fi/é ASPE OFFICE OF BEHAVIORAL HEALTH, ISSUE BRIEF

PN ENLet DISABILITY, AND AGING POLICY October 17, 2023

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REIMBURSEMENT MECHANISMS AND CHALLENGES IN
TEAM-BASED BEHAVIORAL HEALTH CARE

 

KEY POINTS

e Although team-based models of behavioral health care are widespread, reimbursement gaps
remain common, making sustainable funding difficult; federal and state funding remain critical to
many team-based models.

e Fee-for-service generally limits reimbursement to direct care provision and is a commonly cited
barrier to reimbursement for team-based behavioral health care, which often includes activities
outside of direct care.

e Many team-based models use alternative reimbursement mechanisms to sustainably reimburse for
team-based care.

 

INTRODUCTION

Team-based care models typically involve two or more individuals of varying disciplines and backgrounds who
work collaboratively to provide coordinated care.! Behavioral health care, specifically, can necessitate a team-
based approach due to patients' complex care needs, characterized by co-morbidities, specialty care, and
frequent transitions between health care professionals or teams.! Team-based care can also help address
behavioral health workforce shortages by including peers and non-licensed behavioral health workers in teams
of licensed providers, thereby facilitating professional providers' ability to practice at the top of their license. In
addition to mitigating workforce shortages, team-based care is associated with increased well-being and
reduced burnout for providers and increased care coordination and integration of care for patients.>3

Despite the demonstrated benefits of team-based care models, experts in the fields of behavioral health
workforce and network adequacy have noted that existing reimbursement models do not adequately support
team-based care.*®> Fee-for-service (FFS) billing, the dominant reimbursement mechanism in the United
States,® is generally tied to volume of procedures provided directly to the patient. By contrast, team-based
care often combines direct services with activities that are conducted between visits (e.g., outreach, referrals,
documentation) and between team-members (care coordination, team meetings, consultations). Because of
the emphasis on direct service provision, it can be difficult for providers to bill for team-based activities in a
FFS context. Additionally, many existing licensing, credentialing, and payment policies limit the ability of peers
and non-licensed behavioral health workers to independently bill for services rendered, creating a
reimbursement gap for team-based models of care that involve peers and paraprofessionals.! In response to
barriers to sustainable reimbursement linked to traditional FFS billing, team-based models are turning to
alternative reimbursement mechanisms, such as enhanced FFS, bundled rates, and per member per month
(PMPM) payments.'

 

October 2023 ISSUE BRIEF 1
This issue brief outlines: (1) the reimbursement challenges of several team-based behavioral health care
models; and (2) the approaches different models take to sustainably bill for team-based care. This study seeks
to address the following research questions:

1. What are common reimbursement gaps across team-based behavioral health models?
2. How have reimbursement gaps been mitigated by alternative reimbursement mechanisms?
3. What challenges remain for models implementing alternative reimbursement approaches?

METHODS

To identify models of team-based care and associated reimbursement strategies, we conducted a scan of peer-
reviewed articles, gray literature, industry reports, presentations, and website content. We used key search
terms in general Internet searches (Google) and in searches of scholarly literature (Google Scholar). In addition
to these searches, we conducted scans within government and other stakeholder websites that are relevant to
team-based care (e.g., the Centers for Medicare & Medicaid Services [CMS] and the Substance Abuse and
Mental Health Services Administration [SAMHSA]}. The scan was supplemented by interviews with subject
matter experts in behavioral health care delivery models and reimbursement mechanisms. We conducted six
interviews with nine stakeholders across commercial and public sector behavioral health care, including
individuals with expertise in how peer specialists are included and reimbursed in team-based care models.

Eleven team-based behavioral health models were identified in the environmental scan: Coordinated Specialty
Care (CSC), Mobile Crisis Teams {MCTs), Pediatric-Child Psychiatry Teleconsult, Sustained Addiction Recovery,
Emergency Department-Based Treatment and Support, Opioid Treatment Programs (OTPs), Opioid Health
Homes (OHHs), Behavioral Health Homes (BHHSs), Psychiatric Collaborative Care Models (CoCMs), Assertive
Community Treatment (ACT), and Certified Community Behavioral Health Clinics (CCBHCs). A subset of these
models is discussed in this brief, which focuses on models that highlight common reimbursement gaps and
promising alternatives to FFS billing.

