As we’ve discussed before on the BestNotes blog, value-based care is becoming the future of U.S. healthcare. However, most value-based payment (VBP) models have focused on physical health rather than behavioral health.
The law firm of Manatt, Phelps & Phillips, LLP, under its Manatt Health division, recently created a report for the California Health Care Foundation that examines how three state Medicaid programs have adopted VBP models for behavioral health.
While this report is focused on California-specific recommendations, it provides valuable information for any state looking to implement VBP for behavioral healthcare.

What the Report Includes

The Manatt Health report focuses on three state Medicaid programs:

Vermont: The state Medicaid program implemented a hub-and-spoke model that expanded addiction treatment access. Also, its Mental Health Payment Reform Residential Substance Use Disorder Case Rate and Applied Behavioral Analysis Case Rate methodologies may further expand behavioral health VBP.
New York: The state’s Behavioral Health VBP Readiness Program helps behavioral health providers create networks that can participate in VBP models.
Tennessee: Under Tennessee Health Link, the state’s Home Health Program, community mental health centers can better serve high-need members. Also, the state’s Episodes of Care program has used a new VBP approach for individual behavioral health conditions.
The report includes descriptions and assessments of the models used in these three states, based on interviews with key stakeholders and publicly available materials. The authors considered the models’ challenges, successful and unsuccessful results, and adjustments. The final section includes a discussion specifically for California’s consideration.

Key Takeaways for Behavioral Health Models

Behavioral health providers and payers should be aware of several key takeaways in the report.
Total Cost of Care for Behavioral Health
The report’s findings suggest that models based on total cost of care may not be suitable for behavioral health. In a total cost of care arrangement, a group of providers assumes financial risk for the total cost of care for an attributed population, regardless of where services are provided.
Some reasons for this potential unsuitability include:
Complexity involved in dividing responsibility for total cost of care across physical health and behavioral health providers
Inability to manage downside risk
Behavioral health providers usually cannot influence the full continuum of care
Lack of standardized managed care contracting templates for behavioral health VBP
Episodic and Bundled Payment Models More Promising
The report suggests that episodic or bundled payment VBP models may be better for behavioral health. These models focus on discrete behavioral health treatments, events, or diagnoses. Evidence suggests that these models can improve some behavioral health access quality of care.
Cost Savings Still Uncertain
The report authors did find evidence that episodic or bundled payment VBP models could help improve behavioral health access and quality outcomes without raising overall Medicaid costs. However, it is unclear whether these models will create meaningful cost savings. These models may have to be adjusted to target cost reduction as well as improve care access and quality.
Preparing for Value-Based Care in Behavioral Health
The right EHR system can help behavioral health providers prepare for value-based care. Record and track client data and outcomes, create customized progress notes, and generate accurate reports with BestNotes, a behavioral health EHR solution built specifically for your practice’s needs. Contact BestNotes today to learn more, or schedule a live demo.