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

Jerry Rhodes

CEO CRC Health Group

.Two major legislative actions will impact the mental health and substance abuse industry after 2014- Affordable Care Act- Mental Health Parity Act.Affordable Care Act will provide mental health/substance abuse treatment up

to a population of 32 million currently lacking insurance (including Medicaid expansion); many variables will ultimately determine size of this population.Parity will afford strengthened mental health care/substance abuse coverage to an additional 30.4 million through new mandates for service under the Parity Act.Both Parity and the ACA will potentially provide mental health insurance coverage in some form for up to 62 million people.This will be an unprecedented increase in the potential market for mental health and addiction treatment services

What’s happened to date: ACA and Parity—Potential for massive market expansion

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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.These changes were dramatic improvements in the Parity Bill—without these changes the residential level of care was at risk. 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

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Implications of ACA.There will likely be an extended period of uncertainty as ACA evolves and little noticeable impact on the industry in the near term and possibly much longer.The participating states and exchanges will likely determine extent of services in compliance with Parity—not every service is likely to be covered.The ACA will offer a new markets for treatment services. New populations previously not served will have access to services but not necessary in the inpatient setting, this is evidenced by the fact that:The newly created Medicaid eligible population for states opting in the ACA will not be exempt from the IMD provisions. .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

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So What is the extent of the Treatment market today?

Low Level Use

?

Little or No Use

In treatment: ~ 2,300,000

Abuse/Dependent

~ 23,000,000Harmful

Users 40,000,00

0

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 -- wanted it & were turned

down? 800,000 -- who say they tried to get

treatment and could not. (Will ACA help?)

19,900,000 Didn’t try to get treatment(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?

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.Here’s what payers are saying:

WE Want How we get it

What do Payers Want in this new market?

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• Fee for Service to Case Rates• Care Management (UR) to scorecards• Efficient cost management

Cost Effective Quality Service

• Use Performance data to evaluate programs (against one another)

• Provide incentives for support best practices and cost effectiveness

Improving Outcomes

• Value based purchasing • Recognition of high performance

Reward Provider

performance

• 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

What does this mean?

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

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. Compliant6. Evolve out of the “Residential” moniker

Six Habits of the Highly Effective Treatment Programs

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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

· This has significant implications for clinical programming and program operations

· Adhering to the belief that what one currently does will suffice – will not make the cut in the new market

· Organizations must have an ability to change critical components of their clinical and operational structure· Clinical flexibility (fixed LOS and level of care)· Financial capability (significant depth and capability)

Six Critical areas for Treatment Programs going forward

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Implications for Treatment Programs

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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

· Finance will be critical element in the compliance team· Audit · Documentation and billing

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

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Six Habits of the Highly Effective Treatment Programs

What’s happened in the last 25 years:

Drug Alcohol MentalHealth

Mental Health

Substance Abuse

Medical Health

Medical Health

Medical Health

Behavioral Health

1990

2005

2015

Partner with Other Healthcare Providers

From Here:

Facility -Based

(Bricks &

Mortar)

WHERE DO WE WANT TO PROVIDE SERVICES?

Partner with Other Healthcare Providers

To Here:

Partner with Other Healthcare Providers

ACOsMentalHealth

Providers

Bricks and

Mortar

Home and School Based

Programs

HospitalsCommunity

Providers

.Data Driven- Three Key areas of data :

•Management Data—do you have this?- Operational and management performance reports (financials and critical

operating metrics)- KPIs- Internal and external benchmarks- Dashboards- Operational Analytics—the deep dives- Staff Productivity

•Outcomes/Performance –external benchmarks are essential- Patient satisfaction- Clinical interactions and measurements- Failure rates- Participation in the continuum

Six Habits of the Highly Effective Treatment Programs

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.Market and Environment 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

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.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

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.Evolve out of the “Residential” MonikerPart 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

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Detox

PartialInpatient

Parity Issue: Scope of Service—Analogous service comparisons

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Acute MedicalHospital

RehabSNF(Intermediate)

OutpatientSurgery

Doc Visits

Inpatient-PsychiatricDetoxInpatient- Rehab

Intermediate(Residential)

PartialIOPOP

General Medical Model Mental Health Model

Questions?

Six Habits of the Highly Effective Treatment Programs

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