Behavioral Health

Incorporating Value in Behavioral Health

July 19, 2017 12:06 pm

Working out the details of value-based behavioral health models is challenging, experts say, but the benefits are worth the effort.

In 1996, the Institute of Medicine issued a report on primary care that advocated for the integration of behavioral health care to improve patient health. The report also recognized the need to finance the diagnosis and treatment of mental illness in primary care settings. a

More than 20 years later, a separation of care still exists largely due to an entrenched culture of behavioral health carve-outs and a lack of financial incentives for integrated care.

There is, however, movement toward integration as more healthcare professionals recognize the need to address the impact of mental illness on chronic conditions such as diabetes and cardiovascular disease.

The main catalyst has been the value-based directive to provide better-quality, cost-efficient care. When providers are paid based on patient outcomes, then all factors related to those outcomes should be addressed—and studies have shown that behavioral health greatly affects outcomes and costs.

Increasingly, payers and providers are planning and implementing payment models that incentivize behavioral care. Working out the details of value-based behavioral health models may take time, but advocates say the efforts are worth it—costs decline, care improves, and patients get healthier.

Starting From Scratch

When it comes to healthcare costs, psychiatrist Jeffrey Weilburg, MD, sees unmet behavioral care needs as the biggest piece of low-hanging fruit. Significant progress has been made in improving the quality and cost efficiency of medical care, says Weilburg, medical director for the Massachusetts General Physicians Organization, a multispecialty group affiliated with Massachusetts General Hospital in Boston. “There still haven’t been enough resources applied to mental health,” he says.

As overseer of the mental health unit of the MGH Intensive Case Management Program, Weilburg sees what happens with high-risk, high-cost patients who have both chronic medical and behavioral health conditions. If their behavioral health conditions go untreated, these patients often seek care in the emergency department (ED).

The Prevalence of Behavioral Health Conditions in High-Need Adults

Indeed, according to research by The Commonwealth Fund, ED visits and hospital stays among high-need adults (those with three or more chronic conditions and a functional limitation that hinders their ability to care for themselves) are higher for those with a behavioral health condition than for those with medical conditions only. b

Screenings are often used in population health management to limit high-cost care and reduce utilization. In behavioral health, the PHQ-9 (patient health questionnaire-9) screens for depression. The problem is that if a patient screens positive, primary care practices often are ill-equipped to follow up.

“You can’t just screen,” Weilburg says. “You really have to beef up the availability of follow-up services and treatments to make the screening itself useful. So there are administrative solutions like screening and early identification, but they can’t stand alone.”

As with medical care, care management and coordination are vital to ensure sustained treatment and steady improvement in a patient’s behavioral health.

“There’s a need for better integration of extended services and short-term primary care services, better communication, better administration of the benefit,” says Patrick Gordon, associate vice president for Rocky Mountain Health Plans, Grand Junction, Colo., which covers about 232,500 members primarily in the Colorado area. “There’s no continuum there really with respect to the needs of the patient. And that’s a much bigger challenge.”

An underlying reason for the insufficiency of behavioral care is funding. Treating behavioral conditions requires a team of mental health providers—such as social workers, care coordinators, and psychiatrists—who traditionally are not part of a primary care practice. “One of the biggest issues is there is not a lot of historical support for that type of delivery model,” Gordon says.

Because medical and behavioral care have been delivered and funded through different delivery and payment structures, integrating behavioral and primary care means building new structures from scratch. There is no volume-based history nor an understanding of the specific behavioral health needs of the population or what mix of providers is necessary.

“The hardest part is getting it off the ground,” Gordon says. “There is no cost structure, so you’ve got to essentially go out and create one.”

Finding primary care practices that are willing to go through this learning process and then share performance data on their behavioral services is an even greater challenge, Gordon says.

Moving Toward Value

Despite such challenges, public and private healthcare organizations have begun to take steps to integrate behavioral services into primary care, in some cases using value-based incentives.

In January, the Centers for Medicare & Medicaid Services (CMS) issued new Medicare Physician Fee Schedule codes that support integrated care. Physicians and other practitioners will be paid for providing behavioral health services such as screenings and care management support for patients undergoing treatment. In doing so, CMS says it recognizes that behavioral health integration improves outcomes for those with comorbid conditions.

In April, the New York State Office of Mental Health and the state’s Office for Alcoholism and Substance Abuse launched the Behavioral Health Value Based Payment Readiness Program. The program will fund New York behavioral health providers in the formation of Behavioral Health Care Collaboratives (BHCCs), which are partnerships such as independent practice associations that will be designed to improve health outcomes, manage costs, and help members participate in value-based purchasing arrangements. The funding—up to $60 million over a three-year period—will support the development of a shared infrastructure and functionality for BHCC members, including clinical quality standards, data collection, analytics, and reporting.

