Reimbursement for behavioral healthcare in the United States has been 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-fourth 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,” said Jarvis, managing consultant for Dale Jarvis & Associates LLC in Seattle, Wash. “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 labyrinth data.
“Challenges that folks with behavioral health disorders face involve too little effective care and too much sick care,” Jarvis said. “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 pointed 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 who 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,” he explained. “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,” said 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 said, “there’s more opportunity to take the money and run.”
Louisiana has been in a very serious cost-cutting mode on behavioral health budget items, Jarvis pointed out, noting the state didn’t pursue the CCBHC program. Healthcare providers are being laid off, programs are closing, and “it’s not a pretty situation,” he said.
Popular Formula for Health Systems
Many health systems are headed to a particular formula that aims to reduce inpatient admissions, reduce days and cost per day, plus reduce emergency room visits, diagnostic imaging, and specialty procedures. The end result is behavioral health, primary care, pharmacy, medical specialty, medical inpatient, and system transformation in a shared risk pool.
Jarvis said 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,” he emphasized. “Of the two primary accountable payment models, Alternative Payment Method (APM) Component 1 involves the base payment layer, with four base payment models. APM Component 2 involves the bonus/shared savings layer that’s married to the hip with key performance measures, and needs to be a substantial percentage of the total payment.”
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