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Laying Out a Path to Pay for Integrated Primary and Behavioral Health Care

Integrating physical and behavioral care is good health policy - and it's good for health.

The Institute of Medicine acknowledged that in 1996, when it advocated an integrated approach to primary care that would address physical, mental and emotional, and social functioning. And primary care providers see the importance of this every day. Patients’ mental and physical health problems are interwoven, especially for the chronically ill: the vast majority of patients with chronic diseases such as diabetes, congestive heart failure, asthma, lung disease and others have co-occurring mental health and/or substance use issues. And there is significant evidence that integrating primary and behavioral health care leads to improved outcomes and reduced costs of care.

Yet few payers, either public or private, pay for integrated care. Why is that, and what can be done to change it?

A new report from CIVHC, "Paying for Integrated Care and Behavioral Health: Identifying Barriers and Developing Strategies to Overcome Them," explores these questions. Using findings from interviews with key stakeholders, as well as information from successful integrated care programs around the country, the report examines the challenges that both providers and payers face and presents recommendations for addressing those.

The report comes at an opportune time. The State of Colorado is currently developing its State Healthcare Innovation Plan using a pre-testing award under the State Innovation Model (SIM) program initiative from the Centers for Medicare and Medicaid Innovation. That plan centers on integrating primary care and behavioral health within new payment models, and aligning those payment approaches between Medicaid and commercial health plans.

Some findings from the report provide useful insights into the development of the SIM plan, including:

• Transitioning away from fee-for-service is a chicken-and-egg problem. Payers note that most physicians in Colorado do not have the financial and clinical management systems in place to enable them to accept the downside risk that must, eventually, be part of value-based payment. For their part, physicians point out that they can’t implement the necessary management systems unless and until they have the money to make those investments. And, for primary care physicians, that kind of funding cushion rarely exists; their fee-for-service (FFS) payments are too low to enable them to do much more than cover their staffing and overhead costs. Yet, even if practices are ready and able to accept prospective payments, it is not clear that most Colorado payers are ready and able to administer them. A system engineered to pay providers retrospectively on the basis of patient-specific claims submitted according to a list of diagnosis and treatment codes cannot readily be re-engineered to accommodate prospective, non-code-based payments for an entire population of patients. This problem is compounded by the fact that most commercial payers have separate divisions to administer behavioral health benefits and claims. Both payers and providers need a payment transformation “glide path.”

• Barriers—some real, some perceived—make it hard for behavioral health professionals and primary care clinicians to share information about their patients. Separate electronic health record systems, reporting and billing requirements stymie efforts to create shared care plans and medical records. Concerns about potential HIPAA violations lead providers to err on the side of caution when exchanging information about shared patients. Federal restrictions on sharing information about substance use treatment compound the problem. Educating providers about which barriers to information-sharing are real, and which are misperceptions, is critical—but even more important is the development of new record-keeping systems to facilitate shared care-planning and common billing.

• Payers need to understand and believe in the return on investment from integrated care before they pay for it. Numerous independent actuarial analyses illustrate the potential cost savings from integrating care for the chronically ill, and health plans elsewhere in the country have demonstrated significant quality improvements and cost reductions from integrated care. Colorado payers need to see and analyze that data. A SIM-specific actuarial model, currently in development, will help them understand and, one hopes, embrace that plan.

• At the same time, employer purchasers and the brokers who counsel them need to understand the value of integrated care. Education about both the ROI of integrated care and how it can fit into value-based benefit design models is crucial for driving market demand.

This is an exciting time for those of us who believe that integrating behavioral health and primary care is essential for improving the health of Coloradans and controlling our health care costs. As we build our body of knowledge about how to integrate care effectively, and how to overcome barriers to paying for it, Colorado’s SIM vision comes closer to realization.

"Paying for Integrated Care and Behavioral Health: Identifying Barriers and Developing Strategies to Overcome Them," was generously funded by a grant from the Colorado Health Foundation. 

About the Author: Edie Sonn is CIVHC's Vice President of Strategic Initiatives. Contact her at

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