordination of care).

• Accountable measures (e.g. access, coordination efforts, outcomes and/or patient satisfaction).

Value Propositions for VBC

In a 2019 article titled The Role of Patient Reported Outcome Measures in Mental Health? Johnson discussed 7 myths in psychotherapy. More than 40 years of research provides convincing evidence concerning why psychotherapy works and clarifies when it doesn’t work; regardless of the type of psychotherapy used. Psychotherapists frequently take positions not supported by the evidence:

1. Patients don’t want to be screened or see measures of their progress (They do.)

2. Providers are equally effective (They aren’t)

3. Providers know when patients are “On Track” (They don’t.)

4. Academic degrees, experience and training predict outcomes (They don’t.)

5. Most patients do not recover quickly (Many do recover quickly.)

6. Patients with severe symptoms recover slowly (People with severe conditions may also recover quickly.)

7. Therapist self-ratings are generally accurate (They aren’t.)

Employers purchase insurance from Healthplans that can answer employers’ 2 most important questions. What am I paying for? How much will that cost?

What are they paying for? Access and outcomes.

How much will it cost? That depends on the (1) therapists’ effects, (2) the patients’ symptom burdens and life problems, (3) feasible outcomes, and (4) the alliance between patient and psychotherapist.

Image 1 (below) is a display of symptoms burden and patient improvement over a 90 day period for several psychotherapists. In this example, there is a great deal of scatter over time. A health plan is interested in reducing the scatter above the the regression line. Which would have the effect of increasing the slope of the line, thereby have a positive effect on patient outcomes. But in order to do this, a Healthplan must be willing to add resources to increase the level of care (LOC) rather than restrict the frequency of appointments or terminate care.

The slope of the line seen in Image 1 is 9.01%. On a population basis, that is a respectable rate of improvement.

Image 2 (below) is a display of symptoms burden and patient improvement over a 90 day period for one psychotherapist . In this example, there is less scatter over time. A health plan is interested in reducing the scatter above the the regression line. In this case, the Healthplan may want to add resources, if possible, for patients who are not improving or getting worse.

References

• The Role of Patient Reported Outcome Measures in Mental Health? Johnson. 2019.
  https://www.mentorresearch.org/the-role-of-patient-reported-outcome-measuress-in-mental-health