Alternative Payment Model Launches for Addiction Recovery

September 19, 2018
Tracey Walker
Tracey Walker

Payers are becoming more receptive to a different approach for paying for addiction treatment and recovery services, as evidenced by the formation of a new healthcare alliance that aims to redesign the structure and payment of these services.

Payers are becoming more receptive to a different reimbursement approach for addiction treatment and recovery services, as evidenced by the formation of a new healthcare alliance that aims to redesign the structure and payment of these services.

The Alliance for Recovery-Centered Addiction Health Services, a national group of healthcare industry leaders, formed the Addiction Recovery Medical Home (ARMH) model.

The model has been developed by dozens of healthcare institutions and professionals, in an attempt to establish a structure that promotes the type of integration and patient care capable of producing improved outcomes for patients, payers, and health systems by aligning all incentives.

This is consensus learning model and the Alliance intends to pilot the ARMH model in two to three markets beginning in 2019. A rigorous research methodology will be developed and leveraged to study the effects of the model on recovery when compared to non-ARMH models of care and to study correlations between specific model tenets and the corresponding outputs.

Alliance members include Leavitt Partners, Facing Addiction with NCADD (The National Council on Alcoholism and Drug Dependence), and Remedy Partners, along with major payers (Anthem, AmeriHealth Caritas, Beacon Health, CareSource). America’s Health Insurance Plans (AHIP) has contributed, endorsed, and is now promoting the ARMH model to their members.

How it all began

In August 2017, Leavitt Partners and Facing Addiction with NCADD convened a group of 40 senior representatives of various healthcare organizations ranging from health insurers, hospital systems, behavioral health managers, employers, and other healthcare businesses like Remedy Partners. Further, several nationally prominent addiction experts attended.

“The purpose of this meeting was to sponsor a discussion about the future of addiction treatment and recovery in America and determine if the conditions were right to explore the creation of alternative payment and delivery pathways for long-term treatment and recovery,” says Greg Williams, Facing Addiction with NCADD’s executive vice president.

In the months that followed, this group organized the alliance to develop and promote an innovative approach to payment and delivery of addiction treatment and recovery services.

The model and how it will work

Drug overdoses have become the leading cause of death in America for those under 50, while addiction to alcohol remains even more prevalent than opioids. The death toll continues to rise in spite of the existence of a more than $35 billion industry attempting specialty addiction treatment today, according to Bloomberg Businessweek.

“The problem is our healthcare systems have largely deployed an acute infectious disease-like response to what is definitively a chronic health problem,” says Williams. “Or worse, many mainstream healthcare institutions haven’t responded at all.”

The chronic nature of addiction requires the same approach any chronic disease model would demand by integrating provider resources, coordinating information, continuity in patient engagement, and ideally, a payment model that incentivizes these features, according to Williams.

“A longer-term focus and supports for patients managing a litany of care transitions in their recovery journey has the potential to markedly improve recovery rates,” he says. “A patient in sustained recovery for one year can see remission of the worst effects of substance use disorders; while those in sustained recovery for five years can see risk-factors reduced back to a population health baseline very similar to many cancers in remission.”

But there is reason to hope, according to Williams.

“We have evidence that informs us what works in recovery,” he says. “We have the talent to grow/build a workforce to encircle patients in advancing their recovery. We have an evolving payment culture that is progressively moving financial accountability closer to the primary care physician and the patient. What we require now is unique innovation and collaboration to harness these converging forces and change the nature of treatment and recovery from addiction. A system that incentivizes recovery. Not relapse.”

Five key elements

The ARMH-APM is built on five key elements that represent its most foundational principles:

  • Payment
  • Quality Metrics
  • Integrated Treatment and Recovery Network
  • Care Recovery Team
  • A comprehensive Treatment and Recovery Plan.

“The model itself was established in a commercial context and is initially targeting Medicaid managed care and large employer health plans, with high deference for adopting payers and providers to develop situation and population-specific applications,” Williams says.
The goal is to organize a system and network capable of aligning incentives for payers, providers, and most of all creating a patient-centered approach, according to Williams.

“Ultimately, it is our belief by organizing and systematizing a chronic care model for addiction we can reduce costs and improve long-term outcomes for patients and their families,” he says. “Ultimately, creating an economically sustainable approach to closing the current 90% addiction treatment gap in America by bringing new mainstream healthcare institutions to the table.”

The ARMH model is unique in its scope and transformative approach to long-term community-based treatment and recovery from substance use disorders, Williams says.

“The ARMH model was established with the initial goal of organizing care principles most germane to opioid use disorder and alcohol use disorder; however, the underlying principles traverse the substance spectrum and are intended to be sufficiently modular to support recovery in other contexts,” he says. “The majority of other approaches simply respond to individual substances and do not take into account the reality of a poly substance use epidemic in America and for providers on the ground.”