For each model, we identified publicly available information about the payer (e.g., which agency or payer
administers reimbursement), funding sources, and reimbursement mechanisms (i.e., how providers are paid).
Where possible, we also identified billing codes and payment rates associated with the model. Other notable
information collected on team-based models included provider team structure, service components, billing or
service restrictions, characteristics of the model, and whether peers were involved.

RESULTS

Models of team-based behavioral health care face two challenges specific to traditional FFS reimbursement:
(1) lack of reimbursement for team-based activities; and (2) lack of sustainable reimbursement for certain
provider types, especially peer support. More generally, because several models provide team-based care
across multiple payers, navigating the fragmented payer system was another common challenge to sustainable
reimbursement. Models that provide team-based care for all patients while billing multiple, siloed payers were
often faced with rate and coverage variability, with payers covering different sets of services and reimbursing
for those services at different rates. By extension, when models achieved sustainable billing for team-based
services within one payer, the team-based care provided might remain unreimbursed or under-reimbursed by
other payers. For a summary of how those challenges manifested in several models, see Table 1. An overview
of all the models identified in the scan, in addition to a summary of major reimbursement issues, are provided
in a related ASPE brief.2 Throughout this issue brief, we distinguish between traditional FFS and alternative
reimbursement mechanisms, a term used to refer to a range of reimbursement approaches that deviate from
traditional FFS.

 

October 2023 ISSUE BRIEF 2
 

Table 1. Barriers to Reimbursement in Team-Based Behavioral Health Models

 

 

Model Barriers to Adequate Reimbursement
Coordinated Specialty e No reimbursement for supported employment, education services, and
Care (CSC) community-based outreach services under many Medicaid state plans.

Difficult to sustainably fund care coordination, team oversight, and training.
FFS billing rates not aligned with high-intensity services.

Reliance on local funding reduces need for FFS billing.

Crisis context can be a barrier to assessing insurance coverage.

On-call time is not billable time.

Payer-agnostic design results in service provision to commercial and
Medicare beneficiaries, with limited or no reimbursement, respectively.
Consultation services remain dependent on grant funding.

e Variable billing volume makes FFS billing difficult to sustain.

 

Mobile Crisis Teams
(MCTs)

 

Psychiatric Teleconsult

 

 

 

 

Across the team-based models of behavioral health care, we found that some models were more embedded in
traditional funding approaches and less likely to leverage alternative reimbursement mechanisms. In other
words, these models were almost uniformly reliant on traditional FFS billing, grant funding, or a combination
of the two. We cite several of the models in our environmental scan to illustrate the range of reimbursement
issues that affect models using traditional reimbursement. We distinguished between models that rely on
traditional FFS and models using an alternative reimbursement mechanism, either by design or because they
were adapted to bill using an alternative reimbursement mechanism. This second group of models illustrates
common alternative reimbursement mechanisms used by team-based behavioral health models, how those
mechanisms alleviate reimbursement gaps, the specific advantages of the alternative reimbursement
mechanism to team-based care, and what challenges remain.

Reimbursement Issues Affecting Team-Based Behavioral Health Models

We found that several models face consistent barriers to sustainable reimbursement for their team-based
activities and consequently, rely on grant or local funding, either as a primary funding source or to supplement
reimbursement gaps left by FFS billing. These three models, CSC, MCTs, and Psychiatric Teleconsult, differed in
how much their funding streams relied on FFS billing. CSC is generally billed for service-by-service under
traditional FFS billing, where certain services provided by the model may not be billable to all-payer types
across all states. MCTs are predominantly funded through state or local funds to maintain on-call availability
even when MCTs are not engaged in direct care provision. MCTs are often reimbursable through Medicaid,;
however, the combination of providing an on-call service and team-based services across payers results in
reimbursement gaps. Finally, the Psychiatric Teleconsult model was identified as rarely sustained through FFS
reimbursement alone, although several states indicated that they were billing teleconsult services through
Medicaid. These models are predominantly grant-funded and consequently do not incur reimbursement gaps
as in the CSC and MCT models.

Unreimbursed Care: Team-Based Activities, Peer Support Services, and Coverage Limitations

The CSC model, which provides recovery-oriented treatment for people with first episode psychosis, is
generally reimbursed, service-by-service, through FFS billing. The provider teams can vary by state but are
generally composed of a psychiatrist, an occupational therapist or other support specialists such as social
workers, and peer support specialists. Key components of the model, including team coordination, training,
patient outreach, and team meetings, are not billable services under Medicaid FFS. Further, peer support
specialist services are variably supported across payers and states. In 2018, 37 states covered peer support
services through Medicaid, either through the Medicaid state plan, a state plan amendment {(SPA), or Medicaid
waivers.? The CSC model also includes supported education and employment services, emphasizing
engagement in work and school as part of the treatment process. However, these services are generally not

 

October 2023 ISSUE BRIEF 3
covered by commercial insurers or by standard Medicaid benefits. Finally, for CSC services that are covered by
payers, the rates are generally too low to support the intensive level of care provided through CSC.1° To fill
these gaps, states rely on block grants and appropriated funds for training support staff and implementing
non-covered services.!! Similar to CSC models, MCTs face barriers to sustainable reimbursement under FFS
billing in that team supervision, training, transportation, and outreach are both integral to the model and
difficult to bill for.

On-Call Services and Indirect Service Provision

Lack of reimbursement for on-call time is another barrier to sustainable reimbursement for models that are
limited to traditional FFS billing. For MCTs, this includes team activities and services that are outside of direct
care provision, including 24/7 availability, transportation time, and care coordination.'? The MCTs' ability to
reach people in remote areas increases access to care; however, this is a financial liability under a FFS scheme
because travel time is not reimbursable. MCTs are further disadvantaged within traditional FFS billing because
services must be available at all hours of operations, whereas actual need for MCT services fluctuates. In other
words, MCTs must be staffed during their hours of operations but only receive reimbursement when their
services are used directly, leading to instability and potential insolvency for provider teams. Teleconsult
models face similar issues as a model providing on-call services. These models fund a team of psychiatric
specialists to act as an available resource to pediatric primary care providers (PCPs) who require specialist
guidance to treat patients facing mental health issues. However, the nature of teleconsult models, providing
consultative services to PCPs, means that these models rarely provide services directly to patients, making
reimbursement through traditional FFS more challenging.!®* As a consequence, a combination of appropriated
state dollars and grant funding pays for psychiatric specialists to consult with PCPs.

Variable Coverage for Team-Based Services Across Multiple Payers

In addition to issues with or a lack of FFS reimbursement, team-based models also contend with a fragmented
payer system. As a crisis service, the MCT model is an especially striking example of the effects of a fragmented
system on team-based care. MCTs are intended to be payer-agnostic; in other words, they provide crisis care
irrespective of insurance coverage or type. Insurance coverage for MCTs is not uniform across payers; whereas
Medicaid often includes coverage for MCTs, Medicare does not cover their services and commercial insurance
coverage is variable. As a result, when Medicaid is the primary payer type for a team-based care model,
patients enrolled in Medicare and non-covering commercial insurers can receive the same level of care
through MCTs without contributing to sustainable reimbursement. Variable coverage across payer types leaves
MCT billing tied to its patient-mix, specifically to the proportion of clients who are enrolled in Medicaid. The
combination of crisis service and an unreliable reimbursement landscape results in MCTs primarily relying on
local funding and Mental Health Block Grant (MHBG) funding, despite the effects that variations in local
budgets and grant funding can have on MCT operations. Although historically, MCTs could be supported
through MHBG funding, legislative action in 2021 requires states to set-aside not less than 5% of their MHBG
funding each year to fund crisis services specifically, representing an additional $35 million in MHBG funding
annually.!* Another payer-agnostic service delivery model, the pediatric psychiatric teleconsult model is
occasionally covered through Medicaid but generally not reimbursed by other payers. These programs pay for
psychiatrists to provide on-call consultations to PCPs that require specialist support in diagnosing and treating
mental illness. The vast majority of pediatric psychiatric teleconsult programs are grant-funded. In both cases,
the lack of a comprehensive, all-payer reimbursement scheme leaves provider teams supporting a larger pool
of beneficiaries than those that can be billed for, and the insufficient funding leaves programs reliant on grant
funding and fluctuating appropriations in state and local budgets.

