Mental Health: Value Based Payment Models Continue to Evolve
Written by David Blaszczak, Senior Advisor at SCALE Healthcare
Bottom Line: Increased demand over the last decade in mental health services has led commercial and public payers to rethink the way mental health services are reimbursed and delivered. Medicare and Medicaid are leading the way and setting an example for how a value-based care model can be implemented for mental health services, while commercial payers are engaged but lagging in adopting value-based models compared to public payers. Preparing for the transition to value-based care in the mental health specialty is crucial to providing the best care possible to patients. Providers will have to become accustomed with the move away from FFS and embrace holistic patient treatment.
According to a study done by the American Psychological Association, 84% of psychologists have seen and increase in demand for anxiety treatments and 72% have seen and increase in demand for depression treatments since the start of the pandemic. This increase in demand for mental health services has put a strain on mental health providers, with around 41% not being able to meet high demand. Value-based care and payment models offer a solution to allow greater access to mental health care without overwhelming providers and increasing costs. Within the mental health specialty, the most common value-based care trends we are seeing revolve around the use of telehealth, episodic payment structures, and collaboration between primary care providers and mental health specialists.
The use of telehealth is an essential part of value-based care within mental health, as it helps bridge inequity gaps in care. Data from KFF shows a shortage of healthcare professionals that mostly affects more rural and impoverished areas. Around 112 million Americans live in rural areas with limited access to care, and states like Montana, South Dakota, Arizona, Washington, and Wyoming are falling short when it comes to meeting the mental health needs of their residents. Telehealth not only works to improve access to mental healthcare but aims to reduce costs with the value-based payment models as well. A Health Affairs report found that the average telehealth visit costed $79, while the average in-person visit was $146. The use of telehealth under a value-based care model would also allow for providers to maximize reimbursement received, because of the lower costs associated with in-patient visits. Mental Health providers who do not prepare for the increased use of telehealth within value-based care, will likely have a difficult time with the switch away from FFS.
Medicare and Medicaid are leading the way in shifting to more value based payment models with increasing number of commercial payers are already dabbling in value-based payment models for mental health and substance use services. Most notable on the commercial side are Cigna and BCBS of Western NY, in tackling value-based payments for mental health services. Cigna’s value-based program is focused on substance use and is in partnership with the American Society of Addiction Medicine. Cigna will be sharing claims data with ASAM to help establish quality metrics for a pay for performance model down the line. BCBS of Western NY is farther along in their implementation of a value-based model, as they have already begun to partner with their region’s behavioral health providers by using a “Best-Practices” payment model. This payment model offers providers a per-member per-month capitated payment based on a variety of patient factors, but still keeps a few services as FFS. With commercial payers at different stages in value-based payment implementation, we believe that early adoption of a value-based care model will pay off in the long run once value-based payments become the norm across all payers. Early adoption of a value-based care model would also help with tapping into the Medicare and Medicaid patient population, as value-based payments are far more prevalent. Some of the most notable value-based payment models for government payers are coming from Arizona, New York, and Pennsylvania. A common trend in this space is to implement core quality standards that are used to judges patient progress and reward providers with bonuses under a hybrid pay-for-performance and episode bundle payments. Under this structure, providers could expect to have a lump-sum payment for the entirety or divided portion of a patient’s care and receive bonuses based on progress made with patients. A switch to this type of payment model is one of the most important aspects for providers and groups to prepare for, as their strategies to tackle patient care can greatly affect profits.
Another trend popping up in the value-based mental health space is collaboration between primary care providers and mental health specialists. This is a way for providers to maximize payments received, because sharing risk and care of a patients helps to treat them more holistically without drastically increasing the cost of care. This type of patient-centered care is another cornerstone to succeeding in a value-based model and can help with medication adherence as well. Since patients would have support from an additional provider, outside of their mental health specialist, they may be able to have a greater understanding of the importance of their treatment and adherence to medication.
While value-based care models in mental health are slower to implement than in other specialties, they are here to stay as access and costs are greatly improved. Preparing yourself or your practice for a switch to value-based care is crucial, as mental health has specific nuances that are not present in other specialties when transitioning to value-based care and will take more time adjusting to.
Contact David Blaszczak for questions or comments about this article.