Behavioral Health in a world of Healthcare Reform

Carl Clark, M.D.CEO Mental Health Center of

Denver

Why Health Care Reform

• We are spending too much money• We are not getting the outcomes we

should get- ranked 37th by the World Health Organization

• There is enough money if we spend it differently.

International Comparison of Spending on Health 1980–2004

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Data: OECD Health Data 2005 and 2006.

Average spending on healthper capita ($US PPP)

Total expenditures on healthas percent of GDP

Schoen C, Davis K, How SKH, Schoenbaum SC. US health system performance: A national scorecard. Health Aff. 2006;25(6):w457-w475.

The Overall Design for Healthcare Reform

• U.S. health care reform must address three issues

UniversalCoverage Payment

ReformDeliverySystem

Redesign

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• There are 10 key healthcare reform issues relevant to the public behavioral healthcare system

Health Reform meets Main Street

byThe Kaiser Family Foundation

Changing from a “sick care” system

to a “health care” system

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Federal Health Care Reform• The Patient Protection and Affordable

Care Act (H.R. 3590) was signed into law on March 23, 2010 by President Obama.

• Provisions can be categorized into 4 broad buckets:– Insurance Reform– Medicare Reform– Medicaid Reform

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Insurance Market Reform• All U.S. Citizens are required to have qualifying

health care coverage by 2014.• Requires guarantee issue and renewability,

prohibits pre-existing condition exclusions.• Prohibits lifetime limits on the dollar value of

coverage.• Provides dependent coverage for children up to

age 26.• Creates a temporary national high-risk pool for

individuals with pre-existing conditions, effective through January 2014; 7/6/10

• Creates temporary reinsurance program for plans that cover high-risk individuals

Provisions that started 9/23/10• elimination of pre-existing condition

exclusions for children• health plans permit parents to cover their

adult children up to age 26• Elimination restrictions on annual

insurance coverage limits and bans on lifetime limits

• increased access to primary and preventive care

Provisions that started 9/23/10

• Rescission- the end of unjustified cancellation of insurance policies when people get sick

• requiring insurance companies to cover evidence-based preventive services and eliminating copayments for many of those services

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Medicare Reform• Provides a $250 rebate for Medicare beneficiaries

(102,000 in CO) who reach the Part D coverage gap in 2010 and eventually eliminates the prescription drug “donut hole” with 50% discounts on brand-name drugs.

• Freezes Medicare Advantage (MA) payments Bonus payments for quality, performance improvement and care coordination beginning in 2014.

• Reduces Medicare DSH payments beginning in 2014.

• Increases funding for the Health Care Fraud and Abuse Control Fund by $250 million over the next decade.

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Insurance/Medicaid Reform• Individuals between 133%-400% FPL receive

federally financed premium credits to purchase insurance through the Exchanges, as well as cost-sharing credits.

• Creates state-based American Health Benefit and Small Business Health Options Program (SHOP) Exchanges through which individuals and small businesses can purchase qualified coverage.

• Eligibility for subsidies and public coverage based on Modified Adjusted Gross Income (MAGI), which conforms to income tax definitions.

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Health Care Reform Coverage- 2020

Employer-Sponsored Insurance-3,300,000

Medicaid –1,200,000

Medicare – 1,000,000

Exchange – 300,000

1. Behavioral Health is now on the Health Policy Community’s “Radar Screen”

Morbidity and Mortality in People with Serious Mental Illness

• Persons with serious mental illness (SMI) are dying earlier than the general population (average age of death is 53)

• While suicide and injury account for about 30-40% of excess mortality, 60% of premature deaths in persons with schizophrenia are due to medical conditions such as cardiovascular, pulmonary and infectious diseases (NASMHPD, 2006)

• OR state study found that those with co-occurring MH/SU disorders were at greatest risk (45.1 years)

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Behavioral Health

• People with a serious mental illness on average die medical problems 25 years sooner than people without a serious mental illness

• 3 out of 5 medical illness are , preventable and will respond to treatment

Medical Conditions

• If a person has a general health diagnosis and a mental illness the cost of their care is three times higher.

