Getting the Contract: Reimbursement for Evidence-based Programs

*Jennifer Raymond is the Director of the Massachusetts Healthy Living Center of Excellence, which is a partnership between Hebrew SeniorLife, an academic affiliate of Harvard Medical School and Elder Services of the Merrimack Valley, an Area Agency on Aging in Northeast Massachusetts.

As the availability of grant funding for community-based social services continues to diminish, innovative members of the aging and disability networks have begun to diversify their revenue streams.  One of the more prevalent mechanisms for achieving this diversity is contracting with health care payers for the delivery of services, including evidence-based health programs.  Aging and disability community-based providers in Massachusetts, California, Maryland and many other states have successfully contracted with health plans, accountable care organizations and other health care providers for the delivery of programs like the Chronic Disease Self-Management Program (CDSMP), A Matter of Balance and many other physical and behavior health programs.  Given their success in improving patient activation and in achieving better health, better care and lower , these programs are particularly attractive to health care providers.  While models for contracting and implementation differ greatly, significant commonalities exist, which can aid community-based organizations in achieving and maintaining a contract.

Before the Contract:  Building Your Network and Service Package

Before approaching any health care partner about contracting, it’s vital to understand a bit about their market.  Not only do organizations need to demonstrate geographic capacity, but they also need to look at the target population(s).  If the plan membership includes large numbers of non-English speaking adults with diabetes, an organization will need to explore ways to meet that need.  The most effective way to develop geographic, language and programmatic capacity, is through partnership with other community organizations to form a “provider network”.  Under a network system, one central “hub” can subcontract with those community partners to fulfill meet a payer’s needs.  As an example, Massachusetts has developed a statewide provider network called the “Healthy Living Center of Excellence (HLCE).” Led by Area Agency on Aging (AAA) Elder Services of the Merrimack Valley and in partnership with Hebrew SeniorLife, HLCE serves as a hub for more than 90 community-based organizations (CBOs) offering many programs in multiple languages and diverse settings.  As such, HLCE can execute a single contract with a health care payer, serving the entirety of the payer’s membership population, and creating a simple method for payers to refer members or patients..

Although there is often value in statewide geographic coverage, not all networks need to cover an entire state. Many health care partners will have smaller footprints and can be served by local or regional networks.  Networks also need not be fully formed before beginning to reach out to potential payers, but instead can be in development stages as you learn the needs of payers in your region.  The important thing is to begin the process and move towards becoming more responsive to a payer’s needs.

Negotiating the Contract:  Understanding Your Value Proposition

When thinking about contracting, it’s important that an organization understand its value to the health care payer.  This value must extend beyond evidence-based programs.   If a payer is sold only on the programs themselves as ways to reduce costs, the payer is likely to wonder why they can’t simply have their staff trained and offer these programs themselves.  In addition to expertise in offering programs, your value proposition might include your existing community relationships and established trust, the diversity of your program settings, and connections to additional resources such as nutrition services, transportation, and home care, all of which can help participants address the social determinants of health that make behavior change challenging.  When a potential payer understands how a CBO network’s value exceeds mere program delivery, they can better understand the importance of investing in the CBO network, rather than building it themselves.

Once a community-based organization understands their value proposition, it can be tempting to use that proposition as the first and primary method for beginning contract negotiations.  A more effective and responsive method, however, is for a CBO to first position themselves as “problem solvers,” not merely service providers.  Asking a potential payer simple questions like, “What keeps you up at night?” will help discover a payer’s true pain points; whether they be high incidence of falls, members with uncontrolled diabetes, “no-shows,” or medication management.  By first understanding what is most important and most troublesome to a potential payer, a CBO can more effectively demonstrate how their programs and services can directly impact the payer’s challenges and positively impact  health and savings.

Another critically important consideration in contract negotiations revolves around how a payer will refer members or patients into programs.  While a contract is a significant achievement, the contract will not be sustainable if the volume of participants is minimal.  Consider contract clauses that allow for multiple streams of referrals:  from case managers or provider staff; “self-referrals” from patients; and through “internal registries” of members or patients from the payer.  This final method has, for many existing networks, proven the most effective.  In Massachusetts, the Healthy Living Center of Excellence (HLCE) has one contract where a health plan (upon proper execution of privacy and Health Insurance Portability and Accountability Act (HIPAA) documents) provides a list of members in a geographic area who are appropriate for a program.  The plan and HLCE reach out to each member collaboratively, through a written correspondence.  Using Motivational Interviewing principles, HLCE staff then calls each member to talk about their goals, barriers to better health and how the program can help.  Not only does such a targeted, individual approach increase the number of referrals from the provider, but it also increases the likelihood that referrals result in program participation (and a billable event for HLCE).

On a final critical note, CBOs should not undervalue their work.  While the “cost” of programs has historically been a primary method of setting payment rates, attention should be paid to the “value” the CBO and program bring to the payer.  The savings to a payer based on reduced readmissions and prevented hospitalizations, for example, far exceed the costs of program delivery and should be considered a more appropriate pricing point than mere costs.[1]  By developing a value proposition, partnering with other CBOs to expand network and reach, and working collaboratively with health care to ensure patients are referred and attend programs, an innovative CBO can not only achieve contract status, but also make great strides in integrating much needed community social services within the health care delivery system.

[1] For additional information about cost vs. value and other important considerations for a CBO contemplating contracting, see Victor Tabbush’s article, “A Matter of Mindset:  CBOs must master outside-in thinking to collaborate up and delivery quality, cost-efficient care”: