Behavioral Health Moves Falteringly Into Reimbursement Reform

Reimbursement for behavioral healthcare in the United States is moving from a fee-based to value-based system in a slower, more fragmented manner, with nearly half the states taking action to bring it more in line with primary care, while nearly one-third of the states are waiting and watching.

That’s what Dale Jarvis, CPA, told attendees at the National Council for Behavioral Health Conference (NATCON) 2016.

“Medicare is the biggest health program that hasn’t embraced behavioral health parity,” says Jarvis, managing consultant for Dale Jarvis & Associates LLC in Seattle. “Alternative payment models are coming into Medicaid for behavioral health, and that’s where change is starting to occur. The commercial sector is very slow on the uptake around behavioral health reform in most parts of the country.”

As a result, many behavioral health providers are lost in the data labyrinth.

“Challenges that folks with behavioral health disorders face involve too little effective care and too much sick care,” Jarvis says. “Under the ‘too little effective care’ umbrella are big gaps between the behavioral health need and capacity, high rates of untreated chronic health conditions, and insufficient evidence that behavioral healthcare is working. Under ‘too much sick care,’ the issues involve crisis and emergency room care, medical and psychiatric inpatient care, diagnostic imaging and medical specialty procedure-based care.”

Major Funding Shift

Jarvis points out three categories of behavioral health payment reform.

• Those who have been reforming for years and continue refining payment methods. For example, Seattle and Maryland are old hands at managing case rates—bundled payments that cover the cost of a defined episode of care.

• Those who have recently started developing alternative payment models, such as case rates exemplified by projects in Oregon.

• The remainder continue practicing business as usual and haven’t done much innovation around payment reform.

“Those in the third group shouldn’t get seduced into thinking that’s how it’s always going to be,” Jarvis explains. “They’re going to have to make aggressive changes to keep up. Through the Medicare program over the last two years, the federal government has really put a stake in the ground, saying they’re going to very aggressively move Medicare into value-based purchasing. Within the last month, they announced they’re ahead of schedule and they’re moving all things medical in Medicare into new payment models that are defined as pay-for-performance and different kinds of base payments, such as capitation and case rates.”

The Chatter About CCBHCs

NATCON networkers were buzzing about a new federal plan to create pilot programs for the behavioral health equivalent of federally qualified health centers (FQHCs).

Created by the Excellence in Mental Health Act of 2014, pilot programs for behavioral health will launch at Certified Community Behavioral Health Clinics (CCBHCs) in eight states. “President Obama has increased the number to 14 in his budget. Some bills pending in Congress increase the program to fund all 24 states receiving planning grants to design their CCBHC system,” says Jarvis.

The pilot program includes payment reform via two models: daily or monthly bundled payment. If a state takes the larger payment, quality results are mandated. “Otherwise,” Jarvis says, “there’s more opportunity to take the money and run.”

Many health systems are headed to a particular complex formula that aims to reduce inpatient admissions, reducing days and cost per day, plus reduced emergency room visits, diagnostic imaging and specialty procedures. The end result is behavioral health, primary care, pharmacy, medical specialty, medical inpatient and system transformation centered on a shared risk pool.

Jarvis says balancing the portfolio involves a very simple strategy known by several names, including value-based purchasing and DSRIP (delivery system reform incentive payments). DSRIP financing of Medicaid is taking place in Texas, New York and California. The concept involves the accumulation of an innovation fund, with seed money coming from the purchaser, such as the Centers for Medicare and Medicaid Services (CMS), and carving money from current budgets.

For example, in California, two DSRIP projects—PRIME (Public Hospital Redesign and Incentives in Medi-Cal) and WPC (Whole Person Care)—involve new money for complex care management for high-cost patients with behavioral health disorders. PRIME represents $7.5 billion; WPC, $3 billion.

“One size doesn’t fit all,” Jarvis emphasizes. “Of the two primary accountable payment models, APM (alternative payment methodology) component #1 involves the base payment layer, with four base payment models. APM component #2 involves the bonus/shared savings layer that’s married at the hip with key performance measures, and needs to be a substantial percentage of the total payment.”

The Four Funding Models

Model #1: Capacity funded services, also known as the “fire department model.” It’s generally paid in one-twelfth monthly increments, based on a budget that supports sufficient staffing and other resources to field necessary capacity to meet potential demand. It covers services where volume may fluctuate, but staff must be available to meet the need. Relevant pay-for-performance measures include response/access time, client/family satisfaction, referring party satisfaction, resolution of problem and care transition success.

Model #2: Fee for service, also known as the “payment for volume” model. Payment is made for every authorized and approved service at an agreed-upon rate. Even though the money follows the client, the incentive is to provide more service with no differentiation in payment tied to whether the service is needed or useful. Services that can be easily billed in units of service and don’t fit another payment model, as a last resort, include emergency room services, urgent care clinics, respite and care. In a mature system, the list is quite short. Applicable P4P measures include response/access time, client/family satisfaction, achieving behavioral health outcomes and providing care within utilization management guidelines without overserving.

Model #3: Case rates/bundled payment covers the cost of a defined episode of care. It may be in the form of a single lump sum for short-duration episodes or monthly installments for longer-term episodes. These services include inpatient care, detox services, health home services, specialty behavioral healthcare and specialty medical care. Relevant P4P measures cover the same issues as model #2, with one exception: providing care within utilization management guidelines without underserving.

Model #4: Subcapitation is a per-member-per-month payment to an accountable care organization (ACO) or comprehensive provider that represents the average anticipated cost of providing a defined benefit package to anyone in the enrolled population who needs particular care. Relevant P4P measures cover the same issues as model #3.

In the bonus/shared savings layer, there are two groups of outcomes: systemwide and individual. In the systemwide outcomes, there must be follow-up after hospitalization; a reduction in inpatient admissions per 1,000; and a reduction in the increase in total health spending per person. Regarding individual outcomes, a depression score under 10 is measured by the PHQ-9 tool and answers whether a chronic condition like diabetes is under control.

“In the P4P/outcomes process, identify the most important outcomes to measure,” Jarvis suggests. “Then develop the benchmark metric for each goal (outcome). Identify the baseline metrics for each measure per provider. Measure frequently. You earn your bonus if you show improvement or hit the benchmark.”

For more: https://www.djconsult.net/. 

Sidebar: The CCBHC Demonstration Program

The 2014 Protecting Access to Medicare Act authorized an eight-state Certified Community Behavioral Health Clinic (CCBHC) demonstration program, part of the single largest investment in community behavioral health in more than five decades (more than $1 billion in total).

Under the legislation, CCBHCs will provide “intensive, person-centered, multidisciplinary, evidence-based screening, assessment, diagnostics, treatment, prevention and wellness services,” including 24/7 crisis response and peer support services, and be reimbursed under prospective payment systems developed by participating states (along with an enhanced federal Medicaid match rate).

In October 2015, one-year CCBHC planning grants were given to 24 states. These will help them certify clinics, gather stakeholder input, establish prospective payment systems and prepare to apply for the demonstration program.

States winning grants were: Alaska, California, Colorado, Connecticut, Illinois, Indiana, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas and Virginia.

State applications are due this October, and the eight participating states will be announced in early to mid 2017.