• Lack of access to medical care.• Lack of insurance coverage for mental

health conditions

• 49% of Medicaid beneficiaries with disabilities have a psychiatric illness• one behavioral health condition doubles medical expenditure for physical

health and also doubles emergency room visit rates and hospital admission rates

The Faces of Medicaid III: Refining the Portrait of People with Multiple Chronic ConditionsCenter for Health Care Strategies, Inc., October 2009

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2. Mental Health and substance use treatment

• Are “essential health benefits” in health care reform. These conditions must be covered.

• This is a national priority• People getting access to care is better for

people and will help to decrease overall healthcare expenditures.

• Greater demand for mental health and substance use treatment services

Benchmark Benefit Package

• Benchmark Benefit Package in the Senate bill– Covers large employers, the Exchanges and

Medicaid– In Medicaid most/all enrollees may be guaranteed

a benchmark benefit package that at least provides “essential health benefits”

Parity

• Will Likely Improve Access and Available mental health and substance abuse Services must be provided at parity with general healthcare services (no discrimination) – Large Employers (Parity Act)– Medicaid (Health Reform Legislation)– Health Insurance Exchanges for

Individual and Small Group Policies (Health Reform Legislation)

– Medicare: on the way (Medicare Modernization Act of 2003)

• Key for public sector systems isscope of services; will plans cover system of care type of services?

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3. Most Members of the Safety Net will have Coverage

Including MH and SU Benefits • 31% to 43% increase in Medicaid enrollees,

depending on the bill• Large reduction in uninsured (54% to 67%)• $16 to $25 billion in additional spending for mental

health and substance use treatment from insurance expansion

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4. Disruptive Innovation is already underway in general healthcare

• The problems facing the American healthcare system mirror nearly every other industry in their early phases

• Healthcare reform speeds up the process

• This creates opportunities and threats for existing managers and provider of care

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System design changes

• Patient centered healthcare homes with integration of primary care and behavioral health services

• Accountable Care Organizations• Regional Collaborative care organizations• Early intervention and prevention

programs

Person-Centered Healthcare Homes• 45 percent of

Americans have one or more chronic conditions.

• Over half of these people receive their care from 3 or more physicians.

• Treating these conditions account for 75% of direct medical care in the U.S.

5. Healthcare Reform Legislation has it “Right” about Service Delivery Design and Payment Reform

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Healthcare Home Principles• Ongoing Relationship with a PCP• Care Team who collectively take

responsibility for ongoing care• Provides all healthcare or

makes Appropriate Referrals• Care is Coordinated and/or Integrated • Quality and Safety are hallmarks• Enhanced Access to care is available• Payment appropriately recognizes the Added

Value

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Bundled Case Rates that pay a Percentage of PACs

and Non-Payment for Never Events

Payment Model to cover Prevention, Primary Care

and Chronic Disease Management; Bonus

Structure for managing Total Health Expenditures

Medical Homes

Specialty Hospitals

Medical Homes

Linkages to High Performing Specialists that

can support the management of Total Health Expenditures and minimize

Defect Rates

Food Mart

Specialty Clinics

Food Mart

Specialty Clinics

Medical Homes

Specialty Hospitals

Hospitals within Hospitals

Clinic

Clinic

Person-Centered Healthcare Homes

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They are all about Improving Quality and managing Total Healthcare Expenditures!

Service Delivery Design and Payment Reform

Regional Collaborative Care Organization Pilot

• 6700 Medicaid consumers which will be taken care of by a group of providers. Both physical and mental health conditions are to be addressed.

• 7 regions in Colorado• Currently being implimented

6. Total Healthcare Costs of Persons with MH/SU Disorders will Drive Integration

• Recognizing the need to embed behavioral health clinicians in medical homes and how will these models evolve?

• Will medical homes partner with CBHOs or hire their own BH staff?

