Blog | Payment Models

Payment for Behavioral Health Care Is in Catch-Up Mode Under Value-Based Care

Blog | Payment Models

Payment for Behavioral Health Care Is in Catch-Up Mode Under Value-Based Care

Don McDaniel makes a case for an integrated payment model for behavioral and medical services.

Long considered separate from medical care, behavioral health offers ample opportunity for healthcare organizations but sorely lacks the resources, energy, and inclusion in new payment models necessary to expand access for the public and make services more mainstream. When considered as part of a holistic approach to patient care, behavioral health services can lead to better patient and financial outcomes. But if left unaddressed, the behavioral health gap will continue to widen, impeding progress.

States Taking Action

Recent attempts to increase access to behavioral health care, such as New Jersey’s pledge to add more inpatient beds for behavioral health cases, promise to offer some relief but won’t solve the bigger problem. Affecting outcomes requires equal access to medical and behavioral health treatment for all patients.

Behavioral health care and medical care continue to be treated separately, particularly when it comes to payment models, which often are administered by two different groups within each state. States need to bring payment mechanisms and treatment plans together to treat patients behavioral and medical conditions as interrelated.

Advancing Value-Based Care

The fee-for-service care model is perfectly designed to make one payment for medical care and another for behavioral health care. As health care moves toward value-based care models, however, healthcare organizations should seek ways to integrate payment for both types of care starting with the following recommendations.

Define the right metrics. The industry struggles with this topic, because no national benchmarks for behavioral health currently exist. The shortage of data on quality further compounds the problem. Behavioral health data require a similar approach to metrics as the Healthcare Effectiveness Data and Information Set provided to medical data. The industry not only must agree on the metrics, but also must ensure the proper infrastructure is in place to track them.

Explore bundled/alternative payment models. The bundled case rates many states have adopted also should be adopted at the federal level. A global or bundled payment approach that includes behavioral health care makes tremendous sense. Payment reform would open up many options, such as increasing the use of apps or telehealth and engaging in alternative visit types for patients in intensive, outpatient, long-term treatment programs. Medication can be prescribed without a face-to-face visit, and some patients can self-administer treatment at home. Given the terrible track record of follow-up among the population requiring behavioral health care, these tactics would allow providers to track their progress.

Seek out federal demonstrations. Organizations with access to Health Resources & Services Administration (HRSA) funding should consider obtaining grants and engaging in demonstration projects with CMS. The Certified Community Behavioral Health Clinic demonstration program, funded through the Substance Abuse and Mental Health Services Administration, is an excellent example; it creates a model for increasing access to behavioral health services for patients under Medicaid.

Proactively engage health plans. Healthcare organizations should out to health plans about creating new programs together, making the case that if the program is successful in driving down costs and improving outcomes, it can implemented with all the health plans’ covered locations. As a first step, the provider organization should ask the health plan for an opportunity to review its data so the provider can understand how the health plan is spending money to keep the population healthy. Using that information, the provider organization can determine what value it can offer by better managing members through integrated behavioral health care.

With payment reform for behavioral health care still in the early stages, healthcare leaders can expect wildly differing ideas coming from all directions. Anything that moves the needle toward integrating delivery and payment for behavioral and physical health care is a move in the right direction. Healthcare leaders should be prepared for change, but they also should be catalysts for change.


Don McDaniel is vice chairman at Continuum Health, Marlton, NJ.

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Don McDaniel

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