Treating individuals with serious mental illness through fee-for-service or managed care is challenging, as these models often fail to account for the full range of services needed to treat the whole person.
As a result, some payers are looking to partner with providers to adopt a value-based approach to care for these patients. For example, Elevance’s health service division, Carelon, has teamed up with SMI provider firsthand on a total cost of care approach.
The initial conversations began when both parties found treating SMI in a managed care model felt like fitting a square peg into a round hole.
“SMIs are chronic and complex. There’s cyclical acuity that basic managed care is not set up to actually address,” John Machalek, general manager of Carelon Behavioral Health’s SMI Business, said at Behavioral Health Business’ VALUE. “Their care journeys are not linear, and so one of the things that we really look for to actually manage this population is finding the right partners to actually help us address this population. SMI members live at the extreme end of the ecosystem, and managed care has historically focused only on the median or average member.”
Carelon is looking to solve for how it can support members with SMI longitudinally to make them more self-sustaining.
The other major piece often missing from basic fee-for-service or traditional managed care approaches is the ability to treat patients for comorbidities that often accompany SMIs. Dr. Joe Parks, chief medical officer at firsthand, noted that people with SMI have a higher prevalence of chronic medical illnesses and substance use disorder than the general population. This often means more wrap-around services are needed.
“You’re almost certainly going to have social work needs that aren’t covered for services and the usual fee-for-service billing,” Parks said. “There may be times when you need a couple of minutes interaction, there may be times when you need a couple of hours interaction, and there’s just not the flexibility in fee-for-service units that range of treatment gives the person the right amount of what they need and to vary it continuously.”
firsthand is a value-based care provider that cares for individuals with serious mental illness. It has raised roughly $43 million in funding.
The nuts and bolts
firsthand uses a peer model, where individuals with lived experience help engage and support members with SMI and help them get into care. The provider has a team of medical and behavioral health clinicians, including a nurse practitioner and a benefits specialist, who can treat a patient’s physical and behavioral health needs.
As part of the partnership with Carelon, firsthand is responsible for the total cost of care for a patient. That includes behavioral health, physical health, pharmacy, hospital, inpatient and outpatient care, as Parks said: “soup-to-nuts.”
“The total cost of care model is really what makes this work. When we’re looking at all the different kinds of vendors and providers in the ecosystem, all these slices of risk don’t really work on the back end,” Machalek said. “For me as an MCO, it is impossible to basically perfectly divvy up all the membership, divvy up all the risks, make sure I’m not double, triple, quadruple, paying for all these services. And so instead of saying everyone just gets like, this outpatient risk or this inpatient physical health risk, this all in behavioral medical pharmacy risk actually makes us have a fully aligned incentive model, especially for this population.”
One of the ways firsthand is able to operate on this arrangement is through the peer support model and the types of clinicians it employs and trains.
“The team is a lower unit cost team that’s been upskilled. They’re backed up by psychiatrists, physicians and people with higher licensure, but the bulk of the work is done by lower-skilled individuals who have been upskilled with additional certifications, and that lets us really deliver a lot more widely, and we don’t have to do it in units,” Parks said. “We go and do it for whoever needs it, when they need it today, and if they don’t need something, we say that’s okay and you don’t need it.”
Knowing it works
The pair has also worked together to develop a performance measurement using a control group.
“What we’ve done with firsthand is essentially create an intent to contribute to a control group where essentially we’re taking a control group of who, firsthand, would theoretically want to treat and then we’re measuring their performance against that group,” Machalek said. “So I think a couple of things that this solves for are that regression to the mean is no longer a factor. We know exactly what we are generating firsthand, versus other individuals with SMI in the marketplace. We’re able to take this as a published case study after the first year of our arrangement and say it is working.”
Payers and providers have often struggled with data sharing, even within value-based care arrangements, but this partnership aims to change that paradigm.
“One of the unique things is our access to data,” Machalek said. “So we’re plugged into [Admission, Discharge, Transfer] feeds. All of our data flows through claims. We also have authorization data. And so basically, what we built is a multi-tenancy platform where I can work with partners such as firsthand and create a clinical data exchange where they’re not only feeding information into it, but I’m feeding information into it as well. And we’re trying to create, as cliché as it is, that golden member record, where we can both have all of our teams basically pull from that data.”
The pair’s unique approach, measuring outcomes via a control group, covering the full cost of care and using data transparency, could be a roadmap for future SMI care.