Policy Development Related to Performance-Based Contracting in Managed Care.  The Health Care Authority (HCA) contracts with managed care organizations (MCOs) and behavioral health administrative services organizations to provide integrated medical care services, including behavioral health care services, to Medicaid clients.  State law requires HCA to employ performance-based contracts in its role as a service coordination organization and as the state behavioral health authority.  The purpose of these performance-based contracts specified in law is to achieve improved outcomes for clients, including through increased use of evidence-based, research-based, and promising practices.  These contracts must include performance measures targeting the following outcomes:

• improvements in client health status and wellness;
• increases in client participation in meaningful activities including employment and education;
• reductions in client involvement with criminal justice systems;
• enhanced safety and access to treatment for forensic patients;
• reductions in avoidable costs in hospitals, emergency rooms, crisis services, and jail and prisons;
• increases in stable housing in the community;
• improvements in client satisfaction and quality of life; and
• reductions in population-level health disparities.

In 2013-2014, HCA and the Department of Social and Health Services (DSHS) established a cross-system steering committee that produced a report identifying 51 potential performance measures to be employed to achieve these outcomes.  The steering committee's work was turned over to a Performance Measures Coordinating Committee (PMCC) for the purpose of refining these measures, developing a common measures set, and selecting a subset of performance measures to integrate into the first iteration of performance-based contracts.  In creating the common measures set, the PMCC expanded the list of performance measures to 66, but eliminated every measure relating to criminal justice outcomes among Medicaid clients.

Integration of Performance Measures into Health Options Medicaid Contracts.  HCA has integrated performance and outcome measures into Apple Health managed care contracts, as reflected in model contracts posted on the HCA website.  All MCOs are required to have an ongoing program of performance improvement projects that incorporate measures of performance based on objective quality indicators and evaluations of the effectiveness of the interventions.  Performance improvement projects are subject to review and approval by HCA, and must include:

• one clinical performance improvement project piloting a behavioral health intervention that is an evidence-based, research-based, or promising practice recognized by the Washington Institute for Public Policy;
• one clinical performance improvement project implemented statewide on improving well-child visit rates in infants, young children, and adolescents; and
• one non-clinical performance improvement project of the MCO's choosing.

In addition, HCA produces certain performance measures and publishes them to each contracting MCO, including penetration rates for mental health and substance use disorder treatment and 30-day psychiatric inpatient readmissions.

HCA has also implemented certain value-based purchasing (VBP) provisions.  A VBP is a species of contractual arrangement in which payments to a contractor are made based on outcomes achieved instead of services performed.  According to the VBP provisions incorporated in the MCO contracts, a percentage of funds ranging from 1.0 to 1.5 percent of the total funds are withheld from the MCO, to be earned back if the MCO implements certain incentives, creates VBP arrangements among its contractors, and achieves quality improvement and attainment targets.  The quality improvement terms of HCA's VBP provisions currently use a selection of nine target measures scores that are derived from nationally used quality measures, in areas including:

• diabetes care and blood pressure control for adult patients;
• antidepressant medication management for adult patients;
• childhood immunization statuses;
• annual well-child visits for children aged three to six; and
• medication management for children with asthma.

None of the quality measures included in the MCO contract relate to criminal justice outcomes.

Status of Criminal Justice Involvement for Persons with Behavioral Health Disorders in Washington.  An intent section in this legislation cites a presentation by the Research and Data Analysis division of DSHS as evidence that trends related to interactions between persons with behavioral health disorders and the criminal justice system are worsening in Washington.  This presentation, titled "Forensic Risk Modeling in the Medicaid Population," was delivered to the Select Committee for Quality Improvement in State Hospitals on October 18, 2018, and presents certain data relating to Medicaid clients who have an identified behavioral health need.  In the period from 2013-2018, the data shows overall arrests of unduplicated adults per month in Washington declined by almost 10 percent according to the Washington State Patrol, while arrests of unduplicated adults with Medicaid enrollment and an identified behavioral health condition increased by 67 percent.  During the same period, monthly referrals for competency evaluation services related to persons charged with a criminal offense rose by 56 percent.

The PMCC must establish performance measures which track rates of criminal justice system involvement among public health system clients who have an identified behavioral health need, including but not limited to rates of arrest and incarceration.  The PMCC must convene a work group of stakeholders with expertise in criminal justice to assist with the performance measures, including but not limited to HCA, Medicaid managed care organizations, and the Department of Corrections.  HCA must establish improvement targets related to these measures.  HCA must report to the Governor and appropriate committees of the Legislature by December 1, 2021, concerning implementation of these items.

HCA must report to the Governor and appropriate committees of the Legislature regarding options and recommendations for integrating value-based purchasing terms and a performance improvement project into managed care contracts relating to criminal justice outcome measures by October 1, 2022.