What are Alternative Payment Models in Behavioral Health

Alternative payment models (APMs) can offer behavioral health organizations a path to transition from models that reward for the volume of services provided to models that emphasize accessibility of care and quality of outcomes. Navigating the billing complexities of the different payment models, however, can be challenging. In this article, we’ll look at six of the most common payment models and consider how revenue cycle management (RCM) teams can use their EHR platform to meet the needs of the business.

Fee-for-service model

In a fee-for-service model, each service delivered is coded and billed separately. Influenced by traditional medical health practices, fee-for-service has long been the standard in behavioral health care. This model may suit organizations that primarily provide a single or regularly recurring service, such as psychotherapy. Organizations that deliver multiple or integrated services for overlapping or more complex behavioral health diagnoses that require extended treatment may find that this model poses significant challenges.

A fee-for-service model requires comprehensive documentation for each service. With complex and often overlapping behavioral health diagnoses, and treatment that can require care delivery over extended time, a fee-for-service model can place a significant administrative burden on a billing team. The billing team needs to document and code services or risk over-billing or under-billing and more time to resubmit and manage claims. A fee-for-service model can also result in fragmented care and a decline in outcome quality.

How a behavioral health EHR can help: In a fee-for-service organization, billing teams must manage and track billing and payments for each service provided, often with multiple payers, and for clients that use services over an extended period. To be successful, organizations need an EHR that makes complete and accurate charge capture easy, streamlines eligibility and authorization processes, and simplifies client statements updates. With accurate and well-documented claims data and billing processes, billing teams can ensure the clean claims needed to decrease time to revenue and achieve complete payment.

Bundled payments model

Bundled payments aim to reduce healthcare costs while maintaining or improving care quality. Payers reimburse providers based on expected costs for clinically defined episodes of care, such as a transition from inpatient to outpatient care.

In this model, behavioral health organizations must rigorously monitor both costs and outcomes. Organizations must carefully assess the potential complexities and model the costs of a specific program. Based on a clear understanding of costs, they can judiciously negotiate bundled rates with providers. Once implemented, billing teams play a critical role in monitoring costs and outcomes over time to ensure that actual costs track against negotiated payments.

How a behavioral health EHR can help: The most significant challenge for billing teams in a bundled payment model is in managing uncontrolled or unexpected costs. In this model, billing teams need robust integrated analytics to help identify high-risk clients so they can help clinical teams steer toward evidence-based care or referrals for the most effective care.

Capitation model

In a capitation model, providers receive a set amount per enrolled client, regardless of the number of services provided. For behavioral health organizations, this fixed payment model can make it challenging to manage cash flow; this is very important to do with high-risk clients or client populations with highly variable care requirements. If expectations aren’t well-managed with clinical staff, it can also lead to clients feeling rushed through their appointments, eroding client satisfaction, employee engagement, and care outcomes.

Efficiently managing client care and streamlining operations will maximize the capitation model’s benefits. Identifying high-risk clients early on can prevent cost overruns. Advanced EHR systems can track and analyze client interactions, allowing clinics to identify and manage high-risk clients more proactively.

How a behavioral health EHR can help: Introduced in the past in medical health settings, capitation models may have a less than stellar reputation with some providers and clients who accused payers of prioritizing profits over care. When adopting a capitation model now, organizations must be able to prove to providers and clients the value that they realize in the quality and cost of care. Billing teams working in a capitation model must have access to robust and customizable reporting and cash-flow analysis tools to maximize cash. They also need data from their EHR platform to help communicate the benefits and costs of care to clients.

Coordinated or integrated care model

A coordinated or integrated care model is one in which multiple providers coordinate to offer comprehensive care. Examples might include medical and behavioral health providers working together to deliver comprehensive care for depression or complementary providers that follow a client with substance use disorder (SUD) from inpatient to outpatient treatment.

How a behavioral health EHR can help: Integration and interoperability of healthcare technology and data may be the most significant challenges in supporting coordinated or integrated care models. Billing teams need secure and compliant communication and consistent data sharing between multiple systems, providers, payers, and clients. Investing in an EHR platform with secure, interoperable Health Information Exchange capabilities can streamline processes. Integrating and automating workflows helps ensure all providers align, reducing oversights, costs, and enhancing client care.

Value-based reimbursement model

Increasingly common in behavioral health organizations, value-based reimbursement models, or value-based care models, base payment on the quality of care rather than volume and risks are shared between provider and payer. The proven success of this model hinges on an organization’s ability to document the quality of care and outcomes, which hinges on data. Adoption of a value-based reimbursement model demands thorough data collection and reporting to track and prove care quality.

How a behavioral health EHR can help: In value-based reimbursement models, it’s essential that an organization be able to document a client’s health status before and throughout treatment. Organizations must be able to do this at an individual and a population level. Billing teams need an EHR platform that enables accurate and complete capture of client demographics, screenings, assessments, diagnostics, and progress notes to ensure timely billing. An EHR platform must also give billing teams advanced reporting and analytics tools so that they can calculate and assess probable performance scenarios with different value-based arrangements across different providers and populations.

Prospective payments model

Primarily used in public-payer-funded models such as Certified Community Behavioral Health Clinics (CCBHCs), a prospective payment system (PPS-1) is a value-based reimbursement model that reimburses providers for services in advance, typically based on predetermined rates. PPS enables organizations to prioritize the services that best suit the needs of their clients and bill for services like care coordination and outreach.

How a behavioral health EHR can help: As with other value-based reimbursement models, this model emphasizes quality improvements and extensive reporting, all of which require the ability to capture, analyze, and report on extensive and varied data types. For billing teams, implementing a PPS-1 model requires an EHR with robust data analysis and reporting tools that integrate and aggregate data across healthcare IT systems.

Navigating billing complexity with an EHR design for behavioral health

Behavioral health payment models are developing rapidly, offering organizations powerful strategies for increasing both accessibility and quality of care outcomes while also managing costs. An EHR platform that is designed for the complexities of different payment models in behavioral health gives billing teams the tools they need to support organizational goals. Qualifacts offers various revenue cycle capabilities for behavioral health organizations. Whether you are looking for core revenue cycle capabilities like real-time eligibility, claims, remits, and posting payments; or additional software to take some of the load off of your staff; or fully outsourced billing, our options allow you to choose what works for you.