Two years ago, the state of Arizona began consolidating agencies that manage medical and behavioral health services for its Medicaid population. The strategy involved integrating private managed care contracts for behavioral and medical services and integrating care at the provider level. Such integration enables value-based purchasing, says Beth Kohler, deputy director of the Arizona Health Care Cost Containment System, which administers the state’s Medicaid program.

Under one incentive program, providers at clinics where 40 percent of business is from behavioral services receive a 10 percent increase in their Medicaid payment rate for medical care to account for providing more-complex services. The state’s managed Medicaid providers are also incented to engage in value-based purchasing: Behavioral health contractors are expected to have 15 percent of spend be value-based, with the number rising to 25 percent next year.

The goal is to determine what works and what doesn’t, Kohler says, and to derive some lessons for value-based integrated care. “Nationally, these arrangements are evolving significantly, and what we really wanted to ensure was that our managed care organizations have the opportunity to innovate and be leaders in this space,” she says.

Private-Sector Efforts

Rocky Mountain Health Plans has been using a global payment model since 2012 to integrate the delivery and payment of behavioral and medical services for participating primary care practices.

The practices have both upside and downside financial risk, losing part of the global payment if costs exceed the payment. Savings are also shared with participating community health centers that support the coordination of behavioral and medical care.

Performance metrics evaluate aspects of care such as depression screening, continuity of care, patient adherence to treatment, and documentation.

Gordon says the payment model has produced positive results, but the long-term impact is yet to be seen.

“We know that these practices tend to perform better financially and on patient satisfaction scores, screening ranks, and clinical quality measures, but whether we’re really reversing some of the adverse trends with health behaviors, depression, addiction, those sorts of things, that’s still an open question,” Gordon says.

As a managed care organization, Optum, Inc., a subsidiary of UnitedHealth Group, has launched various value-based approaches to help incent medical providers—including primary care practices—to integrate care with behavioral health providers, says Deb Adler, Optum’s executive vice president for network strategy.

“The reason we really feel we have to incentivize this approach through enhanced payments and value-based contracts is we want to get more of the medical providers and behavioral providers engaged in solving and improving the outcomes for members across those medical/behavioral health needs,” Adler says.

The new CMS collaborative care codes will be useful in helping to support Optum’s primary care providers that offer integrated care and in engaging new providers to the cause, Adler says.

Optum has also been participating for about a year in an enhanced payment model to promote integration. The program involves about 20 primary care practices in New York state. Payments help fund a Collaborative Care Center to which primary care providers can refer their patients as a source of support for members with complex behavioral health needs.

Individuals are screened and identified for participation in a collaborative care program, which includes both on-site and virtual psychiatrists, a behavioral healthcare manager, and a psychologist. The enhanced payment program is a joint effort with other managed care payers, but Optum has the majority of members, Adler says.

Participating practices already have seen reductions in patient stress, anxiety, and depression based on measurements such as the GAD-7, a tool used to measure improvements in such conditions, Adler says. “We are still evaluating the impact on total cost of care,” she says.

Generally, the impact of addressing behavioral health needs on total cost of care is considered significant, Adler says. One study, published in 2008 in the American Journal of Managed Care, reported that the IMPACT (Improving Mood and Promoting Access to Collaborative Treatment) model used to treat depression in older adults suggested an ROI of up to 6:1 in savings. c

Advocate Health Care, a Downers Grove, Ill.-based 12-hospital system with a large physician network, has integrated behavioral care in both the inpatient and outpatient settings. In 2013, Advocate created a behavioral health service line to address the needs of patients with behavioral and chronic medical conditions, an estimated 26 percent of its patient population, says Jeannine Herbst, executive director of Advocate’s Behavioral Health Service Line

The program includes automatic screening for depression and anxiety for patients who are in the ED and inpatient medical units and are 65 and older. Patients who score above a certain threshold then receive treatment from a psychologist or psychiatrist. On the outpatient side, patients are screened annually for depression and anxiety during primary care visits.

Behavioral Health Conditions and Use of the ED in High-Need Adults

Advocate also developed a collaborative care program at two physician practice sites that have large numbers of high-risk patients with behavioral and chronic conditions. Patients are treated for their behavioral health condition by an embedded psychologist who spends time at both clinics, consults on patient cases with a psychiatrist, and provides suggestions to primary care physicians on how to manage behavioral health patients.

