The behavioral health organization’s ability to make bundled payments work will be a crucial tool as managed care integrates with behavioral health. Bundled payments existed in behavioral health for many years in other forms. Also known as case rates, these reimbursement structures are used for residential facilities. For example, a facility receives a monthly rate for each youth, regardless of the number of services they need. Another example is the Wraparound Approach Services program, which can offer monthly compensation for each youth’s service.
While the approach may be upcoming, it is not without its flaws. United Behavioral Health was sued in 2021 for denying medically necessary treatment due to its bundled payment policy. The concept of cost-sharing can be controversial if it reduces care for certain individuals. Also, in 2020, the law firm of Manatt, Phelps & Phillips, conducted a report for the California Health Care Foundation about their findings in payor models. In their report, they indicated that “the total cost of care model appears ill-suited for behavioral health providers for several reasons: the complexity of dividing responsibility for total cost of care across physical health and behavioral health providers, lack of capital and infrastructure to manage downside risk, the inability of behavioral health providers to influence the full continuum of care, and the lack of standardized managed care contracting templates for behavioral health value-based purchasing (VBP).”
If your agency is looking at the option of bundled payments for services, there may be plausible options. The first assumption to make is that not all client conditions are created equal. For example, the cost for an episode of care for a client diagnosed with bipolar disorder is different than one who has a social anxiety disorder. Therefore, developing a cost per diagnosis or cost per episode approach may be more feasible.
The other key component is data, data, data. Your agency needs to have specific data related to the clients in your geographic area. For example, if you are in Sacramento, California, you will have different treatment models and lengths of stay per episode or diagnosis vs. Los Angeles, California. The same applies throughout the country, If a managed care company comes to you with a request for bundled payments contracting, then you ask them to share their data or use your own. Without hard facts to calculate the costs (plus some cushion), your agency will either deny care to clients or lose money.
Finally, an extra option is to put into a contract specific conditions for exemptions. For example, if your agency contracts for bipolar disorder episodes at a certain rate, a condition can exist that if the client has more than 3 hospitalizations in a specific time, the bundled payments cancel and go to a fee-per-service rate. This allows flexibility to both the payer and the agency.
Many options exist in bundled payments, but behavioral health organizations need to tread cautiously in this area.
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PRAXES is a nationwide behavioral health software, consulting, and training company. No one in the behavioral health industry has a better reputation, and if you give us the chance, we’ll show you why! At PRAXES, our services improve the efficiency and structure of behavioral health agencies serving children and families nationwide. PRAXES brings over 45 years of administrative and clinical expertise. With more than 100 client companies nationwide, we offer the expertise to advance the quality of behavioral health services. We accomplish these goals through our new clinical decision software, our training of best practices, and helping companies meet regulatory standards. At PRAXES, we believe in being creative and fostering new ways to serve children and their families. Our vision is to empower the families our agencies serve with skills that not only improve their functioning, but help them to thrive in their everyday lives. When you give us the chance, you’ll be connected directly to our friendly staff, so you can expect immediate attention to your inquiry. So, don’t wait, call now!
Dan Thorne has unique perspectives on the field of mental health. As a clinician, he has had over 40 years of experience working with clients in the Southern California area. After obtaining his Bachelor’s degree from the University of California at Irvine, he worked with children in the Orange County Juvenile Hall. Here he honed his earliest techniques on at-risk children. After that, he obtained his Master’s degree in Counseling from California State University, Fullerton.
In the 1990’s, Dan turned his attention to the clinical and administrative side of behavioral health organizations. For three years, he was the Assistant Administrator of Starting Point, a chemical dependency facility in Costa Mesa, CA. In 2001, he took an opportunity to be the Director of Harbor View Community Services Center in Long Beach. When he arrived, the Center had only 80 clients and 13 staff. When he left, there were over 400 clients and 75 staff. Dan created several programs through their contract with the Los Angeles County Departments of Mental Health and Child and Family Services. Under his guidance, Harbor View became one of the leading providers of children’s services in Los Angeles County.
While improving the results of the client’s parents at the Center, Dan reflected on his experiences as a parent. His children themselves had special needs such as mental and intellectual challenges, and Dan knew the toll it takes on the parent. In order to help the child, the parent has to be healthy. From this concept, he created his parenting program. After years of refining it, teaching it to his staff at the Center, and then taking the results and comments from these efforts, he became the developer of the current PRAXES program. It is a culmination of Dan’s personal trials and tribulations as a parent along with empirical results and research of over 40 parenting programs.
Our vision at PRAXES is to advance the strength of parents and caregivers of children with special needs (mental health, intellectual, or physical) through education, support, and empowerment. Thus, they can live healthy and functional lives while caring for the child.
Apogee is a clinical decision software designed to help behavioral health practitioners with their treatment and patient engagement. It provides evidence-based and research-based components. Not only do they consist of elements from such practices as Cognitive Behavior Therapy, Seeking Safety, Dialectical Behavior Therapy, Motivational Interviewing, Functional Behavior Analysis, but also the Intensive Models for Parents, Youth, and Children.
PRAXES has over 30 years of accreditation experience. We know what it takes to get your organization accredited. Whether it’s Joint Commission, CARF, or COA, our team can provide an evaluation of your current status and review the standards which need improvements. We will assist you with the policies, documentation, and training required to be accredited.
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