 

October 2023 ISSUE BRIEF 4
Reimbursement Mechanisms that Alleviate Reimbursement Gaps for Team-Based Behavioral
Health Care

Based on the limitations of traditional FFS billing to sustainably reimburse for team-based services, several
team-based models bill for team-based services using alternative approaches: enhanced FFS, bundled
payments, and PMPM payments. These reimbursement mechanisms have advantages specific to successful
reimbursement of team-based care, ranging from codes that encompass team-based activities, to bundled
rates that allow for flexible service provision by a range of team members, to PMPM rates that are intended to
cover the cost of comprehensive care for each patient in the provider's care. A summary of these models, their
payment approaches, and corresponding advantages for team-based care are presented in Table 2.

 

 

 

 

 

 

 

Table 2. Advantages of Reimbursement Mechanisms for Team-Based Care Models
Model(s) RelmNtl):tr:sLnent Advantages Over Traditional FFS for Team-Based Care

Assertive Community | Enhanced FFS Specific billing codes to reimburse for team-based

Treatment (ACT) activities in addition to direct care provision, reduced
burden on providers compared to billing for individual

Psychiatric services using traditional FFS.

Collaborative Care

Model (CoCM)

Certified Community Bundled Rate PPS allows for investments in infrastructure that

Behavioral Health supports team-based care, in addition to hiring staff or

Clinic (CCBHC) providing services that would be difficult to reimburse
through FFS billing.

Sustained Addiction Bundled Rate Combines traditional FFS and bundled rates. In addition

Recovery (ARMH) to adjusting bundled payment by condition severity, the
model uses FFS reimbursement for pre-stabilization
emergency services to reach patients in a variety of
emergent settings. After stabilization, the model uses a
static bundled payment during recovery initiation and
active treatment, followed by a declining bundled
payment during community-based recovery,
corresponding to the lower acuity in that treatment
phase.

Behavioral Health PMPM Monthly payment for patients receiving care through

Homes (BHH) the health home to cover any of services provided by
the health home.

Opioid Health Homes

(OHH)

 

 

 

 

Enhanced Fee-For-Service

Enhanced FFS departs from traditional FFS by defining billing codes that cover previously unreimbursed team-
based care as well as indirect care. ACT models are often reimbursed using enhanced FFS billing that allows
provider teams to bill for a range of ACT services under a single code, which can include services beyond
individually reimbursable services in state Medicaid fee schedules. ACT models provide a suite of services,
combining medication provision and therapeutic services with social, employment, and housing supports to
individuals living with serious mental illness (SM1).1> CoCM refers to the combination of several team-based
activities and is billed for using a novel FFS billing code that accounts for services that are often
unreimbursable through traditional FFS, such as outreach and care engagement efforts, registry
documentation, psychiatric consultation, team collaboration, and care coordination (both internal and cross-
team).2® In CoCM, teams consist of a PCP, a care manager, and a psychiatric consultant, often a psychiatrist.
The model is designed to expand the treatment capacity of primary care teams to address common behavioral

 

October 2023 ISSUE BRIEF 5
health issues such as depression and anxiety. The CoCM model was initially designed for Medicare and has
since been expanded to Medicaid and replicated by private insurers.

