CMS Considers Behavioral Health Alternative Payment Model

July 24, 2017 - CMS recently announced its intention to develop an alternative payment model targeting behavioral health services. The federal agency is seeking stakeholder feedback on model development in a public meeting on Sept. 8, 2017, in Baltimore.

The behavioral health alternative payment model would join the ranks of over 80 care delivery and payment models offered by the CMS Innovation Center. CMS designed the Innovation Center to create and run payment and/or service delivery models that improve care quality and access while decreasing healthcare costs for Medicare, Medicaid, or Children’s Health Insurance Program (CHIP).

The Innovation Center seeks to extend their services to behavioral health conditions, the meeting announcement stated.

Through a behavioral health alternative payment model, the Innovation Center aims to “address the needs of beneficiaries with deficits in care in the following potential areas leading to poor clinical outcomes or potentially avoidable expenditures: (1) Substance use disorders; (2) mental disorders in the presence of co-occurring conditions; (3) Alzheimer's disease and related dementias; and/or (4) behavioral health workforce challenges.”

The alternative payment model may include other payer participation and increase provider use of telehealth services. The behavioral health-specific reimbursement arrangement could also qualify for maximum value-based incentive payments under MACRA’s Advanced Alternative Payment Model track.

The healthcare industry has recently struggled to lift the divide between physical and mental health. But population health management and value-based reimbursement models are calling on providers to integrate behavioral health services to improve patient outcomes and lower costs.

By not addressing behavioral health issues, recent research showed that providers may be jeopardizing patient outcomes. A majority of patients with chronic diseases experience major depressive disorder and elderly individuals who report feelings of extreme loneliness and isolation face increased risk of premature death by 14 percent.

Behavioral health concerns also led to increased healthcare costs and low-value healthcare utilization. Patients with behavioral health issues are less likely to adhere to treatment plans and experience recurring hospital admissions.

A 2015 Agency for Health Research and Quality (AHRQ) report stated that about 8.6 million inpatients in 2012 involved at least one mental or substance abuse disorder diagnosis, representing about 32.3 percent of all inpatient stays that year.

Behavioral health issues, such as mood disorders, also topped the list of conditions with the largest number of adult readmissions for Medicaid and private payers in 2011, a 2014 AHRQ study showed.

Out of the ten conditions causing the most hospital readmissions for Medicaid patients in 2011, four were mental health or substance abuse disorders. The conditions included mood disorders, schizophrenia and other psychotic diagnoses, alcohol-related disorders, and substance-related disorders.

The conditions resulted in 113,100 readmissions and $832 million in hospital costs.

For private payers, mood disorders ranked second in the top ten list of conditions causing the most hospital readmissions in 2011, with 3.2 percent of readmissions.

Increased healthcare costs and readmissions could harm provider revenue. CMS currently penalizes hospitals with excessive readmissions by up to 2 percent under the Hospital Readmissions Reduction Program. Value-based purchasing models, such as MACRA, also tie claims reimbursement to improved patient outcomes and cost efficiency.

Despite the importance of behavioral health, alternative payment models do not necessarily reimburse providers for integrating the care or providing mental health services. In September 2016, the American Medical Group Association (AMGA) called attention to a lack of claims reimbursement for integrated behavioral health and coordinated chronic disease management.

The industry group urged CMS to be more flexible when it comes to paying primary care providers for initiating a behavioral health visit.

In the most recent announcement, the federal agency aims to address stakeholder feedback on behavioral health reimbursement by holding a public meeting.

The meeting will include four panels of behavioral health experts who will speak to payment and services delivery. They will discuss substance abuse disorders, Alzheimer’s disease and related dementia conditions, and behavioral health workforce development.

CMS invited stakeholders from across the healthcare industry to attend the meeting in September. Attendees will have the opportunity to listen to the panelists, ask questions, and make “brief individual statements.”

“The recommendations provided during this meeting will assist us, as we explore the possibility of designing a model test to address behavioral health payment and service delivery,” the federal agency wrote.