• Will Accountable Care Organizations [ACOs] (networks of primary care providers pooling medical home support functions) become the employers of the BH clinicians?

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7. There is No Guarantee that New BH Revenues will Spent on CBHO Services

• A recent study of US MH/SU spending estimates that in 2014 less than 16% of U.S. spending on MH/SU services will occur in Community Behavioral Healthcare Organizations [CBHOs]

• We should not assume that new behavioral health expenditures will be more heavily weighted towards CBHOs(Note: Figures are summarizedfrom Table A2 of the 2008 SAMHSA Report, “Projections of National Expenditures for Mental Health Services and Substance Abuse Treatment 2004 – 2014”)

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Projected Projected2014 2014

Hospitals, General and Specialty $53,844 22.6%Psychiatrists and Other Physicians $34,907 14.6%Psychologists, Counselors, Social Workers $21,803 9.1%Nursing Homes and Home Health $14,601 6.1%Prescription Drugs $61,222 25.6%Subtotal $186,377 78.1%Ratio 78%Community Behavioral Health Care Organizations

Multi-Service Mental Health Organizations $22,969 9.6%Specialty Substance Abuse Centers $14,822 6.2%

Total CBHOs $37,791 15.8%Ratio 16%Total Service Provider and Drug Expenditures $224,168 93.9%Insurance Administration $14,551 6.1%Total Mental Health/Substance Use Treatment $238,719 100%Addition of Uninsured Estimate $20,000Revised Total $258,719

U.S. Spending on MH/SU Treatment (Millions) (pre-Healthcare Reform Legislation)

8.Payment Reforms will be Linked to the Ability to Demonstrate Outcomes and Manage Costs

• New funding mechanisms will be utilized to better fund services that manage total healthcare expenditures

• Many Person-Centered Healthcare Homes will be funded with a 3-layer reimbursement mechanism

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Note: PPS = Prospective Payment System, the FQHC cost-based reimbursement system

Case Rate

Fee for Service/PPS

Bonus

· Prevention, Early Intervention, Care Management for Chronic Medical Conditions

· Per Service Payment· Prospective Payment System (PPS)

Settlement (FQHC model) to cover shortfalls

· Share in Savings from Reduced Total Healthcare Expenditures (bending the curve)

Payment for inpatient care will bundle hospital and physician services

• Bundled payments that only pay for part of Potentially Avoidable Complications (PACs) will penalize providers that have higher error rates and reward those with lower PAC rates

• Bundled payments may include all costs in the 30 days post an inpatient stay, including any return to the hospital

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Payment Reforms will be Linked to the Ability to Demonstrate Outcomes and Manage Costs

RCCO and Global paymentWho do we partner with?

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Colorado’s Relative Level of MH Underfunding is Incompatible with Meeting the Needs of All Individuals in

Quadrants I - IV

• Drawing on the California Integration Policy Initiative framework of Mild, Moderate, Serious and Severe Levels of Care, and …

• Assuming meaningful cost offsets can be achieved by treating the persons with Mild and Moderate BH disorders in primary care...

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Current Healthcare

FundingCurrent

BH Funding

General Healthcare System Funds BH Services for Mild & Moderate Levels of Care (mostly in Primary

Care Settings)

Specialty BH System Funds BH Services for Serious & Severe Levels

of Care (mostly in Specialty Care Settings)

Untangling the Behavioral Health Funding

Aligning the Behavioral Health Delivery System

• Core competencies needed in order to continue being an important part of the healthcare delivery system.1. A full Array of Specialty Behavioral Health Services 2. A well defined Assessment Process and Level of Care System 3. A solid approach to Prevention, Early Intervention, and Recovery 4. The ability to practice as a Team to Coordinate Care 5. Demonstrated use of Clinical Guidelines 6. Measurement Systems and Tools that measure consumer

improvement 7. A robust Electronic Health Record that includes Patient Registries8. Quality Improvement Processes and supporting Data Systems 9. Financial Systems to manage Case Rate Payments & the FQBHC

Prospective Payment System• And these competencies will need to be communicated to the Medical

Homes in your community with whom you want to partner.