Although enhanced FFS mitigates some of the financial strain and coding burden of traditional FFS, especially
regarding coverage of indirect care, some reimbursement gaps remain. State by state, Medicaid programs may
selectively include ACT components in the ACT billing code, often leading to a lack of reimbursement for
provision of other care elements such as vocational services. Additionally, enhanced FFS retains the incentive
inherent in traditional FFS to favor volume over quality of care. Further, enhanced FFS does not solve the issue
of a fragmented payment system; for example, ACT codes are not covered by Medicare.'" Within CoCM, we
noted that, although the novel billing code was specifically designed to reimburse for team-based care, uptake
has been low, and barriers to applying novel billing codes, such as documentation requirements, persist,16:8

Bundled Rates

A bundled rate, wherein a set of services are all covered under a single code covering an episode of care
shared over a care team, presents another alternative to traditional FFS.}®* CCBHCs receive bundled payments
from CMS to cover any CCBHC services that patients can receive during encounters. It should be noted that
while CCBHCs outside of those participating in the demonstration do not use the same bundled payment
system, this section is focused on demonstration CCBHCs, which do. CCBHCs provide coordinated essential
services, including integrated addiction and mental health services, medication-assisted treatment, and 24/7
crisis response. Crucially, the bundled payments for CCBHCs are calculated specifically for the CCBHC and
include care coordination, establishment and maintenance of a health information technology system, and
crisis and referral services, rather than aggregating FFS reimbursement rates.' Additionally, under an
innovative model of sustained addiction recovery, the Addiction Recovery Medical Home Alternative Payment
Model (ARMH-APM), providers receive bundled payments from some commercial payers and Medicaid
managed care organizations (MCOs) to provide long-term substance use disorder (SUD) stabilization and
treatment services. ARMH is designed to coordinate and reimburse for long-term addiction treatment and
coordinating acute, outpatient, and behavioral health care with a central team. ARMH includes three phases
(stabilization, recovery, and active treatment) that stretch over 5 years. ARMH's initial stabilization phase,
localized to emergency departments delivering acute and pre-stabilization services, is reimbursed using
traditional FFS billing. Following the acute phase, providers are paid through monthly bundled payments
during the recovery and active treatment phases of the ARMH model, where the two phases differ in bundled
rate to reflect care intensity.

Bundled payments provide an alternative to traditional FFS reimbursements but can have limited utility if
designed poorly. Setting effective payment rates requires accurate cost estimates. Successful bundled
payments have required models such as CCBHCs to analyze volumes of cost data to establish rates that
accurately reflect the cost of team-based care.

Per Member Per Month

PMPM payment models allot providers a fixed monthly fee for each eligible beneficiary in their care.? Two
Medicaid health home models, BHH and OHH, use PMPM reimbursements.?>?*> BHHs provide comprehensive
care management and assessment, along with health promotion, and individual and family support to those
suffering from SMI. OHHs implement a similar suite of services, in which the services are tailored to the
population being treated for opioid use disorder (OUD). Generally, both BHHs and OHHSs receive a monthly
payment per beneficiary, where states have flexibility in determining the specifics of the payment mechanism,
some electing to set tiered rates that account for condition severity.

Although PMPM payments can support flexible service provision, including indirect care, there are limitations
to this payment approach. If a PMPM payment does not cover both the direct and indirect care, the outcome

 

October 2023 ISSUE BRIEF 6
is a shortfall between cost of care and payment for care, similar to the limitations of traditional FFS. In
addition, PMPM payments are often uniform across an individual's treatment course and do not reflect
intensity of services. In other words, the same PMPM rate applies to both the early stages of care, generally
more time-intensive and resource-intensive, and the more stable, less resource-intensive stages.
Consequently, although the PMPM may accurately reflect the average cost of team-based care over the full
treatment course, providers may perceive a budget shortfall during the early stages of treatment. Misaligned
costs and payment over the treatment phases may incentivize providers to preferentially treat patients who
have stabilized in treatment over those in early treatment phases. This issue is especially salient to SUD
treatment due to the potential for relapse and recurring need for high-acuity, early-phase care. Further,
because of the uniform reimbursement rates, PMPM payment mechanisms may face resistance among
Medicaid MCOs that historically set their own rates.?*

DISCUSSION

Unsustainable reimbursement is a common barrier to team-based behavioral health care, especially under
traditional FFS billing arrangements. In addressing our research questions, across models that rely on
traditional FFS billing or grant funding, we found several common reimbursement gaps across models of team-
based behavioral health care. Several models successfully incorporated alternative payment approaches, such
as enhanced FFS, bundled payments, and PMPM payments, to sustainably fund team-based activities,
mitigating some of the barriers under traditional FFS billing. Each alternative, however, included specific
drawbacks, leaving models that successfully implemented alternative reimbursement mechanisms with their
own challenges.

