Payment for health care that rewards quality and outcomes over volume—known as value-based payment (VBP)—is reshaping the delivery of care. But behavioral health providers have often not been included in these VBP arrangements. As state Medicaid programs and managed care plans have introduced VBP models for behavioral health care, this has started to change. Behavioral health providers often find themselves struggling to navigate this new payment landscape, and policymakers and payers are looking for ways to support them.
Just as this transition to VBP was getting underway, COVID-19 dramatically affected the delivery of behavioral health services, including a sudden shift to telehealth and increased use of crisis services. These changes have strained the system, but they have also presented opportunities to strengthen the health information technology and data infrastructure that supports VBP. At the same time, increasing demand for mental health and substance use services as a result of the pandemic could make it more difficult for behavioral health providers to succeed in VBP arrangements.
Mathematica has a long history of working with federal agencies, states, and foundations to support the implementation of VBP models. We’re currently evaluating the Certified Community Behavioral Health Clinic (CCBHC) Demonstration, supporting the Delta Center for a Thriving Safety Net initiative, and helping Minnesota’s Medicaid agency explore how VBP can promote new models of care for people with disabilities enrolled in Medicaid home and community-based services waivers. We’ve also worked with managed care plans to refine their approach to measuring and incentivizing high quality behavioral health services. Through our work, we offer an objective, data-driven perspective on designing and measuring the success of VBP arrangements.
Here are several considerations for payers developing VBP models for behavioral health care:
- Participating in VBP requires substantial investment of time and resources. Behavioral health providers must significantly transform their services, staffing, and billing practices to engage in VBP. This transformation requires planning, and providers often encounter barriers to fully ramping up their services—particularly, workforce shortages and gaps in staff training. It takes time to work through these challenges. For example, in the CCBHC Demonstration, states and clinics had a two-year planning period during which they developed the payment rates, hired and trained staff, and established new billing practices and processes for care delivery and coordination. States and clinics reported that this time was critical to swiftly launch the new model.
- Service delivery requirements and payment arrangements should be flexible, so providers can tailor services to their patient populations and local context. Behavioral health providers serve communities with different populations and resources. In the CCBHC Demonstration, states could select the payment model that best fit the participating providers and the communities they serve. Although CCBHCs are expected to adhere to requirements regarding service delivery and staffing, states could grant clinics some flexibility in response to workforce shortages or other implementation realities. Some clinics reported that this flexibility was critical to effectively structure their treatment teams and provide services that were a good match for their communities.
- Support investment in health information technology infrastructure to facilitate care coordination and quality measure reporting. Relative to other health care sectors, behavioral health providers have not had the same financial resources to enhance their electronic health records and other health information technologies. In the CCBHC Demonstration, upgrading these systems was a heavy lift for some clinics, and state agencies played a major role in supporting those efforts. Fortunately, states and CCBHCs ultimately found that these system enhancements enabled them to capture information they used to coordinate care and identify opportunities for quality improvement.
- Have patience when aligning payment with costs. Payers should anticipate that it might take several years to land on the right payment rates for behavioral health providers, and they shouldn’t rush to abandon the model based on the early costs. In the CCBHC Demonstration, the rates aimed to cover the full cost of the required services. During the first year of the demonstration, the payment rates were, on average, higher than the cost of services. States expected this because they didn’t always have complete historical data to inform their cost projections. Several states planned to adjust the rates in later years as they collected better data to inform more accurate cost projections. Learning from this experience, payers can leave the door open to renegotiate rates, but they must collect good data to make these decisions.
- Provide ongoing monitoring and support to help providers overcome implementation challenges and understand their performance. Payers should establish mechanisms to facilitate communication across providers and give timely feedback on their performance. In the CCBHC Demonstration, some states convened learning collaboratives that helped clinics troubleshoot issues in hiring, retention, training, and billing. The CCBHC Demonstration also includes a common set of quality measures that all CCBHCs report, which enabled clinics to understand their performance relative to each other. Some states provided feedback reports that helped clinics target quality improvement efforts.
Payers across the country are making strides to engage behavioral health providers in VBP. Over time, more data will emerge to help us understand how these arrangements affect the quality, outcomes, and costs of care. Right now, many questions remain about establishing payment rates, setting reasonable performance targets, and designing VBP arrangements that incentivize the integration of behavioral health providers into the broader delivery system. COVID-19 has added uncertainty about sustaining and adapting VBP models while shifting to telehealth and other new modes of delivering services. We are eager to continue working with our partners to tackle these tough questions and ensure that VBP arrangements improve the lives of the people they are designed to serve.
More about our work
We are supporting several initiatives focused on VBP in behavioral health care:
Certified Community Behavioral Health Clinic (CCBHC) Demonstration. The CCBHC Demonstration changes how Medicaid reimburses community behavioral health clinics that provide a core set of services. The participating clinics receive a fixed prospective daily or monthly payment intended to cover the full costs of the required CCBHC services, and clinics can receive bonus payments based on their performance on quality measures. Mathematica and the RAND Corporation are conducting a national evaluation of the demonstration for the Office of the Assistant Secretary for Planning and Evaluation to examine its implementation, outcomes, and costs. In addition to the latest report to Congress, reports on the implementation and costs of the demonstration are available online.
Delta Center for a Thriving Safety Net. Supported by the Robert Wood Johnson Foundation, this center provides technical assistance to state primary care associations and state behavioral health associations to advance VBP and care. Mathematica partners with the Robert Wood Johnson Foundation to provide formative feedback on how the Delta Center’s technical assistance efforts are helping build capacity to engage in VBP among these associations and their provider members. The Delta Center website hosts free webinars, grantee spotlights, updates on VBP during COVID-19, and other resources on VBP for safety net providers.
Developing VBP options for programs serving people with disabilities in Minnesota. Mathematica is helping Minnesota’s Medicaid agency explore how VBP can promote new models of care, services, and reimbursement structures for people with disabilities enrolled in Medicaid home and community-based services waivers. As part of this work, we’re gathering information on VBP programs in Minnesota and across the country and analyzing state Medicaid data to assess proposed VBP options and their impact on service use and costs. We’re also engaging providers, county and state administrators, clients, families, and advocates to understand their objectives for VBP models and obtain formative feedback on proposals. This work will yield an action-oriented proposal for Minnesota to implement VBP strategies that prioritize the outcomes most valued by people with disabilities and that use public dollars efficiently.
Disclaimer: The views and opinions in this blog are those of the authors and do not necessarily reflect the views or opinions of the Robert Wood Johnson Foundation, the Office of the Assistant Secretary for Planning and Evaluation, or the Minnesota Department of Human Services.