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9. Current Behavioral Health Payor Structures may be Disrupted as Medicaid Authorities and Health Plans

Attempt to Bend the Cost Curve

• Different Scenarios will play out across the country– Some states will end their carve-outs “tomorrow” to achieve

clinical integration– Others will stay with the status quo and attempt to avoid change– A 3rd group will work with their MH/SU

partners to moveinto the nextgeneration

– A 4th group willstay with carve-out model butre-procure theentire system

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Current Health Plan Designs

Managed Care Organizations (MCOs)

for Health Care of TANF

Fee for Service Medical Services for Disabled

Behavioral Health Carve-Outs

Fee for Service Behavioral Health

Near Future Designs

Managed Care Organizations (MCOs)

for Health Care with Carve-In of BH

Behavioral Health Carve-Outs

Emerging Designs

Integrated Systems of Care that Align Service Delivery, Management

Structures and Financing for Medical Care and

Behavioral Health Services in Support of Full Clinical Integration

Managed Care Organizations (MCOs)

for Health Care

10. Health Insurance Reforms Shift “Risk for Total Cost of Care”

• Plans will no longer be able to – Discriminate against pre-existing conditions, – Rescind coverage except in cases of fraud, – Nor apply lifetime limits or unreasonable annual limits on

benefits. • These changes combined with Parity requirements will make it

harder for private plans to “kick” persons with SMI/SUD over into the public system

• If the plans are forced to hold the fullrisk for these persons, CBHOs willbecome much more valuableresources to health plans

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Shift Patients toPublic System

Limit Covered Services

Budget 15% - 30% for Admin & Profit

Rescind Coverage or Jack Up Premiums

Create Lifetime and Annual Limits

Price Premiums with many Rate Bands

Deny Coverage for Pre-Existing Conditions

For Consumers

• You decide who you and where you want your health care home to be.

• It could be your primary care physicians office

• It could be your mental health center.

The Four Quadrant Clinical Integration Model

Quadrant II BH PH

· Behavioral health clinician/case

manager w/ responsibility for coordination w/ PCP

· PCP (with standard screening tools and guidelines)

· Outstationed medical nurse practitioner/physician at behavioral health site

· Specialty behavioral health · Residential behavioral health · Crisis/ED · Behavioral health inpatient · Other community supports

Quadrant IV

BH PH

· PCP (with standard screening tools and guidelines)

· Outstationed medical nurse practitioner/physician at behavioral health site

· Nurse care manager at behavioral health site

· Behavioral health clinician/case manager

· External care manager · Specialty medical/surgical · Specialty behavioral health · Residential behavioral health · Crisis/ ED · Behavioral health and

medical/surgical inpatient · Other community supports

·

Beh

avio

ral H

ealth

(MH

/SA

) Ris

k/C

ompl

exity

Quadrant I

BH PH

· PCP (with standard screening tools and behavioral health practice guidelines)

· PCP-based behavioral health consultant/care manager

· Psychiatric consultation

Quadrant III

BH PH

· PCP (with standard screening tools and behavioral health practice guidelines)

· PCP-based behavioral health consultant/care manager (or in specific specialties)

· Specialty medical/surgical · Psychiatric consultation · ED · Medical/surgical inpatient · Nursing home/home based care · Other community supports

Physical Health Risk/Complexity

Persons with serious mental illnesses could be served in all settings. Plan for and deliver services based upon the needs of the individual, personal choice and the specifics of the community and collaboration.

Low High

Low

Hig

h

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For Mental Health Providers

• How will you assure that consumers with mental health needs are getting their general medical care.

• Collocating • Imbedding primary care services• Improved coordination with primary care

Model for Improving Primary Care

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Colorado’s healthcare system

rank in 2007

* The equity dimension was ranked based on gaps between the most vulnerable group and the U.S. national average for selected indicators. Comparisons were made by income, insurance, and race/ethnicity. 43