State and federal grant funding is crucial to the operations of MCTs, Psychiatric Teleconsults, and CSC
programs. Funding sources vary widely; some models rely almost entirely on grant funding (e.g., psychiatric
teleconsults), whereas others mostly receive local funding (e.g., MCTs). Even models using alternative
reimbursement mechanisms such as demonstration CCBHCs rely on state and federal grants. Additionally,
SAMHSA's MHBGs fund state Medicaid programs to implement many team-based behavioral health models. In
addition to appropriations and grants, state Medicaid programs can apply for waivers to receive federal funds
to cover team-based care. Section 1915(b) waivers allow a state to use savings it achieves through Medicaid
managed care to provide additional services that are not already included in the state plan, whereas 1115
demonstrations permit the waiving of certain federal Medicaid requirements and allow reimbursement for
costs that would not otherwise be eligible for federal funds for experimental, pilot, or demonstration projects
that promote Medicaid objectives."> Within Medicare, which does not reimburse for key team-based services,
(including ACT, peer services, or psychiatric rehabilitation) Medicare Advantage Special Needs Plans (SNPs) are
able to tailor their benefits to the target population. To date, however, only one SNP exists specific to
individuals with SMI, offering its enrollees case management, ACT, and supported employment, in addition to
mental health services.?® Across models, Medicaid waivers and SPAs are common strategies to allow for
reimbursement of certain elements of team-based care, such as peer support specialists or supported
education and employment services.

The shift from FFS to an alternative reimbursement mechanism requires establishing the necessary billing
codes and payment structures so that team-based care providers can bill appropriately. CMS and State
Medicaid agencies have developed new codes and service definitions that support multidisciplinary teams
through enhanced FFS. CoCM codes allow for reimbursement of team activities, allowing providers to bill for
the collaborative work between PCPs, psychiatrists, and behavioral health care managers. However, many of
the novel billing codes are underutilized, and barriers to uptake warrant additional study. In addition to new
billing codes, bundled and enhanced FFS rates can allow payment for indirect care and team-based care to be
folded into a single rate. CCBHCs use a prospective payment system (PPS) rate for the bundled payments to
fund their services, which include a range of team-based behavioral health services, and can include MCTs and

 

October 2023 ISSUE BRIEF 7
CSC services within the set of evidence-based practices that the CCBHCs offer.?" Recently, CMS expanded
coverage for OUD treatments in Medicare through a bundled payment to OTP providers.?® Our findings
support the flexibility of bundled rates and PMPM as a key facilitator of team-based care, especially in SUD
treatment settings.

In addition to the different approaches to payment across the models, we saw a broad range of strategies that
states and programs used to allow for reimbursement through alternative mechanisms. In managed care
environments, contracting mechanisms can be used to require providers and MCOs respectively to implement
team-based care models. Alternatively, commercial payers and states can establish more general guidelines for
team-based care, allowing flexible and individualized programs that incentivize the use of teams. Commercial
payers and states can align these guidelines to contract payment strategies, either through withholding or
other incentive arrangements. Incorporating team-based care elements into contract care management
requirements, such as encouraging use of multidisciplinary care teams to support patient needs, is another
strategy to increase use of team-based care. Finally, contracts can tie team-based care requirements to
performance improvement projects or value-based payment initiatives.

