Value-Based Payment Models in Behavioral Health: State Innovations and Outcomes

The adoption of Value-Based Payment (VBP) models for behavioral health providers across various states signifies a transformative approach in financing mental health and substance use disorder (SUD) services. By focusing on the quality and outcomes of care, rather than the volume of services provided, these models aim to improve patient outcomes, enhance the efficiency of care delivery, and reduce overall healthcare costs. Here's a closer look at how some states have tailored VBP models to address the unique needs of behavioral health providers:

New Hampshire: Capitated Payments for Community Mental Health Providers

Since 2014, New Hampshire has been at the forefront, implementing capitated payments for Community Mental Health Providers (CMHPs) through Medicaid Managed Care Organizations (MCOs). This model pays CMHPs a Per Member Per Month (PMPM) fee based on four clinical eligibility categories: Serious and Persistent Mental Illness (SPMI), Serious Mental Illness (SMI), Severe Emotional Disturbance, and Low Utilizers. These payments are directed to CMHPs without MCOs deducting for administrative costs or profit, ensuring that funds are fully utilized for patient care. Importantly, these payments are linked to quality performance, although the specifics can vary by MCO.

Tennessee: Health Link

Tennessee's Health Link program is designed to provide coordinated care for individuals with SMI and SUD diagnoses, drawing on the CMS’s health home model. Providers receive monthly case rates for care coordination and management activities, with the opportunity for additional outcomes payments based on performance in quality and efficiency metrics. While the program is open to various mental health agencies, Community Mental Health Centers (CMHCs) make up the majority of Health Link providers.

Vermont: Mental Health Case Rate

Vermont offers mental health agencies a fixed prospective monthly payment, encouraging the delivery of at least one qualifying service per month to meet caseload targets. The introduction of a separate quality payment, funded by the legislature, adds an incentive for providers to meet specific benchmarks, transitioning from pay-for-reporting in its first year to a more outcome-focused model in subsequent years.

Certified Community Behavioral Health Clinics (CCBHC)

The CCBHC program, a federal initiative launched in eight states, aims to improve access to a comprehensive range of behavioral health services. Clinics meeting federal criteria receive Medicaid funding through a state-approved prospective payment system (PPS), calculated based on the expected cost of services. The program not only mandates the provision of a wide array of behavioral health services but also includes requirements for staffing, access, care coordination, and quality reporting. Depending on the state, the payment methodology for CCBHCs may incorporate quality bonus payments (QBP) for meeting specific performance goals, blending elements of Pay for Performance (P4P) within the VBP framework.

These examples illustrate the innovative efforts states are making to finance behavioral health services through VBP models. By aligning payment structures with the quality and outcomes of care, states aim to foster a more effective, efficient, and patient-centered behavioral health system.