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Primary Care and Co-Occurring

New Financing Models

Current financing models for health care typically include behavioral health services provided and funded separately from primary medical care. The Patient Protection and Affordable Care Act (PPACA), the new health care law, is creating new financing models that will support the bringing together of primary care and behavioral health. The law will require new approaches to organizing and financing more holistic care.

The PPACA introduced Accountable Care Organizations (ACOs) to address fragmentation of services and high costs of care. ACOs are to be instituted as part of Medicare's Shared Savings Program and expanded to all population groups. The ACO model organizes primary care providers, specialists, and hospitals around the care of a specific group of patients. The approach brings together various health care skills to deliver patient-centered care. This integrated organization and finance structure is expected to significantly reduce costs and improve patient outcomes over traditional fee-for-service models.

ACO Financing Model: Community Care of North Carolina

The Community Care of North Carolina (CCNC) program is an example of what future ACOs and integrated care may look like. CCNC is a primary care case management system that enrolls all of its state Medicaid patients. Health care is managed through regional networks of physicians, hospitals, social services, and health departments.

CCNC network providers are paid on a per-member, per-month basis for all treatment, care management, and prevention services, rather than per episode of treatment. Fee increases are provided for high cost subpopulations in each regional network. In 2010, CCNC added psychiatrists to its 14 networks to improve outcomes in patients being treated for depression, attention deficit hyperactivity disorder, or substance use.

To expand the integration of primary care and behavioral health, the CCNC system has begun a shared savings demonstration project, serving people dually eligible for Medicare and Medicaid. This expansion will be financed by a per-member, per-month fee, which will cover the costs of both care management and the movement of behavioral health services to where all other care is delivered. Savings from this integrated care model will be reinvested across North Carolina's community care networks.

Patient-Centered Medical Home Model

The second system model promoted by the health care reform law is the Patient-Centered Medical Home (PCMH). PCMHs have the same coordination of care and cost saving goals as ACOs. However, the two models have a different focus: ACOs focus on the larger health system, and PCMH models focus on patient-level coordination, such as at the level of an individual clinic.

Multiple models of primary and behavioral care integration illustrate the ideals of the PMCH model. These include:

  • A population-focused Care Management model featuring a care manager with behavioral health training who receives referrals from the primary care physician. This model also includes shared treatment plans, medical records, and standards of care. The approach has undergone formal evaluations for populations affected by depression and has shown favorable results.
  • The Primary Care Behavioral Health (PCBH) model, where behavioral health staff provide care alongside primary care physicians in the clinical environment. Care is provided as soon as needs are identified, with shared treatment plans, medical records, and standards of care. The repeated observation and interaction of this approach provides an important means of skills transfer between services and professionals.
  • A blended model featuring both an embedded care manager and behavioral health staff operating in the style of the PCBH model. This approach is currently under assessment in the Department of Veterans Affairs.

Here are a few additional facts about the models discussed above:

  • ACOs and PCMHs can work together. Patient-focused PCMH models can exist within the "medical neighborhood" of an ACO.
  • The ACO can bring efficiencies, economies of scale, and incentives for integration to the organizational environments that support a local and regionalized PCMH.
  • North Carolina's CCNC program model combines elements of both models. It is an ACO incorporating 14 regionalized PCMH structures.

PCMH Financing Model: Minnesota's DIAMOND Program

The PCMH financing model is based on the monthly care management fee, paid per enrollee, per month, in addition to fees for service. In Minnesota, the DIAMOND program (Depression Improvement Across Minnesota, Offering a New Direction) provides a variation on this framework for financing PCMH models. Over 90 clinics in the DIAMOND project are being paid an "all-payer case rate" for depression care services that include a DIAMOND care manager, the primary care physician, and a supervising psychiatrist. All-payer rates pay the same amount for all patients receiving the same service treatment from the same provider. The monthly, per-person fee is paid to the primary care practices for these services under a single billing code.

Combining the PCMH monthly management fee and the DIAMOND "all-payer case rate" payment model may create new collaborative care models for bringing behavioral health into primary care settings.

Four Possible Payment Reform Models

1. Fee-for-service, plus management fee, plus performance fees. This finance payment model is the closest to the current system, while still including features that support health reform goals. This payment model includes the traditional fee-for-service and adds additional payments that can help primary care practices move towards care coordination models, including paying for services that are different from visit-based care.

2. Prometheus model—Episode of care. This complex finance model pays according to best practices that are connected to the diagnosis (or episode of care), or payments are made as a yearly rate for chronic conditions. Payment is also provided for prevention and for avoiding preventable conditions. The Prometheus model is calculated on evidence-based care models for people with chronic and multiple conditions.

3. Risk-adjusted comprehensive payment and bonuses. This model eliminates fee-for-service payments but pays a global per-patient fee for comprehensive, risk-adjusted primary care. Large bonuses are also paid for quality patient care and cost savings outcomes. This model may not provide enough incentives for integration of behavioral health and primary care systems because they are not specifically targeted.

4. ACOs. This model represents integrated care at the highest system level. It coordinates and engages all providers across multiple health sectors to deliver coordinated care for all patients, defined by their patient population. A single risk-adjusted payment is negotiated by all providers and divided by ACO members. Shared savings realized by the ACO coordinated care network are also divided by ACO providers.

The Ideal Financing Model

The March 2011 report Better to Best: Value-Driving Elements of the Patient Centered Medical Home and Accountable Care Organization summarized the following elements of an ideal financing model. The ideal model is focused on the four key elements of health care reform: access, care coordination, health information technology, and payment reform.

  • Reduce the preferences for procedural services.
  • Use value (quality per unit of cost) rather than cost of delivery as a key metric in payment design.
  • Reduce the emphasis on volume.
  • Reimburse payment for teams and information technology.
  • Reimburse practices' encounters beyond the face-to-face visit.
  • Pay for services provided by all team members.
  • Risk-adjust reward payments to support practices caring for complex or needy patients.
  • Balance incentives between over- and underutilization. This is done through use of a blended payment mechanism so practices are not rewarded solely for cost containment.
  • Ensure coordinated, patient-centered care.

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