These strategies can help states and programs mitigate barriers associated with traditional FFS billing,
transition to alternative reimbursement mechanisms, and collaborate with MCOs to cover and reimburse for
team-based care. However, adjustments to reimbursement mechanisms are often limited within payer type,
leaving team-based care models with sustainable reimbursement through one payer, while providing
unreimbursed or under-reimbursed care to patients covered by other payers. The persistence of a fragmented
payment system is particularly challenging, especially for payer-agnostic models, such as psychiatric
teleconsults and MCTs, and contributes to those models' reliance on other funding sources.

LIMITATIONS

Information on reimbursement mechanisms associated with public payers (i.e., Medicaid, Medicare) was
available in greater detail and in more states than information on commercial reimbursement mechanisms.
Although we found general descriptions of team-based care covered by commercial insurers, the
reimbursement details were often proprietary. Similarly, our examination of Medicaid MCOs across models
indicated that the characteristic flexibility of Medicaid MCOs allowed them to tailor coverage and
reimbursement to support team-based care. However, because states may have multiple MCOs, each with its
own reimbursement policies, assessing both commonalities across MCOs and within-state differences was
often difficult. Finally, for models that relied on local funding sources (e.g., county-level funding), these funding
levels were difficult to quantify. In addition, local and state funds can vary from year to year, making it difficult
to describe the effect of those funds, outside of the potential effects of year-to-year budget fluctuations. For
example, we may be able to broadly identify that a model relies on local funding to sustain team-based
behavioral health care, but year-to-year changes in local funding will generally be unavailable.

CONCLUSION

Traditional FFS billing reimburses for direct care provision, limiting its use for team-based care, which is
generally predicated on team-based activities in addition to direct care. Some team-based behavioral health
models have addressed these gaps in reimbursement by implementing alternative reimbursement
mechanisms, including enhanced FFS, bundled payment, and PMPM. Enhanced FFS augments existing billing
codes to support team-based care, either by creating tiered rates to reflect team composition or by adjusting
rates to reflect the cost of team-based care. Bundled payments reflect the cost of services and labor that make
up an episode of care, allowing providers flexibility in which services are included in that episode of care and to
allow those services to vary over the course of treatment. In a variation on the bundled payment, the tiered
bundled payment applies different bundled rates at different stages of care to align with the acuity of each

 

October 2023 ISSUE BRIEF 8
stage of care. PMPM models can also provide a single payment that includes indirect care costs. These
reimbursement mechanisms can be developed with support from local, state, and federal grant and
appropriations funding, by creating new billing codes and payment structures, and, in the case of managed
care, by contracting requirements. Although these alternative reimbursement mechanisms address common
issues with FFS billing, they do have limitations. For example, enhanced FFS rates may not include all team-
based services, simply setting a bundled rate by combining the FFS rates of the bundled services may
perpetuate the underpayment of team-based care inherent in traditional FFS, and PMPM rates, if set too low,
can make early treatment phases, which are generally higher acuity, difficult to fund sustainably. Finally,
reimbursement mechanisms are often tied to specific payers and, consequently, contribute to the challenge of
team-based models operating in a fragmented payment system.

 

October 2023 ISSUE BRIEF 9
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U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Assistant Secretary for Planning and Evaluation

200 Independence Avenue SW, Mailstop 447D
Washington, D.C. 20201

For more ASPE briefs and other publications, visit:
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ABOUT THE AUTHORS

Ben Huber, Nadya Belenky, Colleen Watson, and Brent Gibbons
work at RTI International.

ACKNOWLEDGMENT

The authors thank Miku Fujita for her research support
throughout the study, and Tami Mark and Sara Karon for reviews
of an early version of this report.

SUGGESTED CITATION

Huber, B., Belenky, N., Watson, C., & Gibbons, B. Reimbursement
Mechanisms and Challenges in Team-Based Behavioral Health
Care (Issue Brief). Washington, DC: Office of the Assistant
Secretary for Planning and Evaluation, U.S. Department of Health
and Human Services. October 17, 2023.

COPYRIGHT INFORMATION

All material appearing in this report is in the public domain and
may be reproduced or copied without permission; citation as to
source, however, is appreciated.

 

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October 2023

ISSUE BRIEF

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