“The primary care provider is still the driver of the overall care, and the behavioral health care, but he is getting support from a psychiatrist as well as the embedded psychologist, who is providing psychotherapy and other support,” says David Kemp, MD, medical director of Advocate’s Behavioral Health Service Line

Recognizing a shortage of behavioral health providers, Advocate initiated a telehealth program to provide behavioral health services via computer technology at sites where psychiatrists and/or psychologists are unavailable or present only on a limited basis. Behavioral health providers are located at one of Advocate’s hospitals and provide telehealth services to six other hospital sites and two physician practice sites in the system.

Advocate plans to expand the collaborative care model to other practice sites through telehealth technology. The hub of providers also offers curbside consults to primary care physicians to assist them with the management of their patients.

“We’re building our future model on the telehealth platform because we know there’s a shortage of providers, as well as a need to treat a large number of patients in many physician practices, and it’s more cost-effective to do this virtually than it is to embed providers in every office,” Herbst says.

Another key component of the program is care management. Advocate’s care managers are part of the team and manage complex patients. Advocate recently has invested in training medical care managers in integrated care management and is working on expanding the curbside consult service to them.

Advocate’s behavioral health service line providers also participate in a virtual interdisciplinary care team with physicians, a pharmacist, care managers, and post-acute providers to optimize care coordination and provide resources for patients.

Offsetting Medical Costs

“The main reason the behavioral health service line was started was to support our population health efforts by reducing the total cost of medical care by addressing the behavioral health comorbidity of our patients in our full-risk plans,” Herbst says. “But it is part of our mission to treat the whole person, so we provide services such as the screening and the telehealth access to psychiatrists and psychologists to all of our other patients.”

From the beginning, the belief was that expenses for behavioral health services would be offset by expected savings in the total cost of care, Herbst says. New payment structures, such as the CMS collaborative care codes, are encouraging, but in general reimbursement for this type of model is still being developed by payers, she says.

Because some of Advocate’s programs, such as collaborative care and telehealth, are fairly new, there is not enough data to make a final judgment on whether the organization’s behavioral health efforts are providing sustainable cost reductions. But directionally, the data looks promising, Herbst says.

One metric Advocate started tracking, in 2013, was the variable direct cost of a hospital stay. Initially, Advocate found that patients with a chronic medical condition and behavioral condition had higher costs of care, Kemp says. “And some of the national data will demonstrate that the cost is anywhere from two to four times higher when a behavioral health condition is present,” he says.

David Kemp, MD, medical director, Advocate Behavioral Health Service Line

For 2015 and 2016, with the inpatient integrated behavioral health program having been implemented at the end of 2014, Advocate found that the cost gap between chronic medical patients with and without a behavioral condition was shrinking. In some instances, the cost of care was actually lower for someone with a behavioral and medical condition.

Other services, while very much value-based, largely are not yet reimbursed. With telehealth services, for example, payment varies by state, and many payers still do not cover the service, Kemp says. “But to be effective for population health, and to be efficient, we need to start using those types of technology more often, and we’re hoping to see payers getting behind that and supporting those types of interventions,” he says.

What’s Next?

For the most part, providers and health plans are encouraged by the new emphasis on behavioral care. But will that optimism soon fade?

Amid progress in behavioral care and value-based models, there is political uncertainty over the continuation of the healthcare reform efforts of the past several years and how potential changes will affect care and coverage. The consensus among these providers and plans is that reversing course is not an option.

The question is no longer whether integrated care will reduce total costs but instead how to integrate behavioral care in a way that reduces costs most dramatically.

“If you’re talking about a healthcare system that is going to effectively manage the entirety of medical costs, you cannot ignore substance abuse disorders and behavioral health conditions,” Kemp says. “It’s just too big and too much of a player to go unaddressed.”

Karen Wagner is a freelance healthcare writer based in Forest Lake, Ill., and a frequent contributor to HFMA publications.

Interviewed for this article: Deb Adler, executive vice president for network strategy, Optum; Patrick Gordon, associated vice president, Rocky Mountain Health Plans; Jeannine Herbst, executive director, Advocate Behavioral Health Service Line; David Kemp, MD, medical director, Advocate Behavioral Health Service Line; Beth Kohler, deputy director, Arizona Health Care Cost Containment System; Jeffrey Weilburg, MD, medical director, Massachusetts General Physicians Organization, Boston.


a. Donaldson, M.S., Yordy, K.D., Lohr, K.N., et al., “Primary Care: America’s Health in a New Era,” Institute of Medicine, 1996.

b. Hayes, S.L., McCarthy, D., and Radley, D., “The Impact of a Behavioral Health Condition on High-Need Adults,” The Commonwealth Fund, Nov. 22, 2016.

c. Unutzer, J., Katon, W.J., Fan, M-Y, et al., “Long-Term Cost Effects of Collaborative Care for Late-Life Depression,” American Journal of Managed Care, February 2008.


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